Prepared A Code Of Conduct To Members

Published Date: 02 Nov 2017

The Association of Ethiopian Microfinance Institutions (AEMFI) is a network of microfinance institutions in Ethiopia. Registered in June 1999, as a non-profit non-governmental organization that would create a forum for experience sharing and policy advocacy. It was initially initiated established by a group of 4 MFIs with objective to create a forum by which collective needs of MFIs could be addressed

1.1. Vision, mission, objectives and activities of AEMFI

The vision of AEMFI is to see a reduced level of poverty through efficient and sustainable delivery of financial services by finance providers to the poor in Ethiopia.

Mission

AEMFI’s mission is to serve and develop a sustainable institutional structure providing a viable microfinance service in Ethiopia, by: promoting best practices in the industry, serving as a forum for debate and dialogue, facilitating sharing of experience and information; and creating an enabling environment for the industry

Objectives

Helping finance providers through training, experience sharing visits and technical assistance,

Addressing problems facing the industry by undertaking research,

Assisting finance providers in identifying loan and equity funds from domestic and foreign sources,

Improving performance of finance providers by setting indicators and creating a database,

Availing microfinance related information for use by policy makers, donors, lenders, networks, researchers, microfinance clients, and the public at large.

Core activities

To achieve its objectives, AEMFI carries out the following activities as specified in its memorandum of Association and its other documents:

Training and Experience Sharing Visits

Research & Publications

Performance Monitoring & technical assistance

National, Regional and International Networking

Establishing a Resource Centre

Advocacy and Dialogue

Conducting Workshops, Conferences, etc

1.2. Ownership, Governance and Management

AEMFI has a well-defined Ownership and Governance structure. It is a membership Association of twenty-seven licensed MFIs in Ethiopia. The supreme decision making organ of the Association is the General Assembly of member MFIs. Currently it comprises of 54 members, 2 from each MFI on an equal representation basis. Next to General Assembly is Board of Directors elected by the General Assembly to serve for three years. Every three years, the General Assembly elects AEMFI's Board of Directors and appoints the auditors, both of whom remain in office for three years.

The Board is responsible for policy issues, directions, approving the Institution's plan and budget, and appointing the Executive Director and the Senior Officers. The Board of Directors is made up of 7 representatives with various educational backgrounds, which is considered essential for better management of the Institution.

An Executive Director assisted by seven unit heads and other three administrative & support staff runs the day-to-day management of the Association.

1.3. Organizational Structure & Responsibilities

Its General Assembly, Board of Directors, and an Executive Director currently lead AEMFI. It has seven functional units namely: Training Unit, Performance Monitoring & Technical Assistance Unit, Program Management Unit, Research and Publication Unit, MIS unit, SACCOs unit and Admin and Finance Unit. The following indicates activity categorization under the functional units:

Functional Unit

Responsible Officer

Activity/Program

Training

Training Officer

- Training

- Exposure Visits

Monitoring & Tech. Assistance

Finance & Monitoring Officer

- Performance monitoring

- Technical assistance

Program Management Unit

Program Officer

- Advocacy & Dialogue

- Networking

- Gender and HIV/AIDs

Research & Publication Unit

Executive Director

- Research & Publications

MIS unit

MIS Officer

- Troubleshooting

- Resource Center

-Follow up website

SACCOs Unit

SACCOs Officer

- Training

- Performance monitoring

- Technical assistance

Admin & Finance

Admin & Finance Head

- Accounting

-Human Resource

In the year 2005, AEMFI revised its administrative manual and organizational structure, and the board approved it in year 2006.

The following is the new organizational structure of the Association.

General Assembly

Board of Directors

Executive Director

MIS Unit

SACCOs Unit

Unit

Program Mgt. Unit

Monitoring & Technical Ass. Unit

Admn & Finance

Unit

Research & Publication Unit

Training

Unit

Other Support Staff

Secretary & Cashier

Accountant

1.4. Staffing & Membership

AEMFI’s membership has not increased during 2007. In addition to the functional unit heads stated above, AEMFI also has six support staff: an accountant, a secretary, a driver, a cleaner and two security guards. Our A/research officer, Tgest W/tsadic and performance and monitoring officer Tsegaye Anebo has left AEMFI in 2007. The staffing and membership profile of AEMFI is shown in the following table in the last 8 years.

Years

2000

2001

2002

2003

2004

2005

2006

2007

Membership

19

20

21

23

23

26

27

27

Staffing

2

4

7

8

8

10

14

12

The staff profile of AEMFI currently include, 6 technical staff, one finance and administration head, one secretary, one driver, two security personnel and one office assistant.

I. Program Management Unit

The Program Management Unit has been actively working on advocacy, promotion and information dissemination, publication, networking as well as gender and Microfinance and HIV/AIDS. In addition, the unit helped in establishing a solid partnership and cordial relationships with the key stakeholders: Government, NBE, Donors and local training institutions and service providers, etc

Consequently, from January- December, 2007 the unit achieved the following activities in line with its responsibility given to it.

Advocacy and dialogue

- Printed media

- Electronic media

Workshops and Conferences

Networking

Others

Advocacy and Dialogue

Public Media

The unit made a number of efforts to get free air time to conduct programs in ETV and radio. After long deliberations and discussions with the government, AEMFI obtained free airtime to broadcast its programs once in a week, for 20 minutes. It has been effectively transmitted its program in the last six months since it start disseminating and promoting the industry to the public. The program was effective in widely introducing and presenting the performance of MFIs.

With the limited resources mobilized by AEMFI, it was only possible to transmit the radio program. Although the ETV provided us, the airtime, we failed to use this golden opportunity due to lack of funds.

Printed Media

Published Bulletin Volume 7. No. 1

The bulletin on Microfinance Development Review Volume 7 No. 1 was published and distributed to all member MFIs and partners.

Published Occasional Paper No. 18

The occasional paper No. 18 " Managing Growth of Microfinance Institutions (MFIs): Balancing Sustainability and Reaching Large Number of Clients in Ethiopia" was published and distributed to members, stakeholders and partners.

Published Occasional Paper No. 19

A study was conducted on Development in Saving and Credit Cooperatives in Ethiopia: Evolution, Performances, Challenges and Interventions. This was published as occasional paper No. 19 and disseminate to members and partners.

