Resource: The Role of Microfinance in Asset-Building and Poverty Reduction: The Case of Sinapi Aba Trust of Ghana

The paper evaluates the extent to which Sinapi Aba Trust has contributed to poverty reduction among rural and urban poor especially women by supporting them with small loans to expand their businesses to generate income to build up their asset base. Using a cross-sectional data from 547 respondents, the study found that participation in the programme has enabled established clients to own savings deposits and subscribe to a client welfare scheme which serves as insurance to pay off debts in times of illness or death. Established clients were also found to be in a better position to contribute towards the education of their children and payment of healthcare for members of their households as well as contribution towards the purchase of household durables. The study noted that programmes that are financially sustainable have greater effects on participants, and that there is the need for clients’ graduation to benefit most from participation in such programmes.


Source

Peru: the world’s best climate for microfinance

The success of microfinance sometimes appears simply a matter of a brilliant idea (lending small amounts to unbanked entrepreneurs) and a charismatic leader (Muhammad Yunus, now a Nobel prize winner).

But microfinance’s future growth may depend on governments and big investors. So it’s significant that, according to a new report out today, Peru has the world’s best business and policy environment for microfinance. Bangladesh, home of the Grameen Bank, doesn’t even make the top 30. Read more

From the CEO of Small and Microenterprise Program SMEP (Kenya)

I am happy to inform you that SMEP has entered a new dawn in the following areas:-

a) Transformation into a DTM on 25th August, 2010 SMEP was issued with a letter of Intent by CBK, which is an approval in principle to conduct Nationwide Deposit Taking Microfinance Business. This letter takes SMEP a step closer, towards becoming a licensed Deposit Taking Microfinance institution. Currently we have a Nationwide Network with 32branches/satellites with over 70,000 customers , and Kshs 1billion outstanding portfolio. SMEP is working towards fulfilling the final phase of the requirements as set out by CBK. 

b) Governance- New Chairman- Mr. Gabriel Kivuti takes over the leadership from Mr Joseph Muriu who has spearheaded the institution since inception. Mr Kivuti has a wealth of experience in both Microfinance and Banking- having worked with Standard Chartered bank, been a board member of various institutions including Micro Finance Institutions. He has been and is still a practicing consultant in microfinance and banking. Currently consulting for world bank. 

c) Management Information system Upgrade T 24 Emerge 

We are delighted to announce that through financial support from Triple Jump Advisory Services, STRAJ T24 Consultants together with our ICT team have successfully upgraded our ICT system from Release RO5 WINDOWS Platform TO Release R08 LINUX / WEB BROWSER Platform. We are indeed grateful for the support given by Triple Jump.

To cater for the new dawn, SMEP has embarked on various reforms. These include but are not limited to construction of new state of art banking halls in Mombasa, Nairobi, Nakuru, Mwea, Maua and Kisumu amongst others, increasing its visibility through branding, reviewed agriculture products , and other products to provide a supermarket of products for our customers, training staff and upgrading the Company’s MIS to also consolidate both portfolio and finance.

We are looking forward to your continued support, financially or otherwise to enable us reposition SMEP be the preferred and model provider of high quality financial and non-financial services in Kenya in order to alleviate poverty and enhance a strong and equitable economy.

We sincerely thank you all for making SMEP what it is!!

God richly bless .

Mrs. Phylis I.Mbungu

Chief Executive Officer

---------------------------------------------------

Small & Micro Enterprise Programme

Kirichwa Rd off Argwings Kodhek Rd

P.O Box 64063 - 00620

NAIROBI.

Tel+254/020-2055761,020-2673327/8, 0711807040

E-Mail: ceo@smep.co.ke/info@smep.co.ke

www.smep.co.ke

Gabriel Kivuti

Chairman, SMEP

+254722361133

E-mail: gabrielkivuti@yahoo.com

NEWS FROM Lift Above Poverty Organisation (LAPO Nigeria)

After years of growth LAPO has entered a phase of consolidation in 2009.  This consisted of series of actions towards transformation into a regulated nation-wide microfinance institution and strengthening of our service delivery structures and systems. This had become necessary in order to address emerging issues and concerns in the international microfinance community and at the same time take advantage of current developments in the Nigerian microfinance market. Expectedly there have been obvious challenges but your support and understanding have been helpful in addressing them.

 LAPO with its strong  service delivery structures and systems; responsive products and services and  expertise in micro-lending remains  outstanding and acknowledged in the local microfinance market

Periodically, we shall use this e-newsletter to update our partners on significant developments in LAPO.

