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Africa Village Financial Services

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(a)  General Information

Year of Establishment  1998

Legal Status

Africa Village Financial Services S.C. was registered legally by the National Bank of Ethiopia, according to Proclamation No.40/1996.

Current Operational Area (s)

Addis Ababa City Administration and Oromiyaa Regional State

Future Expansion Plan

Increase outreach in the Addis Ababa City Administration and the Oromiyaa Regional State.

Total Number of Woredas Covered so far

Five Kifle Ketemas in Addis Ababa and four Woredas in Oromiyaa

Total Number of Branches Opened so far

Three branches and two sub-branches

Total Number of Clients served so far

3,037 out which 1,745 and 1,292 are urban and rural clients respectively. 

Gender Sensitivity

Male clients  = 40%, Female Clients = 60%

(b)  Loan Services/Products

• Agricultural Loan

• Manufacturing Loan

• Service Loan and

• Trade Loan

Annual Lending Rate, Service charge and other fees

AVFS S.C. charges different rates of interest and service charge based on the type of loan product. The annual interest for each type of loan products stated above could be 13 or 16% based on the level of the business of the clients. Similarly, the annual service charge varies between 3 and 4%. AVFS charges a one-time additional fee of Birr 5, which is the same for all types of loan products or clients.

Loan Size and Loan term Per Loan Cycle and Loan Type

Loan Term

Maximum Loan term = 12 months for all loan types

Minimum Loan term = 6 months for all loan types

Loan Eligibility Criteria

• Potential clients are expected to meet the following criteria:

• must belong to either an ‘Iddir’ or group formed at Kebele level. He/she should get the approval of the management committee of the Iddir or that of the Kebele committee he/she belongs to;

• must make a deposit of 10% of the loan requested towards the Loan Insurance

• Fund (LIF) over a period of five weeks before loan is disbursed;

• his/her age must be in the range 18 to 65 years;

• must operate or prepared to engage in viable micro and small enterprise activity;

• loans must be taken for productive investment only;

• must agree his/her business be evaluated by loan officer as well as the group

• and center members he/she belongs to;

• must agree to pay the interest and any other fees to be paid to access a loan;

• must agree to make loan repayments (including the interest) on weekly, bi-weekly

• or monthly basis, as per the loan schedule agreed upon;

• must agree to pay loans defaulted by his/her group member from the LIF;

• must agree to pay interest and other fees in case grace period is provided by

• the Institution;

• must get the approval and signature of the spouse on the loan agreement form;

• should agree to and respect center bylaws. 

Type of Collateral Needed

Group Collateral/Guarantee for all loans.

Some of the economic activities financed so far

• Petty Trade;

• Agriculture;

• Service; and

• Manufacturing.

Grace Period

No Grace period for all loan types.

Time needed to process and get loan

49 days

Business Plan Presentation

Borrowers are requested to fill out a business with the following contents:

• current volume of sales and expenses;

• future (short-run) expected volume of sales and expenditure;

• withdrawal from the business net income/loss;

• Retained earning;

• Loan utilization plan.

Loan Application Format

The borrower is expected to fill out application form with the following main contents:

• Full name, age, sex, ID number, residence and work addresses (City, Woreda, Kebele, H.No.), level of education, number of family members, marital status;

• Business experience;

• Type of activity that the loan is requested for

• Purpose of loan and amount of loan requested;

• Number of unpaid family members assisting the owner of the business;

• Number of regular employees engaged in the business;

• Amount of expenditure for utilities.

Target Clients for Loans  Urban and Rural households.

Target Clients for Savings  Urban and rural households.

Willingness to lend to new business start-ups such as high school drop-outs, college graduates and similar groups

New business start-ups can access financial services of the Institution provided that their parents are willing to sign for the loan. In addition, such borrowers should meet the rest of the criteria set by the Institution.

Frequency of Revising Institutional Policies  On yearly basis.

(b)  Savings Products

(c)  Other non-financial Services

Entrepreneurship and leadership training to micro and small enterprise owners.

Service Out-lets  AVFS S.C. provides services at the doorsteps of the clients.

New products to be introduced during the coming 3-5 years

The borrower is expected to fill out an application form with the following contents:

Target Clients for Loans  Urban and rural households.

Service Out-let  Services are provided at the doorsteps of the client.

Address

Telephone:  +251-1-204732 or Mobile: +251-09-206401

P.O.Box:  70099, Addis Ababa, Ethiopia

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