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Newsletter April - June 2020

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 The SMED unit continued in the third quarter of 2020 the implementation of its activities in support to the local small and micro enterprises sector, whether by financing small and microfinance programs and institutions, or by providing grants, training and technical support. These activities for the period are summarized as follows:

 I.   Funding activities

 1-    Loans

 During the quarter, lending to MFIs operating in the sector has amounted to about YR 929 million, as the Nama MF Foundation was funded with YR 350 million and Al-Ittihad MF program with YR 579 millions. The funds were meant to support the portfolios of the two MFIs to allow them to meet the demand for loans by small and micro entrepreneurs so that they could improve their living conditions.

The total volume of the active loan portfolios for programs and institutions until the end of June 2020 has reached about YR 26.2 billion, and the number of active borrowers 88,729 (34% female).

 2- Grants

 SMED continued during the quarter in providing grants to its partners, which amounted to more than YR 3.8 billion. Beneficiary organizations were the Small and Micro Enterprise Development Agency (SMEPS), Nama MF, National MF, Themar MF, Azal MF, Hadramout MF, and Al-Ittihad MF, as well as the Yemen Microfinance Network (YMN) and the Yemen Loan Guarantee Program (YLG). The grants provided covered technical support, training, and institutional building activities for these bodies, thus enabling them to continue implementing their work in providing financial and non-financial services to the sector. These activities have also included compensating clients affected by the war, and supporting and expanding financial services in the areas of integrated intervention through the formation and training of rural savings and lending groups (VSLAs).

 

 II.     Internal activities in the unit

 1.    Supporting War-Affected Clients (Phase 2)

 The project compensates those clients who have been affected by the War to help them restore their damaged businesses, and provides them with debt relief. The aim is to alleviate the effects of the War on their livelihoods and that of their families.

 During the quarter, 161 microfinance clients (including 53 women) have been compensated for a total amount of about YR 36.6 million. In addition, the debts of 170 defaulting clients were forgiven, for a total amount exceeding YR 28.6 million.

 As such, the cumulative number of beneficiaries has reached 4,823 people (47.5% women), who have received compensations for a total of approximately USD 2 million by the end of the quarter.

2.    The Village Savings and Loans Associations Program (VSLA)

 SMED has continued working with the VSLA Program during the second quarter of the year. The program is spread over 6 districts in the country, as a new district was recently added (Al-Shaour in Hazm Al-Odain, Ibb Governorate). The number of groups reached 93 by the end of the quarter, comprising 2,357 active members (44% women), while the savings accumulated have reached about YR 64.9 million. In addition, 306 group members were trained during the quarter in several areas including savings and rural finance, and bookkeeping, administrative and organizational skills. Also, 117 loans have been disbursed, amounting to more than YR 16.8 million. At the end of the quarter, the number of outstanding loans reached 185, valued at approximately YR 26.3 million.

  3.    Information technology and automated software systems

 The unit’s website and the credit bureau’s websites have both continued to be developed through the addition of new statistical reports and charts. Work has continued on updating the database of the credit bureau and carrying out its regular maintenance.

 In addition, two applications have been completed: the feasibility study for agricultural loans and commercial loans using mobile phones. Training has been continued on their application in almost all of the programs and institutions operating in the sector. In addition, a video training material for the two applications has been prepared. The aim of the two applications is to evaluate the client's activity in the field, and conduct an accurate and systematic study of the economic feasibility of the loan according to its type (agricultural or commercial).

 Work has also continued during the quarter in providing routine technical support to the MFIs that use the Automated Human Resources System, the Loan Tracking System (Maeen), and the Automated Accounting System, as well as making backup copies of the data obtained for preservation in the unit.

  SFD has also activated the automated issuance of the SEEP monthly reports in Azal, Al-Ittihad, Hadhramaut MF programs, while work is still underway to develop the automated release of the report in Nama and National MF institutions.

 4.    The Yemen Loan Guarantee Program (YLG)

 The number of guarantees issued during the quarter to SME owners has reached 378, valued at about YR 653.2 millions, covering loans amounting to about YR 954.8 millions (principal + profit) granted by the MFIs to SME owners. By the end of the quarter, the value of outstanding guarantees amounted to a total of about YR 1.4 billion, covering 1,025 active MFI clients. It is worth mentioning that since the establishment of YLG in November 2017, 1,543 loan guarantees have been issued, totaling more than YR 2.2 billion to cover loan exceeding YR 3.2 billion in value (principal + profit). The program has also carried out other activities during the second quarter, including building up an information management system for its documents, attending a number of training workshops by its cadres, and holding an internal workshop on financial analysis according to the SEEP Framework for monthly financial reports.

 

 III.     Yemen Microfinance Network

 The network’s activity during the quarter has continued to focus on organizing training courses and workshops, including a training course in Rural Finance (6-15, April 2020), in which 23 employees from MFIs participated to familiarize with the concept of rural small and micro finance, its varieties, the related challenges, risk control, and how to develop the economic feasibility study for agricultural income generating projects. YMN also conducted a training course in Marketing in Financial Institutions (11-14 May, 2020), which included the concepts of financial marketing in MF institutions and programs, as well as various marketing methods aimed at reaching all segments of society with the aim of helping these entities expand outreach. The Internal Audit course (June 8-11, 2020) was held with the participation of 12 internal auditors working in MFIs. Internal audit methods in general, and in microfinance in particular, were presented and discussed. The course also included uncovering, treating and preventing financial fraud by strengthening financial controls.

 Two sessions were also implemented in “Remote Management for Managers” and “Efficient Remote Work” (6-16 June, 2020) by the network for those working in the Al-Nahdha Social Association (the sponsoring agency), its MF program (Hadhramaut MF), respectively. The two sessions - in which 25 people from both the association and the MFI participated - focused on how to follow-up and supervise office and field activities. The course provided training in how to remotely monitor field and office activities using appropriate software in light of the spread of the Corona virus in Yemen. Also, YMN organized the Time Management and Effective Delegation training course (June 21-22, 2020), in which 14 trainees from a number of MFIs participated in several topics, including time and workplace management, how to plan for small and micro projects, and the nature and process of delegating effectively in the workplace. The Problem Solving and Effective Decision Making course (24-25, June 2020) focused on how to identify and analyze the problem, take the appropriate decision to solve it, and avoid its occurrence in the future or reduce its effects. The Management of Change and Effective Motivation training course (29 June - 1 July, 2020) focused on topics such as change, the role of managers in the process of change, and how to plan and implement change successfully.

 YMN also organized a workshop in Digitization and Digital Transformation (June 23 - July 1, 2020) with funding from by the International Finance Corporation (IFC). Twenty-three people (mostly managers and decision-makers) from programs, institutions, and microfinance banks participated, as well as from the Social Fund for Development and other stakeholders. The workshop dealt with global experiences in digital transformation in financial institutions and the related risks, the concept of digital transformation and the advantages it can bring to microfinance in Yemen, as well as difficulties, challenges, and opportunities for developing the digital transformation of the local sector, in addition to how to develop a strategy in this domain.

 

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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