Funding

In the second quarter of 2018, SFD and Al Nahdha Social Association signed an agreement to finance Hadramout Microfinance Program with an amount of 200 million (approximately USD 433,624) to enable it to continue financing the activities of the clients located in Sayoun, Tareem,

Al-Soum, Al-Qatan, Shibam, Mukalla, Sheher, Al-Hami, Al-Mahra, Sah and Shabwah. The number of active clients reached 6,806, 31% of them were females. SFD also financed the National Microfinance Foundation (NMF) with a similar amount, representing the second installment of a financing agreement totaling 400 million Riyals to enable it to provide financial services to income-generating activities.

 
Grants:
SFD has been the main supporter of MFIs during the current crisis in Yemen, which has been lasting for more than three years, with the aim of enabling them to continue providing financial and non-financial services to the owner income-generating activities. The total amount of financial support during the quarter has amounted to approximately 1.3 billion Riyals.

 
The compensation of war-affected SMEs Project:

 SFD has played a major role in supporting war-affected clients (Phase II) in Al Amal Bank, National MF Foundation and Nama MF Foundation. The total number of clients compensated by the end of this quarter reached 2,350, of which the percentage of women was 70%.

 
Alternative Energy Project:

 The armed conflict has resulted in the lack of electricity necessary to operate the facilities of microfinance programs and institutions, thus affecting their work and forcing them bear considerable financial burdens from the use of generators and the additional costs of fuel and maintenance. Accordingly, SFD has supported a number of MFIs, including: Azal, Nama, National, Hadhramout, and Al-Ittihad, as well as the Loan Guarantee Program to furnish their branches and premises with integrated solar systems that would provide them with an alternative source of energy. This would contribute to improving their operational efficiency and reduce their financial cost, which would indirectly improve the continued access of financial services for owners of small and micro enterprises.

Development of mobile phone services:

 SFD has sought to introduce financial services related to income-generating activities through mobile phones in rural areas. This would play a large role in the financial education of this segment of the population, and allow the beneficiaries to save effort and money. A grant agreement was signed with Al-Amal Bank to support and disseminate this new service.

Development of rural finance methodologies:

 SFD has funded the National Microfinance Foundation (NMF) and Hadramout MFI with a grant to allow them qualify and train their cadres in designing appropriate financing methodologies targeted at agricultural entrepreneurs.

 
Yemen Loan Guarantee Program (LGP):

 The program aims to provide appropriate guarantees to customers who are unable to provide them to microfinance programs and institutions during the loan application process. During the quarter, SFD has provided the necessary support to the program in the form of funds to cover its administrative expenses, and train and qualify its cadres locally and abroad.

Development of the Microfinance Environment and the Infrastructure of Information Systems:

 SFD has played a major contributing role in the creation of a small and microfinance environment by qualifying and training a number of cadres working in Yemeni microfinance programs and institutions. SFD has been collaborating with LFS (a German consulting firm) in developing methodologies for agricultural micro-lending, and by continuing the development of the related information systems infrastructure of MFIs. The latter is considered as one of the most important pillars in helping speed up customer service, keep track of the loan portfolio, and make the necessary decisions. Activities in this regard have included the updating and development of the automated Human Resources system, and the designing of a desktop and a mobile application for fingerprint recognition of customers. Activities have also included the development of a mobile application for studying and evaluating agricultural finance and linking it to the automated systems, and the provision of the devices, networks and accessories necessary for the infrastructure of the systems.

Small and Micro Enterprises Development Agency (SMEPS):

 SFD has continued to finance the projects run by SMEPS, for which it is its main funder. The funds have allowed the continuation of SMEPS’ activities in developing methodologies and products in the fields of agriculture and fishing. The funds have included other activities, including training and qualifying the cadres in SMEPS in order to raise their efficiency and performance, as well as to cover operating expenses, and purchase fixed assets.

 
Al-Awael Microfinance Company:

 The war in the governorate of Taiz has cast a shadow over the future of Al-Awael MF Company - considered as one of the oldest microfinance programs, providing financial services to owners of income-generating activities since 2000. SFD aims at providing the necessary support to restore the activities in Al-Awael, where a consultant has been hired to manage the situation it faces and put in place an integrated vision for its restructuring.

 
Develop a tool for evaluating MFIs:

 In collaboration with LFS, SMED is developing a tool to evaluate microfinance programs and institutions. The trial version of the evaluation tool was presented to the Small and Microenterprise Development Unit on May 3rd, 2018 with its accompanying manual. To test the tool, SMED has selected the National Microfinance Foundation as the first assessment case.

Capacity Bui0lding of Agricultural Lending Programs and institutions:

 In April 2018, LFS organized a training course in “Finance for Small and Agricultural Enterprises”, lasting 14 days and including 18 participants from Yemeni MFIs, the SMED Unit, and the Loan Guarantee Program. To make it more effective, the training has been combined with ToT courses in order to prepare the participants in training their colleagues in their respective institutions. The training was conducted at the Alexandria Businessmen Association in Alexandria (ABA) in Egypt. Several farmer clients were visited by the participants in Alexandria.

 
Opening of New Branches:

 As part of the SMED's endeavor to expand the provision of financial services in all regions of Yemen, MFIs have been encouraged to open new branches to serve rural areas. MFIs have been provided grants to open branches in the following areas: Amran, Al-Zeidia, Ma’bar, Saber (Lahj). These branches will provide services to the owners of microenterprises, especially farmers among them, where agricultural loans will occupy the largest proportion.