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Newsletter July - September 2018

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I. Internal Activities in SMED Unit

  1-        Loans, cash grants, technical support expenses and training

 As a result of the increasing demand and need by SME owners for financial services aimed at helping them develop their projects and improve their living conditions, during the third quarter of 2018 SFD

has granted a loan of 200 million Riyals (USD 285,715) to Al-Ittihad MF Program to continue its financing activities in several branches in Abyan Governorate, as well as Mukalla, Al Shahr, Aden and Lahj.

 

During the quarter, a total of YR 712,203,563 (equivalent to USD 1,544,910) in grants was disbursed to support the expansion of financial and non-financial services in the Integrated Intervention Areas and the Small and Microenterprise Promotion Agency (SMEPS) in order to continue their work in developing methodologies and products in the fields of agriculture and fishing, improve performance efficiency, cover operational expenses, purchase fixed assets, and for training.

 

 The compensation scheme for war-affected small and micro entrepreneurs and Loan Guarantee Program were also supported as detailed below. Also, during the quarter a grant of USD 68,500 has been transferred to Al Amal Bank, constituting the last installment of the Technical Support Grant for developing a housing microfinance product.

 

2-        Supporting the Expansion of Financial and Non-Financial Services in Integrated Intervention Areas (VLSA)

 

The project is intended to support and expand financial and non-financial services in five integrated intervention districts in the governorates of Ibb, Dhamar, Amran, Lahj, and Hadramout. The project is self-financed by SFD, and directly implemented by SFD for certain aspects and by SMEPS regarding the provision of non-financial services and several advisory works. The idea of ​​the project revolves around the formation of 120 rural savings and financing groups. The capacity and skills of its members are being built in various fields through the disbursement of cash grants that enhance their ability to finance income-generating entrepreneurs for their members. The project also includes a number of interventions in the sectors of health and agriculture. During the third quarter of 2018, a field survey has been conducted to identify needs, and 44 consultants have been trained in forming groups, in training them in financing and saving, and conducting feasibility studies for income-generating projects.

 

3-        Support for War-Affected Customers (Phase 2)

 

The project aims at compensating 4,000 small war-affected microfinance clients, and restore their activities and return to the labor market. During the third quarter of the year, 519 clients of small and microfinance programs have been compensated.

 

4-        Training in Micro and Agricultural Lending

 

Funded by the German Development Bank (KfW ) and implemented by German LFS Consulting Company  a training course in the economic feasibility study of microcredit was held in Cairo (Egypt) in the month of June of the year. The session was attended by 15 participants from microfinance institutions and programs, and from the SMED unit. A refreshing training course, in which representatives of the programs and institutions participated, was held in July via video conferencing.

 

5-      Provision of Alternative Energy Systems for Programs and Institutions

 

During the quarter, Hadramout Microfinance Program and the Loan Grantee Program have received the remainder of the project's budget, which is intended to enable a number of MFIs to purchase solar systems for their headquarters and branches. Over the course of the quarter, the MFIs have continued working on contractual arrangements for purchasing solar energy systems, while SFD has provided all the necessary technical support to properly complete procurement procedures.

 

6-      Field Validation and Auditing Activities

 

In order to ensure the correctness of field operations in MFIs, and to ensure the correct following of procedures in the existing loan portfolios and the proper outreaching of the target group, teams of the SMED unit have conducted a number of field audits during the quarter. This included large samples of clients in several branches of Namaa MF, as well as clients of Hadramout MF program clients in its branches in the valley. During the third quarter, an evaluation of the financial and administrative situation in the Loan Guarantee Program in the Capital has also been carried out. An assessment involving the financial and field operations aspects of Al-Rayyan program of Nahdah Social Welfare Association was carried out.

 7-      Development of Automated Systems and Software and Others

 a-     SMED website

 

During the quarter, various indicators and charts have been added to the website. In addition, a mechanism has been developed to introduce the SEEP report data in both the portfolio follow-up system and the accounting and human resources system within the website in order to avoid manual input errors during data entry. A pilot application was carried out in Azal Microfinance Program.

 

b-     Fingerprint Technology

 

SMED has continued during the quarter the supply of fingerprint reading devices and the development of the necessary applications needed to facilitate the registration of MFI customers and verify their identity.

 

c-     Mobile Application to study Agricultural Finance

 

Implementation of this application was completed in the quarter using the Android system. Launched in May 2018, the application is expected to enable finance professionals to evaluate and assess in the field the economic feasibility of the activities carried out by MF customers who wish to obtain agricultural loan using a mobile phone, and thus, raise work efficiency.

 

d-     The Credit Query Site

 

During the quarter, the database in website has been updated, as usual. Furthermore, the search mechanism for customer names has also been developed for better search results. During the quarter, 22,803 inquiries have been conducted by 9 microfinance entities.

 

e-     The Human Resources Automated System

 

During the quarter, technical support has been continuously provided to microfinance programs and institutions, and system errors have been corrected. Special additions have also been made to control the calculation of certain expenses, such as travel allowances and holidays, screens used to evaluate employees, correspondence, and other tasks.

 

f-      Technical Support in the Portfolio Monitoring System (Ma’een)

 

A number of technical aspects have been developed in the system, including the addition of scoring screens for small and micro activities carried out by customers. The evaluation of agricultural loans has also been linked to the mobile application. In addition, regular technical support of the system for the programs and institutions has continued. Problems with the database been solved and periodic maintenance provided.

 

g-     Development of User Manuals

 

The IT team has continued during the quarter working on the design of a user guide for the loan tracking system and the automated accounting system in order to facilitate all aspects of their use and operations.

 

II. Yemen Loan Guarantee Program (LGP)

 

The Loan Guarantee Program has been established by SFD, and it is the only one of its kind in Yemen, providing the necessary guarantees to small and micro entrepreneurs unable to provide them. During the third quarter, SFD has provided the program with the necessary support to cover its operating expenses and train and qualify its staff. The total support amounted to USD 37,950. During the quarter, LGP has issued 12 guarantees, worth YR 5,441,330. The number of guarantees issued by the program since its establishment until the end of the third quarter has amounted to 151 guarantees, valued at YR 58,045,241, and covering various areas of microfinance. LGP has been actively focusing on motivating MF entities to increase lending activities, assist them in entering new governorates and regions, and encourage them to target a larger segment of clients. Together with its partners, the program has been seeking to develop new products that cater to income-generating activities.

 

III. Yemen Microfinance Network (YMN)

 

During the third quarter of 2018, YMN has implemented a number of activities, the most important of which are the following:

 

1- Training of trainers (4th course) - In September, a training course was held for 11 trainees from various MFIs aimed at making them trainers on the IFC methodology. The training course was part of the network's objective to build the capacity of Yemen's microfinance staff and raise their competence through quality training.

2- Studies on MF sector – In the third quarter of 2018, a qualitative field study on financial services through mobile phones was finalized by a consulting company hired by YMN. The study has yielded important results and recommendations that were addressed during a workshop attended by a number of stakeholders and individuals.

Small and Micro Enterprise Development Unit

Republic of Yemen

Social Fund for Development

Sixty street,Faj attan, Sana'a,Yemen

Tel :967-1-449669

Fax : 967-1-499670

 

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