The African Development Bank (AfDB), a multilateral financial institution, and the government of Spain have established the Microfinance Capacity Building Fund for Africa in an effort to strengthen the continent’s financial sector. Funding from the Spanish government will flow through its Agency for International Development (AECID in Spanish) and Ministry of Economy and Finance.
Given the relative youth of Africa’s financial services sector, the Microfinance Capacity Building Fund will work towards deepening and expanding the availability of financial services and the institutions that provide them. The Fund will promote transparency throughout the continent and will provide monetary support to projects that target female empowerment and rural development. Additionally, the Fund will provide technical assistance to help develop the capacities of retail financial institutions, improve market structures and create an enabling legal and regulatory environment.
Through September 19, 2011, the Fund will accept proposals relating to transparency in the microfinance sector. Proposals are sought primarily from financial institutions and government agencies in countries in the West African Monetary Union (UEMOA in French) although proposals from other countries in the Economic Community of West African States (ECOWAS) will also be considered. The Fund is seeking to fund 8-10 projects, which will each be awarded between EUR 200,000 (USD 275,000) and EUR 500,000 (USD 687,000).
By Rohan Trivedi, Research Associate
About The African Development Bank:
Established in 1964, AfDB is a development bank that provides loans and grants to governments and private companies in Africa. AfDB commits approximately USD 3 billion annually to African countries as well as organizations that work within their borders. Owned and funded by member governments, the bank has a mandate to reduce poverty and promote sustainable development. Currently, AfDB shareholders consist of 77 member countries, which include 53 African countries. As of April 2011, the president of AfDB is Donald Kaberuka.
About The Spanish Agency for International Development:
Agencia Española de Cooperación Internacional para el Desarrollo (AECID) is Spain’s agency for international development. AECID is responsible for all international aid disbursed by the Spanish government.
Sources and Additional Resources:
 AfDB Press Release: “AfDB Launches Microfinance Capacity Building Fund”, http://www.afdb.org/en/news-and-events/article/afdb-launches-microfinance-capacity-building-fund-8301/
MicroCapital.org story, June 22, 2011: “MICROCAPITAL BRIEF: African Development Bank (AfDB) Loan Guarantee Scheme Provides Loans to Women Whose Businesses are Too Big for Microfinance”, http://www.microcapital.org/microcapital-brief-african-development-bank-afdb-loan-guarantee-scheme-provides-loans-to-women-whose-businesses-are-too-big-for-microfinance/
MicroCapital.org story, November 2, 2010: “MICROCAPITAL BRIEF: African Development Bank (AfDB), Governments of Denmark and Spain to Create African Guarantee Fund (AGF) to Bring Economic Resources to African Businesses Including Microfinance Institutions (MFIs)”, http://www.microcapital.org/microcapital-brief-african-development-bank-afdb-governments-of-denmark-and-spain-to-create-african-guarantee-fund-agf-to-bring-economic-resources-to-african-businesses-including-microfinance-in/
MicroCapital Universe Profile: African Development Bank (AfDB), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=African+Development+Bank++%28AfDB%29
MicroCapital Universe Profile: Spanish Agency for International Development (AECID), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Agency+for+International+Development+%28AECID%29
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