AKAM is working with AKF in East Africa to enhance the productivity of small garden plots as part of an effort to move rural residents beyond subsistence agriculture.In East Africa, AKAM’s primary objective is to provide loans to microenterprises and small businesses for income generating activities such as small-scale agriculture, fishing, artistic activities and retail.
AKAM’s East African institutions had about 3,918 beneficiaries in 2010, with 46 percent of the beneficiaries being women. The value of outstanding loans surpassed US$ 605,000.
The First MicroBank Mozambique
At the end of 2004, the First Microcredit Programme (FMP) was established to support AKF’s Coastal Rural Support Programme activities. FMP did this by providing microcredit services to AKF’s beneficiaries and the poor in Cabo Delgado. In 2009, AKAM set up the First MicroBank, S.A. (FMB-M) to take over the activities previously undertaken by FMP. This transfer of activity took place in 2010 after the bank received a rural micro bank licence from the Banco de Moçambique.
The prime objective of FMB-M is to improve the quality of life of the poor in Mozambique by supporting economic development through the provision of sustainable financial services. FMB-M provides microfinance services in Cabo Delgado Province (Pemba, the districts of Metuge, Quissanga, Ibo Island and Chiure).
The FinScope Survey published in 2009 showed that about 78 percent of the bankable population in Mozambique had no access to any sort of banking or microfinance services; 12 percent of that population had access to banking services; one percent had access to formal microfinance services; and 10 percent had access only to the informal microfinance sector. The survey also showed that 61 percent of urban and 86 percent of people in rural areas had no access to formal banking services.
FMB-M was incorporated in 2009 and was authorised to start operations as a licenced microfinance bank. This licence enables the institution to provide credit, ranging from microfinance to small and medium enterprise loans but more importantly to initiate savings mobilisation, which it plans to do by the end of 2011 or beginning of 2012.
As part of its licencing and development process, FMB-M upgraded its main branch in Pemba and opened a new branch in Chiure. FMB-M had 1,224 outstanding loans in 2010, worth US$ 322,000.
The microfinance activities in the Province of Cabo Delgado are a part of an integrated approach taken by AKDN and its agencies to reach out to remote populations and alleviate poverty. The inauguration of the bank and the procurement of the rural banking licence will enable FMB-M to aid development in Mozambique’s northern provinces, which have the highest poverty rates in the country. FMB-M will offer its clients agricultural, entrepreneurial and salary-based loans.
In 2011, FMB-M will be launching Core Banking & Microfinance (the management information system). It will also be strengthening its policies and procedures and ensuring that its entire staff is trained by the AKAM Training Academy.
The First Microfinance Agency Tanzania and Kenya
The First Microfinance Agency Tanzania disbursed 1,444 loans worth US$ 406,000 by the end of 2010. The First Microfinance Agency Kenya disbursed 1,887 loans valued at US$ 571,000.
Having faced operational difficulties, AKAM is in the process of reengineering both entities starting with a re-conceptualisation of the model (methodology and approach) in line with the socio-economic environment as well as the human resource capacity.
|Microfinance Loans Disbursed:
Value (US$ '000s)
|Microfinance Loans Disbursed: Number||587||2||1||4|
|Microfinance Portfolio Outstanding:
Value (US$ '000s)
|Microfinance Portfolio Outstanding: Number||1,224||1,345||780||3,349|
|Average Microfinance Loan Size (US$ unit)||263||150||104||172|
|Percentage of Women Borrowers||24%||58%||55%||46%|
|Portfolio at Risk (%)||47.4%||7.5%||0.3%||18.4%|
|Number of Staff||38||33||19||90|
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