United Nations Capital Development Fund Articles

What keeps MicroStart from selecting more high-performing organizations? - Click To Read Article
The desire to reach a target number of organizations in each country

Viewpoint of outgoing clients - Impact Study of the Zakoura Microcredit Program - Click To Read Article
On the whole, the program was viewed positively, even by clients who had left it. It may be noted that for 32.8% of them, the loan was considered easy to reimburse, but the loan amount was believed to be too small to meet their business needs. One must remember that one of the main complaints the participants (present clients) make to Zakoura is the small size of the loans.

The Role of Microfinance in Addressing the HIV/AIDS Pandemic in Zambia: The Rainbow Model Provides a Future for AIDS Orphans - Click To Read Article
Poverty and HIV/AIDS constitute a vicious circle. Poverty creates vulnerability to HIV/AIDS, and HIV/AIDS leads to poverty. Unfortunately, the interventions of the national and international community are not moving as quickly as the desperation and the loss of hope in the people coping with the pandemic at the grassroots level.

Technology Innovations at Grameen Foundation USA - Click To Read Article
How will easy, affordable and reliable access for a person in a remote village be provided? When will this person have the ability to make a simple one-minute call, send a complaint to the local government, or make a loan payment without undo cost or travel difficulty? The microfinance industry is answering these questions with technological innovations.

The Art of Selecting Promising MFIs - Click To Read Article
The key question for MicroStart is whether it can equip and motivate those in charge of MFI selection to choose "small and promising" rather than "small and weak."

Summary of TSP Performance in Countries Visited - Click To Read Article
The experiences of the TSPs in each country visited during the evaluation illustrate a range of different issues.

Summary of main recommendations - Impact Study of the Zakoura Microcredit Program - Click To Read Article
In preparing the recommendations, we shall try take into account not only the results of the client surveys, on the basis of each of the five tools used, but also the ground reality of the ZMC program. In other words, the aim is to take into account what is desirable while bearing in mind what is actually feasible.

Report from the Field: Incorporating Microfinance into Kenya's Economic Recovery Strategy - Click To Read Article
With a population of 30 million people and a per capita income of US$260, Kenya is categorized the 20th poorest country in the world.[1] Estimates indicate that about 47% of the rural population and 29% of the urban population live under conditions of absolute poverty, where malnutrition and seasonal famine are not just a consistent fear, but also a frequent reality in their lives. On the other hand, the unemployment rate, currently estimated at between 25% and 35%, threatens to get out of hand as roughly 0.5 million school dropouts continue to join the ranks of the unemployed every year.

Redefining Microfinance as a Strategy to Achieve the MDGs: International Year of Microcredit Report Advocates Shift from Poverty Alleviation to Wealth Creation - Click To Read Article
With microfinance gaining attention for its vital role in eradicating poverty, the International Year of Microcredit recently released a report, "Microfinance and the Millennium Development Goals (MDGs): A Reader's Guide to the Millennium Project and Other UN Documents", to provide further background and support for microfinance initiatives.

Reaching the MDGs: A Concrete Look at the Challenge of More Effective Aid (Not Just More Aid) - Click To Read Article
Some acronyms never make it into the mainstream, and forever remain part of the secret language of a closed group of people that share the same profession, hobby or interest. But everyone is talking about the MDGs, or Millennium Development Goals.

Recommendations - Click To Read Article
This report recommends that SUM reorient MicroStart to focus more clearly on finding and supporting organizations that have good potential to become major providers, while reducing the proportion of its resources devoted to low potential organizations.

Points of Intervention - Click To Read Article
This section is a walk through the MicroStart process, with specific recommendations. It focuses on the key areas of intervention SUM has identified. SUM's goal is to develop simple, efficient, and meaningful procedures, and these suggestions are offered in that spirit.

Overall Conclusions and Main Messages - MicroStart: Finding and Feeding Breakthroughs - Click To Read Article
Through MicroStart, UNDP is making an important contribution to the growth of microfinance around the world, both through its direct support of MFIs and through the processes and ideas it is introducing into countries where microfinance is just beginning.

