Microfinance

IFC Advisory Services in the Middle East and North Africa's Microfinance program aims at supporting the growth and development of a sound microfinance industry in the Middle East and North Africa (MENA) region. The program’s assistance to the microfinance industry is market-based and seeks to promote commercially sustainable microfinance institutions that can offer low-income clients an ever-increasing range of financial services. This is a long-term strategy intended to close today’s enormous gap in the demand and supply of financial services to underserved populations.

The Microfinance program is active in Afghanistan, Jordan, Lebanon, Morocco, Pakistan, Syria, West Bank and Gaza, and Yemen.


What Does the Program Offer?

The program mainly focuses on institutional capacity building of existing microfinance institutions and the creation of greenfield microfinance institutions. IFC's approach is to work at three levels:

• Micro (institutional)
• Meso
• Macro (policy level)

IFC is a member of CGAP (the Consultative Group to Aid the Poor), which focuses on country-level policy assessments and infrastructure improvement.

Overall, the program’s approach is demand-driven and customized to specific country needs. In particular, the program supports:

• Commercial banks to downscale into microfinance services
• Start-up of greenfield microfinance banks or institutions
• Transformation of microfinance institutions or NGOs into for-profit financial intermediaries
• Development of best practices within microfinance institutions by assisting them with business planning, innovative products and management solutions
• Partnerships with or support to network operators (i.e. SANABEL)
• Creation of links between microfinance institutions and local financial and capital markets
• Assistance to governments to strengthen the legal and regulatory frameworks for microfinance, in coordination with CGAP

Expected Outcomes and Impact

The Microfinance program's successful implementation will ensure an increase in access to funding for underserved segments of low-income entrepreneurs and in investment opportunities for commercial investors in the MENA region. It will also help develop the microfinance sector.



Key Achievements

To the end of fiscal year 2007, the integration of IFC's Investments and IFC Advisory Services in microfinance sector have led to the following results:

• IFC investment of $37 million in seven microfinance institutions
• 621,288 borrowers; 19 percent of total borrowers in the MENA region, including Afghanistan and Pakistan
• Women representing about 47 percent of borrowers
• $294 million in outstanding loans

In addition, IFC Advisory Services' Microfinance program was successful at:

• Helping shape the capacity building and strategy for two greenfield institutions
• Working with ten microfinance institutions
• Producing six diagnostic studies, assessments, feasibility studies, and surveys
• Organizing a roundtable in Lebanon on “Reconstruction Microfinance in Conflict-Affected Areas” to share relevant international experiences with Lebanese microfinance institutions and banks

Eligible Partners & Clients

Eligible partners are financial institutions, which are providing microfinance services such as:

• Microfinance banks and institutions (MFIs)
• Other financial institutions (i.e. leasing companies)
• Microfinance networks
• Commercial banks

The program also supports the start-up of greenfield microfinance institutions


Examples of Projects

In Pakistan, IFC helped establish Tameer Bank through an initial investment of $5 million. The bank is currently receiving capacity building assistance from IFC Advisory Services, primarily in the areas of IT design and implementation, training and new products development (mobile phone banking and rural products).

In Morocco, IFC Advisory Services is supporting FONDEP in its transformation into a financial institution through an investment (a partial credit guarantee) and a comprehensive advisory services package.


In the West Bank and Gaza, IFC Advisory Services assisted the management of Al Rafah Bank in conducting a review of its current strategy and developing an action plan to guide its launch and roll out. Read more...



In Jordan, IFC Advisory Services provided advisory services to the government to review the strategies, policies, performance, and practices of DEF, and identified potential strategic options for its role in the microfinance sector.



In Lebanon, IFC Advisory Services organized a roundtable for Lebanese microfinance institutions to share international experiences and best practices in post conflict microfinance. Read more...


For additional information contact

Momina Aijazuddin,
Microfinance Program Manager
E-mail: maijazuddin@ifc.org