Central Bank of Nigeria Approves LAPO Microfinance Bank

The Central Bank of Nigeria has given approval to the application of LAPO Microfinance Bank Limited. With this LAPO comes under the regulation of the bank. The approval marks a significant development in the life of our institution and in addressing the issue of savings mobilization. With the approval by CBN, LAPO Microfinance bank now has a new board of 7 members and the CEO. Two of the seven seats are reserved for future investors and partners. Dr. Philip Osarenren Emokpae (economist; monetary policy, management and marketing) the former chairman of LAPO now chairs the new board. 

New CFO JOINS LAPO

A new Chief Financial Officer has joined LAPO. He is Dr. Kamakhya Narain Singh. Dr. Singh holds an MBA (finance and strategy) and a PhD (Strategic management of MFIs and their role in sustainable development) from Oxford University UK and the Banaras Hindu University, India,    respectively. He is a member of the Indian Institute of Chartered Financial Analysts (CFA) and the Indian Institute of Banking and Finance. Prior to this appointment, Dr. Singh was a microfinance specialist with the Asian Development Bank, and has more than 15 years of professional experience in the MF and SME sector in Europe, Asia and Africa. He resumed on May 3.

International Auditing Firm Preparing 2009 figures

After intensive discussion with our short list of international auditing firms based in Lagos on contents and fees we have now signed an agreement with Deloitte. Their auditors are starting with immediate effect to prepare the 2009 auditing report. It is expected to have the approved and authorized report by August/ September ready to be forwarded to our partners.

German Bank Manager as Volunteer

A German banker Barbara Hagelschuer from the “Sparkassen Gruppe” (largest banking organization in Germany) will be in LAPO in the next four months. She will be involved  in internal operational and financial system strengthening components of the transformation process.

Consultant to support the Change Process

LAPO is closely working with a management coach and consultant Bernhard Vester. He is involved in consulting on change management, strategy and organizational development. 

Strategic Functions Are Now Operating From Lagos

An annex of LAPO’s Head Office has been established in Lagos. Strategic functions such as finance, credit relationship management are carried out in the Lagos office. The office in the Lagos a commercial nerve center of West Africa will facilitate interface with our partners, regulators and other collaborators. The office is located at 65, Kudirat Abiola Way, Oregun, Ikeja.

Interest Rates And Charges Reviewed

In addition to the reduction in interest rate in October 2009, LAPO has again reviewed its charges. Registration fee and loan application fee of N500 and N200 respectively have been removed. There is training and loan processing fee of 1%. Insurance cover will now be provided at a premium of .6%. These changes take effect in June 2010. It is expected that as a regulated microfinance bank with easy access to public savings, LAPO will be able to offer lower rates on its facilities in the near future.

Volume of Operations is in the Increase

Monthly disbursement rose from N500 million in January to N1.5billion in April.  January to April disbursement is N5.2 billion. This represent 30% increase over the figure of N4 billion for the same period of 2009. The N21billion for the year is realizable.

INSURANCE COVER FOR LAPO CLIENTS

LAPO has launched an insurance scheme for her clients. This is in collaboration with GoldLink Insurance a major insurance company in Nigeria. Cover provided includes life, fire in market place and medical (hospitalization only). The premium rate is .6% of loan amount.

Improvements in our Data Processing

The migration of our existing software M2 to the more robust software FOCUS by the Fern company in North Ireland was successfully activated. This will not only lead to more reliable data but will also help reduce workload on branch level.

Publisher:        Godwin Ehigiamusoe, CEO of LAPO

INAFI Africa Trust conducts training of Trainers for Branch Managers

INAFI Africa recently conducted  training for trainers (TOT) for branch managers of member organizations. The first training was conducted in Lusaka, Zambia last July 12-14 and in Dakar, Senegal last August 16-18.

In total, 34 enthusiastic and dedicated branch managers attended the TOT course both in Dakar and Lusaka. The participants were particularly pleased with the training level especially the very resourceful facilitators who have vast experience in the field of Microfinance as practitioners. However, the participants preferred the training to have been at least five days instead of the three days.

The tool kit has been designed to provide MFI branch managers and operation staff with the relevant knowledge, skills and values on how best to support operations and other support staff in order to enhance their productivity, maintain high portfolio quality and lead to branch profitability and growth. This has been developed both as an orientation and in-service guide for branch managers of Member Microfinance Institutions affiliated to International Network of Alternative Institutions (INAFI) Africa.

