The Land Investment for Transformation (LIFT) programme is a 6.5 years FCDO funded programme that aims to improve the incomes of the rural poor and to enhance economic growth. The programme works to achieve its objective through second level land certification (SLLC), improved rural land administration, and the development of the rural land market system through its economic empowerment unit (EEU). The SLLC aims to achieve 14 million parcels in 140 woredas for approximately 6.1 million households in Oromia, Amhara, SNNP and Tigray regions. The EEU, on the other hand, performs interventions aimed at accelerating the impact of SLLC on poor farmers by improving rural land market systems. The unit’s interventions focus on access to finance (A2F), rural land rental and conservation agriculture which are implemented using the market for the poor (M4P) approach. Within A2F, the EEU team is implementing a portfolio of interventions targeting different constraints affecting the poor. This includes working with several MFI partners to develop, pilot and roll out new products that improve access to credit and non-credit financial services for rural farmers, allowing them to make larger, more effective agricultural investments. LIFT has collaborated with several MFIs to pilot and roll out its services. In line with this, LIFT-EEU has also signed a Memorandum of Understanding (MoU) to work in partnership with the Association of Ethiopian Microfinance Institution (AEMFI) in order to sustain the A2F interventions as the programme is in its final stages.
The recent COVID 19 pandemic is anticipated to have an impact on the activities of the association and member MFIs. The high levels of uncertainty have led people to hold investments and reduce financial transactions. An assessment by LIFT’s EEU reveals a significant decline in savings as clients opt for withdrawal of savings to cope with the shock the pandemic might bring. Relatedly, the study by AEMFI showed, an increased portfolio at risk (PAR) from 5.2 percent at end of March 31, 2020, to 7.8 percent on April 30, 2020.[1] The response measures from the MFIs, however, were not well organized and structured. As the report from AEMFI’s study shows, several MFIs followed a wait and see approach due to the uncertain nature of the pandemic trajectory.
[1] “Effects of COVID-19 Induced Crisis on Ethiopian MFIs and their Clients” AEMFI, 2020
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