The Grameen Crédit Agricole Foundation publishes its Newsletter #39, which highlights the great resilience shown by its partner institutions to best support vulnerable populations.

The Foundation has been interested in the effects of the Covid-19 crisis on its partner microfinance institutions (MFIs) and conducted a series of surveys for over a year in collaboration with ADA and Inpulse. The results of these studies are summarized in the report “The impact of the crisis on microfinance institutions. Analyses and Perspectives.” that you will discover in this Newsletter.

There is no doubt that the pandemic has had a negative impact on the MFIs activities. However, we are witnessing a gradual recovery of activities in the sector, as KOMIDA can attest. Major actor of microfinance in Indonesia and partner of the Foundation since 2004, KOMIDA has succeeded in pursuing its expansion in rural areas with the opening of 10 additional branches in 2021. The institution continues to support its clients by emphasizing the granting of social-oriented microcredits.

In the section “Views from the field”, we present UGAFODE Microfinance Limited, a Ugandan MFI at the forefront of financial inclusion for refugees. Thanks to the support of the Foundation, the United Nations High Commissioner for Refugees (UNHCR), and the Swedish International Development Agency (Sida), UGAFODE opened in March 2020 a branch office in the Nakivale Refugee Settlement in Uganda. The initial results are very encouraging and the ambition is to expand the project to other regions.

Finally, you will discover the testimony of Jean-Baptiste Bounes, Mergers and Acquisitions Manager at SODICA, who carried out the first Solidarity Bankers mission online in favour of Phare Performing Social Enterprise (PPSE) in Cambodia.

Missions on the field and online are currently to be filled.

Read the Newsletter

(*) Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA in June 2018, Solidarity Bankers is a skills volunteering programme aimed at all Crédit Agricole group employees for the benefit of microfinance institutions or impact businesses supported by the Grameen Crédit Agricole Foundation.

Since January 2021, the Grameen Crédit Agricole Foundation has pursued its financing in Eastern Europe and Central Asia and has thus granted seven new loans to its partners.

In Kosovo, the Foundation granted a new loan to the microfinance institution AFK for an amount of €1.5 million over a three-year period. The Kosovo Finance Agency (AFK) is a microfinance institution that aims to improve living conditions in Kosovo by providing access to sustainable financial services to micro and small businesses. AFK aims to promote the development of rural areas as well as women entrepreneurs and minorities. The institution serves 19,300 active borrowers (22% of them women and 51% of them living in rural areas) and manages a portfolio of 36 million euros.

In Moldova, the Foundation granted a new loan to the microfinance institution Microinvest for an amount of €1.4 million over a three-year period. Microinvest provides microcredit and business start-up assistance to small entrepreneurs in many regions of the Republic of Moldova. 70% of its loan portfolio corresponds to loans to private entrepreneurs living in rural areas. The institution has nearly 37,000 clients, 66% of whom live in rural areas and 41% of whom are women.

In Montenegro, the Foundation granted a loan to the microfinance institution Monte Crédit for an amount of one million euros, over a three-year period. Founded in 2005, Monte Credit is a microfinance institution whose mission is to empower rural families to create income and jobs, freeing up economic potential so that communities thrive. The institution has more than 4,000 clients, 54% of whom are women and 51% of whom live in rural areas.

In Kyrgyzstan, the Foundation granted a new loan to the microfinance institution OXUS for an amount in local currency equivalent to €800,000. OXUS Kyrgyzstan is a microfinance institution created in 2006 by OXUS Group and ACTED. It is a responsible company committed to providing financial services to the working poor and the under-banked in Kyrgyzstan. To date, the institution has nearly 8,000 clients, 48% of whom are women and 62% of whom are clients in rural areas.

In Kazakhstan, the Foundation granted a new loan to the Asian Credit Fund (ACF) microfinance institution for an amount in local currency equivalent to one million euros. ACF is a microfinance institution created in 1997 by the American NGO Mercy Corps. ACF’s financial services are designed to promote the development of rural households, the growth of small businesses and home ownership. ACF adheres to a specialised community lending model that offers tailor-made financial solutions, business advice and technical assistance to its clients. To date, the institution has 27,000 clients, 70% of whom are women and 93% of whom are rural areas clients.

Finally, in Tajikistan, the Foundation granted a new loan of an amount in local currency equivalent to €1.2 million to the microfinance institution HUMO. HUMO is a microfinance institution that aims to support vulnerable and underserved populations living in rural areas through financial and advisory services for small businesses. The institution has nearly 73,000 clients, 37% of whom are women and 75% of whom live in rural areas. Also in Tajikistan, the Foundation granted a new loan to the microfinance institution OXUS Tajikistan for an amount in local currency equivalent to one million euros over a three-year period. OXUS Tajikistan mainly targets microentrepreneurs and farmers in rural areas. Its social mission is clear and aims to improve the economic and social conditions of the low-income population who are not served by the banking sector. To date, the institution has over 14,000 clients, 36% of whom are women and 79% of whom live in rural areas.

