Ethiopia
Key figures
| Started in |
2005 |
|
# of MFIs 2008 |
12 |
|
Allocated 2005-2008 |
EUR 2,5 million grants; EUR 140,000 guarantees |
| # of NGOs 2008 | 2 |
| Networks 2008 | 1 |
|
Focus on |
- Capacity building
- Innovation fund |
The Ethiopian microfinance sector is characterized by a very active government, a dynamic microfinance culture, and a strong national network. The sector is dominated by credit-led MFIs in contrast to West Africa where cooperatives are more predominant.
Since 2005, Terrafina Microfinance has provided seed capital contributions and technical support to three smaller MFIs. These MFIs (Buusaa Gonofaa, Wasasa, and SFPI) have grown out of the start up phase and are well on their way to financial sustainability. They already serve more than 20,000 credit clients each. In 2007,
Terrafina expanded its involvement with two younger MFIs (Harbu and Metamemen) which are also successfully progressing.
Further portfolio expansion is financed through local bank loans, guaranteed by ICCO. Terrafina Microfinance has played a pioneering role in facilitating these local bank loans, which largely did not exist before.
The cooperative subsector of rural savings and credit cooperatives (SACCOs) is still in its initial stages in Ethiopia. Many rural SACCOs live in isolation so Terrafina Microfinance works closely together with the national network AEMFI and the government cooperative agency to increase cooperation among the rural SACCOs. Additionally, efforts are being made for the creation of better regulations and legislation for these MFIs. Terrafina, in cooperation with the Irish NGO SHDI, also is supporting the development of five rural cooperative unions (rural SACCO Unions).
One of Terrafina's unique efforts in Ethiopia has been the creation of the Innovation Fund for Rural and Poverty Outreach. It was started in 2006 to enhance product development efforts among the more dynamic, small MFIs. Five MFIs have participated, each with their own pilot initiative which include heifer loans, young entrepreneur loans, social scorecards micro leasing efforts, and a savings product.
Another component of the Learning & Innovation programme is the start of a special project to promote Social Performance Management in Ethiopia. A follow-up educational and capacity building workshop for consultants was held in 2008, and the first two MFI pilot programs were started in 2009.
In September 2009 Terrafina organized the workshop ‘Linking financial services to community based saving and credit groups' in Addis Abeba.
