Newsletter – January 2019

Great progression of financial inclusion results in the West African Monetary Union (WAMU):

The Central Bank of West African States (BCEAO, in french) updated the results of its quarterly summary on the microfinance sector evolution for September 2018 ( Compared to the same period in the previous year, the number of beneficiaries has increased by 9.1% which make more than 15 million persons at present. Over the same period, deposits to MFIs has increased by 9.1% as well, meaning that 1 335.5 billion CFA were saved and the average individual deposit is worth 87 118 CFA. Then, while the number of people with access to microfinance services has increased, the number of MFIs has decreased, from 626 institutions in 2017 to 593 in 2018. Regarding the level of portfolio degradation rate, it has been estimated at 8.88% on average in the WAMU zone (compared to 6.5% in 2017) for a supposed standard of 3% in the sector.


Four tracks for digital finance in East Africa:  

The exponential development of digital finance is a development factor. It contributes to the national economic performances and to private sector prosperity. Despite all its promises, digital finance will bring the East African countries into the 4th Industrial Revolution only if certain barriers are lifted. Here are the four points raised to establish an effective digital economy:

  • Creating effective addressing systems: to develop online commerce, home deliveries and services between individuals, it is necessary for citizens to have real street addresses, which also facilitates the collection of State taxes.
  • Enabling digital identification : in order to make more procedure able to be taken online (invoice payments, administrative procedure, inscriptions), citizens must be able to prove their identity through digital channels, especially with facial, digital or retina recognition.
  • Online land registration : As a recurrent problem on the continent, the security land should be ensured by online services in order to ensure equal treatment over all territories.
  • Interoperability of payments : the various solutions of digital payment offer great opportunities but suffer from the incompatibility between the different operators. Interoperability facilitates economic exchange as proven by the recent experience of Kenya.

Madagascar, use of arbitration for debt recovery:

A three-year agreement was signed between the Madagascar Arbitration and Mediation Center and the Professional Association of Microfinance Institutions. In case of litigation between an MFI and a client regarding debt repayment, arbitration is an interesting solution to pacify tension between both parties through the intervention of an external mediator. “The system aims to be very fast […] and low cost, compatible with the economic realities of MFIs. This approach is part of the national strategy for financial inclusion, which aims to bring the number of adults with access to formal financial services from 29% in 2016 to 45% in 2022.

Why MFIs must have clients protection policies:

The Association of Microfinance Institutions of Rwanda (AMIR) urged the main players in the sector to design appropriate products in order to improve client protection and reduce losses for both clients and microfinance institutions. The lack of client protection policies leads to losses for both clients and MFIs. It has been established that client protection is one of the ways to reduce non-productive loans that reached 12.3% in June 2017. Seven client protection principles were built by the SMART Campaign, a global action that brings together initiatives on client protection in microfinance. These principles recommend: designing appropriate products, preventing over-indebtedness, ensuring transparency towards customers, having responsible pricing, ensuring respectful and equitable treatment of customers, ensuring confidentiality of their data and proposing a formal mechanism for complaints resolution.

Training on “Social Performance Management as a tool for improving customer satisfaction”:

MAIN organized in partnership with the Consortium Alafia (APSFD Benin) a training workshop on “Social Performance Management as a tool for improving customer satisfaction”. The training was held in Cotonou from 16 to 18 January 2019 at the “Chant d’Oiseau” center. It has brought together 23 participants representing 16 institutions from 5 African countries (Togo, Burkina Faso, Benin, Chad and Mali)

The objective of the training was to introduce participants to the concept of Social Performance Management (SPM) and then to make them understand how to strengthen and measure customer satisfaction. More specifically, the goal of the training was to enable participants to:

  1. Explain the Universal Standards for Social Performance Management (USSPM)
  2. Fill in the SPI4 tool
  3. Explain the benefits of SPM to customer satisfaction

The two transverse themes discussed during the training were the Universal Standards for Social Performance Management (USSPM) designed by the Social Performance Task Force (SPTF) and the Client Protection Principles (CPP) enlightened by the SMART Campaign. These themes are international standards established to maximize the impact of microfinance on development and thus to achieve its original mission. The USSPM are made of a set of criteria divided into 6 dimensions which take in account the various aspects of the practices to be implemented for a useful microfinance to its customers that is able to ensure its own sustainability. The CPP, whose 7 main principles are integrated to the USSPM, focus on the clients’ interests and their protection against risks related to financial services.

These themes are each subject to specific monitoring tools, including the SPI4 tool for social audit of MFIs and the the SMART Campaign assessment questionnaire for MFI certification. Participants were trained in the use of these tools and their application methodology. It has been established that an effective integration of these good practices into their management processes, financial service providers will improve customer loyalty and their operations results. Participants leave this workshop motivated and committed to promote social performance within their institutions.
The training was really appreciated by the participants and the lessons learnt will contribute to the improvement of service quality for better client satisfaction.

Upcoming Events :

African Interest-Free Banking & Finance Forum:
On 6th February 2019, a forum on finance without interest rates will be held in Addis Ababa. The forum will focus on the potential of the interest-free finance market, its latest trends and the challenges and new opportunities in this sector in Africa. More than 18 countries will be represented at the event.

Information Communications Technology for Development Conference: 
The 11th Conference on Information and Communication Technologies for Development (ICT4D) bring together private, public and civil society organizations in the humanitarian and international development sector. From April 30th to May 3rd 2019 in Kampala, Uganda, participants will discuss how they use technological innovations to improve the impact of their activities.

Annual Africa Banking and Finance Conference:
From 24th to 25th April 2019, the annual conference of the African bank and finance industry will be held in Nairobi, Kenya. The program will focus on African microfinance, financial inclusion, technology in the banking and financial sectors and many other topics. An exhibitor space will be set up for actors who wish to expose their products, services and solutions.

Business Plan Training and financial projections (Microvision, new Microfact tool):
From March 18th to 22th 2019, ADA organizes in Luxembourg and/or in Belgium a training in business plan and financial projections design for microfinance, based on the Microfact Microvision tool with Chuck WATERFIELD as a facilitator. Microfact is a joint initiative of ADA and BRS aiming to strengthen the financial and social performance capacities of microfinance and micro-insurance institutions. To do this, Microfact offers a set of tools and will soon launch its new Microvision tool, enabling MFIs to develop 5-year financial projections.

2019 Microfinance Conference:
From 7th to 8th February 2019, the Faculty of Social Sciences, College of Humanities and Legal Studies, University of Cape Coast in Ghana will organize their annual Microfinance Conference. Since 2006 the Conference has attracted local and international participants from the industry, academics, governmental organizations, ministries and development partner institutions. The tenth in the series will be organized under the theme: Microfinance and the Sustainable Development Goals.

Training in “Driving Strategic Innovation in Inclusive Finance”:
From 18th to 22th February, the Microfinance Association organizes an executive education program in Johannesburg, South Africa in “Driving Strategic Innovation in Inclusive Finance”. Its aim is to provide high-level management and leadership training to those shaping the microfinance industry, including CEOs of leading microfinance institutions and executives of mainstream banks entering the microfinance market. This course will combine lectures, case studies, and use of practical tools to allow participants to explore inclusive financial services models.