The Fifth African Microfinance Conference held in Addis Abeba at the United Nations Economic Commission for Africa gathered key stakeholders from the microfinance industry to discuss important issues related to the future of inclusive finance in Africa. During the conference, was also launched the UNCDF MicroLead Expansion Program, whose objective is to support leading financial and technical service providers with savings led methodologies to expand their operations to new markets which are underserved in Sub-Saharan Africa. More particularly, in Ethiopia, the Pamiga/Basics consortium will be in charge of a project aiming at strengthening the microfinance operations of Buusaa Gonofaa and Wasasa, and increasinig the outreach of these two Ethiopian MFIs on the rural poor market, particularly in terms of mobilization of savings.
The UNCDF programme MicroLead aims to contribute to the development of strong inclusive financial sectors by supporting the expansion of microfinance market leaders in underserved countries. MicroLead promotes sustainable access to financial services, with a focus on savings mobilization, for more than 975,000 low-income people, at least half of whom are women or rural dwellers.
The programme offers grants to leading providers of financial services targeting poor clients to expand operations to underserved markets. It also supports technical advisors who work to help those providers to develop the institutional capacity to extend their reach.
MicroLead began in 2009 when UNCDF, in partnership with the Bill & Melinda Gates Foundation, initiated a flagship global microfinance programme to provide loans and grants on a competitive basis to microfinance institutions, commercial banks and financial cooperatives based in developing countries.
To date, the Bill & Melinda Gates Foundation/UNCDF-funded MicroLead programme has awarded funding for 13 projects worth $20.1 million to southern-based market leaders to enable their entrance into developing countries with savings-led methodologies. The Bill & Melinda Gates Foundation/UNCDF programes’s goal is to reach 525,000 new clients by 2013; based on awarded projects’ projections and results to date, 850,000 new clients are expected to be reached by 2013. In September 2011, UNCDF and the MasterCard Foundation launched the expansion of the successful programme. The $23.5 million, six year expansion will increase access to microfinance, particularly savings services, to 450,000 low income people in Sub-Saharan Africa.
In this new phase, experienced institutions or networks from developed and developing countries may apply to either establish greenfields or provide technical assistance that results in significant impact, particularly in the number of small-balance savers reached. With a view to strengthening the field, a learning agenda has also been added to enable UNCDF to test if a savings-led approach creates stronger and more resilient financial service providers. he MicroLead expansion uses a proven competitive process to select a minimum of eight institutions to enable innovative and experienced microfinance leaders to establish new operations in underserved African countries.