Strengthening Institutional Capacities for SME Lending
2014-05-31 - 2015-03-31
MicroFund for Women (MFW) is one of the leading MFIs in Jordan and the MENA region. As a non-profit company, in the last two decades MFW was able to develop a loan portfolio of around USD 35 MM. MFW traditionally applies a group lending technology that caters to the financial (and business development) needs of women, as well as provides individual lending.
However, it recently moved into the lower end of the SME finance segment with a pilot test in 2013, and would like to strengthen its institutional capacities to allow it to move up the market. EBRD is supporting this initiative by providing a USD 3.5 MM lending facility to MFW to fund the growing SME loan portfolio, as well as a TA package to strengthen the organization’s capacities.
According to the Terms of Reference the objective is to assist MFW in enhancing its institutional capacities in the following areas:
SME lending methodology, as distinct from their existing micro lending process but building on the current institutional strengths and proximity and knowledge of its clients;
Internal audit and control procedures;
Performance measurement and reporting, to support managerial decision-making as the business becomes more complex.
To that end, LFS:
conducted a market scoping
Revised and updated the SOPs
developed an updated strategy for MFW in partnership with the organization (including recommending target groups and a lending product)
launched an SME lending pilot, including both classroom and on-the-job training for SME staff
provided ongoing support on how to streamline procedures and processes, remove bottlenecks, incentivize referrals from branches, incentivize LO performance, and developing a marketing strategy to reach a new clientele base for the bank.
reviewed and made recommendations on the internal audit function and reporting mechanisms of the institution, in light of its new SME lending function