Published Occasional Paper No. 20

The occasional paper No. 20 " Linking Banks and Microfinance Institutions (MFIs) in Ethiopia: Best Practices, Challenges and Prospects was published and distributed to members, stakeholders and partners.

Published AEMFI's Performance Report ( 1999-2006)

Since 1999 AEMFI has been actively providing value adding services to its members. The unit has prepared and compiled all the activities of AEMFI from year 1999-2006 and published it as a separate report and disseminated to members, partners, stakeholders and others.

Conducted Annual General Assembly and Presentation of the Performance MFIs

As per the decision of the Ministry of Justice AEMFI conducts its general assembly every year. Thus, the AGM of AEMFI was conducted between March 22-23, 2007. The next one and half days was allotted for the presentation of all member MFIs performance and Challenges.

All general managers and board chairpersons of member MFIs attended the AGM. During the AGM, the annual report of the network for the year 2006 and annual plan for the year 2007 was presented by the executive director of AEMFI. The audit report of year 2006 was also presented for the approval of the assembly. Finally as per the Memorandum of Association of the network, election of board members was also accomplished.

Submit the Annual Report and External Audit Report to the Ministry of Justice

The annual report of 2006, action plan of 2007 and external audit of year 2006 was submitted to the Ministry of Justice. In addition to this the minute of the general assembly attached with the approved plan and report was also submitted to the Ministry of Justice.

Purchase of Books and Publications

AEMFI resource center was frequently used by member, researchers, practitioners and consultants. In order to strengthen and satisfy the need of member and others, AEMFI has purchased different books and publications to the resource center. Moreover, a librarian was outsourced to catalog and code the new books and publications. Moreover, it has also linked the new books and publication into the website of the network.

Follow up on Distribution of Publications to Members and Partners

The publications of AEMFI were distributed to different book stores for sale. The unit also followed the sales and collection of payments.

Follow up Membership Fee for the year 2006 and Distribute a Reminder for year 2007

As per the members decision and the board approval, member institutions should pay annual membership fee of Br. 2,500 (Two Thousand Five Hundred Birr). The unit has distributed a number of reminder letter to all member MFIs. AEMFI also paid the entire annual membership fee to networks such as AFRACA, AFMIN and SEEP.

Hosted the Experience sharing visit to Ethiopian MFIs for Three Tanzanian Delegates

AEMFI hosted the experience sharing visit of three delegates from Tanzania .As per their request AEMFI organized a visit to NBE, RUFIP, GASHA, WASASA and AEMFI as well. During their stay, the delegates discussed with the National Bank of Ethiopia, Supervision Department Head, the General Manager of Gasha and with others. The last day was allocated for wrap up of the visit and a brief summary on the microfinance industry in Ethiopia.

Develop a Project Proposal and Follow up Three Years Partnership Program with OXFAM NOVIB

AEMFI submitted a three years project proposal to Oxfam Novib. It is therefore, approved to get financial support from Oxfam Novib. The project was approved for three years (2007-2009) AEMFI concluded an agreement with Oxfam Novib and started implementing the activities accordingly.

Follow up a Study on Access to Financial Services to Women Entrepreneurs and (WEs) with and Without Disabilities

As per the agreement with ILO to conduct a study on Access to financial services to WEs with and without disabilities, the unit developed a TOR and selected a consultant to undertake the study. To this end MDCTSC conducted the study and submitted the final report. AEMFI in collaboration with ILO, is n the process of preparing a workshop to discuss the findings of the study.

Prepared a Code of Conduct to Members

As per the decision of members in the AGM, the network prepared a draft Code of Conduct to member MFIs for their comments. However, only few MFIs responded by filling the questionnaire and the rest have not yet submitted the questionnaire.

Prepared a Member Satisfaction Survey

In order to evaluate and improve its services, AEMFI conducted a member satisfaction survey. To this end, some MFIs responded and the rest have not yet replied.

Conducted Workshop on Management Information System (MIS) to member MFIs

AEMFI in collaboration with Microfinance African Institution Network (MAIN) organized a workshop/training on Management Information System (MIS) for member MFIs. This workshop was held between April 23-27, 2007 at Woliso. The workshop focused on data analysis, design and implement effective information systems in their respective institutions.

Accomplished a Project Proposal on Gender Mainstreaming in Micro-Finance

The unit in collaboration with al consultant Mrs. Linda Mayoux prepared a project proposal on gender mainstreaming in finance and submitted to Oxfam Novib. The consultant is one of the highly experienced expert in the area of gender and Microfinance. AEMFI is now in the process to start implementing the project which is mainly focused on gender mainstreaming in member institutions. OXFAM Novib will be one of the major donor for this specific activity.

Prepare a Concept Note on HIV/AIDS and Microfinance

The network has been working in the area of HIV/AIDS and Microfinance in the last five years. It is also planning to work very strongly by looking universities or other organization that are involving in this area. Oxfam Novib has recommended us to one university, which is based in Holland. They are still planning to work in the area of HIV/AIDS and Microfinance. Ethiopia is selected as one of the country, which the university is planning to work with AEMFI. The unit has prepared a concept note and submitted to the selected partners who are interested in working with AEMFI. We are expecting their response and comments.

Prepare a Terms of Reference (TOR) for a Study on Microfinance and Micro-Insurance and Conduct a workshop

AEMFI in collaboration with Nyala Insurance co. is planning to organize a joint workshop on microinsurance. However, AEMFI had limited budget to conduct the study and the workshop. The association is looking for funding from different donors. AEMFI was also approaching Women's World Banking for funding.

The objectives of the workshop is to create an awareness on how micro insurance can be intertwined with microfinance activities and create synergy. The objective encompasses and development microinsurance products to effectively combat poverty reduce asset depletion.

Follow up on African Microfinance Journal

AEMFI in collaboration with MAIN, AFMIN, INAFI and AFRACA jointly published the first volume journal last year. It has decided to publish the journal twice every year. AEMFI is the lead network for this specific activity. Thus, as per the agreement with members, AEMFI is trying to obtain articles from partners and members. As soon as we receives the articles it will immediately submit them to the editors once accepted, the English version will be translated into French version or French version into English.

