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| Project Name: | Strenghthening The Microfinance Sector in Benin (PRISM) |
| Project Description: |
The main purpose is to develop the agricultural sector in Benin in order to diversify the production and to make it competitive.
The program has five components which are:
- Component A: Support to agriculture private sector
- Component B: Support to rural finance
- Component C: Support to the decentralization process
- Component D: Institutionnal Strengthening of the Ministry of Agriculture with 4 sub-components
- Component D: Support to Agriculture research and extension
CARE is in charge of the implementtion of the Component B which is called in French Composante Appui au Financement Rural (CAFiR).
CAFiR is in line with the poverty reduction strategy of Benin government and aims at strengthening all the microfinance stakeholders in Benin by a great integration of the financial market and by improving farmers, women economic groups, small and medium entreprises operating in rural areas (especially those supported by the Component A) access to financial services.
One of the specific objective is to strengthen 70 rural credit and savings association - known as village banks- in order to increase the quality of their services to their members. The village banks will be encourage to set up apex organisations that could be able to take up from the project and to provide oversight and quality services to their members. The component will also encourage mature MFI and commercial banks to extend their operations in rural areas, at least by providing loan fund to the village banks. A guarantee fund and bonifiction system will be set up by the component in order to facilitate the integration of the financial market in Benin.
The component will cover the national territory of Benin, but will give priority to 20 districts in which the component A will operate.
In order to foster synergy between the component A and the component B, both components will share office space and will meet quite often together.
CAFIR will support rural finance activities in Benin by setting up and implementing three funds:
1- Professionnalisation fund: This fund aims at strengthening the capacity of 70 selected village banks in Benin and will encourage them to set up apex structures that will take over from the project and will be able to provide oversight and quality services to them.
2- Bonification and support fund: This fund will incentivize mature MFI and commercial banks to operate in rural areas in Benin and will subsidize the interest rate of loan fund provided by them to village banks.
3- Guarantee fund: This fund will also help village banks to be able to access loan fund from the financial market. The fund will also help Small andamp; Medium Enterprises in rural areas to access loans. |
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