western and central africa
DESCRIPTION
Rural finance WCA Strategy & Action Plan. M. Manssouri, Country Program Manager Implementation Workshop, Bamako, 8-11 March 2005. Western and Central Africa. Regional Context. Benin Burkina Faso Cape Verde Cameroon Central African Republic Chad Congo Democratic Republic of Congo - PowerPoint PPT PresentationTRANSCRIPT
Western and Central Africa
Rural financeWCA Strategy & Action Plan
M. Manssouri, Country Program ManagerImplementation Workshop, Bamako, 8-11 March 2005
Regional Context
• Benin• Burkina Faso• Cape Verde• Cameroon• Central African Republic• Chad• Congo• Democratic Republic of Congo• Côte d'Ivoire• Equatorial Guinea• Gabon• the Gambia• Ghana• Guinea• Guinea-Bisseau• Liberia• Mali• Mauritania• Niger• Nigeria• Sao Tome and Principe• Senegal• Sierra Leone• Togo
• Presently, IFAD has a loan portfolio of approximately USD 3.35 billion in 90 countries.
• The Western and Central Africa Division currently manages an active portfolio of 51 loan projects totalling about USD 610 million in 16 countries.
• About 1/3 of IFAD resources have historically been devoted to rural finance.
Rural finance in the Region: From Unsustainable Projects to Integrated Systems
1980’s
Centralized Systems(Top-down approach)
Commercial Bank
Development Bank
Project
1990’s
Development of Decentralized
Systems
2000’s
Integrated Systems Development
MFI
MFI
ViabilityOutreach Linkages
Sustainability(participation, Interest Rate)
Integration
Recurrently Insufficient Access to Rural finance in the region
Informal savings & credit
mechanisms
Commercial Banks
Exist but are insufficient
Cannot adapt their financial products to the needs of poor and isolated clients
Official agricultural
credit institutions
Problems of interference and low repayment rates is discouraging
Integrated projects with
credit component
Disappointing results in terms of repayment, sustainability and impact
Lack of access to capital (for income-generating activities, schooling, emergency
situations, social obligations…)
•Few MFIs have reached financial self-sufficiency. Only 40% of MFIs achieved operational self-sufficiency
•The need for capacity and institutional building far exceeds the need for capital
Rural Finance in The Region : Insufficient Access in Rural Areas
West Africa– 272 MFIs reaching 2,351,800
clients
– ECOWAS zone: 20% of households have access to MFI services.
– MFIs have strong rural tradition (esp. in cash crops)
Central Africa
– 1,034 MFIs reaching 414,000 clients
– CEMAC zone: 8% of households have access to MFI services
– MFIs are mainly urban
MFI Resources West Africa Central Africa
Deposits 64% 69%
Shareholder Capital 20% 11%
Credit provision within a projectserious problems encountered when projects directly administer credit programmes
Existing financial networksUsing formal financial institutions as a channel for distribution of direct credit to poor rural populations is not always promising
Support for self-sufficient sustainable MFIs: a long term effort
Support for national rural finance systems through:
– macro-economic stability– a regulatory and political environment that
provides incentive for MFIs– Efficient Partnership among Government,
MFIs/MFAs, funding agencies…
Lessons learned: From unsustainable project to sustainable institutions
Future Challenges: Filling The Gap, Developing the Market, Serving the Rural Poor
•10-20%Other appropriateforms of support
•30-40%Extended micro-finance services
•20%•20%-30%Co-operative banks and specialized lending institutions
Non-viable market
Untapped market
Cash crop zone
population
Urban population
Dispersed, marginal
populations
Economically active populations & viable zones
• Forms of Support
The Rural Finance Strategy
1. To increase viability and outreach of rural finance
2. To strengthen implementation capacity at all levels for more effective rural finance interventions
3. To improve MFI monitoring & reporting and impact assessment of rural finance interventions
3. To improve MFI monitoring & reporting and impact assessment of rural finance interventions
Operationalising the Strategy
How to support quality rural financial institutions to reach the rural poor?
How to build a conducive regulatory environment?
How to meet the unmet needs (agriculture, poorest people…)?
1. Increase outreach and viability of rural finance
2. Strengthen Implementation capacity for more effective rural finance interventions
How to further develop capacities at all levels?
How to improve program implementation?
3. Improve M&E & Impact Assessment
What is the Role of M&E in terms of increasing efficiency, learning, and policy dialogue ?