AfDB Launches Microfinance Capacity Building Fund
The African Development Bank Group (AfDB), in partnership with the Government of Spain, yesterday launched the Microfinance Capacity Building Fund for Africa. Its purpose is to help strengthen capacity building efforts in the financial sector that benefit poor and low-income populations in the continent, particularly women and those living in rural areas.
Microfinance in Africa has proven to be a powerful tool to promote inclusive economic growth and generate employment. Yet the sector is fragile and its outreach is limited: only one in five households have a deposit account with a regulated financial institution, compared to an average of one-and-a-half in five in other developing regions, and four in five in developed countries.
Indeed, the core mission of the Microfinance Capacity Building Fund is to deepen the outreach of the African financial sector by developing inclusive financial sectors that are composed of diverse institutions providing permanent access to a wide and adapted variety of financial services for a broad range of poor and low-income people. The fund will help increase transparency within the microfinance sector, supporting projects in rural areas and empowering women. It will provide technical assistance at three levels: at the micro level to retail institutions, at the medium level to market infrastructure, and at the macro level for legal and regulatory framework and supervision.
The Microfinance Capacity Building Fund will provide technical assistance across various parts of Africa. The fund will provide awards through three separate Calls for Proposals, occurring annually over the course of 2011 – 2013. Each call will focus on a specific area(s) of intervention and a specific set(s) of African countries.
The Microfinance Capacity Building Fund gets underway with immediate calls for applications for innovative projects to increase transparency within the microfinance sector. Acknowledging that a lack of transparency in the microfinance industry is a key barrier for a microfinance institution to raise capital, gain confidence from clients, and therefore grow, expand, and deepen outreach, this area will address capacity-building needs at the retail, market infrastructure, and regulatory levels.
The Call for Proposals opened on July 19, 2011 and will close on September 19, 2011. Under this Call for Proposal, the Fund is seeking proposals from countries from the West African Economic Monetary Union: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. Other countries within the Economic Community Of West African States region such as Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone will be considered on a case by case basis. Award amounts will range from approximately 200,000 Euros to 500,000 Euros per project, depending on the activity, and will be given to a total of approximately eight to 100 awardees.
This article was originally posted on Sustainable Development Africa Platform
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