Strengthening the Microfinance Lending Community
Summary
ACDI/VOCA’s Central Asia Microfinance Alliance II project (CAMFA II) was the continuation of the highly successful CAMFA project, one of a new generation of ACDI/VOCA credit projects addressing marketplace demand for financial services and products through the establishment of targeted assistance. CAMFA, which lasted four years, supported local financial institutions in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. It strengthened the microfinance-lending community by offering a broad range of innovative financial solutions, technical assistance and training to make the institutions more sustainable and effective.
ACDI/VOCA built on these successes through CAMFA II, a 3-year, $4.85 million, USAID-funded project. Based in Bishkek, Kyrgyzstan, CAMFA II increased access for micro and small business to a broad range of financial services. It expanded its outreach to rural and isolated regions throughout Kyrgyzstan and Central Asia. The project focused on developing the microfinance-enabling environment of the region, promoting innovative lending methodologies suitable for rural customers, and creating synergy with value chain finance interventions.
CAMFA II had the following three components:
Component 1—Microfinance Association Capacity Building
ACDI/VOCA worked through the four existing microfinance associations (MFAs) in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan to complete these activities. The Central Asian MFAs are part of a growing global community of organizations seeking to reach large numbers of small-scale entrepreneurs through a coordinated approach to service delivery.
CAMFA II improved Central Asia’s policy and regulatory environment to enable microfinance sector innovation and delivery of a more diversified set of products and services; increases the availability of microfinance training and specialized technical assistance; offers best practice information on national and regional levels; and supports standards development and increased transparency.
Component 2—Frontiers LLC Management and Support
In 2003 ACDI/VOCA established Central Asia’s only locally based wholesale lender to the microfinance sector, Frontiers LLC, in Bishkek, Kyrgyzstan. As a direct result of its strong growth and a commitment to cost containment, Frontiers became operationally self sufficient well ahead of projections. ACDI/VOCA also supported an “agricultural lending window” in Frontiers by providing lending capital and technical assistance to nonbank institutions working in rural areas. Under this CAMFA II component, ACDI/VOCA monitored Frontiers’ assets and continued to provide technical assistance and strategic leadership through ACDI/VOCA’s role on Frontiers’ board of directors.
Component 3—Rural Finance
Under this component, CAMFA II expanded on CAMFA I’s success in rural and agricultural lending services by assisting MFIs, credit unions and other lenders in Kyrgyzstan willing to undertake innovative approaches to serving agricultural and rural areas.
CAMFA II’s services were available through a competitive awarding process. This process focused on the strategy and commitment of the MFIs and credit unions to apply new lending methodologies and innovative lending procedures for agricultural lending with the potential for replication, in order to increase outreach to rural customers located in remote and isolated areas of Kyrgyzstan.
CAMFA II’s Goals
By project’s end in September 2009, CAMFA II helped over 190 MFIs increase their depth of outreach, diversify services and improve efficiencies to support over 365,000 small-scale businesses with small loans and training. In addition, CAMFA II strengthened Frontiers’ institutional sustainability and help support it in serving small-scale microlenders throughout Central Asia.
Local Partners
To learn more about CAMFA II’s local partners, please visit the websites of these local microfinance associations:
Association of Microfinance Organizations of Kazakhstan (AMFOK)
Association of Microfinance Organizations of Tajikistan (AMFOT)
Association of Microfinance Institutions (AMFI)
To learn more about CAMFA I, click here.
