UNDP signs MOU with Micro Financing Institutions

Accra, Sept. 26, GNA - The United Nations Development Programme (UNDP), on Wednesday signed a Memorandum of Understanding with 10 Micro-Finance Institutions (MFIs) from five regions under its Microstart Programme in Accra.

They are Afram Rural Bank Limited, Upper Manya Kro Rural Bank Limited, both in the Eastern Region, Sen's Program in the Ashanti Region, Upper Amenfi Rural Bank Limited and Akoti Rural Bank Limited, both in the Central Region.

The remaining are Empretec Ghana Foundation, the Greater Accra Region, Borimanga Rural Bank Limited, Ghana Development Communities Association, Grameen Ghana, and Maat-N-Tudu Association in the Northern Region. The Microstart Programme was established in 2000, with Ghana as one of the pilot countries to build capacity of micro-finance institutions to overcome challenges faced with the lack of knowledge in the rudiments of pro-poor lending.

This third phase of UNDP's support to the micro-finance sector was being implemented as a component of the UNDP/Government of Ghana Capacity Building for MSME Project.

The Deputy Resident Representative in Ghana, Shigeki Komatsubara signed for his organization while Ms Mary-Anne Addo, Acting Director, External Resource Mobilization of the Ministry of Finance and Economic Planning, signed on behalf of the government.

Under the agreement UNDP would provide a grant capital of up to GH=A250,000 to each institution over a three-year period between 2007 and 2010, while the partner MFIs were expected to contribute matching funds equivalent to 30 to 50 per cent growth in their loan portfolio. The MFIs would also be assisted to develop the appropriate Management Information System to ensure the efficient tracking of their operations, the monitoring and reporting of their performances. Komatsubara said the 10 institutions had been selected through a rigorous selection process, with the help of other partners including the Ministries of Trade and Industry and PSI, Finance and Economic Planning, Bank of Ghana, ARB Apex Bank, and the Ghana Microfinance Institutions Network (GHAMFIN).

He said the MOU marked the joint commitment to supporting the national development agenda of a pro-poor private sector growth.

Komatsubara said UNDP and its partners would not compromise on the efficient use of the resources provided and urged the recipients to use the grant judiciously to promote employment and wealth for the poor. "UNDP in partnership with Government, ARB Apex Bank and GHANFIN will not hesitate to use all available means to retrieve all resources provided to any institution that performs poorly, or fails to observe the rules under the MOU.

"I would therefore like to use this forum to encourage our partner MFIs to work assiduously for their own institutional development and prosperity, and secondly, for the socio-economic benefit of the target clientele, the MSME operators and the communities in their catchments area," he said.

Ms Addo said the excellence performance of the first 11 institutions should serve as a mentor for the current recipients to emulate and urged them to endeavour to overcome challenges they might be confronting in disbursing the funds.

She commended UNDP for its continuous support and pledged government's commitment to a fruitful partnership. Mr Kofi Denkyi, National Project Manager, UNDP, said the four partner institutions in the Northern Region underscored UNDP's commitment to working in areas of the country where the incidence of poverty was relatively high.

He said in the next three years and beyond, those 10 institutions would partner UNDP and the government to accelerate their efforts in the battle against abject poverty and hunger, and a conscious effort would be maintained to enhance the productivity, growth and the transition of the microfinance sector.

He said the institutions would be provided technical assistance, equipment and materials as well as limited financial resources to complement their institutional development efforts and funding for on-lending to MSMEs.

Mr Kwame Duodu Bonsu, Chief Executive Officer, Sen's Program and Mr Owusu Ansah, Financial Services Consultants, representing Empretec Ghana Foundation Ghana, both recipients, commended the UNDP and the government for the support. 26 Sept. 07