What is MICFAC?
•Download as PPT, PDF•
1 like•1,789 views
DFID and World Bank are setting up a new facility, known as MICFAC, to help increase the access to microfinance services - such as loans, savings, insurance and money transfer services - for the poor of Sub-Saharan Africa. How can we do this best? Find out more about the facility then have your say in our consultation at: http://consultation.dfid.gov.uk/microfinance2010
![Paradigm Shifts in the Microfinance Sector ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],“ Access to financial services can mean the difference between surviving or thriving” (G20 Leaders Statement, 2010)](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Recommended
Recommended
More Related Content
What's hot
What's hot (19)
Viewers also liked
Viewers also liked (14)
Similar to What is MICFAC?
Similar to What is MICFAC? (20)
Recently uploaded
Recently uploaded (10)
What is MICFAC?
- 1. Microfinance Capacity Building Facility for Sub Saharan Africa (“MICFAC”) A Regional Approach to Expanding Access to Finance for the Poor by DFID & World Bank
- 4. Access Strand in Selected Countries Source: Data extracted from FinMark Trust and Finscope www.finscope.co.za
- 5. Low Outreach of Deposit and Loan Accounts from Commercial Banks in SSA Source: Financial Access 2010, CGAP and the World Bank Group
- 6. Multiple Constraints to Improving Access to Financial Services Source: OPM 2010
- 7. Amongst the Biggest Challenges facing Microfinance in Africa are Capacity Constraints. Despite facing such challenges, some microfinance providers have shown dramatic growth in Sub Saharan Africa.
- 8. UNDP defines ‘capacity’ as “ the ability of individuals, institutions and societies to perform functions, solve problems, and set and achieve objectives in a sustainable manner”. Building capacity therefore covers a broad range of initiatives at different levels of intervention: human capacity; organisational capacity; institutional capacity. Source: //uk.oneworld.net/guides/capacitybuilding
- 11. Missing Graduates in Africa Source: World Development Indicators
- 12. 3 out of 5 Top Risks in African Microfinance are Capacity Related Note: Major risks facing the microfinance industry as identified by practitioners, investors, regulators and deposit takers (2008 rankings are in parenthesis in the 2009 columns); Source CSFI Macro-economic trends (-) Inappropriate regulation Refinancing (27) Staffing 5 Credit risk (3) Managing technology Management quality (1) Cost control 4 Corporate Governance (6) Credit risk Macro-economic trends (24) Inappropriate regulation 3 Staffing (7) Management quality Liquidity (20) Corporate Governance 2 Management quality (2) Too little funding Credit risk (10) Management quality 1 2009 2008 2009 2008 Africa Global response Rank
- 18. Capacity Building is a Dynamic and Interconnected Process
- 30. Proposed Components and Activities of MICFAC Grants to strengthen regional Centres of Excellence to offer quality training (e.g. improve curriculum, certification, training materials, expansion to new markets and topics) 3. Strengthening supply of skilled labour and service providers Grants: Scoping for cross-border expansion; bank downscaling initiatives 2. Increasing supply of microfinance operations to serve new clients and new markets Grants: Mgt skills/governance; new products dev; MIS/risk mgt tools, IT platform improvements, regulatory compliance – seminars/workshops with regional entities 1. Strengthening capacity of microfinance providers (criteria to be established in the design) SAMPLE ACTIVITIES COMPONENTS
- 33. Thank You For Feedback/Suggestions, please contact: Korotoumou Ouattara [email_address] Angus Kirk [email_address] Zahia Lolila [email_address]
Editor's Notes
- This presentation largely draws on a Feasibility study undertaken by Oxford Policy Management Team commissioned by DFID and the World Bank. The OPM team consisted of the UK-based OPM staff members: Sukhwinder Arora (Team Leader), Robert Stone, Abigail Carpio and Janet Hayes and the Africa-based OPM external consultants: Hugh Kweku Fraser (East Africa), Gerda Piprek and Henriqueta Hunguana (Southern Africa) and Ernest Kofi Obeng and Gabriel Nkodo (West /Central Africa).
- The debate in the literature on financial inclusion and among key stakeholders has resulted in a broad consensus on the key areas that need to be addressed in tackling these supply side constraints and promoting pro-poor financial sector development, namely: Strengthening the regulation of financial sectors Extending the reach of microfinance, especially for women Using new technologies to extend financial access to the poor Expanding rural and agricultural finance Lending to small and medium enterprises Reducing the costs and risks of sending remittances Increasing the availability of micro-insurance to help poor people to mitigate the risks resulting from climate change Linking social cash transfer payments to the financial sector Building the capacity of regulators and financial service providers.