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Rémy Rioux, CEO, Groupe Agence française de développement
[French Development Agency]

A historical partner, the Agence française de développement (AFD) [French Development Agency] has been supporting the Foundation’s activities for over 10 years. Its CEO, Rémy Rioux, shares with us his vision on the impact of the economic and health crisis generated by the Covid-19 pandemic on the African continent and his assessment of the partnership with the Foundation.

— What were the main impacts of the pandemic on the African continent in your opinion and how did the AFD respond to this crisis? What were your key areas of response?

R R: Africa experienced an unprecedented shock in 2020, which, I would like to stress, was totally external to the continent. The continent appeared quite resilient in terms of health, but less so on the economic front. An unprecedented recession, averaging 2.6%, affected more than forty countries simultaneously. Beyond the cyclical impact, the crisis above all raises concerns about a deep weakening of economies and societies.

The Agence française de développement Group (AFD) mobilized very quickly to support its partners. In terms of health, with a €1.2 billion “Common Health initiative”, half of which in Africa, for some fifty projects and nearly €130 million in donations; and on the economic level, with the “Choose Africa” programme to support the entrepreneurial sector and then its strengthening with a Resilience component, bringing the programme to €3.2 billion committed by 2022. Finally, in the wake of the «Finance in Common» Summit, we support African public development banks (a hundred or so of which throughout the continent), to turn them into sustainable growth relays.

— How do you assess the historic partnership with the Grameen Crédit Agricole Foundation?

R R: The AFD Group has been providing the Foundation with portfolio and individual guarantees for more than 10 years and has financed the African Facility, which enables us to support small microfinance institutions for the benefit of disadvantaged populations, particularly in rural areas. The partnership with the Foundation has since 2020 been handled by Proparco, our subsidiary dedicated to the private sector. Beyond the financial partnership, we appreciate the quality of the relationship between our two institutions, which is marked by trust and transparency. The importance of supporting the microfinance sector has been reinforced by the Covid-19 crisis and working with the Foundation constitutes a solid lever for strengthening the sector.

— Can a large institution like yours and an agile player like the Foundation still invent new ways of acting and if so in what priority areas?

R R: The complementary nature of our two institutions and their response methods makes the partnership strong and relevant to several priority areas, namely: support for the development of microinsurance, particularly agricultural microinsurance; assistance to microfinance institutions in improving social performance management; development of the digital offer in the microfinance sector; and green microfinance. The context of the crisis has reinforced the relevance of these areas of response.

In recent months, the Grameen Crédit Agricole Foundation has pursued its financing in sub-Saharan Africa with four new loans granted, two of which to new partners.

In Togo, the Foundation granted a new loan to the microfinance institution Assilassimé for an amount in local currency equivalent to € 2.2 million. Assilassimé’s mission is to provide sustainable access to social microfinance services adapted for people experiencing exclusion or extreme poverty, with limited access to the traditional microfinance system. The institution seeks first and foremost to enable them to carry out income-generating activities and improve their living conditions. To date, Assilassimé has over 19,000 clients, 91% of whom are women.

In Zambia, the Foundation granted a new loan to the microfinance institution AMZ for an amount in local currency equivalent to € 1 million. AMZ aims to serve customers who have previously been excluded from the formal financial market, mainly because of their poverty or their place of residence. The products offered are designed to meet their financial needs. The institution has over 80,000 active borrowers, 92% of whom live in rural areas and 56% of whom are women.

In Rwanda, the Foundation granted a first loan to the microfinance institution ASA Microfinance Rwanda for an amount in local currency equivalent to € 500,000. ASA Microfinance Rwanda Plc (ASA Rwanda) is an institution created in 2016 by ASA International. Its mission is to contribute to poverty reduction through economic empowerment by ensuring access to financial services to the disadvantaged community of Rwanda. The institution grants loans according to group and individual methodologies. They mainly finance women who represent more than 95% of its clientele, and mainly operates in rural areas.

Finally, in Kenya, the Foundation also granted a first loan for an amount in local currency equivalent to € 766,000 to the microfinance institution YEHU. YEHU is a microfinance institution whose mission is to fight poverty by empowering poor rural entrepreneurs in Kenya to help them lift themselves out of poverty through better accessibility to sustainable financial services. This includes enabling them to save while giving them access to microloans, which can be used to start or grow their small business. Yehu also offers business training, microinsurance products and other services to improve the lives of its members. To date the institution has 28 000 clients, 96% of whom are women. 76% of its clients live in rural areas.

To date, the Grameen Crédit Agricole Foundation has 89 partners in 39 countries and manages a portfolio of €86 million, 46% of which is located in so-called fragile countries.

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