Strengthening Microfinance and Financial Inclusion in Guinea
Project Development Objective (PDO)
This project aims to support the government of Guinea in strengthening the microfinance sector and expanding financial inclusion by achieving the following objectives:
1. Adoption of an updated National Financial Inclusion Strategy (NFIS) with a clear monitoring and evaluation (M&E) framework and capacity of the to-be-established steering committee
2. Enactment of modernized laws and regulations for the microfinance sector
3. Enactment of regulations on digital financial services and agents
4. Adoption of a microfinance institution (MFI) resolution framework
5. Adoption of updated supervisory manuals, methodologies, guidelines and filing forms and
adoption of enhanced supervisory capacity
6. Operationalization of microfinance funding vehicles (including l'Agence Nationale de la
Microfinance [ANAMIF]); and implementation of restructuring options
Background
By early 2014, even before the Ebola crisis had taken full effect, the microfinance sector in Guinea was facing serious challenges and the government had suspended a development program due to weak loan repayment performance and a perception of low standards of governance. The microfinance sector faced various challenges from central bank supervision down to management within the MFIs. These challenges included (a) insufficient supervisory skills and inadequate procedures; (b) outdated legal and regulatory framework governing the sector and supervision activities; and (c) limited skills, management capacity, and governance at MFIs and at ANAMIF.
Activities
The project consists of three components:
1. MFI legal and regulatory framework and supervision capacity building
Conduct a thorough review of the existing legal and regulatory framework for the microfinance sector, and assist in drafting a modern set of laws and related regulations as needed. Develop regulations to accommodate the use of digital financial services at the microfinance level, including the role of payment agents for mobile money.
2. Strategic advice on microfinance funding vehicles
Provide strategic advice on the role and governance structure of microfinance funding vehicles including ANAMIF. Organize meetings to present the new ANAMIF framework for the local authorities (Ministry of Finance and Central Bank), to present the role and governance of microfinance funding vehicles including ANAMIF, and to articulate next steps that include an action plan and timetable for implementation. Advise the Ministry of Finance (and ANAMIF) regarding the restructuring of existing MFIs loan portfolios.
3. Support the establishment of the steering committee to define the NFIS policies
Support the establishment of a steering committee to review and update the NFIS and a secretariat to coordinate key stakeholders, as well as to guide the preparation of the NFIS. Develop and implement an M&E framework for the National Financial Inclusion Strategy.
Expected Outcomes
The expected outcomes of the project are as follows:
1. Stronger legal and regulatory framework for the microfinance sector
2. Stronger supervisory and resolution capacity for the microfinance sector
3. Microfinance funding vehicles operational and MFIs restructured
4. NFIs updated with steering committee and capacity in place