MICROCAPITAL STORY: DFID Expands Microfinance Partnerships in Nigeria with US$ 13.9 million in Funding

The UK Department for International Development (DFID) has become increasingly involved in Nigeria’s microfinance sector over the last three months, with recent donations to two separate Nigerian organizations involved in microfinance. In August DFID donated N12 million (USD 102 thousand) to an Abuja Enterprise Agency (AEA) run project entitled AEA FCT-wide Enterpreneurship Campaign (AFEC), and then again in October announced that it would provide GBP 8 million (USD 13.8 million) over five years to Enhancing Financial Innovation and Access (EFINA), a non-governmental organization (NGO) conceived by DFID.The first project, AFEC, is an on-field outreach research project designed to broaden entrepreneurial awareness and deepen the impact of the AEA in throughout the FCT where modern technology and media is less effective. The FCT stands for Federal Capital Territory and refers to a land area of 8,000 km², encompassing the capital, Abuja. The funding comes through DFIDs Federal Public Service Reform Programmes (PSR) and other partners reported to be involved in the project by Nigeria’s Business Day include Peace Microfinance Bank, Fortis Microfinance Bank, National Poverty Eradication Programme (NAPEP), FCT chapter and National Directorate for Employment (NDE) FCT chapter.

The objectives of AFEC are to broaden the awareness of the AEA’s activities to the interior and outskirts of the FCT in an attempt to increase entrepreneurial activity throughout the area as well as making other programmes and products associated with the AEA more accessible to people living in the FCT. The goal is to identify 3,000 rural entrepreneurs in the FCT in 2008. The exact role that each partner has played in the project to date has not been stated, apart from DFID, as the funding body for AFEC.

The second DFID funded project is EFINA, an NGO whose role is to provide financial institutions and regulators with information that can be used to develop products and services that will cater to the needs of the poor in Nigeria, set up in late 2007. EFINA is also reported to receive USD 1 million over three or five years (depending on the source) from the Ford Foundation, although this has not yet been listed on its grant database. EFINA intends to initiate an “ambitious” research agenda, and have recently conducted a survey in partnership with FinMark Research and Marketing Services (RMS) which states that 79 percent of men and 85 percent of women in Nigeria do not have bank accounts, and 53 percent of the Nigerian adult population are financially excluded from both formal and informal financial services. The results of this survey have been made available to Daily Trust and the complete report of the survey will be formally launched on October 28, 2008.

The Abuja Enterprise Agency (AEA) is the business support organisation for the Federal Capital Territory of Nigeria. Its purpose is to encourage and support people to start and grow a business. The AEA does not report its financial information, and the year it was established is not stated.

The Department for International Development (DFID) replaced the Overseas Development Administration in 1997 as the department of the British government responsible for carrying out overseas development work. DFIDs mission statement is to lead the British government’s fight against world poverty. In March 2008, its total assets less current liabilities totalled GBP 3.1 billion (USD 5.36 billion).

The Ford Foundation was established in 1936 as a charitable organization to further the goals of scientific, educational and charitable purposes. They have distributed over USD 15 billion globally and donate an average of 2000 grants per year. In 2007, their assets were valued at USD 13.7 billion.

By Lori Curtis, Research Assistant

Additional Sources:

All Africa (From Vanguard): “Efina Partners Financial Institutions to Boost Economy“

All Africa (From the Daily Trust): “Nigeria: Efina Secures N1.965 Billion from Ford, Dfid“

Business Day: “AEA, DFID, microfinance banks partner on development of micro-business“

Daily Trust: “AEA, DFID hold entrepreneurship campaign“

Department for International Development: “DFID Resource Accounts“

Federal Capital Territory Administration: “Facts“

The Guardian News Nigeria: “DFID Partners FCT Agency For Enterpreneurial Scheme“