The specific objectives of the training was to: provide branch managers with relevant skills and knowledge required to perform the general management of the branch and field offices; to enable branch managers play the crucial role of marketing of the institution existing and new products and services, to build their capacity in the area of risk management and to manage quality portfolio and growth through prudent portfolio management skills.

The tool kit was presented in a systematic format that outlined clear training process. Mrs. Rose Mwaniki, who also helped in developing the training module the training for the English speaking members, facilitated the training in Lusaka. Meanwhile the training for French speaking members was conducted and delivered in Dakar led by the main facilitator, Mr. Adama Thiam, who also helped in developing the French training module.

The training was largely based on a participatory training approach, which allowed the participants share experiences from their respective institutions. To further enhance participation of the entire team, the learning was conducted through small working groups. This enabled the participants discuss issues together and develop new skills and knowledge through teamwork.

INAFI has developed other modules/courses relevant to microfinance sector namely; Credit Officer Course, Financial Ratio Analysis and Interpretation Course, Strategic Business Planning Course, Governance and Leadership Course, Key Performance Indicators in Microinsurance. These courses are available upon request.

INAFI Africa wishes to thank all the organizations that showed interest and subsequently sent their staff for the training program. It is through emphasis of on continuous financial education that we anticipate improved productivity and performance of the staff as a result improving the Institution bottom-line.

ABOUT THE TRAINING

It is not without mentioning the branch managers of MFIs play a significant role in the success or failure of their respective institutions. They are in-charge of the overall supervision of staff within the branch; they manage operations and other important assets of MFI. In a sense, they are in-charge of the nerve center of the organization.

One of the key pillars of profitable and growing MFIs is the quality of supervision provided to the frontline staff. A stringent supervisory process does boost staff morale especially where the performance indicators are clearly articulated and understood across the institution.

The branch managers can only be able to provide relevant support to the field staff if they themselves are able to internalize and appropriately apply operations and institutional policies and procedures effectively. In other words, they must be well versed with their job requirements and continually be on top of things to be able to support those that they supervise. This is the main reason why INAFI considers this toolkit as an important contribution to both its Members’ human resources management and the sector in general.1

1 Source: B. Gray et al., “Can Financial Education Change Behavior?: Lessons from Bolivia and Sri Lanka,” Working Paper 4 (Microfinance Opportunities: Washington, D.C.: 2010).

Nigeria's microfinance policy review underway

Nigeria's microfinance sector has failed to make the expected impact on the economy due to misconception by the operators, but this will soon change.

Lamido Sanusi, the Central Bank governor, said the bank will come up with a reviewed policy framework in order to make it more effective.

Akintunde Sowunmi, deputy director, development finance, who represented Mr. Sanusi at a conference organised by Credit Awareness yesterday in Lagos said less than three percent of the rural population of Nigeria have access to microfinance services.

Mr. Sowunmi said one of the challenges is to create awareness about credit acquisition in order to make more people interested in accessing it.

"Despite the importance and benefits of credit, there are socio-economic barriers inhibiting access to financial services such as education, gender, age, irregular income, poor infrastructure, and even geographical location," he said.
Read more

Hints of the Subprime in New Microcredit

Enthusiasm for microfinance has surged since Professor Muhammad Yunus and his Grameen Bank shared the Nobel Peace Prize in 2006.

This November, APEC finance ministers will be asked to adopt an initiative on “financial inclusion” when they meet in Kyoto.

Unfortunately, this coincides with a wave of financialization of micro-lending, a phenomenon Yunus deplores. Read more

FDEA launches new website

Femme Développement Entreprise en Afrique (FDEA) or Women's Business Development in Africa is a Senegalese non-governmental organization, non-profit organization founded in 1987 and a member of INAFI International just launched its new website.

FDEA’s mission is to create an institutional framework adapted to the needs, technical capabilities, and socio-economic realities of women entrepreneurs. FDEA provides African women with a credit system of training, coaching and consulting in the field of micro, small and medium business. In Senegal, FDEA works in 6 regions: Dakar, Louga, Kaolack, Dourbel, St. Louis, Tambacounda and Bakel. The headquarters is in Dakar, with a regional office in Kaolack. FDEA works closely with other African NGOs: Cooperative for Education of Women, Family Health and Sanitation in Mali, Relief Society of Tigray in Ethiopia, NGO Coordination mutilation in Guinea, and the network of the Caisses Populaires Burkina. FDEA is affiliated with Conseil des ONG D’Appui au Developpement (CONGAD) Senegal.

