Association of Ethiopian Microfinance Institutions

Organization Statement AEMFI

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AEMFI - Association of Ethiopian Microfinance Institutions
 www.aemfiethiopia.org    aemfi@ethionet.et

1.  Origin

The Association of Ethiopian Microfinance Institutions (AEMFI) is a non-profit, non-governmental organization that was established on 28 June 1999 obtaining a license from the Ministry of Justice of the Federal Government of Ethiopia. The Association is located in Addis-Ababa and has not yet opened regional offices/chapters.


2.  Vision

Formal commercial banking has been unable to provide access to poor rural and urban Ethiopians that comprise 45% of the overall 65.3 million population. These people live below the national poverty line and are living witnesses of a structural and endemic poverty. According to WHO, these people live in absolute poverty not attaining the minimum calorie intake per day.

The vision of AEMFI is to see a reduced level of poverty and increased level of consumption and ultimately wealth/capital creation in Ethiopia through an active intervention of current and future microfinance institutions growing into efficient and sustainable rural banks and micro-finance banks. AEMFI is committed to be support MFIs that can reach millions of poor Ethiopians that can play active role as financial intermediaries and institutional investors.

3.  Mission

AEMFI’s mission is to create an institutional structure that serves as a national/industry forum and network for microfinance institutions that provide micro-finance services to economically and socially disadvantaged Ethiopians. Currently, members of AEMFI consist of 20 microfinance institutions that are contributing towards poverty reduction by providing micro-finance services to over 500,000 poor Ethiopians. AEMFI helps to increase the efficiency and effectiveness of the existing MFIs and facilitate the establishment of new ones.

4.  Governance

The supreme decision making body in AEMFI’s organizational structure is its general assembly which consists the board chairpersons of member MFIs, general mangers of MFIs. The management of AEMFI are non-voting members of the general assembly. Each member MFI has equal representation in the general assembly via its board chairperson and general manager. According to the memorandum of association, the general assembly every two years, elect and appoint the board of directors and auditors of AEMFI. The board has 7 members comprising of the general managers or board chairpersons any seven of the member MFIs. The executive director AEMFI is appointed by the board of directors and is a non-voting member of the same.

The organizational structure of AEMFI follows.













5. Specific Objectives

Based on the vision and mission statements stated above, AEMFI strives to achieve the following objectives:

  • help build multifaceted capacity of MFIs in Ethiopia mainly through training

  •  study the status, problems, and prospects of existing MF institutions in Ethiopia and assess the feasibility of forming new ones

  •   help improve the national policy and regulatory environment in favor of the MF industry and its beneficiaries in Ethiopia

  •  help MFIs pool loan and equity funds from domestic and foreign sources

  • help formulate and disseminate resolutions and best practices related to the MF industry in Ethiopia

  •  help appraise and improve the performance of MFIs by serving as the industry’s self-monitoring and database forum

  • facilitate collaboration, experience-sharing, and information exchange among MFIs in Ethiopian and the rest of the world

  • provide MF related information resources for use by policy makers, donors, lenders, continental and international networks, researchers, MF beneficiaries, and the general public

  • advocate about the MF industry in Ethiopia through media and publication and

  • stimulate exceptional contributions of individuals and organizations to the MF industry by creating incentive systems

6.  Activities

To achieve its objectives, AEMFI would carry out the following programs or activities as specified in its memorandum of association and its other documents:

a)       Coordination of training

b)       Systems Improvement

c)       Conducting research

d)       Organizing workshops and conferences

e)       Organizing experience sharing visits

f)         Performance monitoring and database

g)       Maintaining resource center

h)       Industry promotion and publication

i)         Administration and fund raising


AEMFI facilitates the provision of various types of training to employees of member MFIs and its appropriate staff as a major way of fulfilling its capacity building objective/mission. Most important areas of training involve the following:

Senior Management Level & Support Staff

  • Business Planning and Budgeting

  • Project Design and Proposal

  • Product Design and Development

  • Monitoring, Evaluation, and Impact Assessment

  • Accounting and Reporting for Consolidated Entities

  • Financial Management and Statements Analysis

  • Management Information System for MFIs

  • Human Resource Management

  • Credit and Saving Mobilization Strategies

  • Research and Survey Methods

  • Internal Control and Audit

Middle Level

  • Branch Planning, Budgeting, and Accounting

  • Project planning and control

  • Monitoring, Evaluation, and Impact Assessment

  • Credit and Saving Management

  • Internal Audit and Control

  • Human Resource Management

  • Communication and Report Writing

  • Entrepreneurship and small business development

  • Records Management

Operational Level

  • Communication and writing skills

  • Internal audit and control

  • Basic management concepts

  • Internal audit and control

  • Community mobilization and participation

  • Records Management

Systems Improvement

AEMFI facilitates the undertaking of studies to improve the operations and management information system (MIS) of its member MFIs. Based on the studies, AEMFI supports member MFIs to design and implement improved operation and management information systems in computerized environments. To the extent possible, AEMFI strives each member MFI to have an integrated MIS that mainly encompasses:

  • the accounting information system

  • operational information system

  • human resource information system and

  • Materials and property information system.

