Nearly every country in Africa utilizes microfinance. Why, then, does the continent's microfinance sector show little development? This question was recently explored at the Diagnostic to Action: Microfinance in Africa Multi-Stakeholder Conference hosted by Women's World Banking and Africa Microfinance Action Forum (AMAF) in Nairobi, Kenya on June 4th.
The purpose of this conference was to share the findings of a study conducted by WWB and AMAF, in partnership with the Spanish Agency for International Cooperation and Development, the Government of Luxembourg, ADA, and Care, detailing the present and prospective state of the African microfinance sector. While identifying the obstacles faced by the African poor and microfinance institutions, the study also offered numerous suggestions for the future.
The attendees included leaders of the microfinance industry in Africa, continent-wide organizations such as the African Union and African Development Bank, African and Spanish women's organizations, United Nations representatives, and national policy makers. Mary Ellen Iskenderian, President and CEO of Women's World Banking, explained the need for gathering such a wide group of stakeholders: "Microfinance will be a key component of any successful growth and economic development strategy for Africa, but for it to succeed, collaboration among the public, private, and nonprofit sectors is required."
His Excellency Hon. Mwai Kibaki, Commander-in-chief of the Armed Forces of the Republic of Kenya, and Her Royal Highness the Grand Duchess of Luxembourg, Maria Teresa, opened the conference. According to the Grand Duchess, "Diagnostic to Action: Microfinance in Africa" is the expression of a bottom-up process, of a clear will to find answers, develop strategies, empower economics and bring back hope to Africa. Sharing her passion for microfinance, the Grand Duchess reminded her audience that social outcomes, not just financial results, should be taken into consideration when evaluating the success of MFIs. Furthermore, she stressed the need to drastically change our mindset and work together in future microfinance endeavors.
The study lists the obstacles facing the poor in Africa: AIDS and other diseases, isolation, low population density, and lack of basic services and infrastructure. Furthermore, insufficient financial resources pose the greatest challenge microfinance providers face when attempting to offer their services.
The conference however was focused on the way forward. Among the ideas generated was to develop a "microfinance map" for Africa in order to make international business feel more comfortable interacting with MFIs in Africa. The study and the conference set out to articulate an African strategy created by African people to respond to opportunities and overcome the challenges in the continent‚Äôs microfinance sector. President Kibaki, thinking about the future and the challenges ahead, summed it up best. He said, "There is need to consider collaboration that builds sustainable capacity within the sector."