Salone News

National Micro-Finance Forum---Recommendations

28 May 2007 at 21:15 | 477 views


In 2004, development partners (UNDP, UNCDF, KFW and Cord Aid) in collaboration with GoSL developed a Microfinance project named, Development of Sustainable Pro-Poor Financial Sector in Sierra Leone 2004-2009’

The goal of the project is to contribute to the achievement of the Millennium Development Goals by reducing poverty by half by 2015 through the provision of increased access to competitive and sustainable financial services to poor and low-income people for micro and small businesses


A total of 45,000 clients have been serviced by nine Microfinance Institutions (MFIs), with loans ranging from Le 300,00-Le 5,000,000

Wide geographical coverage: Project is operating in nine district headquarter towns, including Freetown

National Microfinance Policy has been implemented

Capacity building through training of MFI and project personnel of UNDP

Strategic partnerships with other donors and investors to mobilise additional resources


To harmonize stakeholders concerns and build a national shared vision for the sector through discussion of critical project implementation issues so that the outcome forms the basis for redirecting the focus of the project.


1. Microfinance in Africa: Achievements, Challenges and Lessons learnt

Sector development varies by country according to environment (political, economical, legal and regulatory frameworks), outreach and sustainability of the sector.

Despite some important development during the last 10 years and some leading successful MFIs (Benin, Senegal, Kenya, Uganda), many African microfinance industries are still at start-up to expansion’ phase.

Micro and small-to-medium-sized enterprise (SME) development policies are positively impacting the market

Implementing conducive legal and regulatory framework with more involvement of the Central Bank and the Ministry of Finance

Donors supporting stand-alone microfinance programs and diverse financial intermediaries including the sustainability objective, internal capacities and inclusion of performance-based agreement

Diversity of professional Technical Service Providers and competition

2. Overview of Sierra Leone Microfinance Sector and Evaluation of the Technical Service Provider (MITAF) as an institutional mechanism for achieving project output objectives

High potential for financial services by the poor

Improvement in capacity but limited number of MFIs delivering services

Poor regulation and supervision

Clarity of roles in terms of resource mobilisation, provision of direct technical services to MFIs and concentration on assessment and monitoring functions

Increased capacity building for both Ministry of Development and Economic Planning (MODEP) and BSL

Consistent and complementary monitoring and supervision requirements for community banks with that of the Banking Supervision Department

Revision of Microfinance Investment and Technical Assistance Facility (MITAF) staffing structure to best meet future need


High level / professional participation in the sector

Great success achieved in the sector as 45,000 clients serviced

Shared vision amongst stakeholders with respect to outreach, sustainability, sound institutions and impact

Revise implementation arrangements to promote national ownership

Amendment of PRODOC and MOU

Developing a national strategy for building a national shared vision with following elements:

Increased outreach between 100, 000-200,000 low income households and people in rural, peri-urban and capital city areas of the country

Provision of key products and services like credits, savings, remittances and money transfers

Services to be provided by specialized banks, MFI, NGOs, credit unions and cooperatives

Reduce income poverty by 25%


Achieve a developed microfinance industry with strong outreach, financial sustainability, sound institutions and high impact on poverty

Intensify capacity building initiatives at both MFI and institutions dealing with project activities (training and technical assistance)

Increased support of financing instruments (equity investment, etc)

Expand networking with sub-regional and global actors (e.g. AFRACA, CGAP)

Improved legal and regulatory framework

Increased national ownership and smooth exit strategy of MITAF.

Photo: Mrs. Konah Koroma, one of the brains involved in the project.