- Many definitions of Capacity building exist. In the context of this presentation, we adopt the UN definition that focus on fundamental aspects of capacity: people, institutions, systems and problem solving with emphasis on sustainability.
- A three thronged strategy in addressing MF capacity : Individuals directly or indirectly involved in MFIs (staff, Board members, Policy makers/general practitioners) MFIs and associates targeting operating systems for internal efficiency and improved performance. Institutional linkages that address outreach to the critical mass while addressing sustainability. Long term view of capacity building that focus on expanding the outreach (quantity and quality) for example through regional and umbrella institutions - Centers of Excellence and MFI APEX organizations .
- This demonstrate that the flow of qualified individuals into the SSA labour market is substantially lower than in the other regions. One implication is that there will be relatively fewer skilled workers who can work in SSA MFIs. This constraint on the labour supply may continue to pose serious problems well into the future. Computed by aggregating total number of tertiary graduates in relevant countries, dividing by total population of relevant countries and normalising to per one million. Data available for 11 countries from Asia, 13 from Latin America, and 6 from SSA. Methodology All computations are performed using data from the 2008 World Development Indicators. When 2008 data was not available, 2007 or 2006 data was imputed where possible. Most statistics are weighted averages by population. WDI data drawn 07/2010. Definitions: from UNESCO Institute for Statistics: Tertiary Education: Programmes with an educational content more advanced than what is offered at ISCED levels 3 and 4. The first stage of tertiary education, ISCED level 5, covers level 5A, composed of largely theoretically based programmes intended to provide sufficient qualifications for gaining entry to advanced research programmes and professions with high skill requirements; and level 5B, where programmes are generally more practical, technical and/or occupationally specific. The second stage of tertiary education, ISCED level 6, comprises programmes devoted to advanced study and original research, and leading to the award of an advanced research qualification.
- Major risks facing the microfinance industry as identified by practitioners, investors, regulators and deposit takers (2008 rankings are in parenthesis in the 2009 columns) The importance of capacity constraints for African microfinance in particular is graphically illustrated by the contrast between the 2008 and 2009 ‘Microfinance Banana Skins’ reports. The Centre for the Study of Financial Innovation (CSFI) produces these reports on the basis of surveys of stakeholders in the global microfinance industry. The 2009 report notes that as a result of the financial crisis, ‘globally, risks that were thought minor in the 2008 survey have been propelled to the top of the rankings, edging out risks that were previously seen as crucial to the prospects for microfinance.’ The risks that have been demoted globally include those that relate to management, corporate governance and staffing. The African response, however, ‘was very different from the rest, focusing strongly on institutional issues, particularly weaknesses in management, governance and staffing.’
- VSLAs: Village Savings and Loan Associations; ROSCAs: Rotating Savings and Credit Associations;
- This analysis refers to formal providers of microfinance in Africa
- Capacity building is a dynamic process and closely connected with processes at work within an organisation and its interaction with external stakeholders. For example Many MFIs do not have clear ownership and governance structures, which accentuates and perpetuates a number of other weaknesses such as lack of a clear strategic plan setting out organisational priorities; inability to review progress, and make strategic choices; inability to enforce follow up actions; Policy makers, regulators, investors, and service providers need capacity development support for their own efforts, which means that their own capacity is limited, but it is they who create the triggers and the mechanisms for enhancing capacity of MF providers they are also affected by the capability of the microfinance providers: for example: successful, well informed MF practitioners can advocate for better policy framework and implementation In addition, capacity building organisations and other support organisations together with policy making and regulatory bodies draw from largely the same pool of talent and face similar issues of human resource development.
- The focus is to address MF capacity constraints (supply and demand side of the MF sector) A fresh and long term view of developing institutional capacity for scale/reach
- International microfinance service providers (e.g. Opportunity, ACCION WOCCU, DID, Freedom from Hunger, CRS, Oxfam, CARE, etc.; Successful/ promising MFIs going to scale in Africa (e.g. Equity, KREP, LAPO, BRAC, ProCredit, etc.); DFI Investors (e.g. KfW, IFC, UNCDF, Aureos); National Microfinance Networks/ Apex Cooperative organisations; Commercial Banks downscaling – directly or moving into neighbouring countries; Partnerships and linkage banking (e.g. CRDB and SACCOs/MFIs; Afribank and MC2s; BNDR); New models of delivery (branchless banking/ partnerships between banks, telecom companies)