The Accelerated Microenterprise Advancement Project (AMAP) Financial Services Objectives are to expand the delivery of financial services to microentrepreneurs and low-income households, increase the capacity of financial providers to serve microenterprises, expand the dissemination of best practices in USAID-sponsored programs in the microfinance field, and promote the development and adoption of policy, laws, and regulations that encourage the start-up, stabilization, and competitiveness of microenterprises and the institutions and markets that serve them.
Throughout the year 2005-2006, the Chemonics Consortium worked to further AMAP program objectives while maintaining a commitment to superior performance in the areas of quality products and services, technical competence, cost control, timeliness, and responsiveness. The consortium’s commitment to AMAP standards of performance is evident in several key areas.
High-quality products and services were a priority, with the IRIS Center completing a draft of a toolkit to assess the legal and regulatory environment for microfinance. This practical country self-assessment tool aims to inform government thinking about key governance issues in microfinance, determine an enabling environment for microfinance growth, and identify areas for policy improvement and enhancement.
Superior technical performance was also a focus, with Chemonics’ work under the AMAP Knowledge Generation task order providing practitioners and donors with practical tools for broadening and deepening the provision of microfinance. Research teams developed a checklist for donors interested in designing youth-inclusive microfinance programs, as well as guidelines for donor coordination in conflict-affected areas of Africa.
Effective cost control was achieved through the application of cost-effective management practices, such as leveraging European Union funds to boost lending to Malawi’s coffee and tea sectors. The Malawi DMS task order co-financed a study that quantified the nature of credit supply and demand in these sectors, which will help financial service providers identify market opportunities and develop demand-driven products.
The consortium also involved its members and subcontractors in the proposal process, including subcontractor personnel in the proposal for the USAID/Haiti task order. The task order aimed to build capacity for strong institutions and managers, improve the enabling environment by supporting necessary policy, legal, and regulatory changes, promote the development of new products and services, and promote economic growth that benefits the poorest households.
During the reporting period, the Knowledge Generation task order made several strides in developing and implementing research agendas under a number of technical topics. The Transitions to Private Capital (TPC) research team researched the challenges and role of Private Voluntary Organizations (PVOs) in the commercialization and transition to private capital of microfinance. The team presented and discussed its results in a one-day workshop during the annual SEEP conference, attracting approximately 30 managers from leading PVOs involved in the commercialization of microfinance.
The Legal and Regulatory Framework topic saw the development of a Legal and Regulatory Framework for Access to Finance (LRFAF) Policy and Programming Tool, as well as a training module for USAID staff. IRIS presented the LRFAF tool at the USAID Learning Conference in June 2006, and pilot testing of the tool is likely in 2007 in Kazakhstan, Nigeria, and Morocco.
The Measuring Outreach topic collaborated with PlaNetRating to field test the Social Performance Monitoring (SPM) Tool developed under the task order. The team selected La Asociación Nacional Ecuménica de Desarrollo (ANED), a Bolivian MFI based in La Paz, to evaluate the potential and practicality of incorporating the SPM tool into PlaNetRating’s GIRAFE rating and evaluation process. The results of the field test were used to further refine the SPM tool and will be integrated into PlaNetRating’s overall evaluation of ANED.
The AMAP Financial Services Objectives and the consortium’s commitment to superior performance have led to several key outcomes, including the development of practical tools for broadening and deepening the provision of microfinance, the assessment of the legal and regulatory environment for microfinance, and the evaluation of social performance in microfinance institutions. These outcomes will contribute to the sustainability of the SPM tool beyond the life of the Knowledge Generation Task Order.