Follow up a Study on Establishing a Microfinance Institutions in Gambella and Somalia Regions

A study was conducted on establishing microfinance institutions in Gambella and Somalia regions. The network has submitted the final report of the study to the Ministry of Federal Affairs for their comments. As per the agreement with the consultants, the findings of the study will be presented in a one-day workshop .

Follow up on the preparation of Business Plan for Afar, Gambella and Somalia Regions

AEMFI has taken an assignment by the Ministry of Federal Affairs to prepare a business plan for the three deficit regions. To this end, AEMFI selected a consultant to undertake the assignment. The overall objective of the study is to facilitate the establishment of MFIs in Afar, Gambella and Somalia regions by preparing a business plan acceptable to the National Bank of Ethiopia. Thus, the preparation of the business plan for the three regions namely Afar, Gambella and Somalia regions was completed and submitted to the Ministry of Federal Affairs for their comments and finally support the establishment of MFIs.

Coordinate and Compile Activity Report and Annual Work plan of AEMFI

Annual activities report of the 2007 and annual work plan of the year 2008 were prepared to be approved by the board of AEMFI and in annual general meeting. Annual activity report for donors were during the reporting period.

Others

Follow up the overall activities of AEMFI

Attending workshops and various forums representing AEMFI

Prepare an agreement between IFAD and AEMFI

Follow up the radio program

Attended 3rd African Microfinance Forum, Kampala, Uganda

Attended SEEP Annual General Assembly and WAM policy forum

Attended Financial Risk Management Training program which was organized by Women's World Banking

Follow up the multi purpose building

Follow up the preparation of the bi-annual conference in Assosa

Comparison of plan and performance for the year 2007

Planned Activities

Status

Comment

Advocacy and Dialogue

Radio Program

Completed

AEMFI has start broadcasting a radio program once in week for 20 minutes.

TV Program

Incomplete

Due to budget constraint, the network has not able to implement this activity

Publications

Printed Media

Completed

Published the bi-annual bulletin (Microfinance Development Review) Volume 7 No.

Occasional Paper No. 18

Completed

Published the occasional paper No. 18 " Managing Growth of Microfinance Institutions (MFIs): Balancing Sustainability and Reaching Large Number of Clients in Ethiopia .

Occasional Paper No. 19

Completed

Published occasional paper No. 19, The study on Development in Saving and Cooperatives in Ethiopia: Evolution, Performances, Challenges and Interventions

Occasional Paper No. 20

Completed

Published Occasional Paper No. 20 Linking Banks and Microfinance Institutions in Ethiopia: Best practices, Challenges and Prospects.

Published AEMFI's Performance Report (1999-2006)

Completed

Published AEMFI's performance report of 1999-2006.

Publication of WEs with and without disabilities

On progress

ILO didn't release the budget to publish the study

Publication of a study on Governance and Ownership

Incomplete

The study even has not yet started

Publication of a study on Baseline survey

On progress

The final version of the study has not yet submitted

Publish a study on Product development

On-going

The study is on progress

Publish a study on Microfinance and Pastoralist areas

On-going

It is on progress

Publication of African Microfinance Journal

Incomplete

We are not able to get enough articles for the journal.

Workshops

Workshop on access to financial services to WEs and with and without disabilities

On-progress

The final study was submitted to ILO and we are expecting their go ahead and also the final payment for organizing the workshop.

Workshop on Baseline Survey

On progress

We are waiting the go ahead from partners (RUFIP and ADB)

Workshop on Governance and Ownership

On progress

The selection of consultants is on progress

Workshop on Linking banks and microfinance

Incomplete

To be conducted in 2008

Workshop with National Bank of Ethiopia (Quarterly meeting)

Incomplete

Due to their busy schedule, we were not able to conduct the meeting on time

Accomplished Annual General Assembly of AEMFI

Completed

AEMFI has conducted its Annual General Assembly and approved the performance of the network and external audit report.

Workshop on the performance of member MFIs

Completed

Each member MFIs presented the performance, challenges and wayforward

Submit Annual Report and External Audit Report to the Ministry of Justice

Completed

As a procedure the network should submit its annual report and annual plan of organization

Purchased books and publications

Completed

The unit has purchased different books and publications for the resource center.

Distributed publications

Completed

Different publications of the network were distributed to members and partners

Membership Fee

Completed

Annual membership fee of 2007 has been collected from members. Moreover, AEMFI paid the membership fee for international networks

Hosted experience sharing visit

Completed

AEMFI hosted the delegates from Tanzania

Finalized partnership agreement with NOVIB

Completed

AEMFI signed three years partnership agreement with NOVIB

Follow-up a study on access to financial services to WEs and without disabilities

Completed

AEMFI conducted a study on access to financial services for WEs with and without disabilities

Prepare a code of conduct for the industry

On-progress

The unit developed a draft code of conduct to members

Conducted workshop on Management Information System

Completed

AEMFI, in collaboration with MAIN conducted MIS workshop to members of MFIs and MAIN members .

Prepared WEMAN project proposal

Completed

The unit developed a project proposal on Gender Mainstreaming in Finance and submitted it to NOVIB.

Produced a concept note on HIV/AIDS and Microfinance

On-progress

The unit developed a concept note in the area of HIV/AIDS and Microfinance and submitted it to one of renowned university in Holland

Prepared a Terms of Reference (TOR) on conducting a workshop on microinsurance

On-going

The unit prepared a TOR to organize a joint workshop on microfinance and Microinsurance to WWB.

Follow up a study of establishing a microfinance Institutions in Gambella and Somalia Regions

Completed

Follow up on the business plan preparation to establish microfinance institution in Gambella and Somalia regions

Follow up on the preparation of Business Plan for Afar, Gambella and Somalia regions

Completed

AEMFI took the assignment to prepare a business plan for the three deficit regions. The assignment was given by the Ministry of Federal Affairs.

Coordinate and Compile Activity Report and Annual Work Plan

Completed

Annual report and annual plan of AEMFI were compiled by the unit.

