By Mam Ndegene Secka, Today Online Gambia -

Mr. Lamin Jobarteh, monitoring and evaluation officer at the Social Development Fund has said that the microfinance scheme of the Entrepreneur Promotion and Micro-finance Development Project (EPMDP) will make available a micro-credit fund of GMD 40 million for wholesaling to experienced and qualified non bank financial institutions in the country. He said this while presenting a paper on the micro-finance component of the EPMDP/ SDF at the just concluded regional launching of the EPMDP project held across the country.

According to him, the component would support the development of the National Microfinance Policy as well as strengthen micro-finance regulatory environment and capacity building of non bank financial institutions and nongovernmental organizations as well as support the expansion of financial services and improvement of access to finance by the rural population.

Jobarteh noted that the micro finance component of the EPMDP is designed to provide increased financial services to enable beneficiaries utilize the knowledge and skills acquired under the basic business management and appropriate skills development activities of the project to establish profitable small and medium scale enterprises.

He noted that it would also support the development of sustainable and self-sufficient financial intermediaries that can effectively increase outreach to marginalised communities to increase their economic productivity.

According to him, this component has two sub-components which include the micro-credit fund, and capacity building and institutional development. He said the micro-credit fund will address the gap between the high level of demand and the constrained supply of microfinance services, increase the outreach of the Gambian NBFIs to emerging and existing small and medium scale enterprises and would also provide a revolving fund of maximum of GMD 40 million which would be given to licensed and eligible financial intermediaries/ organisations acceptable to the project. He added that the core objective of the sub-component is to make loan resources available to such segment of the population which currently has no access.

“In this sense, the fund will wholesale resources progressively as the capacities of the NBFIs in the country are strengthened to deliver the loans to new and existing clients. This is also expected to enable the maximum outreach nationwide during the project life while at the same time allowing the sector and the NBFIs to grow,” Jobarteh said.

He noted that criteria for eligibility to the micro-finance fund include that the NBFIs should have a demonstrated track record in financing MSMEs. Only eligible NBFIs would have to submit a request including a business plan detailing their portfolio financing needs. After this, an institutional assessment study would be conducted to determine the capacity constraints of the NBFIs and ensure that acceptable systems of control and financial management are in place to effectively and efficiently administer the fund. “Preference will be given to those institutions that target women, youth, rural zones, poor population, and promotion of MSMEs. The performance of the partner NBFIs will be closely monitored through a signed MoU between SDF and the NBFIs. A performance reporting framework will be provided to partner NBFIs making reporting compulsory, as part of the terms of the MoU.”

According to him, the project would also provide support to enable the Central Bank of the Gambia to respond effectively to the growth of the microfinance sector through the creation of a conducive regulatory environment.

He said the sub-component of institutional development and capacity building of NBFIs would be based on a demand driven approach to foster their sound development and expansion of their services to the rural areas. The support would lead to the design of a microfinance curriculum which will be offered as a Microfinance Management and Development (MMD) diploma course by GTTI, and MDI.

“NBFIs will also be trained in development of loan appraisal tools and guidelines for assessing client’s economic activities. Thus, communities will be exposed to a refresher training, to be undertaken by the participating NBFI staff, on the following areas: Basic Bookkeeping, producing basic financial statements with a view to determine their assets, net income, cash flows and financing needs, in addition to sensitising the clients on the NBFI specific repayment requirements,” he added.

Mr. Jobarteh also noted that an outreach and expansion grant worth a total of GMD38.4 million would also be made available to encourage qualified and experienced NBFIs to extend their operations into rural areas where financial services are not yet provided. This outreach grant he said would cover eligible operating costs necessary for the opening of new branches of existing NBFIs.