We use existing data in innovative ways to help us better understand the experience of the fund’s beneficiaries.

Enabling Impact

There has been a shift in focus in recent years from general concern about poverty alleviation to a desire for more disciplined measurement of the direct outreach and inclusion of microfinance investments. Microfinance investors have also moved away from a unilateral and simplified view of the sector and have developed a more elaborate understanding of its shared profits and mutual social benefits in the current context of ongoing globalization.

In essence, the principal impact that microfinance strives to achieve is to improve the economic wellbeing of microfinance clients: to help them grow their businesses, increase their incomes and create greater economic stability and security.

This has led investors and practitioners to increase the emphasis they put on the level of social responsibility in order to safeguard and ensure long term positive impact and sustainable wealth creation.

The best practice standards of the Smart Campaign are required for all microfinance institutions we do invest in.

Client Protection Principles - Placing clients first

Responsible financial inclusion encompasses core Client Protection Principles to help financial service providers practice good ethics and smart business. The Client Protection Principles are the minimum standards that clients should expect to receive when doing business with a microfinance financial service provider.

All out investment institutions must be fully transparent in the pricing, terms, and conditions and work with clients to prevent them from borrowing more money than they can repay or using products they do not need. Responsible financial inclusion protects clients, businesses, and the industry as a whole. And therefore, one key criterion of the Enabling Microfinance Fund is that all microfinance institutions in the portfolio must adhere to those best practice standards set by the Smart Campaign.

Client Protection Principles

Examples of standards assessed

Principle 1
Appropriate Product Design and Delivery

Products are designed to be appropriate to client needs; client feedback is sought for product design and delivery.

Client Protection Principles

Robust processes are used to verify repayment capacity of clients; credit bureau data is checked systematically (when applicable).

Principle 3
Transparency

The total cost of the loan, including all charges, is communicated to clients both verbally and in writing.

Principle 2
Prevention of Over-indebtedness

Market-based, non-discriminatory pricing is applied and excessive fees are not charged

Principle 4
Responsible Pricing

Client Protection Principles

Clients are informed of their rights; both in-house and third-party collection staff are trained on fair and responsible treatment of clients.

Principle 5
Fair and Respectful Treatment of Clients

Client Protection Principles

Client confidentiality is protected with appropriate technology systems.

Principle 6
Privacy of Client Data

Clients are aware of how to submit complaints; the complaints resolution system is active and effective.

Principle 7
Mechanisms for Complaint Resolution

Client Protection Principles

Microfinance Guarantee Fund for African Women

The latest project of the Enabling Microfinance Foundation involves supporting promising women microentrepreneurs in Kenya and Cameroon in obtaining access to microfinancing. The project foresees the establishment of a micro-finance guarantee fund within the structures of two training organisations in Kenya and Cameroon. 

This provides women microentrepreneurs with the necessary backing vis-à-vis micro-finance institutions to improve credit terms and thus the economic growth potential of the women. With the Fund, training organisations will collaborate more effectively with MFIs for the benefit of microentrepreneurs, thereby fostering poverty reduction. As such the project is a model for further, similar constellations in other regions. 

The Foundation - A Guarantee for Double Impact

"The dual approach is an important factor in strengthening the sector as a whole"

The Enabling Microfinance Fund is ultimately owned by a non-profit foundation with the target of generating the greatest possible social impact by reducing poverty. While the EMF Microfinance Fund is the main instrument for achieving this goal, the revenues of Enabling Microfinance AG as the promotor as well as the operating company of the Fund are, in addition, used to launch new projects to improve the conditions along the microfinance value chain, such as a microfinance training program for women. 

The Enabling Microfinance Foundation oversees the operating company and acts as a guarantor for projects to strengthen access to finance in low income economies through capacity building work.

Working along the value chain to establish and strengthen financing institutions is an important driver of qualitatively and quantitatively sustainable sector development. This dual approach is an important factor in strengthening the sector as a whole, supporting norms and standards to protect the interests of the various stakeholders in this new investment value chain, so as not to introduce counterproductive overflows, misuse or abuse of capital into unaccustomed populations.

The EMF Fund in combination with the support work of the EMF Foundation aims to catalyse access to capital where it is needed most by reinforcing the financial intermediation infrastructure and by promoting more inclusive financial policies. At the same time, the Fund demonstrates the commercial viability of investing in micro, small and medium-sized enterprises in low- and middle-income countries and aims to inspire a new generation of investors to address the wider financing gap.