II. Training Unit

AEMFIs’ training unit was established in May 2002 to enhance the skill and knowledge of the board, management, and other staff of microfinance institutions. Accordingly, the following key objective is indicated in the Business Plan of AEMFI prepared for 2003-2007:

Coordinating various types of professional training for senior, middle level and frontline staff of member MFIs, as a major way of fulfilling its capacity building objective. In order to fulfill the above core objective, the training unit is expected to perform the following activities:

Assess the training needs of the MFIs.

Develop training content.

Develop training modules.

Conduct training.

Document the training process.

Arrange and coordinate exposure visits.

Document results of exposure visits.

Evaluate each training program and make the necessary follow up.

Come up with a cost sharing formula with the MFIs on training activities.

Come up with a criterion that will be used to select the MFIs and their staff who will participate in the training activities.

Timely planning (including writing project proposals) for and reporting on the forgoing activities.

Evaluate the training and exposure visits

In line with the above mentioned goal, objectives and activities the following tasks were performed in the year 2007.

Training

AEMFI’s training unit organized and coordinated four training programs and one workshop i.e. 3 rounds of TOTs on market research for microfinance in Mekele, Addis Ababa and Adama towns. First round training on financial management for branch office was offered in Awassa. A workshop on Product development was delivered to GMs and CEOs of microfinance institutions, which was facilitated by high caliber experts from Microsave.

The unit also coordinated the pilot training for sub-branch offices under the RUFIP program in collaboration with the PCMU (DBE). Currently several rounds of training were being organized in the following areas:

Foundation course for SBO

Acc. & Finance for SBO

Loan appraisal and delinquency management for SBO

Marketing Services for SBO

Program for junior managers

AEMFI was actively involved in liaising between benefiting MFIs, training service providers, PCMU (DBE) and the financers of this project. The unit also closely followed on the successful completion of the initial pilot phase and the take off the actual RUFIP trainings.

Brief description of the Trainings and Workshops Organized for the year 2007

TOT on Market Research in Microfinance (2nd round)

This course was conducted at the Axum Hotel in Mekele, February 7 – 19, 2007. Microsave certified international consultant, together with a local consultant, as co trainer jointly facilitated the training. The training was divided into theoretical sessions and focus group discussions (FGD) sessions all facilitated by both trainers in tandem.

About 15 participants from DECSI and another 3 from the Microfinance program of Mekele University took part in the training. The decision to conduct the training with participants from the two institutions in Tigray region for the obvious language problem that would have been faced at the time of the FGD sessions with DECSI clients. The objective of the course is to enable participants understand Market Research concepts and tools to build the capacity of Ethiopian microfinance institutions in their product development and business development efforts.

TOT on Market Research in Microfinance (3rd round)

This course was conducted at Ras Amba hotel (Addis Ababa), May 7th through 18th, 2007 under the sponsorship of the Irish Aid. 24 participants took part in the training. The participants were selected from the head offices of the MFIs, FCA, AEMFI and the Addis Ababa University.

The objective of the course is to enable participants understand Market Research concepts and tools to build the capacity of Ethiopian microfinance institutions in their product development and business development efforts.

Workshop on Product Development

This workshop was conducted at Imperial Hotel, between June 28th and 29th, 2007. This workshop was part of a product development study agreement signed between AEMFI and IFAD for the Agricultural Marketing Improvement Program (AMIP). As the project was handled by AEMFI in collaboration with Microsave, it was a high caliber training facilitated by the director of Microsave Mr. David Cracknel together with Mr. Trevor Muguwanga(banking specialist). The participants comprised of General Managers and Operation Managers of MFIs, staffs from the FCA and the National Bank.

Financial Management Training for BO

The objective of this course was to impart skills and competencies in financial management and monitoring costs and profits. The training was conducted in Awassa during the period of Oct.15 through Oct.20, 2007. A larger portion of the participants were from Omo and Sidama MFIs and the rest came from SEYAMFI and Letta MFI. This was in response to the high level of demand from both MFIs, especially from Sidama microfinance which was undergoing financial management restructuring at the time.

ToT on Market Research for Microfinance (4th round)

This training was conducted in Adama at Adama Makonnen Hotel from December 17th through 28th, 2007. This training was facilitated by Mr. Shimeles Tefera together with Mr. H/Selassie Tsege, both microsave certified local consultants. Source of fund were Irish Aid and Oxfam Novib. Previously, the training was repeatedly targeting head office staff of the MFIs, for this training AEMFI exclusively invited branch office managers and accountants to attend the training. 26 participants from various MFIs attended the training.

Trainings delivered in 2007

No.

Type of training

No. of Participants

Target

Group

Dates

1.

TOT on Market Research in MF (2nd round)

16

Business development and operations personnel of MFIs

Feb.7-19,2007

2.

TOT on Market Research in MF (3rd round)

24

MFIs,FCA, AEMFI and university lecturers

May 7-18,2007

3.

Product development course

20

General managers and operation heads

June 28-29,2007

4.

Financial Management for Branch Office

35

Branch office personnel of MFIs

Oct.15-20,2007

5.

TOT on Market research for MF (4th round)

26

Branch managers and accountants of MFIs

Dec. 17-28,2007

6.

Pilot trainings of SBO on various courses, under RUFIP

NA

Sub branch staff of MFIs

ongoing

Experience Sharing Visits

AEMFI hosted a team from Lesotho Mine workers Development Agency which visited Ethiopia from 25-28 February, 2007. The objective of the mission was to learn from the experiences of renowned Ethiopian microfinance institutions and accumulate information that will help establish an MFI in Lesotho. During its stay the team made several discussions with the general managers of PEACE, SFPI, GASHA and AdCSI microfinance institutions, including a wrap up session with AEMFI.

RUFIP Related Activities

Visit to Service providers: At the initiation of the Program Coordination and Management Unit (PCMU) of the RUFIP, a team comprising of PCMU staff and AEMFI’s training coordinator visited initially short listed training service providers for the RUFIP trainings, in all the four towns during the period of January 3-27, 2007. The aim of the visit was to asses the capacity of the service providers and helps them come up with their own proposal and activity plan to conduct the trainings. The collected proposals were consolidated and sent for approval to the AfDB during this reporting period.

