Capacity Building Initiatives for Improved

Outreach

A case of Strmme Microfinance East Africa Limited

May 2010

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Presentation Outline

Overview of Stromme Foundation

How Stromme Foundation Operates
Overview of Stromme Microfinance East Africa
Our Capacity Building Interventions
Community Managed Microfinance(CMMF)
Evolution of our Capacity Building Approach
Our Current Outreach
Constraints, Challenges
Lessons Learned and way forward
Conclusion
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Overview of Stromme Foundation

Strmme Foundation (SF) is based on
Christian values emanating from the life
and teachings of Jesus Christ. Strmme
Foundation, based on this identity, is a
value based development organization.

SF has two thematic

intervention:
Education; and
Microfinance

areas

of

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Education
We use Community Based Education
Interventions (CBEIs) in partnership with
local NGOs to reach out to poor
communities.
The purposes is to provide opportunities for
schooling to marginalised groups to access
quality education.
Ultimate goal is to build long term human
resource capacities in poor communities.
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Microfinance (MF)
MF activities are handled by Stromme
Microfinance East Africa Ltd (SMF EA Ltd), a
shareholding company incorporated in 2004 and
owned by SF Norway, SF in East Africa and
Solidarite Internationale pour le Developemment
et IInvestissement (SIDI).
SMF EA Ltd works with partners, by enhancing
their capacity to deliver quality financial services,
expand and deepen outreach to poorer people.

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Overview of SMF EA LTD

Company Limited by shares, incorporated in 2004
Vision: A world without poverty.
Mission: To provide, on a sustainable basis, market
responsive, financial services and capacity building
support to financial and business service providers to
enhance access to financial services by the enterprising
poor in the East African region.
Areas of Operation:
Uganda, Kenya, Tanzania and Sudan
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SMF EA Ltds Overview (Contd)

SMF EA Ltd implements through partner
organisations that include:
Registered MFIs, that provide credit, savings,
transfer services and other related services to
the enterprising poor i.e. MDIs, MFIs, SACCOs,
Financial NGOs, Trusts and Community Banks
Legally
recognised
Community
Based
Organisations engaged in Mobilising Self Help
Groups to manage savings and loans within their
communities
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SMF EA Ltds Overview (contd)

SMF EA Ltds goals are to: Enhance the capacity of our partners to
deliver quality financial services and
increase outreach.
Strengthen our capacity to serve our
partners in the region.
Build the capacity of our partners at 2
levels: i.e. Financial and Non-Financial
interventions.
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1. Financial Interventions
Financial interventions are essential for MFIs for
purposes of meeting their loan disbursements and thus
increasing outreach.
Financial Products offered:
Institutional loans
Consortium funding
Guarantees
Equity placements
Agricultural financing
Housing Microfinance
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SMF EA Regional Context

Currently, Stromme has a
loan
portfolio
of
approximately USD 10
million in 4 countries.
The Eastern Africa Region
currently
manages
an
active portfolio of 24
Partner institutions.

Uganda
Kenya
Tanzania
Sudan

Our
current
Outreach
through our partners is
533,877 clients.

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2. Non Financial Interventions

/ Capacity Building

Non-financial interventions, through capacity building is

primarily focused on building institutional and human
resources capacity of an MFI
We support our partners to improve on the institutional
weaknesses that impede them from improving their
outreach.
We support networks and partnership for acquisition of
skills and training.
We support lobbying, advocacy and promotion of use of
best practices.
Promote and support financial and social ratings in
partner institutions.
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Non Financial / CB (Contd)

We offer Technical Assistance to our partners to
better serve the clients and scale up their
outreach.
We support MFI practitioner networks and
linkages (AMFIU, TAMFI, MASS)
Support Business Development Services.
Community Managed Microfinance (CMMF)
Institutional reviews and evaluations.
Institutional design, business and strategic
planning.
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CB interventions Contd
Exchange visits and tours to mature MFIs
Basic equipment and technical infrastructure
acquistion e.g., furniture, computers, safes, etc.

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Community Managed Microfinance

(CMMF)
These are Self Help Groups that are being promoted

in
communities where there is limited access to financial
services. They mobilise savings and on-lend to the
members within the groups.
We offer training to Partner Organisations to promote
CMMF methodology.
Funds are given towards mobilizing CMMF groups and
training.
Acquisition of toolkits and other program equipments
(motorcycles, MIS, etc.)
CMMF groups monitoring and evaluation
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CMMF contd.
Development of business plans
Payment of CMMF program administration costs for
project staff and activities.
Fund Audits
Outreach to communities
Partners 10
Outreach 19,378 members
Savings USD 545,548
Loans USD 479,493
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Evolution of our capacity building approach

MFI
Projects

MFI

Integration

Small CBO,
NGOs Projects

MF
I

Church
Based
Projects
Sustainability
(participation,
Interest Rate)

Viability
Outreach
Linkages

1990s
Heavily subsidized

2000s
Reduced subsidies

Centralized Systems
(Top-down approach)

Funding of
institutions that
demonstrate growth

2010s to date

Cost-sharing
arrangement

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Our Outreach in the Region

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Current Constraints and Challenges

Limited access by MFIs microfinance clients to support
services.
Low retail capacity of some microfinance institutions.
Weak MFI institutions
Weak or lack of support networks for microfinance
institutions.
Limited capacity building funding despite the huge demand.
Limited competent service providers

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Lessons learnt
Credit provision within a project setup
Serious problems encountered when projects
directly administer credit programmes or in the
auspices of the Church.
Too much capacity building funding to small
or start up MFIs can be counter productive.
Strong MFI networks
A prerequisite to the speedy growth of MFIs and
outreach. And the risk of lending is also lower.
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OUR WAY FORWARD

Increasing support to emerging and sustainable
MFIs: as a long term effort to achieve greater
outreach.
Increasing our support to strengthen MFI
practitioner networks to speed up the growth of
outreach.
Increasing Partnership and synergies among partner
institutions, and funding agencies eg. Cordaid,
Larcamissionen.
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Conclusion
Capacity building interventions are needed at
different levels in the industry to bolster growth of
the MFIs, networks and support structures in the
Microfinance industry.
Access to capacity building funds is a very big
challenge to MFIs.
Capacity building assistance is as important a
need than subsidized credit funds.
The need for capacity and institutional building
far exceeds the need for capital.
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Our Contacts
Stromme Microfinance East Africa Limited
Plot 25, Block LRV 235, Bukoto Street.
P.O. Box 27200, Kampala, Uganda
Tel (256) 41 532844
Email: sfeastsfrica@stromme.org

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END

THANK YOU

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