The Agence Française de Développement (AFD) funds the Responsible Microfinance Facility (RMF), which launched operations in January 2015 and is working to build capacity and improve practice in social performance management (SPM) in the Sub-Saharan Africa and Middle East North Africa regions. The Social Performance Task Force is managing the RMF, in collaboration with the Smart Campaign. One type of funding that the RMF offers is co-financing to financial institutions that would like to implement an "upgrade project." See below for a description of this activity.
Description of an "Upgrade Project"
An upgrade project is a project designed and managed by a financial institution in order to improve its social performance practices. An upgrading project can also be a crucial step for addressing remaining gaps before passing a Smart Certification or to achieve a higher social rating. Before an institution is ready for an upgrade project, it must do an assessment, either an SPI4 or a client protection assessment, of its current state of practice. This helps to identify strengths and weaknesses. After the assessment, the institution analyzes the results and prioritizes areas for improvement. It then develops an action plan for implementing improvements. Once the action plan is created, the institution is ready to implement changes. The implementation of the action plan to address priority gap areas is the upgrade project. Because the actions taken during an upgrade process vary according to the need of the institution, the RMF cannot specify what activities will comprise your institution's upgrade project. They should, however, be activities that would result in improved performance on some or all of the poorly scored indicators of the SPI4 or client protection assessment. The following are examples of common actions taken during upgrade projects: developing and putting in place a client complaints system, providing additional social performance training to employees, surveying clients, developing new product delivery mechanisms, and investing in new infrastructure such as buying a new management information system.
Technical Assistance for Upgrade Projects
All financial institutions implementing an upgrade project must include in their budget at minimum three days of time from an expert TA provider to offer coaching to the institution as it makes changes.
Please consult the database of TA providers maintained by SPTF for information on TA providers that your institution might like to hire for your upgrade project. The database of TA providers contains contact information and information on each TA provider's qualifications, including what SPM-related trainings s/he has attended, whether s/he is an accredited Smart assessor or Smart-approved TA provider, and whether s/he is a qualified SPI auditor. The database also provides reference names and contact information so that you can check references. SPTF does not check references for you, nor does it endorse one provider over another. It is the responsibility of each financial institution to contact possible candidates, and/or to contact their references, in order to choose which candidate is the right fit for your project.
You may also in some cases select providers that are not in the SPTF TA provider database. In these cases, you will have to submit the person's CV and a short description of why you would like to work with them, and the RMF will review this information and then approve or deny this selection.
Value Added of Working with a Smart-Certified and/or SPI4-Qualified TA Provider
When selecting TA providers to work with, please keep in mind that those who are Smart-approved and/or SPI4-qualified have participated in a carefully designed training and mentoring process that ensures strong knowledge of client protection (those who are Smart-approved) and/or the Universal Standards for SPM (those who are SPI4-qualified).
Duration of Upgrade Project
The timeframe will depend on each project and the action plan or gaps identified. Typically, an upgrade project takes between 6-18 months, but some may be shorter and some may take longer.
Sharing Experiences from Your Upgrade Project
The RMF requires all financial institutions who receive co-financing for upgrade projects to share information on their experiences, results, and lessons learned, with the RMF. Peer learning is essential to advancing practice in the microfinance sector. These deliverables will be treated as confidential.
All financial institutions are welcome to apply.
See the TA provider databases for the language abilities of the various TA providers. The reporting you do to the RMF on the results of your upgrade project must occur in English or French.
The cost of an upgrade project varies by project, according to the gaps identified and actions planned to address them. The RMF will co-finance no more than 50% of the total cost of your upgrade project, up to a maximum of US$18,000. Your institution will be responsible for the remaining 50% of the cost of the upgrade project. Your institution may contribute its share of the cost through providing funds and/or through in-kind contributions.
RMF Procedure to Disperse Co-Financing Grant
The RMF will not disburse the co-financing grant to an institution on the date when its application is approved. Instead, it will wait until the institution begins paying for, or using in-kind contribution to implement, its 50% share of the cost. This is to avoid problems that might occur if the RMF contributes 50% but the financial institution is ultimately not able to contribute its 50% share of the cost. Additionally, RMF will pay third-party vendors directly. This means that a portion, or all, of the co-financing may be paid directly to a third party instead of deposited in the account of the institution. In cases where it is not possible for the RMF to pay third-party vendors directly, the institution may pay those vendors directly and then submit receipts to the RMF for reimbursement.
Project Start and End Dates
A question in the application form below asks you for your preferred start date of the project and also to describe any time constraints you have. The RMF will review applications and do its best to make grants at a time that fits your schedule. You will also provide the expected end date of your project, according to the specific upgrade activities you will be implementing.
Deadline to Submit Application
None. RMF accepts applications on a rolling basis.