Visit of the annual mission from ADB and IFAD: A mission from the ADB and IFAD visited AEMFI during the month of May 2008. The meeting agenda focused mainly on the long awaited training component of the RUFIP. After several discussions with the representatives of AEMFI and the PCMU, the mission agreed to give the go ahead for the trainings on the condition that the trainings are sub divided into lots by course and region. As per the request of the mission, the planned training were further subdivided into lots by course and region with a corresponding change in cost breakdown.

Workshop on RUFIP reporting formats: The training unit in collaborating with the PCMU/RUFIP, conducted of two consecutive workshops on the newly developed reporting formats for the RUFIP. The first workshop had the aim of acquainting the General Managers of MFIs and coordinators of SACCOs with the reporting format and getting useful feedback for adjustments. The second workshop was organized for lower level staff of MFIs and SACCOs involved in report preparation with the aim of imparting knowledge on the actual practical usage of the format in reporting.

Contracting of service providers for SBO training: The training officer facilitated the signing of contracts between the DBE and the two identified service providers for the region, Dedebit Credit and Saving Institution (DECSI) and Mekele University (FBE). This has enabled the program to jump start the pilot phase of the RUFIP training. This was continuation of previous successful efforts made in other regions in collaboration with representatives from the development bank.

Annual work plan and Budget for PY5: A detailed work plan and budget for PY 5(July, 2007 to June 30, 2008) of the Rural Financial Intermediation Program (RUFIP) was submitted to the PCMU by AEMFI during this reporting period. Moreover quarterly reports of PY-4 of RUFIP were submitted to the PCMU.

Other Activities

Partnership with Microfinance Management Institute: The Microfinance Management Institute recruited training and academic institutions to expand its global community of capacity building of the professionals working on the development of financial institutions and financial systems for the poor. An application was sent by AEMFI, to join the global network, and was promptly accepted by the MFMI.

Through its partnership with the MFMI, the association is expected to join efforts with a current international cadre of management and MBA faculty from 13 Universities in 10 countries and 40 trainers from CGAP’s microfinance management program called skills for microfinance managers. The benefits gained by the MFMI include:

Global and regional networking with professors, trainers, students and their organizations

Exchange of experience and best practice in global microfinance,

Skills to develop tools and materials for training and academic programs(research methods, course design, development and delivery)

Access to funding to develop training materials

Participate in regional workshops for trainers and academics with significant support of the MFMI.

Product development study for AMIP: The Agricultural Marketing Improvement Program (AMIP) is a project financed by IFAD. The product development assignment under the AMIP has been given to AEMFI to be carried out in collaboration with Micro-save. The first team of experts from microsave arrived here in the month of December; during their three-week stay here the team had several discussions with various supporting institutions and MFIs and their clients. The team has already presented its preliminary findings to stakeholders at a wrap up meeting held at AEMFI.

The first draft report on the potential products for post harvest needs has been submitted to AEMFI towards the end of this year. The training officer has facilitated and participated in the study. Proposal for a composite TOT program: The AfDB, World Bank and IFAD supervision mission also recognized the need to increase the number of trainers in MFIs and service providers and recommended that 2 TOT sessions of 25 participants each be organized, in addition to the TOT planned in PY4.

Accordingly, AEMFI with the objective of executing the previously planned 3 TOTs for PY4 together with the 2 TOT sessions added later by recommendation of the mission, proposed to organize three TOT sessions in methodologies, loan appraisal & delinquency and accounting & finance simultaneously, for 50 participants divided into two groups where both groups take methodologies as common and the other trainings separately.

Capacity building activities: The training officer attended the 3rd annual microfinance conference held in Kampala Uganda through the partial sponsorship of the MFMI. The conference was hosted by AMIFU and lasted for five days from August 20-25, 2007. In addition the training officer attended the first regional workshop of the MFMI which was held concurrently August 22 through August 25 at the same venue.

The training officer attended the 3rd AFRACA agribanks forum held in Nairobi, Kenya, October 16-18, 2007. The theme of the conference was "Africa value chain financing".

The training officer attended the workshop organized by IFAD on the Agricultural Marketing Improvement Program (AMIP). The workshop was held at the Adama Makonnen hotel, between May 1st and 3rd, 2007.

Challenges

The main challenge face this year the same frustrating problem that we have been facing for the last two years, the long delay in getting the green light from ADB for several activity planned under RUFIP.

Comparison of Plan and Performance For the year 2007

Planned Activities

Completion/progress

Comments

Signing of contract with service providers for client and SBO training.

On progress

Floating of tender for service providers was advertised on the July 12th, 2007 edition of the Ethiopian Herald by DBE.

Orientation program for service providers.

On progress

Representatives from AEMFI and the PCMU/DBE were on tour to visit the service providers with the objective of creating linkages among service providers and MFIs and raise awareness of the RUFIP and the microfinance sector.

Floating of tender by AEMFI for service providers of BO and HO training.

Not Yet initiated

This was planned with the RUFIP trainings in mind. Several trainings planned under this component were not conducted due to the decision by ADB to delay the release of the funds.

Organize a TOT program

On progress

The training unit submitted its proposal for the TOT and it awaits the release of the funds by ADB and subsequently by DBE.

Super vision and technical support to service providers of retail courses for SBO.

Completed

A team comprising of PCMU and AEMFI visited the short listed service providers.

Marketing services course for BO.

On progress

The assignment for developing the training manual for the training has been taken up by a senior microfinance practitioner and two university lecturers.

TOT in Market Research for Microfinance

completed

This training was conducted in

3 rounds this year.

A workshop on product development

Completed

This training was conducted at the Imperial Hotel, Addis Ababa. Between July28th and 29th, 2007.

Financial management training for branch office

Completed

Financial Management training for BO was planned to be organized under the RUFIP project but due to the high demand for the training, AEMFI was forced to finance it through Irish Aid.

Exposure visits

Not initiated

This was planned with the RUFIP in mind.

Prepare quarterly report to RUFIP and AEMFI

completed

III. Performance of Monitoring & Technical Assistance

The performance monitoring activity of AEMFI was introduced in late 2001 with the employment of an officer in charge. Most of the monitoring activities kicked off 2003, after preliminary tasks were accomplished in 2002.

