I – Funding activities

1. Loan activities

 Due to the increasing demand by MF clients for loans, SFD has signed during the quarter a loan agreement with the National MF Foundation (NMF) for the amount of YR 670 millions, and another with Nama'a MF Foundation worth YR 200 millions.

The total active loan portfolios of MFIs up to the end of 2019 has reached more than YR 19 billions, while the total number of active clients has reached more than 87 thousands (males and females).

 2. Grant activities

During the quarter, SFD has also provided grants for training, technical support, studies and consulting activities totaling YR 3,438,585,126. Benefiting entities were: the Small and Small Enterprises Development Agency (SMEPS), Nama and National MF foundations, and Azal, Al-Ittihad and Hadramout MF programs. These grants were meant to enable those beneficiaries to continue developing their internal capacity, expanding in rural areas, support the expansion of financial services in the areas of integrated intervention.

II – Internal activities of the SMED Unit

1. Financing the opening of new MFI branches

 In the last quarter of 2019, Nama MFI received a grant of GBP 48,900 to open a new branch in Aden, while Azal MF program received 66,000 GBP to open a new branch in Wadi Moore (Tihama). The funding of new branches helps beneficiary MFIs expand the geographic outreach, include increasing numbers of SMEs, as well as diversifying their portfolios and thus reducing risks.

2. Supporting War-Affected Clients (Phase 2)

 During the quarter, 170 clients (10 of whom women) have received compensations, amounting to YR 70,718,040. About 315 MFI clients in distress had also their loans waived to the amount of USD 14,431 and YR 40,491,005. Thus, the cumulative number of beneficiaries has reached %49 (4,432 women), receiving compensations for approximately USD 1.82 millions until the end of 2019. These amounts have contributed in alleviating the suffering endured by SME owners affected by the war by lessening their financial burdens and assisting them financially to resume their income generating activities.

 3. Rural Savings and Loans Associations (VSLAs)

Work has continued during the fourth quarter with VSLAs, covering 5 districts in the country, and reaching 84 groups which include 1,953 active members (45% women). Accumulated savings during the same period has reached YR 47,309,350. Also, 761 group members have been trained in entrepreneurship and carrying out the feasibility study of income generating activities. Following the training, financing of micro projects has started, and included livestock, honey production, and a number of trade activities, amounting in total YR 9,412,650 for 68 group members (men and women). In the same period, 547 members have been trained in a number of technical fields, including livestock rearing, beekeeping, production and sale of honey, modern agricultural techniques, and solar energy.

 4. Mobile phone financial services

Activities in this regard have continued during the quarter, as the number of Cash-For-Work beneficiaries for whom electronic accounts have been opened reached 1,161 beneficiaries (1,009 males and 152 females). Meanwhile, the number of users of electronic money service (PIAS) reached 411 beneficiaries (342 males and 68 females) of the Cash-For-Work Program. As for the number of beneficiaries who have been educated financially during the quarter, their cumulative number has reached 6,820, of which them 6,104 were males, and 716 females.

 5. Field audit activities and certifications

 During the quarter, field auditing have been conducted on samples of clients in the branches of the National MF Foundation in Sana'a, Dhamar, Amran, Hajjah, Yerim, and Damt. In addition, the clients of the Nama's MF Foundation branches in Sana'a have been filed audited. Client field audits have also been conducted in the branches of Azal MF program in Sana'a, Amran, Al Mahwit and Ma`bar. The total of samples audited during the quarter has reached 2,217 during the last quarter of 2019. In addition to field audits of clients, audits on internal finance and administration have also been also conducted during the quarter in Hadramout MF, and Nama'a in Taiz.

 6. Developing governance in programs and institutions

 SMED has continued it efforts during the quarter in developing the governance of microfinance programs and institutions, where the governance manuals finalized in the previous quarter were distributed to: Nama and the National MF Foundations, Azal, Hadramout and Abyan MF programs, as well as the Yemen Loan Guarantee Program (YLG). This was following the completion of work on a draft manual for the boards of directors of MFIs carried out during the previous quarter. The reports made by the consultant who out the mission were distributed, illustrating the necessary recommendations for each beneficiary MFI.

