Microfinance portfolio
AdéFi, Madagascar
BACKGROUND
After 25 years of stagnation and rising poverty, stabilization measures in the 1990s laid the foundations for strong growth from 1998 onwards, led by public sector investment and notably by export development from the Free Trade Zone (textiles becoming Madagascar's leading export).
In 2002 a political crisis drove the economy into recession, triggering a 12% fall in output. The new government of Marc RAVALOMANANA, with renewed support from development institutions, is determined to foster economic recovery.
GNP/ head is $US 240.
ADéFI (Association pour le Développement et le Financement des micro-entreprises)
ADéFI is an established co-operative institution specialised in lending to small urban businesses. It was launched in 1995 with support from the French Development Agency (AFD) and ACEP (a microfinance operator).
ADéFI finances about a hundred different activities, with a specific focus on production, craft and service activities rather than commerce. It serves its clients via two windows:
- The Very Small Enterprise (VSE) window, intended for the original clientele of micro-businesses, provides short term loans with an average volume of 500 Euros and an average maturity of 12 months
- The Small/Medium-sized Enterprise (SME) window, opened in 2002 to accommodate the development of ADEFI's clients. The SME window is intended to serve a clientele of somewhat larger VSEs, providing loans with an average volume of 8,000 Euros and an average maturity of 36 months.
At 30 June 2004 the outstanding loan portfolio totalled 2.5 million Euros, split 70%-30% between VSEs and SMEs.
INVESTMENT
I&P has provided a 4-year subordinated loan to ADéFI in the context of the opening of the SME window.
To know more on ADéFI, click here: www.adefi.org