AMMONNEWS-The United States Agency for International Development (USAID) and the Foundation for International Community Assistance (FINCA) Jordan Tuesday signed an agreement to launch Youth Financing (YF) project to help enhance micro and youth business environment as part of USAID country’s initiative for reducing poverty.
Under the agreement, FINCA proposes to ensure that the most disadvantaged segments of the population are able to reap economic benefits through microfinance, by providing technical assistance to the USAID in addressing challenges Jordan is facing in increasing the number of jobs available to Jordanians, enhance competitiveness of the private sector and empowering the youth aged 18 to 26.
In a statement released today, FINCA said it proposes to develop a Youth Finance project and offer practical business training for disadvantaged youth in Jordan. The project will refine an already existing Sharia-compliant youth loan product and will offer it as an optional component to its full menu of loan products including Individual Loans, Micro Group Loans and SME loans.
The project is expected to disburse 900 loans in two years to disadvantaged youth throughout Jordan including Amman, Mafraq and Northern Shuneh.
About 98% of FINCA’s clients in Jordan are women, who are expected to be the primary beneficiaries of the Youth Financing (YF) project. FINCA has extensive experience servicing the underprivileged female sector of the population and in developing this program, thus it will take into account the unique needs and circumstances of young women in Jordan. FINCA started operations in Jordan in 2007, and aims to expand its operations in targeted under-served areas in the kingdom where there are wide spread Poverty Pockets. FINCA Jordan team are committed to maintaining their corporate mission to implement sustainable and long-term solutions to the needs of clients. As of July 2012, FINCA Jordan has 15,000 active borrowers served from branches in Amman, Zarqa, Sahab, Zeizya, Jerash, DeirAlla, and Northern Shuneh.
Another million dollars will be allocated to a microfinance program designed to help those affected by HIV after its pilot proved “successful” over the past year, Dan Tri reported Friday.
The additional funds will help maintain a broad range of services, including insurance, for the demographic through 2015, Jonathan Ross, director of United States Agency for International Development (USAID)’s Office of Health, said during a seminar in Hanoi on Thursday.
USAID and several Vietnamese lending institutions implemented the pilot program a year ago, targeting people who are living with or affected by HIV, and who are at high risk of becoming infected by the virus.
150 people have so far received loans totaling nearly VND2 billion (US$95,500) from the Vietnam Bank for Social Policies and the Vietnam Women’s Union’s Tinh Thuong One Member Limited Liability Microfinance Institution, Dan Tri reported.
The recipients used the funds to set up small businesses like groceries, Doan Thi Quy, member of the presidium of Vietnam Women’s Union, said.
Many women have used the loans “efficiently,” Quy was quoted as saying, adding that the project has helped increase the incomes of HIV affected families.
As of the end of last month, 100 percent of the Tinh Thuong borrowers in Hanoi, the central province of Nghe An, and the northern province of Thai Nguyen had repaid their debts, according to a statement released by USAID on Thursday.
Ninety-five percent of the bank’s clients in Ho Chi Minh City have also repaid their obligations, the statement said.
Around 254,000 people are currently living with HIV in Vietnam, and half of them are in need of antiretroviral drugs for treatment, Dan Tri reported.
More than 20 percent of HIV patients contracted the virus from injection drug use. That figure climbs to 60 percent in some areas, it added.
Since 2004, USAID and the US President’s Emergency Fund for AIDS Relief have contributed more than $500 million to various programs to support Vietnam’s efforts to prevent and control HIV/AIDS as well as to care for those infected or affected by the disease, according to the agency.
SOURCE: Thanh Nien News
From Voice of America
Microfinance is a key component in fighting poverty in Iraq. Small loans enable citizens to begin or maintain small businesses, called microenterprises. The United States Agency for International Development’s Tijara program provides funding for nine microfinance institutions, serving all of Iraq’s eighteen provinces.
Loans for poor and low-income citizens barely existed when USAID arrived in Baghdad in 2003. Before then, said USAID Deputy Assistant Administrator Chris Crowley in an interview, the banking industry “only financed [a] really large enterprise – the oil sector in Iraq.” As a result, entrepreneurs and owners of small-staffed businesses lacked the necessary resources to get started and flourish.
Due to microfinance loans, hundreds of thousands of jobs have been created in Iraq since 2004. Since that time, $808 million in loans have been distributed with an average of $1,500 each. The number of loans distributed totaled 344,000. In September 2011, USAID reported a 98 percent loan repayment rate.
The microfinance institutions funded by USAID also provide training and technical assistance. The goal is to stimulate private sector growth and create jobs, said Assistant Administrator Crowley:
“This microfinance industry is now spread out all over the country, and it is one link in the financial development that has to take place…if its economy is going to improve overall and jobs are going to be provided at every level.”
