Capacity Building
The EU/ACP Microfinance Programme addresses one of the main bottlenecks in microfinance: retail capacity. It awarded 6,5 m Euros of grant funding to eleven partner organisations to expand outreach through innovative delivery mechanisms and products, and to improve transparency. Most grants support existing MFIs, though two will create new microfinance banks. The initiatives were selected following a one-off Call for Proposals.
Read more about the Call for Proposals
Capacity Building Projects in Numbers
The EU/ACP Microfinance Programme accomplished the following by September 2007:
- Directly strengthened at least 40 Microfinance Institutions (MFIs) in DRC, Ghana, Rwanda, Kenya, Uganda, Senegal, Togo, Mali, Niger, Mozambique, Malawi, Zambia and Zimbabwe
- Supported ProCredit DRC to massively scale up and facilitate clients’ round-the-clock access with the first ever ATMs in the country
- Created 2 start-up MFIs in Madagascar and in Cameroon
- Trained more than 500 staff across Africa, including staff of the rural, community-based Financial Service Associations in Kenya and village banks in Cameroon
- Supported 2 microfinance networks (a regional network and the Ugandan association)
- Rolled out pioneering consumer education and protection initiative by Ugandan Microfinance Association
- Established a technical assistance programme on risk management and social reporting (SMARTRAC) with local consultants trained and 3 assignments undertaken
- Complemented EIB investments from the Cotonou Investment Facility with at least three of grants awarded
- Helped experimentation with diverse financial services, e.g. microinsurance and savings
- Awarded 30 scholarships to ACP policymakers (central bank, ministry of finance, etc.) to enroll in the Microfinance Boulder training programme.
Read about proposals that were selected and their progress
Use of Ad Hoc Technical Assistance Facility
In addition to the Call for Proposals, the EU/ACP Microfinance Programme has a small ad hoc technical assistance facility to address areas that were not well addressed by the Call. These include initiatives in support of Caribbean, Pacific microfinance actors and ACP policy makers.
Caribbean
Caribbean microfinance lags considerably behind that of its Latin American neighbours. While most countries in the region have fairly sophisticated financial systems, access to a range of financial services is limited for low-income people, the self-employed and small businesses. In the English-speaking Caribbean countries especially, poor people tend to be dependent on informal mechanisms, their own savings and government subsidized schemes that are unpredictable and do not guarantee a longer term solution to access to finance. The Microfinance providers in these countries generally have little outreach and low performance. The Carib-Cap programme aims to strengthen their capacities.
Caribbean Microfinance Capacity Building Programme (Carib-Cap)
Carib-cap’s objective is to implement a capacity-building project that will enable Caribbean microfinance institutions (MFIs) to improve their financial performance and outreach. It will do this through
(i) performance assessments of MFIs;
(ii) implementation of Capacity-Building Plans (CBPs);
(iii) award of Good Practice Incentives;
(iv) strengthening of the knowledge management and advocacy capacity of the Caribbean Microfinance Network; and
(v) dissemination of lessons learned.
Ultimate beneficiaries are micro-entrepreneurs and low income households in the Caribbean who currently do not have access to a range of affordable financial services. Direct beneficiaries are primarily, the microfinance institutions of the English-speaking Caribbean countries, including the OECS and the Caribbean Microfinance Network. Thanks to the coverage of the network in the end all the microfinance institutions in the region would be able to benefit.
Carib-Cap is a joint initiative of the Multilateral Investment Fund of the IADB, the Caribbean Development Bank and the EC. Carfib-Cap started in August 2008 and will run over 3 years. It has a budget of around $ 3million to which the EC has contributed 420,000 Euros.
Pacific
Access to financial services in the Pacific island countries is limited because of their geographic fragmentation, demographic dispersion and economic inefficiencies. However, communication technology offers new opportunities to extend financial services to the unbanked in the Pacific. New technologies can significantly reduce transaction costs for clients and financial service providers and open access to remote and isolated areas. The Pacific Financial Inclusion Programme builds on these opportunities.
Pacific Financial Inclusion Programme (PFIP) 
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The PFIP’s objective is to contribute to a sustainable offer of pro-poor financial services by a range of actors, including banks, MFIs, telecom operators etc. using technology and other forms of branchless banking throughout the Pacific. The Programme will do this through the:
(i) creation of knowledge on the financial sector in the region, studies on rural household cash flows and on new organisational models and technology applications;
(ii) dissemination of knowledge through the network, internet and directly working with champions and fostering partnerships;
(iii) support for implementation of pilot projects. Lessons from these pilot projects will feed back into knowledge creation and dissemination stimulating replication.
Ultimate beneficiaries are low income households in Pacific Island States. Direct beneficiaries are financial service providers operating in these countries, their regional network, Microfinance Pasifika and other institutions contributing to a more developed meso and macro level of the financial system.
The PFIP is a joint initiative of the UNDP Pacific Regional Centre, United Nations Capital Development Fund (UNCDF) and European Commission and works closely with Microfinance Pasifika, the regional network. The PFIP has an estimated budget of 5 million$ for 3 years. The EC contributes 400,000 Euros to the Programme between 2008 and 2010 .
Building capacity of ACP policymakers
Policymakers are increasingly getting involved in microfinance, especially following the Year of Microcredit and the Nobel Peace Prize for Professor Yunus and the Grameen bank. The EU/ACP Microfinance Programme offers an opportunity to help policymakers play an enabling role. For example, it awarded 26 scholarships to 30 ACP policymakers to participate in a highly regarded microfinance training in collaboration with the International training Centre of the ILO ( News). The feedback of the policymakers is extremely positive and shows the impact [296 KB] such training can have.
Together with the Central Bank of Central Africa and other funders, the EU/ACP Programme organised a Central Africa Policy Forum in March 2008. You can read more about this. A second edition of this Forum will take place in March 2009 in Kigali, Rwanda.
The Programme will continue to provide more intensive technical assistance funding for capacity building of the Central Banks by providing support for training activities, information systems and advice to strengthen regulatory framework and supervision of MFIs. The EU/ACP Microfinance Programme works closely with the EU/ACP BizClim facility.
