AfDB launches microfinance capacity building fund

These women inspect a site where a building for a microfinance project will be erected. The Microfinance Capacity Building Fund will have a special focus on women and rural areas in Africa. Photo by: OCHA / CC BY

The African Development Bank, in partnership with the government of Spain, has launched the Microfinance Capacity Building Fund – a multiyear effort to increase technical capacity building in the finance sector for the benefit of poor and low-income people in Africa.

With a special focus on women and rural areas, the MCBF aims to increase transparency in Africa’s microfinance industry through technical assistance projects. The Fund will award grants annually from 2011 through 2013 through three separate calls for proposals, each with a focus on a specific intervention area and set of African countries.

The first call for proposal which was released on July 19 specifically seeks to “Increase Transparency within the Microfinance Sector” and primarily covers the area of the West African Economic Monetary Union. Proposals for countries outside the Economic Community of West African States (ECOWAS region), such as Gambia, Liberia, Nigeria, Ghana, Cape Verde, Guinea and Sierra Leone will be considered on a case-by-case basis.

The deadline to submit proposals for the first phase is September 19. AfDB states that eight to 10 grants of approximately €200,000 – €500,000 each will be disbursed in November. The second and third calls for proposals will be in May 2012 and May 2013.

Service providers, networks and groups of retail financial institutions, retail financial institutions servicing low-income clients, and government entities and central banks are eligible to apply. The call for proposal states specifically that network and group applications are preferred over individual applications. All bidders must be an entity legally constituted and registered in Africa.

The MCBF is part of a joint-initiative between AfDB and Spain, a country which has joined a group of key donors to global initiatives that have targeted Sub-Saharan Africa. The Fund has a current volume of €15 million. In July 2009, AfDB and Spain signed a bilateral trust fund agreement on microfinance which evolved into the MCBF.

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