Objectives of Performance Monitoring & Technical assistance unit

Setting performance indicators and definitions for the Ethiopian microfinance providers

Standardizing operational and financial reporting formats and definitions

Satisfy the information needs of various stakeholders by issuing financial and operational reports for the Ethiopian microfinance institutions

Improving management information systems of member MFIs

Improving business planning, financial management, manuals and procedures of member MFIs

Major Activities

Continuously revisiting selected performance indicators and reporting formats with member microfinance institutions and other stakeholders

Preparing and revising a performance monitoring manual for use as a guidance in collecting and analyzing data about the microfinance industry

periodically collecting institutional, financial, and operational data and processing them using an appropriate database -MIX monitor oracle based Toolkit

Disseminating performance indicators, financial data, and operational data of the microfinance industry to various stakeholders using a bulletin published annually

Assist member MFIs in improving their management information systems, business planning, financial management, and systems and procedure

Major Planned Activity in 2007

The unit planned to undertake the following activities related to performance monitoring and technical assistance in 2007.

Collecting and summarizing financial & operational data for Quarter 4 of 2006 and quarter 1,2 & 3 of 2007

Publish Audited financial data and operational data of the microfinance institution in a bulletin including the basic indicators for 2005.

Publish audited financial data and operational data of the microfinance industry in a bulletin including the basic indicators 2006.

Finalize publication of audited financial and operational data of the microfinance industry in MIX Market website for 2006.

Publication of financial and operational data for 2006 Micro Banking Bulletin (MBB)

Technical assistance to Harar MFI business planning using Microfin Software

Quarterly activities report to AEMFI and Ireland Aid

Brief Description of activities performed during this period

Collection of data from MFIs

Financial and operational data for quarter 4 of 2006 and quarter 1, 2& 3 of the year 2007 were collected, summarized and disseminated to relevant stakeholders.

Publication of financial and operational data for the year 2006 in Mix Market website & Micro Banking Bulletin (MBB)

The external audited financial and operational data for the year 2006 for Ethiopian microfinance institutions was summarized and submitted to MIX Market. It was finally published in Mix market website (see Mix Market website) for the details.

Publish Audited financial and operational data of the MFI in a bulletin including the basic indicators for the year 2005

Performance analysis report for 16 MFIs were prepared using MIX monitor (data analysis tool) and published, as AEMFI's performance analysis report bulletin No 3. The publication was disseminated to all MFIs to help them evaluate their performance compared to industry average and within their own peer as well.

Technical assistance to MFIs business

The objective of the mentoring process was to enable the management of the mentored MFIs to have a strategic guide and help them access loan from RUFIP. Freelance consultant was selected by AEMFI to prepare Harar MFI five years business plan using Microfin software.

Other Activities

In addition to its core activities, the unit performed the following activities.

Compiling the annual activities of AEMFI for the year 2007.

Compiling the annual plan of AEMFI for the year 2008.

Compiling the annual work plan and budget

Challenges

One of the major challenges was late response from MFIs in the data collection process.

Comparison of plan and performance for the year 2007

Planned Activities

Completion/

Progress

1

Collecting & summarizing financial & operational data for Quarter 4 of 2006 & quarter 1,2&3 of 2007

Completed

2

Publish Audited financial data and operational data of the microfinance industry in a bulletin including the basic indicators for year 2005.

Completed

3

Finalize publication of audited financial and operational data of the microfinance industry in MIX Market website for the year 2006.

Completed

4

Publication of financial and operational data for the year 2006 Micro Banking Bulletin (MBB)

Completed

5

Technical assistance to Harar MFI business planning using Microfin Software

Completed

6

Writing Project proposal for Ireland aid for the year 2008-2010

On progress

7

Quarterly activities report

completed

IV. Research Unit

The goal of the research unit is to carry out research activities that are of interest to the microfinance industry.

Objectives

AEMFI in its own and on behalf of other interested parties facilitates the undertaking of researches that touch a number of areas. Thus, the unit accomplished the following activities.

A Study on Managing Growth of Microfinance Institutions (MFIs): Balancing Sustainability and Reaching Large Number of Clients in Ethiopia

This study was conducted by the executive director himself. It was published as occasional paper No. 18 of AEMFI.

Baseline survey Study

AEMFI in collaboration with RUFIP selected ITAB consultancy firm to conduct Baseline survey study. The consultant has submitted the draft report of the baseline survey.

Ownership and governance of MFIs

Association of Ethiopian Microfinance Institutions (AEMFI) and Rural Financial intermediation program (RUFIP) posted the TOR of the study two times. However, due to limited number of consultant working in the area, only two consultancy firms submitted their proposals. Nonetheless, as per the world bank procedure there should be or more consultants to undertake the selection. Thus, AEMFI with ADB invited consultants to express their interest of undertaking the study on Ownership and Governance. Eleven local and international consultancy firms expressed their interest to undertake the study within the given deadline. This is in progress.

Rating Microfinance institutions

To help the MFIs identify their operational strengths and weaknesses and to present reliable and accurate information about risks and performance to any independent third parties, AEMFI in collaboration with RUFIP invited consultants to assess MFIs credit worthiness and conduct an in-depth analysis of qualitative and quantitative in key operational areas. This study was advertised internationally using world bank standard procedures, However, three international consultancy firms from different countries submitted their expression of interest. This is currently being processed by PCMU.

A study on Development of MSE sector in Ethiopia

AEMFI with the support of Irish aid selected a consultancy firm to conduct a study on has on financial need assessment of MSE operator in Ethiopia. This is currently in its final stage.

A study on how provide microfinance in pastoralist areas

AEMFI in selected WABEKBON Consultancy firm to undertake the study. The consultancy firm submitted the final draft in the four quarter of 2007.

Product development in Ethiopia

AEMFI in collaboration with Micro Save conducted the product development study. AEMFI is looking for additional funds to start the piloting in selected MFIs.

Preparation of Business plan for new MFIs

AEMFI, with the fund of Ireland Aid and NOVIB hired a consultancy firm to develop the business plan for Afar, Gambella and Somalia regions. MICRO Development Training and Consultancy Service (MDTCS) has already prepared and submitted the final draft business plans. To this end Gambella region is in the process to establish its own microfinance institute in the region.

