Funding (loans and grants)

During the first quarter of 2017, the Social Fund financed the loan portfolio of the Azal Micro and Islamic Microfinance Program

with YR 300 million to enable it to continue the provision of financial services to its clients, particularly those working in rural production activities. Also, the program received YR 26 million to support customer training, particularly in rural areas. The Ittihad MF Program - Abyan was financed with YR 50 million to support the continuation of its financial services in Ja'ar, Ahwar, Al-Shihr, Aden and Hadhramaut. A grant amounting to YR 49 million was also provided to the National Microfinance Foundation, while a grant of US 420,000 was provided to the Small and Microenterprise Development Agency (SMEPS) to support its ongoing training and advisory projects for agricultural and livestock production and handcraft activities, as well as for covering administrative expenses.

Funding Guarantee Program

A number of activities related to the establishment of the funding guarantee program have been completed, including the completion of the operations manual and its endorsement by the World Bank, the completion of the initial draft of the accounting manual, the development of the program's user guide, the initial version of the guarantee certificate & the final version of the partnership agreement with microfinance programs and institutions. Furthermore, the program's team worked on the analysis of the portfolios of a number of MFIs in preparation for the selection of those that are eligible to partner with. The team also conducted field visits to some programs and institutions to acquaint itself with their operations and to promote future activities of the program.

Development of automated systems

During the quarter, SFD has continued the provision of technical support to all automated systems installed in the various microfinance programs and institutions. During the quarter, the MIS for integrating and tracking the functions of SMED's staff underwent development. In addition, development of the MIS for the loan guarantee program has continued, and great portion of it has been accomplished. Also, during the quarter SMED has continued providing technical advice with regards to the three software systems in use by the MFIs (loan tracking, human resources, finance and accounting). Finally, the screens and reports of the solidarity group system in Aden Microfinance Institution have also been revised and updated.

Auditing

In order to verify the existence of customers and the appropriateness of the existing loan portfolios of MFIs as well as the target group access to financial services, an SFD team conducted a number of field audits on a sample of the clients of the National MF Foundation and Microfinance Development Program (Nama') in Al-Hudaidah Governorate. The team also carried out similar audits for a large sample of Aden MF Foundation. The audits were concluded by remarks and recommendations to enhance the role of the microfinance industry in reducing unemployment and alleviating poverty. The SMED Unit also participated in the formulation of the Internal Audit Regulations of the Azal Microfinance Islamic Program.

Yemen Microfinance Network

During the quarter, the network has been active in carrying out several training activities and workshops despite the current crisis. In collaboration with the University of Science and Technology, YMN organized a workshop on the role of microfinance in absorbing graduates from training programs. Another workshop hosting people working in the microfinance, banking and academic sectors discussed the impact of currency exchange on the local sector. A workshop on early recovery and humanitarian assistance during crises was held in collaboration with the United Nations Development Program (UNDP). The workshop was attended by a number of representatives from microfinance institutions and programs from several governorates.

During the quarter, the network also held five specialized training courses targeting MFI employees: principles of microfinance (10 days), accounting for non-accountants (10 days), risk management (4 days), another course in microfinance principles held in Aden MF Foundation (10 days), and an advanced course in internal auditing for internal auditors working in MFIs (5 days).