Credit crisis hits SME financiers

The global financial crisis has begun affecting the activities of micro-finance institutions in the country, and worst hit are institutions which source their funds from Europe and America.

Briefing the media at Safari Club in Nairobi, Kenya ahead of Africa multi-sectoral conference on micro-finance to be held at United Nations offices at Gigiri, Nairobi tomorrow, Kenya Women Finance Trust executive director Jennifer Riria said the institutions will remain affected until the crisis is over.

“The global financial meltdown has begun to affect the flow of funds to micro-finance institutions. We have begun suffering from the tightening of funds coming from Europe and America and it is going to be for sometime,” Dr Riria, who is also the Africa Microfinance Action Forum chairman said.

She said this was happening even as demand for micro-finance funds tripled as those who have lost their jobs venturing into business.

This could be among the challenges that will be unveiled in a study on micro-finance in Africa at the conference.

The study, Diagnostic to Action: Micro-finance in Africa, in-depth look at the Africa micro-finance sector, is intended to be a reference tool for all micro-finance providers, institutions and policy makers interested in promoting economic development and fighting poverty in Africa.

It reveals the obstacles that hinder access to financial products and services including Aids, isolation, low population density and lack of basic services and infrastructure.

The report, Dr Riria, said will contain 26 recommendations for micro-finance institutions, governments and regional organisations. The study was conducted by AMAF and Women’s World Banking among others.

President and CEO of Women’s World Banking Mary Ellen Iskenderian said banks in many countries were not keen on penetrating the micro-finance sector, yet they had capacity to offer superior technology and savings platforms through their wide branch network.