ASSOCIATION OF MICROFINANCE INSTITUTIONS – KENYA

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AMFI secretariat: From left, Nancy Chotero, programmes manager, coordination and administrator, Caroline Karanja, programmes manager, membership and capacity building and Ag. CEO, Shadrack Mithika, programmes manager , finance and perfomance management, Pauline Adhiambo, Administration Assistant and Paul Karanja Mutuku, Office Assistant.
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The Association of Microfinance Institutions – Kenya (AMFI-K) is a member based organization that was established and registered in 1999 under the Societies Act, with the aim of building the capacity of the Kenyan microfinance industry.
In its seventeen years of existence, AMFI-K’s membership has continued to grow. The association has a diverse membership base that provides microfinance products and services to the lower pyramid of our society. The membership includes: microfinance banks, commercial banks which have a focus on microfinance, credit only microfinance institutions, wholesale microfinance lenders, developmental institutions as well as savings and credit co-operatives (saccos).

Pillars
To support the microfinance industry in the country, AMFI-K has 4 key pillars which drive its core services. These are:

Policy advocacy: The aim of this area of activity is to enhance collective action by its members and other stakeholders so as to create an enabling policy and regulatory environment for the microfinance industry in Kenya. In order to deliver this mandate, AMFI-K has enhanced its institutional capacity for advocacy and lobbying to ably support the development of an enabling environment for its members to operate and increase their growth and outreach to the low-income people.

Capacity building: The aim of this area is to strengthen the capacity of its members in delivering appropriate and sustainable microfinance products and services to low income people, through organization and coordination of workshops and training courses as well as effective management of information systems, with a view to enhance members’ capacity to manage and operate their institutions professionally. To achieve this, AMFI-K conducts regular assessment of members’ capacity building needs and organizes demand-driven training workshops and seminars on thematic areas. It also develops content specifically tailored to respond to the members’ needs.

Networking and linkages: AMFI-K provides regular platforms for its members to enhance effective collaboration among themselves as well as other development actors and relevant stakeholders. AMFI also harnesses the wealth of experience and expertise among its membership and relationships with regional and international organizations operating in the microfinance space to provide a platform for peer to peer learning and to improve information sharing and dissemination.

Research and knowledge management: The key objective of this activity area is to provide members with timely and quality research and information that help underpin the policy and advocacy agenda, and facilitate industry product design and decision making processes.

Membership eligibility criteria
Membership to AMFI-K is a sign of commitment to the ideals that the organization seeks to promote. To become a member of AMFI-K therefore, an institution must: offer microfinance services to the poor or low income earners or provide support services to the microfinance industry , be committed or demonstrate clear intent to become sustainable, have a clear microfinance business with a minimum of five hundred customers and one year in operation, should not discriminate against clients on the basis of religion, ethnicity or political affiliation, be non partisan and finally, demonstrate management capacity to effectively manage its operations in accordance with internationally accepted principles as evidenced by the vision and mission, governing body, fit and proper test, corporate strategy, quality of portfolio, investor relations policy and business plan.

Benefits of joining AMFI-K
The benefits of joining AMFI-K include: building the institution’s profile regionally and internationally, having a voice in shaping the future of the microfinance industry in Kenya, access to various forums where members make contacts, sharing and gathering information as well as building consensus on industry issues, access to a wide range of services from AMFI-K including information, capacity building, technical assistance and advertising opportunities in AMFI’s publications and website and finally, networking with the association’s global and regional partners.

AMFI-K’s major achievements in 2016
In 2016, AMFI-K implemented the following important activities for the members:
.Lobbying and participation in the drafting of the Financial Services Authority bill 2016;
. Held four training sessions for the members in the areas of customer service, portfolio and credit cycle management, corporate governance, enterprise risk management as well as a workshop in client protection and responsible microfinance. These sessions saw over one hundred staff of the member institutions trained;
. Lobbying for the credit only regulations by engaging the National Treasury;
. Increased outreach because about ten new member institutions were recruited during the year, hence promoting financial inclusion.

Challenges in the Association
Despite the achievements above, AMFI-K faces some challenges as follows:
. AMFI-K has limited resources and this has affected the institution’s ability to deliver some services;
. Inadequate support from donors and partners;
. Partial regulatory platform for the industry which encourages unfair loan pricing and existence of unethical lending business;
. Lack of government support by not allocating or factoring in funds to the sector in the national budget;
. Competition from well established commercial banks targeting the microfinance clientele.
To mitigate these challenges, AMFI-K conducts a needs assessment survey among its members in order to develop the relevant capacity building programmes, besides lobbying with the right government bodies in regards to policy issues.

Plans for AMFI-K in 2017
To start with, AMFI-K is planning to initiate and promote an interest in research on microfinance so as to enhance the understanding of the needs of the industry, support informed policy and regulatory reform, product development and replication and ultimately, improve financial access for the low income population in Kenya. Secondly, it is also planning to establish a resource centre to ensure that information on the microfinance industry is systematically generated, stored, analyzed and disseminated to ensure continuous learning and the development of innovative, high impact financial inclusion policies. Moreover, the association will engage and develop collaborations with regional and international partners and donors to strengthen its activities. In the same regard, AMFI-K will continue lobbying the government to operationalize the already drafted credit only regulations. Other initiatives that are lined up for 2017 include: aggressively engaging partners to develop programmes that will benefit its members, sourcing for new donors who can fund the association and members activities, developing a marketing strategy for the microfinance industry (and AMFI-K), while taking into consideration the views of various stakeholders – the public, development partners, the entire financial sector as well as its clients.

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