World Bank provides funding to unleash the economic potential of Ethiopian Women Entrepreneurs

WASHINGTON, May 24, 2012 – The World Bank’s Board of Executive Directors today approved a US$50 million credit from the International Development Association (IDA*) for the Women Entrepreneur Development Project to help open doors for female entrepreneurs in Ethiopia and give them access to appropriate skills and employment opportunities to contribute to the country’s economic growth.

The Bank is committed to help in creating equal access to the necessary resources for both female and male entrepreneurs in Ethiopia so that they can develop their business and generate employment in the country” said Guang Z. Chen, Country Director for Ethiopia.

Major obstacles that hinder the role female entrepreneurs can play in Ethiopia’s economy include limited access to vital resources such as finance, land, training, education, and effective business networks. Particularly, the microfinance institutions in Ethiopia have a low coverage for women entrepreneurs and do not provide suitable financing.

In order to alleviate these challenges, the World Bank has created an innovative project specifically targeted to female entrepreneurs in Mekele, Bahir Dar, Hawasa, Adama, Addis Ababa and Dire Dawa.

The project aims to increase the earnings and employment of Micro and Small Enterprises (MSE) owned by female entrepreneurs by improving access to financial services and by providing working capital and investment finance through a dedicated line of credit. It will also improve existing Micro Finance Institutions’ capacity to provide tailored financial products to these female entrepreneurs.

According to recent estimates, in addition to creating employment for women in the economic sectors, reducing gender inequalities in education and the labor market could increase Ethiopia’s annual GDP growth by almost 1.9 percentage points.

In addition to providing financing, the project will build the women entrepreneurs’ skills, facilitate their access to technologies that will help them be more productive, and unleash synergies from clustering.

“The project will give women entrepreneurs the necessary finance, skills, services and support that they are currently lacking to grow their business,” said Yasmin Tayyab, Task team leader for the project. “As a result, this will help to substantially increase their earnings while at the same time creating jobs for Ethiopians.”

SOURCE: World Bank

Making microfinance work for Ghana

World Bank Ghana OfficeUKaid -

UKaid and the World Bank have launched an online consultation to help them identify ways to strengthen the microfinance sector in Ghana(and the rest of Sub-Saharan Africa), and they want to hear from you!

Microfinance still has a long way to go in order to meet the needs of existing and potential customers across Sub-Saharan Africa. Recognising this, UKaid and the World Bank have helped the Government of Ghana to strengthen the policy and regulatory environment governing the microfinance industry to make it more efficient and fair for Ghanaians to access.

The next step is to estabilsh a fund to help strengthen microfinance providers in Ghanaand the rest of Sub-Saharan Africa, so that they can improve their services for existing customers and extend their outreach to serve new customers. The initiative will be known as the Microfinance Capacity Building Facility for Sub-Saharan Africa (MICFAC).

UKaid’s acting Country Director, Mr Daniel Graymore, commented microfinance has enormous promise to support growth in Ghana. This consultaion will help to ensure it delivers on this potential, particularly for women and girls.

Currently only a very small proportion of the adult population of Sub-Saharan Africa has access to formal financial services. Microfinance has helped to increase this proportion in recent years but on average more than half of the adult population in Ghanadoes not have access to quality financial services.

MICFAC will operate in the 39 International Development Association (IDA) countries in Sub-Saharan Africa and is expected to be operational for at least 5 years. Visit http://consultation.dfid.gov.uk/microfinance2010to share you views on how UKaid and the World Bank should support microfinance providers across Ghanaand the rest of Sub-Saharan Africa.

Q and A for the editor
UKaid and World Bank are setting up a new facility to help increase the outreach of microfinance services throughout Ghanaand the rest of Sub-Saharan Africa and want to hear from you. The consultation is located at http://consultation.dfid.gov.uk/microfinance2010.

What are UKaid and World Bank proposing?
The Microfinance Capacity Building Facility for Sub-Saharan Africa (known as MICFAC) is a new joint initiative from the UKaid, the public face of the UK’s Department for International Development (DFID), and the World Bank which will assist in tackling key constraints to the outreach of microfinance services. The objectives of MICFAC are:

to build the capacity of existing microfinance providers to enable them to sustainably serve poorer clients;

to increase the supply of microfinance providers to serve new clients and new markets; and

to increase the quality and supply of providers of microfinance capacity building services.

MICFAC will operate in the 39 International Development Association (IDA) countries in Sub-Saharan Africa (for a list please see www.worldbank.org/ida). World Bank and UKaid expect MICFAC to be operational for not less than 5 years.

What is the state of microfinance in Sub-Saharan Africa

Only a very small proportion of the adult population of Sub-Saharan Africa has access to formal financial services. Microfinance has helped to increase this proportion in recent years but on average more than 80% of the adult population of Sub-Saharan Africa does not have access to quality financial services. Without access to financial services, the poor remain vulnerable to shocks, cannot save money, build assets or invest in income generating activities.

There are many constraints to increasing the outreach of microfinance to the unbanked poor in Sub-Saharan Africa and amongst the most pressing are: the limited number of microfinance providers; and the institutional weakness amongst existing microfinance providers.?

What is the current status of MICFAC?
MICFAC is currently under design. The first phase of the feasibility and design study for MICFAC is now nearing completion. The scope of the work was:

(i) a microfinance provider capacity building needs assessment; and

(ii) (ii) an assessment of existing institutional capacity to channel funding from MICFAC to microfinance providers and to effectively deliver capacity building services to microfinance providers.