Côte d’Ivoire, the official name of the country that some still call the Ivory Coast, is among the world's largest producers and exporters of coffee, cocoa beans and palm oil. Situated on the Gulf of Guinea, Côte d’Ivoire was once considered one of the most stable countries in Sub-Saharan Africa. The Ivorian economy experienced steady growth from 1995 through 1999 due to the devaluation of the CFA franc, improved cocoa and coffee prices, growth in non-traditional primary exports, limited trade and banking liberalisation, offshore oil and gas discoveries as well as external financing and debt rescheduling by multilateral lenders and France. Unfortunately, the country experienced a rapid collapse of political order starting in 1999, a situation that degenerated into civil war in September 2002.

The Human Poverty Index of the UNDP shows that over the period 1990-1995, different forms of poverty affected almost 43 per cent of the population in the country. Poverty in Côte d’Ivoire remains fundamentally a rural challenge with almost 42 per cent of the rural population living under the poverty line, against 23 per cent living in urban areas. In 2002 the Gross Domestic Product stood at U$25.5 billion, with a growth rate of –1 per cent, and a GDP per capita of U$1,550.

Microfinance

The microfinance sector in Côte d’Ivoire is speckled with numerous credit unions, and small savings and credit associations. The majority of microfinance institutions were initiated in the early 1990s as a response to the increasing risk of “mobile saving bankers,’ who would often collect money from clients, retain the savings for an agreed period of time, only to disappear with the cash when the time came to return the money. The general perception among microfinance providers during that time was that Ivorians were becoming increasingly dependent on free government funded public ad social welfare services. As a result, many donors, NGOs and the Government have recently started promoting financial services to the poor segment of society through credit projects, on the premise that, "yes, we can give people money, but now they have to pay it back". In 1995 alone, the microfinance sector contributed over 20 per cent to Côte d’Ivoire‘s GDP and provided almost 30 per cent of the country’s employment. However, access to credit is still a major obstacle inhibiting further development of this sector. The local microfinance providers in Côte d’Ivoire are yet to grasp the nuances of providing financial services to the poor clientele and understanding the role that microfinance plays in the larger context of poverty alleviation.

UNCDF, through its Special Unit for Microfinance (SUM), has begun to promote this new development paradigm in the country mainly through the MicroStart Cote d’Ivoire project, which is part of the global MicroStart programme. In consultation with practitioners and donors, MicroStart was devised as a pilot programme to build the capacity of local organizations to initiate or expand existing microfinance activities. An innovation of the MicroStart Programme is that United Nations Country Offices are able to contract one of the 30 pre-selected global microfinance best practitioners who can then provide technical assistance to local organizations.

In its efforts to assist the Government of Côte d’Ivoire to improve the livelihoods of its population, the Abidjan office of the UN Development Programme (UNDP) identified microfinance as an effective tool in eradicating poverty. As the lead technical unit serving the UNDP Group, UNCDF was approached for its assistance in setting up a MicroStart Programme in Côte d’Ivoire to enhance the access of low-income microentrepreneurs, particularly women, to financial services in order to expand their business, increase their income, and augment employment. Preference was given to provinces targeted by UNDP Côte d’Ivoire. MicroStart achieved its aim through (1) building the capacity of a local organizations to provide microfinance services to economically active poor clients on an operationally sustainable basis; (2) building the capacity of a local technical service provider to provide ongoing technical assistance and developing the structures to support these local organizations over the long term; and (3) contributing to local and global knowledge of the impact of microfinance on clients and how to build the capacity of young organizations.

Thus far, the International Technical Service Provider (TSP) Socodevi, (Société de Coopération pour le Développement International), has assisted four MFIs funded by UNCDF, to deliver financial services to more than 24,000 active savers, and 8,500 active borrowers, of which over 85 per cent were women. Although the institutional capacities and outreach of the four MFIs were strengthened during the first phase of the programme; the MFIs now have to grapple with controlling their delinquency rates, managing liquidity, and following accurate accounting procedures in order to improve their operational capacities.