However, said Assistant Administrator Crowley, the success of microenterprises positively affects all economic levels:
“The microfinance industry. . .has allowed us to move up to small and medium enterprises as well, improving the banking system at those levels so that somewhat larger loans can be made to larger sized businesses.”
To aid small to medium sized businesses, USAID funds the Iraqi Company for Bank Guarantees, which supplies up to 75 percent loan coverage to private banks for loans varying from $5,000 to $250,000. This will allow Iraqi banks to increase investment in the private sector and improve economic growth.
USAID/Tijara will continue to “work very closely with the banking system in Iraq, both public and private,” Assistant Administrator Crowley said, “in order to increase the availability of funding for both micro and medium-sized enterprise…[The program has] been a substantial success.”
By Dias Nyesiga, The New Times
Rwanda Integrated Improved Livelihoods Program (IILP) will soon inject US$ 12.5 to boost access to finance among the rural poor.
Amy Davis, chief of party United States Agency for International Development -USAID said the project locally known as USAID Ejo Heza (A brighter future) aims at building the capacity of low income households to effectively identify and access appropriate financial services necessary to strengthen their enterprises.
The project is a subsidiary of US President Barrack Obama’s initiative of Feed the Future global project and is crafted by CHF international with funding through USAID.
It is expected to bring over 75,000 poor people out of poverty in selected districts that include Rutsiro, Karongi, Nyamagabe, Nyaruguru, Nyanza Huye, Gisagara and Ngororero.
“We will assist financial service providers to develop and deliver effective products to the rural market and also facilitate linkages to access formal finance,” Davis told Business Times at the project’s launch late last week.
The Rwanda Economic Update, published by the World Bank last year highlighted that Household Enterprises (HEs) are the main source of livelihood for over 30 percent of households in Rwanda.
It provides nine percent primary employment of the labour force, and efforts to promote it (Household enterprises) will reduce poverty.
Davis notes that the project will enhance internal saving and loan group formation, strengthen existing ones, create another 2,000 groups and conduct certified financial education series for master trainers.
Its target is to improve livelihoods and food consumption of Rwanda’s poor, especially women. It will focus on maize, beans and dairy farming.
To be implemented, the project will use the Household Economy Approach, a livelihoods framework that analyses the way people get access to things they need to survive and prosper.
It therefore determines people’s food and non food needs besides identifying appropriate means of development assistance.
Financial experts believe that the project will entice financial institutions to move to rural areas to bank the unbanked and also gear up their efforts to encourage rural folks to save. The move has seen more Microfinance Institutions craft products suitable for the rural poor.
“If financial capability of an individual is built and access is strengthened, it is obvious that financial inclusion is obtained,” Jessica Masse, a financial consultant said.
Rita Ngarambe, Executive Secretary of Association of Microfinance Institutions of Rwanda-AMIR, is optimistic that the project will help boost MFIs efforts to serve the rural poor, respect pricing while cultivating a savings culture.
Jean-Pierre Munyaneza, a dealer in cereals noted efforts to boost the market chain will help promote agro business and see farmers pocketing more money from their produce.
“If you help farmers to store their produce, learn how to produce for the market and understand savings, it is enough to fight poverty,” he asserted.
From Daily Champion
Chairman of Accion microfinance bank limited, Mr. Patrick Akinwumi has said the impressive result recorded by the bank in the financial year ended December 31, 2010 came as a result of a good corporate governance strategy introduced in the bank.
This is even as the bank said it recorded a net profit of N93, 123,000million representing 22.7 percent in the year ended December 31, 2010.
According to the bank’s chairman, “We have recorded impressive result primarily because of very good corporate governance. We have an institutional framework. There is a proper balance between the roles the board and the management. Second and perhaps most important, we have recorded progress because of the acceptance of customers of our services, as they find our services convenient, accessible and reliable.
“We are getting to have repeat business. In our first two years, we had to sell our products and services to customers who are relatively new to us. As we enter our third year and fourth year, we are having customers that have done a repeat business, they are beginning to grow and as they are growing, we are also growing,” he said.
Speaking further he said, other factors that led to the growth were staff performance and information technology (IT) platform, adding that the bank have invested significantly in training and leveraging on partnership with Accion International, and have been able to bring in good training resources to ensure best practice in its procedures.
He said, “In terms of processed and procedures, we also have a very strong IT platform which informs that we have standardize approach to doing things and it’s done very fast and in a reliable manner. This is our country; we have to renew our faith in our country. So, we are keen in training young graduates to learn and to grow in microfinance business and of course, with technology and processes. So, these four components are the reasons for the successes that we have achieved. Now, with even a more stable political environment, the institutional framework, we have even more hope that we will continue to grow impressively.
“Of course, we keep our eye on our controls, both the quality of our assets with all the problems that happened last year in the industry, we have not had any of those issues because we keep our eyes on those controls and the quality of our assets,” the chairman stated.
