The European Microfinance Award, an annual award given to innovative organizations active in financial services worldwide, has named Buusaa Gonofa, a microfinance institution in Oromia Regional State, as of one of the finalists for the 2020 European Microfinance Award.
Buusaa, who was selected in recognition for its work in encouraging effective and inclusive saving, will go on to compete for the 118,000 dollar prize that will be announced on 19th November during European Microfinance Week.
The European Microfinance Award 2020 “Encouraging Effective & Inclusive Savings” highlights the crucial role that savings can play for low-income and excluded populations, and how financial providers can encourage their significant and widespread use.
Buusaa was selected for its high-touch saving initiative called ‘Dejaf Iqub,’ which offers a safe, easy, and appealing way of saving through regular doorstep collection of goal-based small deposits. Dejaf Iqub targets informal microentrepreneur operators with active cash flows who run businesses in densely populated market centers.
The two other finalists for the award are Muktinath Bikas Bank (MBB), a leading national development bank in Nepal, and RENACA-Bénin, a cooperative union in Benin.
If Buusaa is selected as the winner, it will collect its prize in the presence of Her Royal Highness, the Grand-Duchess of Luxembourg, and the Luxembourg Minister for Development Cooperation and Humanitarian Affairs.
This is not the first time Buusaa was able to reach global recognition, and in 2008 it won the 2nd European Microfinance Award for ‘Socially Responsible Finance.’
BG was founded in 1999 by a local NGO named Hundee, which implements community-based development projects in Oromia aimed at giving financial services to low-income entrepreneurs in rural areas, landless young people, and smallholder farmers.
By creating incentives and new economic opportunities, the institution encourages young people to remain in and develop their communities rather than migrating to urban areas searching for work. As of 2018, Buusaa had a portfolio with more than 100,000 clients.
There are currently 38 microfinance institutions in the country, accounting for 41.6 billion birr in mobilized savings deposits. In the last fiscal year, these companies’ total capital and assets increased by 20.3pc and 24.1pc and reached 16.6 billion birr and 83.5 billion birr, respectively.
The five largest microfinance institutions in the country are Amhara, Dedebit, Oromia, Omo, and Addis Credit & Savings.
Back in August 2020, The National Bank of Ethiopia (NBE) allowed microfinance institutions to upgrade into full-fledged banks.
Following the directive, Amhara Credit & Savings has already announced its intention to grow into a bank, and preparations are underway.
