In the context of many success stories of microfinance institutions in developing countries, the Development Bank of Austria (OeEB) has launched the "Microfinance Institutions (MFIs) Upgrading and Rating Initiative in East Africa", a project to further develop the microfinance sector in 6 countries in East Africa (Burundi, Ethiopia, Kenya, Rwanda, Tanzania and Uganda).
Background
Despite the various donor activities and fast development of the microfinance sector in East Africa, large proportions of the population are still financially excluded, which is a significant hindrance to private sector development in particular, and to economic development in general.
The case of Kenya is exemplary of the situation in the whole region. According to a recent study realized by FinAccess for the Financial Sector Deepening (FSD) in Kenya, only 19% of Kenyans have access to formal financial services, while 8% of Kenyans are served by Saving and Credit Cooperatives (SACCOs) and MFIs, and 35% depend primarily on informal financial services such as Accumulating and Rotating Savings and Credit Associations (ASCAs and ROSCAs).
East Africa is facing on the one hand insufficient capacity of MFIs, and on the other hand an insufficient or incomplete regulatory environment that constitutes a hindrance for the development of the sector in general.
Overall objective
The overall objective of the MFI Upgrading and Rating Initiative of OeEB in East Africa is to contribute to a sustainable economic development in the region through promoting financial sector development, especially microfinance.
Specific objectives
- To diagnose a selected number of Tier 3 MFIs in East Africa
- To provide upgrading measures (i.e. capacity building) for these selected MFIs
- To rate these MFIs after successful completion of the capacity building measures
- To provide recommendations for support from the DBA to MFIs in East Africa
Geographical scope
The project targets MFIs in 6 countries in East Africa: Burundi, Ethiopia, Kenya, Rwanda, Tanzania and Uganda.
Main project activities
- Component 1: Country analysis and diagnostics of MFIs
- Component 2: Capacity Building for Tier 3 MFIs in order to reach the Tier 2 level
- Component 3: Full rating for minimum 12 MFIs
- Component 4: Recommendations for support to MFIs
- Component 5: Enhancing Institutional Memory and Know How Management
Project Duration:
The MFI Upgrading and Rating Initiative of OeEB in East Africa is running over four years (4 November 2008 - 4 November 2012).
A project implemented by the » ATC Consortium
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