Microfinance African Institutions Network

SAVINGS AND CLIMATE RESILIENCE

A review of successes and challenges in current programming

Development programs are increasingly aiming to support populations already affected by the impacts of climate change through a variety of interventions that aim to strengthen climate resilience. Programs focused on inclusive finance are also designing interventions to reach development outcomes, and within those programs, there are considerable discussions on how savings can contribute to resilience more broadly.

This knowledge review provides insights from across the current literature and shares illustrative examples of programs and activities that are designed to increase climate resilience through the use of savings components. The review focuses particularly on successes and challenges in building up climate resilience, across three dimensions: disaster preparedness, response, and adaptation to climate change.

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CATALYZING WOMEN’S BANK ACCOUNT USE THROUGH COVID-19 RELIEF

Lessons from India on leveraging government transfers to drive women’s financial inclusion

In March 2020 as the COVID-19 pandemic spread worldwide, the Indian government undertook one of its largest relief initiatives to date. From April to June 2020, women customers in the government’s financial inclusion program, Pradhan Mantri Jan Dhan Yojana (PMJDY), received a cash transfer of INR 500 (~ $6.85) per month. The initiative sought to mitigate potential loss of income as a result of the pandemic and bolster the overall financial security of women and their households.

Direct government transfers to women beneficiaries can contribute significantly to women’s financial inclusion by increasing access and usage of financial services. To see if this was happening in India, Women’s World Banking partnered with a leading public sector bank in India to assess the effect of COVID-19 relief payments on the account activity of approximately 318,000 women customers during lockdown. In this blog, we reflect upon key findings from our study and propose solutions which could help build women customers’ financial resilience amidst a global pandemic.

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MICROFINANCE IN EAST AFRICA SCHEMES-FOR-WOMEN-IN-THE-COFFEE-SECTOR

The coffee sector has a huge potential to contribute to poverty alleviation in East Africa, but the sector’s development is hampered by a lack of savings and credit facilities. Moreover, women’s access to financial services is even more restricted than that of men, and most women in rural areas continue to save in secret hiding places, and borrow from shops, agricultural input wholesalers or agro-vets. Microfinance in East Africa – Schemes for Women in the Coffee Sector aims to give an overview of the savings and credit landscape relevant to women engaged in the production and processing of coffee, particularly in Uganda and Kenya. It explains reasons for the limited microfinance coverage of women engaged in the sector, and provides suggestions to increase it. It also offers an easy overview of who-is-who in microfinance in East Africa with services targeted at women and the coffee sector.

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After the merger of MAIN & AMT which took place during the African Microfinance Week in 2017, the “Project of transparency promotion and development in microfinance sector in Africa” is in progress. Transparency is an essential value that still has a long way to go in African microfinance industry. To gain the confidence of investors and clients and finance the development of their activities, Microfinance Institutions (MFIs) must set up transparency policies detailing their financial and social performance and information provided to clients.

After two Tainings of Trainers (ToT) in transparency in 2019, personalized coaching on financial education, training on financial analysis and social performance, the year 2020 was the beginning of implementation of transparency actions in African MFIs. Also in 2020, Transparency Pact was proposed and signed by institution’s members wishing to commit to greater transparency in their practices, with key element as collecting, analyzing and publishing financial and social data on ATLAS. At the end of 2020, MAIN organized an online transparency project capitalization workshop to present the activities carried out, the results achieved and the main lessons learnt with more than sixty members who participated in this online workshop.

Forty-Five (45) institutions, either 47% of member microfinance institutions, have signed the Transparency Pact, including forty (40) French-speaking and five (5) English-speaking institutions. The Pact offers two options for the publication of financial and social data, one nominative (option 1) and another anonymous (option 2). Thirty (30) institutions, including twenty eight (28) French-speaking and two (2) English-speaking, chose option 1 and fifteen (15) institutions, including twelve (12) French-speaking and three (3) English-speaking, chose option 2; either 67% of the signatories of the Pact have chosen to publish their data  nominatevely and 33% have chosen to remain anonymous.

Of the forty-five (45) institutions that have signed the Transparency Pact, twenty seven (27) have sent their Factsheets for 2019 to MAIN, meaning 60% of the institutions that have signed the Pact. Out of these twenty seven (27), there are twenty (20) institutions, including eighteen (18) French-speaking and two (2) English-speaking for option 1. Seven (7) institutions that have opted for option 2 are exclusively French-speaking. This effort that you have made has been highly appreciated by the executive direction of MAIN.

MAIN Transparency Awards were created to reward institutions that respect good transparency practices. During the capitalization workshop, MAIN presented the Awards for the twenty one (21) institutions that have kept their commitments and shared their social and financial data. Three of the last received the “Gold” award consisting of a video clip highlighting their efforts in terms of transparency. Thirteen (13) others received the Bronze award and five (5) the Silver award.

We hereby, would like to urge members of the network who have signed the transparency charter to share their Factsheet from last year (2020) with MAIN during this year 2021, and invite other members of the network, to be part of this dynamic. MAIN wants to become a center of competence in matters of transparency which informs about international standards and disseminates good practices.

This requires the mobilization of all members of the network because your commitment to transparency will be a great achievement for the sector and for microfinance players in Africa. Do not hesitate to visit our dedicated page on https://www.mainnetwork.org/programme-transparence/ or contact us to find out about the next actions on transparency.

The Executive Direction