To help member MFIs maintain an integrated MIS, AEMFI would carry out the following sub-activities:

  • Studying on MIS deficiencies and requirements

  • Rating MFI status

  • Selecting/Developing software

  • Acquiring required hardware

  • Preparing MIS manual(s)

  • Training MFI appropriate staff to administer the MIS

  • Installing and testing software(s) related to the MIS

Research and Survey

AEMFI in its won and on half of other interested parties facilitates the undertaking of researches that touch a number of areas /themes. AEMFFI facilitates the undertaking of research and survey in order to study:

  • the industry’s performance, challenges, prospects, and impacts on beneficiaries of MF schemes

  • ownership structures and governance

  • the level of information and communication technology input into the MF industry

  • impact of MFIs in poverty alleviation gender and empowerment dimensions

  • the supply of and the demand for microfinance services

  • the feasibility of forming new MFIs, etc.

Unless research outputs are restricted from being disclosed by a specified sponsor, they would be presented in the relevant/conference and published in AEMFI produced or other relevant proceedings and publications.

Workshop and Conferences

AEMFI organizes and participates in workshops, conferences, talks, and round the table discussions.  The purposes of these forums include:

  • to provide forums for policy regulation dialogues;

  • to discuss issues related to governance, ownership, and direction of MFIs

  • to present research outputs that identify the status, problems, and prospects of MFIs in Ethiopia;

  • to discuss on ways of mobilizing credit, equity, and capacity building funds 

  • to discuss the impact of microfinancing on women’s empowerment, HIV, and environmental conservation 

  • to learn about innovative and best practices in microfinancing;

  • to share experiences and make consultations; etc. 

Forums related to policy and regulatory issues are organized in partnership with the concerned stakeholders such as governmental regulatory and oversight bodies, MFIs, donors, lenders, continental & international networks, and researchers.   Outcomes/proposals of these forums are submitted to the concerned parties.  AEMFI, to the extent possible, follows up actions taken to implement the proposals.

Industry Promotion / Advocacy and Publications

The purpose of this activity is to create the awareness of policy makers, donors, lenders, continental and international networks, researchers and the general public including MFI beneficiaries regarding the role of microfinance institutions in alleviating poverty in Ethiopia.  In this regard, AEMFI uses:

  • mass media such as TV, radio, and newspapers;

  • its own publications such as magazines, bulletins, tracts, working papers, & proceedings; and

  • other events. 

Further AEMFI strives to create incentive systems to those MFIs, donors, NGOs, government bodies, and individuals that make exceptional contributions to the development of the industry.

Organizing Experience Sharing Visits

 AEMFI organizes local and foreign experience sharing visits to staff members of member MFIs and its appropriate staff:

  • to learn about innovative and best practices and

  • as a way of face-to-face information exchange and communication

Performance Monitoring and Database

In this activity, AEMFI and members involve themselves in the setting-up of an agreed set of performance indicators for the industry based on recommendations made by national, continental, and international bodies and forums.  Based on the accepted performance indicators, AEMFI and member MFIs would monitor individual MFIs and the Ethiopian MF industry as a whole.  In addition AEMFI plans to maintain a networked and computerized database of the MF industry in order to facilitate the performance monitoring process and satisfy the information needs of governmental regulatory and oversight bodies, MFIs, donors, lenders, continental and international networks, researchers, and the general public.  The results of the performance monitoring process along with industry-wide updated data are published in a half-yearly statistical bulletin.

Thus, the sub-activities envisaged to be accomplished under this activity can be listed down as follows:

  • Setting performance indicators for MFIs

  • Reaching consensus with MFIs regarding performance indicators

  • Selecting/developing a database software that can be networked at national level

  • Installing and testing the networked database software

  • Maintaining the networked database

  • Monitoring performance on continual basis

Maintaining Resource Center

AEMFI has established a resource center so that it may be used by member MFIs, NGOs, researchers, and the general public as a source of information and reference regarding the microfinance industry in Ethiopia and elsewhere.

Administration and Fund Raising

To undertake the foregoing activities namely: training, research, workshops and conferences, industry promotion and publication, experience sharing visits, performance monitoring and database, and maintaining a resource center, AEMFI needs to efficiently and effectively manage its human, material, and financial resources.  Further AEMFI needs to raise funds from various sources.

Currently, AEMFI has two main units: performance monitoring & training and projects and logistics headed by two of its officers under the guidance of the executive director as shown in the organizational structure.

Regarding fundraising, AEMFI obtains its financial resources form the following sources: grants/donation, membership fees, sale of publications, and fees for services.   Actual and potential donors of AEMFI include: NPA (Norwegian People Aid), IFAD (International Fund for Agricultural Development), PACT-Ethiopia, ADB/AMINA (African Development Fund), Ireland AID, WWB (Women’s World Banking), UNDP, CAA (Community Aid Abroad), and SOS FAIM.