Other TSP Issues - Click To Read Article
1. Local Technical Service Provider

Microfinance - Where We Are Now: And Where We Are Headed - Click To Read Article
All of us who are involved in microfinance know that it is neither just nor economically tenable for financial systems in poor countries to serve only a tiny proportion of the population and exclude the vast majority. We are no longer alone in this. All over the developing world people are waking up to the fact that poor people need - and will pay for - a wealth of financial options, solutions and services, just like rich people. They are realizing that poor people represent a vast untapped market opportunity. And as a result we are witnessing poor people's finance becoming mainstream finance in most poor countries.

Microfinance as Key Poverty Reduction Strategy Paper (PRSP) Component: The Majority of PRSPs Include Access to Financial Services - Click To Read Article
By the late 1990s, it was clear that something was not working in the field of development. Deteriorating economic growth in Sub-Saharan Africa, the failure of Structural Adjustment Programmes used by the World Bank and International Monetary Fund (IMF) and the question of how to link debt relief to poverty reduction led policy makers to adopt the Poverty Reduction Strategy Paper (PRSP) initiative in September 1999.

Microfinance 2015: Panel Focuses on the Future and Outlook of Microfinance - Click To Read Article
Where will microfinance be in 2015? What is the future and challenges of microfinance? The first discussion held at the launch of the International Year of Microcredit 2005 focused on these key questions.

MFI Performance in Countries Visited: A Few Numbers - Click To Read Article
Before reviewing the performance of MFIs in MicroStart, it is useful to consider what minimum level of performance would justify the expenditures MicroStart is making.

Micro-Start Program: Local Technical Services Provider - Impact Study of the Zakoura Microcredit Program - Click To Read Article
Zakoura Micro-Crédit (ZMC) is the microfinance arm of the Zakoura Foundation, a national NGO devoted to increasing the quality of life of the most underprivileged Moroccans. ZMC provides credit and training to a target market of economically disadvantaged women using a solidarity group methodology. Between its founding in 1995 and September 2000, ZMC had disbursed 82,814 loans totaling 121,489,000 Dirhams. Its current repayment rate is 99.69%

Managing Foreign Exchange Risk: The Search for an Innovation to Lower Costs to Poor People - Click To Read Article
There is currently much debate over whether commercial investments in microfinance pass foreign exchange risk exposure to poor clients through high interest rates - i.e., whether foreign investment in microfinance is expensive for poor people. But what makes foreign currency exposure such a problem?

Managing Credit Risk in Microlending Operations - Click To Read Article
One of the most important determinants of a successful microlending operation is the successful management of credit risk. Or, more simply, keeping loan delinquencies to an acceptable level.

Jeffrey Sachs, Elizabeth Littlefield and William Easterly Speak at NYU: The Role of Microfinance in Achieving the MDGs Is Highlighted - Click To Read Article
The Millennium Development Goals were set forth with a goal to cut extreme poverty in half by the year 2015. The International Public Service Associations Spring Conference of New York University's Robert F. Wagner Graduate School of Public Service was held on March 25, 2005, discussing the topic, "The Millennium Development Goals, Lessons, Opportunities and Challenges."

International Year of Microcredit Advisors Visit Kenya and Uganda: Princess Maxima, Diederik Laman Trip and Marilou van Golstein Brouwers Promote Microfinance on the Continent - Click To Read Article
In the third week of February 2005, The Netherlands' Princess Maxima, ING Netherlands Chairman Diederik Laman Trip and Triodos Bank Senior Fund Manager Marilou van Golstein Brouwers visited Africa to promote the International Year of Microcredit and the importance of microfinance in the global fight to eradicate poverty.

Introduction - MicroStart: Finding and Feeding Breakthroughs - Click To Read Article
UNDP's Special Unit for Microfinance (SUM) commissioned a mid-term evaluation of its MicroStart program to take place in September-October 1999. SUM believed that an evaluation at this time would identify areas for improvement while there was still time to make changes. SUM directed us, as evaluators, to focus on the validity of the assumptions underlying MicroStart and on the processes used to implement it, rather than on the impact of the program.

Is MicroStart a Successful Microfinance Strategy for UNDP? - Click To Read Article
When MicroStart began, its designers were attempting to develop a program that would fit well with UNDP's strengths and weaknesses. They decided to focus on new institutions, recognizing UNDP's presence in many countries where microfinance was still new, as well as the limits on UNDP's ability to provide grants. In order to compensate for the lack of experience of country office staff, they developed a project blueprint that they hoped would prevent some of the most likely errors UNDP offices with little microfinance background might make.