Critical review of the financial sector in Ethiopia and producing the draft financial sector development strategy to initiate the process

AEMFI in partnership with GTZ, NBE, and Federal Cooperative Agency produced draft report of microfinance strategy for Ethiopia. The road map was presented in a consultative workshop where the key agents/players in the microfinance industry participated in the discussions. The strategy is currently in the process of being finalized based on the comments from the workshop.

Accomplished a study in microfinance and women entrepreneur particularly disabled women entrepreneur and living with HIV/AIDS

AEMFI in collaboration with ILO conducted a study on microfinance and women entrepreneur by selecting MDTCS to carry out it. MDTCS submitted the final report of the study to AEMFI.

Comparison of plan and performance for the year 2007

Research Activities

Status

Managing Growth of Microfinance Institutions (MFIs): Balancing Sustainability and Reaching Large Number of Clients in Ethiopia

Completed

Baseline survey

Completed

Ownership and governance of MFIs

On progress

Rating Microfinance institutions

On progress

Development of MSE sector in Ethiopia

On Progress

Conduct research on how to integrate microfinance with pastoralist development ( pastoralist area)

Completed

Product development in Ethiopia

On progress

Preparation of Business plan for new MFIs

Completed

Critical review of the Financial sector in Ethiopia and producing the draft financial sector development strategy to initiate the process

On progress

Microfinance and women entrepreneur particularly disabled women entrepreneur and living with HIV/AIDS

Completed

V. SAVING AND CREDIT COOPERATIVES UNIT

Introduction:

In its effort to strengthen the microfinance sector of the country, the Association of Ethiopian Microfinance Institutions (AEMFI) has established a separate unit to handle the activities of Saving and Credit Cooperatives (SACCOs) since 2006. This unit focused on financial cooperatives building the capacity at different levels, such as training, technical support, research and performance monitoring.

The main objectives of the unit include:-

Promoting SACCOs through training, advocacy, creating different forums and workshops to discuss the challenges of financial cooperatives

Developing standardized manuals, procedures, and systems for SACCOs,

Collect data to measure the performance of SACCOs

Conduct research to address the challenges of SACCOs

Advocacy and lobbying

Training :

1) Risk and Internal Control Management

2) Accounting and Financial Management for SACCOs

Performance Monitoring:

Establishing a data base of SACCOs, both urban and rural

Providing technical assistance on business planning and others key areas for SACCOs.

Data collection

Designing benchmarks and performance indicators for SACCOs

Workshop on comparative performance

Research:

Study to develop standard accounting and MIS for SACCOs

Major activities performed in 2007 are:

Organized training on "Risk and Internal Control Management"

This was delivered to all SACCOs’ union managers and some promoters from federal and regional promotion bureaus. The training was conducted from April 30 to May 4, 2007 at Queen of Sheba Hotel, Addis Ababa. Twenty five (25) trainees participated and two facilitators, a freelance consultant and a co-trainer from the Federal Cooperatives Agency (FCA), facilitated the training. The aim of this training was to improve the quality of risk management in SACCOs through:-

Understanding the importance of having an institutional culture of support

strong internal control systems,

Assessing the vulnerability of SACCOs and identifying areas of risk

Applying techniques for of mitigation of risks,

Monitoring the effectiveness of risk management strategies.

Moreover, two resource persons were invited from FCA and the Rural Financial Intermediation Program (RUFIP) to discuss the current status of SACCOs in Ethiopia.

Accounting and Financial management" for SACCOs.

This training was conducted from May 11th to 15th, 2007 at Queen of Sheba Hotel, Addis Ababa. Twenty five participants, SACCOs’ Union Accountants and promoters from promotion offices attended the training. The training was facilitated by Ato Mekonen Yelewimwessen, Amhara Credit and Saving Institute (ACSI) General Manager. The aim of this training was to provide basic financial management knowledge to practitioners.

Risk and Internal Control Management

The second round training on Risk and Internal Control Management was given to SACCO promoters from the four major regions, Amhara, Oromia, SNNPR and Addis Ababa. This training was conducted from September 3rd to 7th, 2007 at the Ethiopian Management Institute, Debre Zeit. Eighteen (18) trainees attended the training and it was facilitated by a freelance consultant, Ato Gebeyehu Tebeje.

PEARLS Monitoring System

As part of its performance monitoring activity, the unit organized training on "PEARLS Monitoring System" in collaboration with the World Council of Credit Unions (WOCCU). It was conducted at Kings’ Hotel, Addis Ababa. A Total of 29 participants attended the training who were brought from Unions, promotion offices and from different stakeholder institutions like Self Help Development International (SHDI) and the National Bank of Ethiopia (NBE). The objective was to bring best practices of SACCO and the internationally accepted operations and indicators of performance monitoring to Ethiopian financial cooperatives.

Performance Monitoring

The unit collected data on the four RUFIP targeted regions (Amhara, Oromia, SNNPR and Tigiray) and Addis Ababa city Administration. Gambella and Banishangul Gumuz regions. SACCOs’ product survey was part of this activity which can be used for product development in SACCOs. Moreover, the unit acquired the World Council of Credit Unions (WOCCU), Inc. performance monitoring system, called PEARLS.

Technical Assistance for SACCOs

AEMFI have been providing trainings in the area of business planning and financial modeling using software called Microfin to staff in the cooperative sector. Though the training was provided for all union managers and some promoters in two rounds, AEMFI did not believe that its intervention was enough. AEMFI with the help of the Irish Aid provided technical assistance to one SACCO as a pilot. Due to its relatively better performance and capacity, the Sidama SACCOs union was selected to get the first technical assistance. To this end, AEMFI contracted a freelance consultant to carryout this activity and a five years business plan is developed for this union.

Other activities performed in 2007:-

Communication with Canadian Cooperatives Association,

Communication with World Council of Credit Unions (WOCCU)

Experience sharing visit to Credit Agricole/ France by a delegate lead by

AEMFI’s executive director

Study visit to the Ghana Credit Union Association (CUA) Ltd.

Together with two other staffs of AEMFI, the unit head attended a two weeks workshop on Microfinance and Community Economic Development at Martyrs’ University, Uganda and is following its continuation on a distance level.

