The take-off facility for agricultural and rural microfinance in Africa
The Foundation targets primarily Sub-Saharan Africa within the framework of its action for promoting improved access to financial services for the most underprivileged. It is indeed the region where inclusive financial services are most needed and least developed. With the support of the French Development Agency (AFD), the Foundation implemented, in 2013, a pilot project to support a larger number of rural microfinance institutions (MFIs), in Western and Eastern Africa: “The take-off Facility for agricultural and rural microfinance in Africa”.
The African Facility allows the Foundation to select beneficiary MFIs and provide them with funding according to more flexible criteria and procedures, especially in terms of portfolio size, risk, level of debt and operational self-sufficiency. In addition to financial criteria, the quality of institutions’ governance and management is a key element of assessment, as is their social performance, in particular their commitment to women and small farmers. This funding offer is then accompanied by a technical assistance plan designed to enhance the operational performance of the partner institution, in particular its risk management.
The first stage of the Facility was carried out between 2013 and 2016 and helped strengthen 16 MFIs in Africa and support them towards operational self-sufficiency and financial sustainability.
The second stage of the programme, between 2017 and 2020, will allow financing and providing technical assistance to over 20 MFIs. AFD's new financing is based on three components: a € 6 million loan to develop the Facility's credit activity, a € 2.2 million grant to contribute to technical assistance missions and an ARIZ portfolio guarantee to cover up to 50% of the loans granted to MFIs in Sub-Saharan Africa. Since the signing of the second stage of the programme in March 2017, 12 technical assistance protocols have already been signed and 61 technical assistance missions carried out or underway. The missions aim to consolidate the risk profile of the partner institutions through different topics such as the development of a business plan or risk management and improvement of the information system. The missions will also focus on the measurement and management of social performance, agricultural finance and green microfinance.
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For further information on the Facility, please contact Pierre Casal Ribeiro