Feasibility Study for the Launching of a Greenfield MFI, Burundi

Origin of funding: DCI Monaco
CONTEXT:
The association FVS/AMADE Burundi is the result of the union between FVS (families who fight against AIDS) and AMADE Burundi (Burundi section of the Association Mondiale des Amis pour l'Enfance). FVS/AMADE Burundi was created in 1999. Both organizations have decided to work together in order to fulfill their interlinked objectives of helping children in difficult situations, fighting AIDS and help the victims of the disease.
Among its activities in regards to the caretaking of Vulnerable Orphans and Children (VOC) and helping Persons Living with HIV/AIDS (PLHIV), the organization FVS/AMADE Burundi is supporting the development of income generating activties (IGA) for PLHIV and orphans' host families.
To this end, FVS/AMADE Burundi is collaborating with microfinance institutions (MFI) by financing guarantee funds in order to enable their beneficiaries to gain access to microcredits. However, this collaboration between the organization and MFIs is running into many difficulties:
- Bankruptcy and closure of partner MFIs, which block the savings of the beneficiaries and those of the organization's economic support activities;
- Concentration of MFIs in Bujumbura and an absence of appropriate partners in the rest of the country, in particular in the provinces of Gitega and Bururi ;
- Apathy of MFIs in the recruitment, follow-up and collection processes.
FVS/AMADE Burundi is thus seeking to create its own microfinance institution. The management of the International Cooperation of Monaco has chosen PlaNet Finance to lead a mission to study the project and bring recommendations, which will enable FVS/AMADE Burundi to consolidate its efforts in supporting the socioeconomic inclusion of its beneficiaries.
OBJECTIVES OF THE PROJECT:
- Evaluate the opportunity for the creation of an MFI belonging to FVS/AMADE Burundi;
- Analyse the cost recovery system of AMADE Burundi's teams, the distinction with socially oriented activities, the IGAs, human and financial resources to be put forward, the types of financial products to offer;
- Make recommendations to consolidate and ensure the sustainability of the access to financial services adapted to vulnerable populations and supported by FVS/AMADE.
RESULTS / IMPACT:
- The study's report is written and provides the results of the analysis focusing on the demand, regulatory and local frameworks, which will help FVS/AMADE to decide which financial services are best adapted to their beneficiaries;
- Recommendations are made to elaborate an operational plan of action which will aim at consolidating FVS/AMADE's efforts in terms of economic support and the sustainable socioeconomic inclusion of marginalized populations.
- Offer of technical support services by PlaNet Finance to AMADE Burundi to support the implementation of its project.
PLANET FINANCE'S TASKS IN THE PROJECT:
Implementation of activities based on three phases:
1. Preparation of the mission with the FVS / AMADE, collection and analysis of secondary data (legal framework, existing studies and research reports, etc..) - 2 days;
2. Field Mission - 12 days:
- Context analysis: Interviews with the FVS / AMADE Burundi;
- Interviews in Bujumbura with RIM, partner MFIs of the FVS / AMADE and with the FENACOBU;
- Interviews with the management and support organizations helping local populations targeted by the project of the FVS / AMADE (ministries, programs, etc.).
- Interviews with Coopec Bururi and Gitega.
- Demand analysis: Meetings with the client beneficiaries of FVS / AMADE in Bujumbura; Meetings with the client beneficiaries of FVS / AMADE respectively in Bururi and Gitega.
- Analysis of the regulatory framework: Interviews with representatives of the Ministry of Finance; Interviews with BRB
3. Analysis, writing the study report and recommendations - 2 days.