THE PURPOSE BEHIND OUR PERSPECTIVEBackgroundMicrofinance associations (MFAs) are member-based networks and play a major role in stabilizing the microfinance sector as a whole. They provide a wide range of services such as information brokerage, training and capacity building, political lobbying, and more. Over the past five years or so, a number of MFAs have emerged in various regions of the world. Most of them operate at the national level, which SEEP has inventoried. Other MFAs are regional, and include AFMIN in Africa, REDCAMIF for Central America, SANABEL covering North Africa and the Middle East, and MFC in the Central and Eastern Europe/Newly Independent States region. There has been increasing donor interest in supporting both national and regional associations. Presently, more than 25 MFAs have entered into partnerships with technical service providers or donors. As a result of this interest by donors, a group of donors, practitioners and technical service providers developed guidelines for supporting MFAs. These guidelines have been developed under GTZ's leadership, and coordinated by SEEP. Role and services provided by MFAs MFAs are increasingly demonstrating their role as key players in developing the microfinance sector. For example, they help members improve their performance and enhance their ability to face challenges posed by the macro-socio and economic environments in which they work. MFAs also provide a forum for their members to engage in joint learning and training, promote performance standards, share information, and collaborate on a wide range of industry-related issues, and develop consensus on and advocate for policies to promote an enabling environment for microfinance. MFAs offer a variety of programs and services benefiting their members and others, including data collection and dissemination, information services, service brokering, advocacy, and capacity building. Sustainablity of MFAs MFA viability does not carry the same definition as MFI sustainability. Unlike MFI sustainability which is determined by calculating the percent of expenses covered by internally generated revenues, not all services offered by MFAs generate revenue. Therefore "financial viability" is a more appropriate term when describing an MFA's ability to cover costs. Donor Support and Funding to MFAs Donors should understand the role of national and regional MFAs and find common areas of interest, while keeping in mind that the primary objective of donor support should be to strengthen the MFA so it can provide effective services to its members and the industry. Donors should also develop long-term relationships with MFAs, including realistic and performance-based funding strategies agreed by both parties. Donors can effectively support MFAs by taking into account their stage of development and the maturity of the MFI industry within the national or regional context. More specifically, donors can effectively support MFAs by taking the following actions:
Source: http://www.microfinancegateway.org/p/site/m/template.rc/1.26.9100/
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