When Jean-Marc heard about PAMF he immediately contacted the agency because he wanted to increase his funds to be able to satisfy his orders. Jean-Marc can now produce up to 50 metal cookers per week, after receiving his loan of 500,000 Ariary (US$ 244), which is sufficient to satisfy his clients’ needs for now. He would like to extend his activity in order to sell his products in other regions. The Première Agence de Microfinance Madagascar
According to the Human Development Index, Madagascar was ranked 135 out of 169 countries in 2010. It is one of the poorest countries in Africa. It has also been calculated by the World Bank that 67.8 percent of the 20 million inhabitants live on less than US$ 1.25 per day (44 percent of them facing extreme poverty).
Madagascar’s economy is based on agriculture and the main agricultural products are rice, cocoa, cassava, beans, onions and vanilla. The agricultural sector, which accounts for over a quarter of the gross domestic product and employs over 80 percent of the population, is prone to periods of heavy cyclones and drought.
The microfinance market is still underserved in Madagascar. While the number of people who could benefit from access to microfinance services is estimated at more than 14 million, the penetration rate calculated by the “Coordination Nationale de la Microfinance” at the end of 2010 was only 17.5 percent.
By the end of 2010, the number of active borrowers reported for the whole sector was 734,000 clients with an outstanding amount of US$ 88 million. This represents an annual growth of 17 percent compared to 2009. Of these clients, 46 percent of the active borrowers at the end of 2010 were women.
While the supply of financial services is found primarily in Antananarivo and other urban centres of the island, the Première Agence de Microfinance Madagascar (PAMF-Mada) is dedicated to serving those clients who are most in need of financial services, particularly in remote areas. This focus allowed growth in PAMF-Mada’s portfolio by 83 percent during 2010 compared to the year before.
The total outstanding portfolio by December 2010 was US$ 3.42 million for more than 15,000 active clients against US$ 1.87 million one year before. In the same year, the breakdown of the loan disbursements was 67 percent of loans went to the business sector; 48 percent went to the agricultural sector; and nine percent to services, arts and crafts.
For the overall microfinance sector, deposits were estimated to be worth US$ 68 million. PAMF-Mada’s deposit collection was launched at the end of 2009 and by the end of 2010 it had collected US$ 551,000 for over 8,200 individual depositors.
PAMF-Mada collaborated with AKF in the Sofia Region to provide training and funding to the rice cultivators in the area. Between 2005 and 2010, AKF trained nearly 17,000 small scale farmers in participatory rice farming methods. On average, groups participating in the programme more than tripled their yields.
Optimising the use of water, transplanting young shoots in rows with adequate spacing, managing pests and weeding are some of the techniques taught to these clients. Bringing in their savings as contribution, the villagers approach PAMF-Mada and obtain loans to acquire inputs and the agricultural equipment necessary to make use of these techniques.
To allow the institution to grow its deposit base further, small and medium sized deposits will be developed in 2011. A comprehensive assessment will be done to see if there is a need for social loans such as those for housing improvement or refurbishment and for school stationery and books.
PAMF-Mada will build on the progress made in 2010 in advancing its outreach and successfully building on its deposit services. Although the launch of a small and medium enterprise (SME) loan product was planned for the fall of 2010, the first disbursements were postponed to the first half of the next year. In 2011 PAMF-Mada plans to strengthen institutional capacity, build a diversified deposit base and provide loans to SMEs.
|Microfinance Loans Disbursed: Value (US$ '000s)||2,525||3,348||6,177|
|Microfinance Loans Disbursed: Number||10,382||14,588||22,208|
|Microfinance Portfolio Outstanding: Value (US$ '000s)||1,124||1,873||3,421|
|Microfinance Portfolio Outstanding: Number||6,335||9,555||15,688|
|Average Microfinance Loan Size (US$ unit)||177||196||218|
|Percentage of Women Borrowers||68%||62%||58%|
|Portfolio at Risk (%)||1.8%||1.8%||1.4%|
|Number of IndividualSavers||-||1,180||8,229|
|Value of IndividualDeposits (US$ ‘000)||-||47||551|
|Number of Staff||127||154||192|
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