AfDB looks to address microfinance capacity building

Aug 03, 2011

A new African microfinance initiative aimed at encouraging capacity building in the sector so as to benefit those living in rural areas has been launched by the African Development Bank Group (AfDB).

A new African microfinance initiative aimed at encouraging capacity building in the sector so as to benefit those living in rural areas has been launched by the African Development Bank Group (AfDB).

The bank has implemented the Microfinance Capacity Building Fund for Africa with assistance from the Spanish government and is now urging countries in the West African Economic Monetary Union to propose ways of improving microfinance transparency.

This is a "key barrier" preventing microfinance providers from raising capital and earning the confidence of customers, the AfDB said, adding that it is seeking to address the issue "at the retail, market infrastructure and regulatory levels".

According to figures from the institution, only 20 percent of African households use a deposit account at a regulated bank or other provider, substantially less than the 80 percent figure seen in developed countries.

One nation taking steps to improve its microfinance industry is Ghana, where the central bank is introducing new regulations that will improve confidence in lenders, Luv Biz reports.
ADNFCR-2976-ID-800675149-ADNFCR