Oxfam Novib Fund’s First Loan to Finadev Chad
The Triple Jump managed Oxfam Novib Fund made its first loan to Finadev Chad. Finadev Chad is an MFI owned by the Finadev Africa network. With a portfolio of EUR 3,2 million and 6440 clients, Finadev is the second largest player in a country where microfinance is notably under-developed.
The United Nations’ Human Development Index ranks Chad as the seventh poorest country in the world, with 80 per cent of the population living below the poverty line. With the Sahara desert in the north and the semi-arid tropical savannah Sahel Belt in the centre, the country’s most fertile cropland lies in the southernmost 10 per cent of its territory. Most of Chad’s population relies on subsistence farming and raising livestock for their livelihood while years of civil war have scared foreign investors away.
The microfinance sector in Chad is notably under-developed but is mostly active in the south. The lack of programs to promote the sector has also kept international operators away and limited the dissemination of microfinance best practices. Over the past ten years several MFIs have failed due to the challenges of operating in an environment such as this that is furthermore inadequately governed.
As the second largest MFI in Chad, Finadev has an estimated market share of 30 per cent. With its seven branches it currently covers the capital N’Djamena, where it is almost the only microfinance provider, as well as the southern region of the country. Finadev is currently expanding in the eastern part of Chad. Finadev’s mission is to serve people who are unbanked or underserved with a complete range of financial services of exemplary quality at a reasonable cost, so as to promote self-employment.
Finadev offers group and individual loans to clients who range from being very poor micro-entrepreneurs to small and medium enterprises, and to a lesser extent to salaried workers. Since 2011, it also offers deposit services, including current accounts, savings plans and term deposits.
Since the Finadev network took over the institution in 2009, several key institutional changes have been implemented, most notably a new and dependable management information system (MIS) and a new management team. As one of only two operationally sustainable MFIs in the country at the time of writing, Finadev demonstrated its ability to reach a diverse range of clients, from the very poor to SMEs, in an environment where infrastructure costs are high. Finadev is well positioned to grow, because opportunities for more professional microfinance services abound throughout the country. By doing so, it will be playing an important role in disseminating best practices and paving the way to a more competitive microfinance sector in Chad.