IFC and Microfinance in Africa: Building Strong Commercial Institutions - Click To Read Article
The International Finance Corporation (IFC)-the private sector arm of the World Bank Group-has $4 billion invested in various kinds of financial institutions in 88 countries: including banks, leasing companies, credit rating agencies, and pension funds. IFC also has $256 million invested in 56 microfinance institutions in 38 countries, reaching more than 1.3 million clients. Institutions in Southern Europe, Central Asia, and Latin America currently comprise the lion's share of this portfolio, but Africa is a growing emphasis as well.

Financial Sector Development as an Essential Determinant for Achieving the MDGs: Increasing Private Credit Shown to Reduce Income Inequality - Click To Read Article
Whether or not one has access to private credit is a litmus test for wealth or poverty. If you're rich, you have it, and can use it to get richer. If you're poor, you don't have access to it, and you remain poor. Conventional wisdom suggests that building up the financial sector has little effect on this gap.

Finance Matters for Poverty Reduction and Attaining the MDGs: Recent Empirical Evidence - Click To Read Article
Finance is an important component of development, including for poor people. Indeed, recent empirical evidence has shown that a more developed financial system can help reduce poverty and lower income inequality.

Findings - Impact Study of the Zakoura Microcredit Program - Click To Read Article
It must be noted that in general, there were relatively more clients as compared to non-clients who were open and more at ease in answering the questions raised. For example, to a question referring to changes in their income, the proportion of clients who gave no answer was 1.1% as against 9.3 % for non-clients.

Faulu Kenya Issues KES 500 Million (US$7 Million) Bond to Assist Poor People: A Journey to the Capital Markets - Click To Read Article
Over the last 20 years, microfinance institutions in Kenya have largely developed through concerted grant funding. This situation prevailed up to the late 1990s when key donors started pushing MFIs to start moving towards sustainability in their operations.

Does It Make Sense for UNDP to Help Launch Small and New Organizations? - Click To Read Article
The most fundamental question that this evaluation addresses is the validity of UNDP's decision to build a program focused on supporting small MFIs.

Diversifying Financial Assets for Poor People: Micropensions as a Tool to Build Wealth - Click To Read Article
Poor people need access to a variety of real and financial assets to build wealth. While using both formal and informal mechanisms, they seek the same financial goals as the rich, such as capital appreciation, risk mitigation, capital preservation, and financial leverage (i.e., increasing expected rates of return by assuming more risk).

Creating Effective Capacity Building Relationships - Click To Read Article
MicroStart's use of TSPs is an experiment in creating a new framework for capacity building. The original design sprang from the recognition that the standard CTA model in use throughout UNDP projects was not the best way to support the development of microfinance institutions.

Can Technical Service Providers Add Significant Value? - Click To Read Article
The second major hypothesis behind MicroStart is that technical assistance from an experienced microfinance organization or consulting firm can help build the capacity of small, young MFIs.

Can MicroStart Have a Significant Impact on Policy and the Environment for Microfinance? - Click To Read Article
MicroStart programs establish an action-oriented framework for bringing key players together to learn about microfinance development. These players include government policy makers, private sector actors (potential social entrepreneurs or financiers), MFIs, and other donors.

Are Small Capital Grants Worthwhile? - Click To Read Article
The MicroStart approach is to make small grants available to participating MFIs. These grants can be used to cover operating losses or to capitalize loan funds. SUM staff wanted these grants to be a way to funnel small doses of funds in a way that would not overwhelm a small and young MFI’s capacity to absorb them. Each grant has a ceiling of $150,000 and is used for either covering operating losses and/or for loan capital.

African Countries Focus on Microfinance: Twelve African Nations Engaged in the International Year of Microcredit to Date - Click To Read Article
Half of the population in Africa lives on less than one dollar a day. More than half the population has no access to safe drinking water. More than two million infants die annually before reaching their first birthday.[1] Such is the harsh reality of the scale of poverty in Africa. The Millennium Development Goals and the objective to halve the proportion of people living in extreme poverty by 2015 has driven a number of regional and national initiatives focused on poverty eradication in Africa based on local needs and priorities.


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