The bank’s profit before tax grew by 42 percent from N106.6 million in 2009 to N150.8 million in 2010. Its savings deposits also grew by 45 percent from N204 million in 2009 to N295 million in 2010.
The number of active savers and borrowers increased by 45 percent and 19 percent, respectively, to 47,071 active savers and 9,473 active borrowers at the end of 2010.
In its four years of operation, the bank has successfully disbursed over N6.5 billion to its customers, closing the year 2010 with an active loan portfolio of N1.091 billion, up by 28 percent, N850 million in 2009.
Akinwuntan noted that the bank this year collaborated with the United States Agency for International Development (USAID) in expanding its reach to the private health sector, through USAID health guarantee loan scheme that expands opportunities for micro-entrepreneurs in the private health sector industry to secure loans to improve family healthcare delivery in Nigeria.
However, the major outlook for the bank in 2011 was growth-based, to take advantage of the huge demand for the products and services it offers. This includes setting up new branches in Surulere and Agege areas of Lagos State, while undertaking the upgrade of existing business units.
From Rural Bankers Association of the Philippines -
With microfinance making a head way in the countryside’s, the next logical advance among rural banks is providing the country’s poor with micro insurance. An oft quoted line in the rural banking industry is that microcredit provides the poor with their current financial needs while micro insurance provides for their future financial requirements.
The country currently has a low insurance coverage level, which based on Insurance Commission data is only 13.9 percent of the population, more so with the poor with only 2.9 million of the 27.6 million Filipinos below poverty line having some form of cover for their future.
Most of the poor in the rural areas are farm workers and are considered the most susceptible to weather changes, hence, they being the most in need of ample insurance cover.
The United States Agency for International Development (USAID)-backed Microenterprise Access to Banking Services (MABS) program of the Rural Bankers Association of the Philippines (RBAP) has been holding a series of forums, the latest of which was on Sept. 17, to propagate the microinsurance business in the countryside primarily through the training of its bank members.
RBAP-MABS seminars and workshops provide RBAP member rural banks with information on initiating the process to become licensed microinsurance agents.
Last February, the Bangko Sentral ng Pilipinas (BSP), through its policy-making Monetary Board, had allowed rural, cooperative and thrift banks to sell or distribute microinsurance policies.
The Monetary Board said its decision to vest rural banks with the authority to sell the key financial service was reached because these banks are ideal insurance distribution channels and trusted financial institutions in the countryside with a deep knowledge and understanding of the low-income market.
Subsequently, the BSP issued Circular 683 providing the rules and guidelines for rural banks to market, sell and provide microinsurance services through partnerships with reliable insurance providers.
Before the Monetary Board ruling, rural banks’ main insurance service is credit life bundled into loans, while big financial institutions offer bancassurance or the sale of insurance policies within their premises.
Rural banks cannot afford the five percent stake requirement on insurance firms to be able to offer their own bancassurance service.
Now rural banks can partner with established insurers, with the banks’ participation involving the dissemination of information and acting as collection agents of insurers. The BSP ruling opened up life, crop, and property insurance policies to more of the countryside population.
Microinsurance is an integral service that protects not only the insured rural folks but also the availability of lending since banks will have less to worry about with the radical shifts in weather affecting farm businesses and consequently their loan exposures.
Crop insurance, for instance, provide farmers affected by natural calamities the seed money to restart their lost business.
The RBAP currently have partner-insurers for its member banks established insurers AA International, Country Bankers Life Insurance, Philippine Prudential Life, PhilAm Life, Pioneer Insurance, Malayan-Grepalife and MicroEnsure Philippines.
RBAP’s earnest efforts to propagate microinsurance also received a big boost from a $100,000 grant from the International Labor Organization (ILO) under the Microinsurance Innovation Facility, which was launched in 2008 with the support of a grant from the Bill and Melinda Gates Foundation that was made available to RBAP’s research and training arm Rural Bankers Research and Development Foundation Inc. (RBRDFI).
The grant will primarily fund training and technical assistance for rural banks to partner with insurance companies in providing microinsurance to about six million rural bank clients.
As a result of the grant, the RBAP-MABS Microinsurance Initiative was formed in which a turn-key, batching system for licensing and accreditation of rural banks as microinsurance agents will be instituted as well as installing an SMS-based client feedback mechanism to aid in micro-insuranc product enhancement. An online resource hub for easy access to market information relevant to rural banks, commercial insurers and regulators will also be set up.
According to an ILO study on the local microinsurance industry, three risks emerge as the greatest concerns for rural businesses which are illness or accident of the entrepreneur or a family member; natural calamities such as typhoons; and basic business risks such as high competition and low demand.
Microinsurance was seen in the study as having the potential to reduce vulnerability of rural residents from these risks.