Study of Microfinance Sector Capacity Building in Sierra Leone

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TABLE 3: INDUSTRY STRENGTHS AND WEAKNESSES STRENGTHS Good groundwork/ structure for coordination is in place, although actual coordination is yet to mature Some industry collaboration started and continuing Evident ability and potential by MFIs to effect more outreach to rural areas and to the poor Improving performance of some MFIs, indicating that with good TA and/ or management, MFIs can improve further In some community banks, PAR is coming down (portfolio quality is improving) – thanks to the secondment of resident technical advisors WEANESSES Inadequate local/ national supply of capacity building services to MFIs in areas like accounting, financial management, internal controls, product development, business planning and others Inappropriate institutional context of the MFP unit (being part of NaCSA) Poor loan portfolios, reflecting inability to manage loans Severe understaffing among NSOs, posing the challenges of shortage of both numbers of staff and critical skills needed The member-based industry network, as an institution, is yet to be established. Board members have full time jobs in their own institutions, which take priority over nurturing SLAMFI The association (SLAMFI) is financially weak Owing to the rather narrow definition of microfinance, community banks and other institutions outside of NGOs do not take themselves to be MFIs, thus weakening industry cohesion Current initiatives address the supply side and there is no initiative that addresses the demand side capacity needs. The proposed MITAF exit strategy, by strengthening SLAMFI to take over some key MITAF activities, does not appear very suitable Lack of a systematic and complete training/ TA needs assessment before developing solutions In some cases (NGO and community banks), unclear ownership structures A very narrow product range and minimal product development/ innovation by the institutions – perhaps meaning product features are unsuitable in many cases for specific client needs Inadequate double bottom-line focus; past interventions exclusively focused on giving credit to the poor. This was done to the relative neglect of institutional sustainability. The current main initiative, the Pro-Poor Financial Sector Development under MITAF, focuses heavily on the reverse. page 20
Limited numerical and geographical outreach by all types of microfinance institutions in comparison to the market potential Limited opportunities within the country for quality training and technical assistance in diverse performance areas Lack of an all-embracing national framework for microfinance capacity building. The current capacity building framework is not inclusive: MITAF deals only with fairly mature MFIs and BoSL only nurtures community banks and gets only minimally involved with other MFIs. Weak network support organizations Modestly knowledgeable and trained management & staff of the MFIs Overall poor loan portfolio management especially among community banks. Lack of industry knowledge among the board members/ directors of MFIs Promotion of loans/ credit as “microfinance” and savings as only a means to getting the loans. This reflects inadequate knowledge among MFI clients, staff, management, board members and local leaders. Weak internal controls and management information systems (MIS) among the institutions, in some cases resulting into fraud Community banks are weak, with little capital and not capable of attracting investments, and yet they are licensed to take savings from the public. Low outreach and weak linkages with mainstream financial institutions Inadequate external financial support of MFIs for fixed assets, initial salaries and other establishment costs to effect rural branching out Limited funding for innovation, research and development, exacerbated by low capacity for product development among MFIs page 21
Page 1: Study of Microfinance Sector Capaci
Page 5 and 6: Table of Contents LIST OF ACRONYMS
Page 7 and 8: LIST OF ACRONYMS Short ACP ADE AfDB
Page 9 and 10: EXECUTIVE SUMMARY This report artic
Page 11 and 12: PART I: OVERVIEW OF THE SECTOR ASSE
Page 13 and 14: The political will, national policy
Page 15 and 16: 2. THE MICROFINANCE SECTOR IN OTHER
Page 17 and 18: High level of illiteracy; overall,
Page 19 and 20: Profitability/ sustainability Asset
Page 21 and 22: Figure 1: Stages of Microfinance in
Page 23: 4. ACCESS TO FINANCIAL SERVICES IN
Page 26 and 27: purposeful assistance needs to be g
Page 30 and 31: 7.2. Opportunities and Threats TABL
Page 32 and 33: PART II. FIVE YEAR STRATEGY [2010-2
Page 34 and 35: Objective 4: Industry cohesion and
Page 36 and 37: The proposed structure of SMART-Cap
Page 38 and 39: 1.3.2. Establishment of SLAMFI For
Page 40 and 41: 1.4. Continuity Strategy of SMART-C
Page 43: APPENDICES page 35
Page 46 and 47: Strategic objective Outputs/ Indica
Page 48 and 49: Strategic objective Outputs/ Indica
Page 50 and 51: ACTIVITY RESP’ 2009 2010 2011 201
Page 52 and 53: ACTIVITY RESP’ 2009 2010 2011 201
Page 54 and 55: ACTIVITY Solicit donor funding for
Page 56 and 57: programmes grew fairly fast in numb
Page 58 and 59: Because of significant commercialis
Page 60 and 61: APPENDIX 4: ASSESSMENT OF NSOs 1. M
Page 62 and 63: - Challenging institutional context
Page 64 and 65: B. Objectives and Institutional Cap
Page 66 and 67: - Developing and administering indu
Page 68 and 69: 3. MICROFINANCE INVESTMENT AND TECH
Page 70 and 71: Output 4: Microfinance sound princi
Page 72 and 73: Financial endowment Poverty/ rural
Page 74 and 75: positive and negative lessons learn
Page 76 and 77: - Improve the human resource compet
Page 78 and 79:
MININSTRY OF FINANCE, DEVELOPMENT A
Page 80 and 81:
The concept trains the people to be
Page 82 and 83:
CLAUSE ISSUE/ PROPOSAL 5 (4) BoSL t
Page 84 and 85:
CLAUSE ISSUE/ PROPOSAL 2 Requiremen
Page 86 and 87:
Government microfinance programs 65
Page 88 and 89:
delegated institution could suffice
Page 90 and 91:
H. LIST OF DOCUMENTS REVIEWED i) Th
Page 92 and 93:
17 MFIs nb. of clients During missi
Page 95 and 96:
APPENDIX 7: LIST OF PERSONS INTERVI
Page 97 and 98:
24 Yoni Chiefdom 25 MatMCB 26 Jong
Page 99 and 100:
APPENDIX 8: MFI PERFORMANCE SUMMARI
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Study of Microfinance Sector Capacity Building in Sierra Leone

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