Micro and SME Finance

Micro, small, and medium enterprises (MSME) are key drivers of socio-economic development but often face major difficulties in accessing financial services. For this reason, we work together with microfinance institutions (MFIs) and banks that are downscaling their operations to lower-income clientele to overcome challenges related to human resource development, demand-orientated product design, geographic outreach, and risk management.

AFC offers its consolidated knowledge to establish and further develop MFIs, financial cooperatives, and commercial banks. Following international best practices and utilizing the latest technological developments, our services in this area are comprised of methodologies for MSME lending, risk management, product development, savings and insurances, training programmes, business planning and strategic development, internal audit, the improvement of Management Information Systems (MIS) and the assessment of socio-economic impact.

Nigeria is an illustrative example of our services to promote MSME finance where we have strengthened the capacity of banks and MFIs in strategic management, financial administration, and demand analysis. This resulted in a significant increase of their operational efficiency from 74% in 2003 to 124% in 2010. At the same time, their financial services had a positive impact on job creation as clients created on average 1.1 jobs compared to only 0.8 jobs created by non-clients.

AFC has implemented further projects on MSME Finance in – among others - Kenya, Tanzania, Sudan, Uganda, Rwanda, Nigeria, China, Kyrgyzstan, Lebanon, Laos, Myanmar, Tajikistan, Thailand, and Yemen.