The role of informal microfinance institutions in saving

• Advanced management information system that facilitate effective planning, control
and timely monitoring of loan repayments.
Management autonomy and incentives structures
A variety of mechanisms have enhanced the efficiency of these institutions, some of the
important are:
• High degree of management autonomy in formulating operational policies.
• Policies that provide for staff accountability, investment in human capital, and
rewards (monetary incentives and promotions) that are related to sound
financial performance and sustainability. Staff incentives are linked to the
performance of the loan portfolio, so clients ate monitored more closely than is
usual.
• Appropriate financial ratios for measuring a financial institution’s performance
should be designed and put in place. For instance, return on equity and return
on assets has become more common in recent years. In addition, the use of the
subsidy dependence index is recommended to evaluate those providers who
depend on their access to subsidies.
Table 8: The Summary of the Activities and Programs of Various Donors.
Local Counterpart
Local NGOs and
Community Based
Organizations (CBOs)
SIDO, Poverty Africa,
SCCULT, CREW, PTF
Program
Amount
$ 10.8
million
$ 20 million,
among 10
countries
Region Program Description
Coast Region,
mtwara, Lindi,
Morogoro, Singida
Counterpart MFIs
have differing
coverage of the
entire country
Small Entrepreneurs Loan Facility
(SELF)
Capacity building for MFIs, Policy
dialogue with Government agencies,
Coordination with other donors
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