I. Financing activities (loans and grants)

 In the third quarter of 2019, the SFD signed several financing agreements with MF programs and institutions (MFIs) totaling YR1.1 billion. The National MF Foundation (NMF) received YR 300 million, and Azal and Hadhramaut MF Programs YR605.5 million and YR200 million respectively. The funds were meant to enable those entities to continue financing the projects of their clients in the various governorates of Yemen.

 he total active loan portfolios in MFIs until the end of the quarter amount to more than YR 16 billions, while the number of clients reached approximately 86 thousand men and women.

Similarly, support grants were provided to Nama'a MF Foundation, Hadhramaut MF Program, NMF and Azal MF Program. Activities funded included governance, development of new Islamic financing products and supporting the expansion in rural areas. The grants provided for these activities amounted to more than YR74.4 million. Also, YR19.4 million were provided in support of several other projects and activities such as the Support and Expansion of Financial Services in Integrated Intervention Areas, the training of rural savings and financing groups (VSLAs), establishment of Themar Foundation, field validation of MF clients and supporting war-affected MF clients.

II. SMED internal activities

 1.  SFD workshop of microfinance partners

 The SFD organized an extended two-day workshop in Aug 2019 with its microfinance partners. During the workshop, which was attended by 29 people representing 13 MFIs, performance indicators, achievements and challenges during the first half of 2019 were discussed.

2. Supporting war-affected clients (Phase 2)

 During the quarter, 234 MF clients (37 female) have received compensation amounting to nearly YR51 million, with debts of 184 MF clients in distress amounting to 23,726$ cancelled. Thus, the cumulative number of  beneficiaries reached 4,262, receiving compensations of 1.7$ million approximately.

3.  Rural Savings and Finance Groups (VSLAs)

The SMED Unit has conducted field visits to follow up on and evaluate the activities of the 83 groups comprising some 1,947 members (%45 females). Savings have reached YR25.5 million at the end of the quarter, in addition to YR1.1 million in balance kept at the groups' emergency funds. A number of consultants and project officers have been trained in entrepreneurship and carrying out feasibility studies for income generating activities, thus enabling the trainees to train the groups' members.

4.  Financial services via mobile phone

The number of beneficiaries who opened electronic accounts at Al-Amal Bank reached 1,103 (including 136 females) and the number of beneficiaries using the PES service provided by the bank amounts to 375 beneficiaries (including 59 females).

5.  Auditing activities and field certification of clients

 Field approvals were made on samples of clients of Nama'a and NMF in Taiz Governorate to ensure the validity and integrity of the portfolios and the extent of their use. The financial and administrative performance of the branches of Nama'a in Sana'a was also evaluated and an intensive training course was implemented in Al-Mukalla City, aiming to expand the base of qualified consultants in implementing field certifications on the MF clients present in the eastern regions of the country.

6.  Developing governance in MFIs

 A corporate governance evaluation was completed for 6 MFIs operating in the sector, with the Governance Manual and the Board's Evaluation Tool for MFIs completed. These activities aim to develop corporate governance within the partner agencies and support the MF sector.

7. The Yemen Loan Guarantee Program (YLG)

 YLG provides guarantees for micro loans to clients whose guarantees are not sufficient to request financing from MFIs or who are unable to provide them. During the quarter, YLG has issued 124 guarantees equivalent to more than YR 144.4 million, bringing the total value of the existing guarantees to YR 403.7 million and the cumulative value of the collaterals issued since the establishment of YLG to more than YR 649.4 million for 673 guarantees. The YLG has also adopted the human resources guide, activated social networking sites and its official website and activated its new web-based MIS.

8.  Development of automated and software systems

 Work continued on developing the website of the SMED during the quarter, as new graphic indicators were added and the geographic map of microfinance clients was updated. Also, experimental work on introducing the fingerprint technology in the sector has continued within Azal MFI. The system facilitates registration and verification of new clients and their identity as well as avoidance of possible errors when financing.

 Moreover, mobile application for the feasibility study of agricultural loans is still in the experimental phase in Azal MFI. The objective of the application is to evaluate client activities in the field and assess the economic viability of the loan so that accuracy improves and work speed and productivity increase. Similarly, mobile application to study small loans (trade) was initiated, which would improve the ability to evaluate clients and their activities more precisely. And within the Credit Bureau (CB), the IT team at SMED has updated and completed the database of all MFIs' clients, with new data related to the activity, region, balance and loan expected completion date added. These additions should increase the ability to evaluate a customer upon inquiry. Technical support for the automated systems for human resources, loan tracking and accounting was continued during the quarter in the MFIs, with the accounting-system user guide completed.

III - The Yemen Microfinance Network (YMN)

1. The fundamentals of microfinance

YMN implemented the training course in Aden Governorate, with the participation of a number of member institutions from Aden, Seyoun and Abyan. The course included a number of topics including sustainability; social performance; mechanisms for implementing market studies; arrears management; risk control; effective organizational building; supervision and management; and planning and reporting.

2. Economic empowerment of women entrepreneurs

In partnership with its members MFIs, a round table on promoting the economic empowerment of women entrepreneurs was organized. The event came as part of "Economic Empowerment of Women" being implemented by the All Girls Foundation. The meeting discussed the role of MFIs in supporting women entrepreneurs, in addition to a number of working papers that dealt with challenges faced by this category. Proposals were also put forward to   create opportunities for women entrepreneurs, and a number of recommendations were finalized.

 1.  Writing project proposals for donors

The course was held with the participation of a number of MFIs from several governorates. Participants were trained in formulating project proposals for donors, develop the budget, in addition to writing relevant technical reports, ways and means to evaluate the project during implementation and after completion, and how to submit proposals to donors.

2.  Risk management training course

 The session was attended by a number of staff from the MFIs. Several issues related to risk management in the entities operating in the sector were addressed, including practice on a number of risks and problems that may be encountered. A number of issues were also reviewed, such as frauds that may face operators in the sector.

3.  Rural finance training course

 The course targeted a number of staff in MFIs, and aimed at introducing participants to agricultural financing and its types, and in improving their capacity to distinguish related challenges and risks. The course also aimed at developing the skills of trainees in the initial examination of loan requests, improving their skills in studying agricultural activities, and preparing financial statements according to the particular nature of the agricultural product.

4.  Training meeting for communication officers

 Participants from MFIs received training on how to document and photograph customer success stories, the rules of journalistic editorial, and social media management for MFIs, as social media promotion has become an important means of e-marketing for the microfinance sector in Yemen.