What is a MFI?
A microfinance institution (MFI) is an organization, private, public or both, that supplies financial services to low-income clients, including consumers and self-employed, who traditionally lack access to traditional banking and related services.
MFI refers to a wide range of organizations providing the financial services previously mentioned. The MFI can be any of the following: NGOs, credit unions, cooperatives, private commercial banks, non-bank financial institutions and parts of state-owned banks, for example.
During the 1970s and 1980s, the microenterprise movement led to the emergence of non-governmental organizations (NGOs) providing small loans for the impoverished. In the 1990s, a number of these institutions transformed themselves into formal financial regulated institutions.
These institutions are regulated by the government in the countries of origin in order to provide credit and savings services to low-income clients.
Amifi partners with microfinance institutions in emerging countries as local agents.
Country partners meet and evaluate the entrepreneurship candidates through local networks. This evaluation is based on the loan amount, feasibility of the project, candidate credit history, as well as local reputation in the community, among others factors.
“MFIs can be government-owned, like the rural credit cooperatives in China; member-owned, like the credit unions in West Africa; socially minded shareholders, like many transformed NGOs in Latin America; and profit-maximizing shareholders, like the microfinance banks in Eastern Europe. The types of services offered are limited by what is allowed by the legal structure of the provider: Non-regulated institutions are not generally allowed to provide savings or insurance.”
Relationship with all the parties
Amifi acts as an intermediary between individual social investors and microfinance institutions. Amifi holds international contracts with the MFIs to establish their collaboration with the common vision of alleviate poverty in the world.
MFIs provide Amifi with entrepreneurship projects in different sectors of activity, which are translated if needed, and uploaded onto the website.
Individual investors have then direct access to worldwide projects through the Amifi website.