The unit head attended a two weeks TOT on RUFIP

Problems encountered in carrying out these activities:

Absence of organized and reliable data about SACCOs, Lack of standard record keeping and reporting in SACCOs impeded establishing performance monitoring for SACCOs.

Mushrooming of RUSACCOs without a strong capacity building intervention,

Absence of professionals with sufficient knowledge of financial and cooperatives

Absence of a common forum among stakeholders including the responsible governmental office to coordinate fragmented interventions to support the sector

Limited attempt to measure the impact of the training

Comparison of plan and performance for the year 2007

Trainings:

Status

Remarks

1

Risk Management and Internal Control

Completed

This training was given in two rounds. The first round was given for all union managers in the country and the second one was given to promotion office professionals.

2

Accounting and Financial Management for SACCOs

Completed

3

Research:

Study and Develop Standard Accounting and MIS for SACCOs

Not done

Due to FCA’s comment; FCA has started working on it and told AEMFI to find out other research topics together with a proposition of three research topics. So, currently AEMFI is working out over these suggested issues.

4

Performance Monitoring:

-Data collection

-Designing comparative

performance indicators

for SACCOs

-Workshop on comparative

performance

Only the data collection part is accomplished (25%)

Lack of standard record keeping and reporting in SACCOs slowed the accomplishment of our plan of establishing performance monitoring system in SACCOs. So, the major part of the plan is postponed to the next operation year of 2008.

5

Technical assistance for SACCOs

At final stage

The contracted consultant is doing on the finalization of the Business plan.

6

Advocacy and Lobbing for SACCOs:

-Communicating with international organizations working on Credit Unions development;

-WOCCU and Desjardins

-Credit Agricol/ France

-Canadian Cooperatives

Association (CCA) etc.

About 75% is completed!

With the exception of CCA, AEMFI built a good relationship and develop cooperation with others. The SACCOs unit is on the way to develop partnership with the CCA.

8

Staff Capacity Building: -Experience sharing visit

to Credit Agricol, France

-Experience sharing visit to Ghana Credit union

Association

Completed

A delegate lead by the Executive director of AEMFI visited Credit Agricole, France. The team was composed of people brought from FCA, three MFIs and AEMFI.

A staff from AEMFI went to Ghana to visit GCUA Ltd.

VI. MIS Unit

The unit planned and performed the following activity for year 2007

Follow up AEMFI Website

Content preparation and assist the designer in technical part

Searching web Host companies

Update current website when it is useful

Troubleshoot software problem, system failure and Support computerized monitoring system

Arrange and organize the resource center

Attended workshop in Deberezet prepared by a group of professionals from Agri-ProFocus members

Attended MIS Workshop co-ordinate by MAIN and AEMFI in Woliso

Training on Microfinance and community Economic Development at Uganda Martyrs University (UMU)

Follow Up AEMFI multi-purpose building

Attended Training Bankers Realm (BR) in ACSI for one week.

Attended Training in Networking

Follow up the Omni tech plc initiative in developing common MIS tool- Software for MFIs.

Promote the industry in different channel such as publication, website and other

Disseminate publication

Support, assist one of member MFI, OCSSCO, in web designing

Follow up field Visit from AFAR region to MFIs, NBE and AEMFI

Collected and summarized the loan purpose and products of members

Attended Technical Corporation among Developing Countries (TCDC) Program 2007 at the ARB Apex Bank Ltd. Accra- Ghana

Challenges

There was no earmarked budget from donors to implement the activity.

Comparison of plan and performance for the year 2007

No.

Planned Activity

Completion/Progress

Comment

1

Follow up AEMFI Website

Completed

Re-design website and negotiate with host companies called "Hostmysite", and launches its website at www.aemfi-ethiopia.org.

2

Troubleshoot software problems and system failure

Completed

Support and assist AEMFI in any troubleshooting and system failure.

3

Arrange and organize the resource center

Progress

Follow up cataloging and encoding books in the database

4

Attending workshop in Deberezet prepared by a group of professionals from Agri-ProFocus members

Completed

Attended a workshop on learning alliance on chain empowerment of farmer organizations in Ethiopia.

5

MIS Workshop co-ordinate by MAIN and AEMFI in Woliso

Completed

Attended a training mainly focused on Loan Performer

6

Attended two days workshop in Agricultural Marketing Improvement Program (AMIP) and product development

Completed

Attended a workshop on Agricultural Marketing Improvement Program (AMIP)

7

Training on Microfinance and community Economic Development at Uganda Martyrs University (UMU)

Completed

Participated in Uganda Martyrs University (UMU) Workshop in Microfinance and Community Economic development

8

Training Bankers Realm (BR) in ACSI for one week

Not Yet

-

9

Training in Networking

Not Yet

-

10

Attending workshop Three days World IT Forum in UNECA

Completed

World IT Forum (WITFOR) organized by the International federation for information processing (IFIP) host in Addis Ababa From August 22 to 24, 2007 in UNECA, under the theme "ICT for Development and Prosperity".

11

Follow up Omni tech plc studies in developing common MIS tool- Software for MFIs.

In Progress

To acquire a dependable and suitable MIS solution for our members MFIs a task solution was assigned to one of our local companies called OmniTech PLC. They start perform customization and localization of MIFOs in Amharic, modified based on Ethiopian business calendar and added their own accounting software will be ready to pilot test it in one member MFI.

12

Promote industry in different channel such as publication, website and other

completed

Performance Analysis report No.2 disseminate to Partners, Members and others

13

Follow up field Visit from AFAR region to MFIs, NBE and AEMFI

completed

Facilitating field visit in 4 MFIs, MICRO Development Training consultancy service, NBE and AEMFI to the team comes from Afar region from October30- November 7, 2007

14

Attend Technical Corporation among Developing Countries (TCDC) Program at the ARB Apex Bank Ltd. Accra- Ghana

completed

AFRACA facilitate two Weeks Attachment hosted in ARB Apex Bank Ltd. And there is 5 participant come from Equity Bank, world Vision-Kadet - Kenya and AEMFI. We visit different unit in Apex Bank and Rural community Banks (RCBs) in Ghana.

15

Collection and summarize Detailed Activity report from members

completed

Collection of Detailed activity from MFIs and summarize report