FDEA has 20 branches located in eight regions of Senegal and has approximately Euro 27.5 million cumulative credit portfolio. Outstanding savings accumulated as of 31 December 2009 is Euro 1.967,244,267 while outstanding loan for the same period is Euro 2,051,195. FDEA is serving more than 200,000 clients and processes more than 5,000 credit records per year, of which 80% are for young women entrepreneurs from different categories.

INAFI congratulates FDEA!

SEDPI CEO TO PRESENT MICROFINANCE PAPER IN UK

Mr. Edwin Salonga is one of the nine (9) selected speakers at the international conference on Global Partnerships in Microfinance. The conference is organized by the University of Greenwich, in collaboration with the University of Birmingham and Burgundy School of Business. Mr. Salonga is the Chief Executive Officer (CEO) of the Social Enterprise Development Partnerships, Inc. (SEDPI) and a concurrent lecturer at the Ateneo de Manila University’s Development Studies Program.

The conference will be held on 6-7 September 2010 at the University of Greenwich in London. The event will be graced by Her Royal Highness Princess Máxima of the Netherlands as a guest speaker. The conference intends to look at all potential partnerships in microfinance and to discuss their accomplishments in meeting the microfinance goals. The conference will focus on the following topics a) Strategic Partnerships; b) Enhance New Partnerships; c) The Role of Institutions Involved; d) Collaborative Relations; and e) Global versus Local Partnerships.

The paper of Mr. Salonga is entitled “Fund Guarantees with Clear Exit Strategy: Donors Building the Confidence of Commercial Banks in Funding Microfinance Institutions.” It delves on how the partnership of international donor agencies and commercial banks may support the operations of microfinance institutions (MFIs). One of the major challenges of MFIs is access to commercial funds to increase their loan portfolio, which in turn will be utilized to carry out their mission to reach out to more poor people. However, commercial banks view microfinance as a risky investment due to the traditional banking approach they are more familiar with. It is in this context that international donors at present establish partnerships with commercial banks to build the confidence of the latter on microfinance through a risk-sharing mechanism by virtue of fund guarantees. It is through this scheme that a portion of the funds released by commercial banks to MFIs is guaranteed by the donors. In case that the MFIs fail to pay off their loans to the commercial banks, the respective donors would cover such payments. The challenge however for the donors is to map out a clear exit strategy, in terms of timeframe or milestones, that the MFIs need to observe as this guarantee scheme is a financial intervention that will have to be discontinued over time.

To learn more about the conference, click here.


SEDPI is a member of INAFI Philippines

Workshops for Global Microcredit Summit 2011 announced

Microfinance Focus, Aug 23, 2010: Global Microfinance Summit which brings together microcredit practitioners, advocates, donor agencies, international financial institutions and others involved with microcredit to promote best practices will be held in Spain from November 14-17, 2011 in Valladolid, Spain.

The Summit’s goal is to ensure that 175 million of the world’s poorest families, especially women of those families, are receiving credit for self-employment and other financial and business services and to help 100 million families rise above the US $1 per day threshold by 2015. Read more

MFIs tap technology as the bridge to reach unbanked millions

Kenyan microfinance institutions have for a long time served the unbanked segments of the population despite several obstacles in their quest to access this niche.

It is estimated that micro-enterprises contribute about 18 per cent of Kenya’s gross domestic product and 25 per cent of non-agricultural GDP.

It is thus not surprising that many MFI’s have taken to using technology, especially mobile phone platforms, to cut on high operational costs and reliance on commercial banks while increasing focus on core functions.

Early this year, during the opening of the Africa-Middle East Regional Micro-Credit Summit in Nairobi, President Mwai Kibaki affirmed the central role micro-finance plays in national development by striving to address the challenge of providing financial services. Read more

JOB VACANCY (Application closed)

Oxfam Novib in partnership with INAFI International is looking for a Project leader who, together with us and many others, wants to work towards creating a just world without poverty.

Around the world people are fighting for their right to a decent livelihood. Oxfam Novib supports them in this. We support projects, strengthen local organizations and campaign for just policies. We do so locally and internationally because poverty and injustice are global problems and are related to unjust economic and political relationships. That is why we work together with Oxfam International.

Project leader for the remittances & development project
36 hours a week, located in The Hague
The contract will be for one (1) year, with the possibility for extension till the end of the project, June, 30th 2012

The remittances and development project, which is implemented in partnership with INAFI International, is an EU-funded project and has multiple objectives. First, the project seeks to contribute to improve the capacity of migrant organizations in 10 different EU countries so they are able to deliver a larger contribution to the economic development in their country of origin. Secondly, the project will train Micro Finance Institutions (MFIs) to transfer remittances from migrants safer and cheaper to the country of origin.
A more specific objective of the project is to create a trans-national program that will train 10 microfinance organizations from 10 different sub-Saharan countries in the development of a global remittance system and that supports the collaboration between the MFIs and migrant organizations from 10 EU countries.

