Paris Microfinance Network

The African Enterprise Challenge Fund Launches

The 17th World Economic Forum (WEF) on Africa kicked off Wednesday with the leader of the House of Lords in the United Kingdom announcing one of the first donations to a new fund aimed at supporting businesses in Africa.

Baroness Amos told reporters at WEF-Africa that Britain would be contributing US$20 million (approx R140 million) over three years to the recently announced Africa Enterprise Development Fund, set up to encourage entrepreneurship on the continent.

The UKs contribution is a significant boost to the Africa Enterprise Challenge Fund which aims to stimulate private sector entrepreneurs in Africa. This is the right approach because encouraging small, independant businesses and entrepreneurial ideas helps developing countries reduce poverty and create sustainable business growth. The fund will look to support businesses which innovate and find profitable ways of improving access to markets and the way markets function for the poor, particularly in rural areas.

It will do this by offering grants, matched by private sector contributions, to innovative business ideas which encourage greater participation of poor people in markets – as consumers, workers or entrepreneurs. It will become operational in early 2008 and will have a minimum capitalisation of $50m when fund commences. It will be hosted in a multilateral institution or a private foundation based in Africa and operate across Africa and primarily aimed at established companies capable of implementing and co-funding relevant projects.

CGAP Virtual Conference

CGAP, the Consultative Group to Assist the Poor, a global resource center for microfinance standards, hosted a Virtual Conference last week entitled, "Vision 2015: What Does the Future of Microfinance Hold?" The conference was held from February 26th - March 2nd starting with a discussion within the ambit of global forces affecting microfinance, and succeeded daily with a different sub-topic – technology, government role, funding. On the last day, CGAP sought participants' input on the future role they believed CGAP should play in working towards universal access, this topic is still open for final comments.

We found each daily discussion to be quite lively and included valuable feedback & ideas from a wide variety of practitioners in the sector. For example, in the Technology discussion there was much focus on advanced distribution channels such as mobile banking, Biometrics and POS technology. However, a pertinent theme of the discussion focused on the need for MFIs to firstly develop a core IT foundation that is stable & efficiently delivers upon the MFIs business strategies & needs (such as efficient enterprise software systems) before launching into additional technology channels.

Day 4's funding discussion touched upon the need for private investors to diversify their investments rather than continuing to focus on the same top MFIs. Additionally, we discussed the idea that perhaps the donor investment organizations should focus more on the least developed MFIs in need of funding for basic growth capacity building?

The online discussions were facilitated by microfinance industry experts and writers of CGAP’s paper, “Four Scenarios for the Future of Microfinance,” Elizabeth Littlefield, David Porteous, and Brigit Helms.

First European Microfinance Award

At the annual 'MicroFinance Week' conference in Luxembourg, held November 29th thru December 1st, the first European Microfinance Award (100K euros) was granted to the Zakoura Microcrédit Foundation of Morocco. The contest, organized by the European MicroFinance Platform (e-MFP), aims to reward the MFI with the most innovative financing program for rural outreach. Zakoura was one of 45 MFIs competing from around the world that have launched successful rural outreach programs.
Zakoura developed & launched a far-reaching rural tourism program that has been succesfully operating since 2003. The program has provided funding & support for more than 950 tourism projects for small hotels (gites), tourist services, atelier visits, etc. in areas such as the remote areas of the Atlas Mountains.

Article in French.

SEEP Network '06 Conference

Seep Network held their annual conference in October in DC bringing together 100's of MFI leaders to discuss important topics such as Social performance, Consumer protection & Market Development. Simultaneously, the Omidyar Network hosted an Investor Roundtable with many of the top investment leaders to discuss topics such as Capacity Building & Funding segmentation.

A serious effort is needed from the Investment community to enhance capacity building for MFI to ensure funding is as far reaching as possible. Can these MFIVs be less risk averse?

You can check out the presentations from the week to learn more.