 7. Yemen Loan Guarantee Program (YLG)

During the quarter, the number of guarantees issued to SME owners has reached 323 guarantees, equaling YR 506,785,648. As such, the total value of existing guarantees has reached YR 754,200,669 until the end of the year. So far, YLG has issued a cumulative of 997 guarantees since its establishment, amounting to YR 1,159,148,115. During the quarter, the program has also continued developing the technical skills of its cadres by participating in a training course in December held in Sudan on Islamic financial products that lasted 6 days and in various other training courses organized by the Yemen Microfinance Network (YMN).

 8. Information technology and software systems

 8.1 The SMED website

The IT team in the SMED unit completed the development of the SMED website, as new reports on the MFIs were added, and included analytical graphs.

 8.2 Fingerprint technology

 The development of the fingerprinting system when lending clients was completed after taking notes consecutively from Azal MFI on the basis of field experience until it will be finally approved. The system registers the customer and verifies his/her identity to make loan processing easier and avoid potential mistakes.

 8.3 The mobile application for agricultural and commercial loans

The agro-loan application has been tested at Azal MFI for months, while testing of the commercial loan application has just started. During the fourth quarter, additional modifications have been made to the agricultural financing application based on the feedback from the program. The aim of the two applications is to accurately evaluate the economic feasibility of the client's activity in the field in order to avoid errors and increase work speed and productivity.

 8.4 The automated human resources, loan tracking, and accounting systems

 During the fourth quarter, routine technical support for these automated systems was provided to MFIs on a continual basis, and backup copies were regularly taken from those agencies for archiving in the SMED unit.

III - The Yemen Microfinance Network (YMN)

During the fourth quarter of 2019, YMN has carried out a number of qualitative activities that have contributed to skills development and knowledge increase in the microfinance sector in Yemen. They were as follows:

 1. Strategic Planning Course (2019/11/7-2)

In November 2019, YMN implemented this qualitative training course in Sana'a. The course lasted 6 days, in which 20 trainees from MFIs participated. Trainees received practical training on how to prepare strategic plans for the MFIs they work in.

 2. Research and Development Workshop (2019/11/11)

 Nineteen participants from MFI participated in the workshop, during which several topics related to the research and development environment in the MF sector, and best practices applied globally were discussed, as well as the role of YMN in this field. Azal MF presented its new loan tracking system, which impressed all participants, while the National MF Foundation presented its credit line system. Participants also received a short training session on digital security development in MFIs.

 3. Financial Analysis Course (2019/11/28-23)

The six-day course was carried out in Sayun (Hadhramaut). It focused on the SEEP reporting standard for financial analysis in MFIs. Nine employees from MFIs participated in the training course, where the majority of them were financial managers and accountants.

 4. Launching the "Exchange of Experiences Program" outside of Yemen

 YMN has launched this program with the aim of enabling its members acquaint themselves with various worldwide developments in microfinance. As such, an exposure trip was organized for 23 of its member MFIS to learn on the latest developments in Islamic finance in Sudan, which has made great strides in this field. The visit lasted 6 days in early December. On Dec. 14th, 2019, the results of the visit were discussed in a workshop, including possible benefits for the MF sector in Yemen. The workshop was attended by 26 trainees from the MF sector.

  5. The International Entrepreneurship Week (2019/12/10)

 The event was organized by YMN in partnership with Rowad Foundation and with the sponsorship of the Global Entrepreneurship Week event, which was attended by 46 participants interested in entrepreneurship. The workshop emphasized the cooperative role the competent authorities should undertake in preparing the necessary curricula that would enhance entrepreneurship among the emerging generations, and among school and university students.

 6. The Credit Feasibility Study (2019/12/26-21)

The course (which lasted 6 days) came in response to the need of raising the capacity of MF employees in estimating the credit capacity of customers when requesting loans for their economic activities. The aim is to reduce risks and losses for MFIs and customers alike. Thirteen employees from MFIs participated in the training course.