IslamicSolidarityFundforDevelopment(ISFD)MicrofinanceSupportProgram(MFSP)forPovertyReduction

MicrofinanceSupportProgram(MFSP)

Aimsto improvelivelihoodsandthesocio-economicconditionsofpoorciviliansandtopromoteentrepreneurshipthroughmicrofinanceservices.

TheChallenges

• Limited access to financial services by poor civilians and an acute shortage of Sharia-compatiblemicrofinanceservicesinruralareaswherelargemarketsexist.

• Legal and regulatorybarriers tomicrofinance institutions, particularly thoseoffering sharia-compatibleproducts.

•Difficulties facing the larger MFIs in meeting capital requirements and governancearrangementsfortheprovisionoffullbankingservices.

• Inadequate financial and regulatory framework with registration of collateral, proper auditingand,accountingservices,andlandtitlesespeciallyin(post)conflictareas.

Objectives

• Topromoteeconomicallypoorpeople’saccess to financial resourcestocreateemploymentopportunitiesandimprovetheirlivingconditions.

•TobuildthecapacityofMicrofinanceInstitutions(MFIs)andbankstoservelargernumberofmarginalizedpeoplebydeliveringqualityfinancialservices.

•PromotingSharia-compatiblemicrofinanceproductsandservices.

Targetgroups

Thisprogramtargetsthefollowingfourgroupsofpeople:

1.UnemployedYouth

2.WomenwithVocationalLiteracy

3.WomenHeadsofHouseholds

4.DeprivedRuralFamilies

MFSPOutcomes

•ExtendlinesoffinancingandequitycapitaltobanksandMFIs.

•Establishguaranteefundstoenhancethefinancingcapacitiesofparticipatingbanks.

•BuildupthecapacityofMFIs,banks,NGOsandcommunity-basedFinancialInstitutions.

•Provide market-oriented training for microfinance borrowers to improve their technicalcapabilitiesandskillsforsmallbusinessdevelopment.

FiguresandFacts

1.Albania

-US$1millionistheISFDcontribution.

-2,500entrepreneursbenefitedfromtheprogram.

2.Benin

-US$25millionistheISFDcontribution.

-256startupbusinesseshavebeenmicrofinanced.

-175,000peopleofwhich90%arewomenhavebenefitedfrommicrofinanceloans.

-11,000Ruralentrepreneurshavebenefited.

3.Coted’voire:

-US$22.3millionistheISFDcontribution.

-60,000personshadaccesstoIslamicmicrofinance.

-20,000Ruralenterpriseshavebeenpromoted.

4.Sudan

-US$5.2millionistheISFDcontribution.

-500,000personsofwhich51%arewomenhadaccesstoIslamicmicrofinance,.

5.Senegal

-US$5millionistheISFDcontribution.

-9000smallbusinesseshavebenefitedfromtheprogram.

6.Kyrgyzstan

-US$5millionistheISFDcontribution.

-500smallbusinesseshavebenefitedfromIslamicmicrofinance.

7.Kazakhstan:

-US$10millionistheISFDcontributionforVocationalLiteracy.

-1,017Ruralentrepreneurshavebenefited.

-400personshadaccesstoIslamicmicrofinance.

8.Tajikistan

-US$10.3millionistheISFDcontribution.

-925smallbusinesseshavebenefitedfromtheprogram.