With 130 MFIs members reaching out to 3.9 million clients, the ACCESS Microfinance Alliance (AmFA) is the largest network of fledgling MFIs in India. Although the microfinance sector is growing at a fair clip, many small MFIs still grapple to upscale their operations. Due to limitations in governance, management, systems and procedures, the smaller MFIs do not possess enough credibility to attract the financial markets effectively. AmFA's primary mission is to bridge the gap between the supply and demand and help the smaller MFIs to upscale their operations and thereby expand outreach. While the nature of engagement of ACCESS with each of these institutions varies following the context, the aim is to bring NGO/MFI partners together on a common platform to assess institutional needs for technical support and present an aggregation of demand for on-lending funds to the financial markets.
Products and Services
AmFA adopts a two pronged strategy: while providing need based technical support to its members, it also builds operational and strategic relations with the supply side players to facilitate inflow of funds. In addition to the array of technical services provided to the MFIs, the AmFA members have a privileged access to a wider range of products and services:
Revolving Loan Fund
The platform allows the institutions to have access to a Revolving Loan Fund (RLF), currently housed in CARE. The fund provides "bridge loans" as an interim measure till the MFIs get linked to mainstream markets.
MFI performance analysis and benchmarking
ACCESS analyses AmFA members' performance indicators, financial statements etc. and publishes the key performance ratios and indicators in an annual publication, MICROSCAN. Providing in-depth and complete financial analysis of partners' portfolios, MICROSCAN is a part of ACCESS strategy to share partners' plans and performances with the financial institutions and fostering possible on-lending relationship with AmFA partners.
Facilitation of on-lending fund linkages
Being able to attract investments is one of the biggest challenges for nascent, emerging as well as growing microfinance institutions. ACCESS assists AmFA members in getting linked to commercial banks for investments and on-lending fund support.
Information Dissemination
ACCESS took initiatives to disseminate the respective performance data of its members on large database such as "MIX", and portals such as "Microfinance Gateway". Portfolio information of members is shared with financial institutions and published in the "Alliance Directory". Special individual member achievements are published in "AmFA Line", a quarterly newsletter.
Strategic Base of the Pyramid partnerships through the AmFA
AmFA's ambition is to look beyond credit and financial inclusion. Access to financial services is important to leverage productive opportunities and reduce poverty. Yet the situation of the poor calls for a wider array of services that would complement the financial assistance and ensure its effective implementation. With 130 NGOs-MFI partners and a current client base of over 3.9 million, the AmFA network is a strong mechanism to deliver a much broader range of services. Several innovative tie-ups have been initiated through the network:
Strategic Partnership with SIDBI
As part of its strategy for upscaling operations of emerging MFIs within the AmFA network, ACCESS initiated a major strategic agreement with SIDBI to provide on-lending support to Tier II and Tier III AmFA partners. Through this tie-up, SIDBI will be facilitated to provide up to Rs. 100 crores to these smaller institutions, and help them upscale their operations. The role of ACCESS in this partnership is to identify potential MFI partners, provide capacity building and mentoring support and facilitate on-lending support from SIDBI. The weak areas of the institutions are identified through ACCESS's Institutional Capacity Assessment Tool (I-CAT) and a business plan is elaborated accordingly. Following the identification of the gaps, ACCESS provides technical assistance and capacity building to the MFI. Along with this, ACCESS also assists the institution with submission of loan applications to SIDBI and ensures a follow-up of the process.
Safe drinking water intervention - Partnership with HUL
Responding to the challenge of providing poor households with clean drinking water, ACCESS has initiated a partnership with Hindustan Unilever Ltd. (HUL) to make safe water solution available and affordable for poor households. While the demand has been stimulated through various awareness building programmes on safe drinking water, the microfinance institutions provided financial support to their clients to facilitate the purchase of the water purifier. This initiative has impacted through reduced client expenditure on health care and reduced absenteeism from work and school due to water borne diseases.
Impacting vulnerability of the Client through microinsurance - Partnership with Max New York Life
In 2008, ACCESS initiated a new partnership with Max New York Life (MNYL), a leading private sector insurance provider in the country. Leveraging the strengths of the AmFA platform, MNYL could deliver a new savings based insurance product (Max Vijay) to the MFIs clients. This helped the AmFA partners to increase their provision of financial services in the form of insurance delivered to their members/clients.
Technology Solutions for MFI partners - Partnership with FINO
ACCESS established a partnership in November 2008 with Financial Information Network and Operations Ltd. (FINO), a Mumbai based technology solutions provider founded with the objective of building technologies to enable financial institutions to reach the underserved. This collaboration aims at supplying Tier II and Tier III MFIs with Management Information Systems (MIS) to improve efficiency in their day-to-day microfinance operations. This would help to streamline the reporting and monitoring mechanisms of the NGOs / MFIs and help them upscale their operations.