Main tasks and responsibilities

- You will ensure the achievement of agreed outcomes and targets. You will achieve this by monitoring the progress and quality of the project, identifying problems, opportunities and exceptions, and you will think of solutions, you are accountable for the budget and you report to the Manager of Special Projects and the Steering Committee
- You manage the project team (functional): you plan the tasks and activities for the project group.
- You will develop, in cooperation with the project staff, realistic work plans. You are responsible for the quality, timeliness and efficiency of the work of the team. You are also responsible for the knowledge and the synergy between the (temporarily assigned) employees and the project;
- You are responsible for monitoring and reporting: you monitor the substantive and financial progress and reporting to the EC according to their requirements, coordinate the production of financial reports and audits;
- You coordinate the meetings of the Steering Committee (organize and prepare for the semi-annual meetings);
- You coordinate the required input from other parties involved such as ON (regional) departments, partner organizations and other stakeholders;
- You will ensure good communication within the project team, with partner organisations, the project beneficiaries and other stakeholders;
- You identify the project risks and control them by taking action and close and regular monitoring.

Required skills and competences
- You have a proven academic level in your previous and current work environment;
- You can demonstrate 3-5 years experience in managing complex international projects. Preferably you also have experience and knowledge of procedures regarding EC-grants;
- You have proven knowledge of microfinance and remittances (including mechanisms, trends and developments, contacts, etc.);
- You have good communication skills and are able to work in and with a team;
- You are result oriented and decisive;
- You are fluent in both English and French.

What do we offer?
For this function we offer a gross salary of a minimum of € 2,828 and a maximum of € 4395 per month on the basis of a 36-hour working week.

Application procedure
Are you interested? Send your application before July 14th, 2010 in writing including a motivation and curriculum vitae and mentioning reference number 5-5964 to jobs@oxfamnovib.nl address to Elvira Hautvast, HR Consultant. To obtain further information about the job please contact Janny Bosscher, manager Special Projects 070-3421 718

Applicants must be Nationals of a European Union member State or have a valid work permit for the European Union.
Acquisition due to this advertisement will not be appreciated
An assessment can be part of the recruitment process

G20 Identifies nine principles for innovative financial inclusion, action plan expected in November

The G20 Leadership Summit in Toronto this past weekend highlighted the importance of the work being done by the G20’s Financial Inclusion Experts Group (FIEG). The group released nine “Principles for Innovative Financial Inclusion” formed through the efforts of the Access through Innovation Sub-Group (ATISG). “We have developed a set of principles for innovative financial inclusion, which will form the basis of a concrete and pragmatic action plan for improving access to financial services amongst the poor. This action plan will be released at the Seoul Summit,” the Toronto declaration said. Read more

MFTransparency and Luxembourg Development Cooperation launch Transparent Pricing Initiative in West Africa

LANCASTER, PA, July 1st, 2010 — MicroFinance Transparency (MFTransparency) and Luxembourg Development Cooperation have partnered to expand the Transparent Pricing Initiative to West Africa. MFTransparency will begin to implement the Initiative in July to promote pricing transparency and consumer protection throughout the region.

Two workshops in Dakar, Sénégal and Ouagadougou, Burkina Faso on July 6 and July 9, respectively, will train industry professionals on issues related to pricing transparency and mark the launch of the Transparent Pricing Initiative in the first two countries of the West African Economic and Monetary Union (WAEMU). Strategic implementation partners in this effort are MFTransparency’s regional partner INAFI (International Network of Alternative Financial Institutions) and local microfinance networks. In Senegal, MFTransparency collaborates with DMF (Direction of the Microfinance) and AP/SFD-Sénégal (Association Professionnelle des Systèmes Financiers Décentralisés). In Burkina Faso, MFTransparency works with APIM-BF (Association des Systèmes Professionnels des Institutions de la Microfinance au Burkina Faso) to implement the Initiative. Read more

Sub-Saharan Africans Bank on Family for Business Loans

Washington, DC, June, 11 2010 - Sub-Saharan Africans would most likely turn to their families if they needed money to start a business, according to Gallup surveys of 18 countries in the region.

Forty-two percent of respondents spontaneously named "family" as their primary source for funds, while banks (16%) and friends (15%) were a distant second. Despite the emphasis on microfinance in recent years in sub-Saharan Africa, 4% mentioned these institutions. Read more