WEDP

INNOVATIONS

NEW METHODOLOGIES
NEW SYSTEMS

FRANCESCO STROBBE
FSTROBBE@WORLDBANK.ORG

FRANCES TOOMEY-MYS
FRANCES_TOOMEY-MYS@DAI.COM

GOALS
To expand access to finance for urban women business owners in Ethiopias missing middle, and replicate our
systemic successes throughout Ethiopia's microfinance industry in a sustainable manner.

CASH FLOW LENDING

POST-LOAN REVIEW

WEDPS Loan Appraisal Tool created a paradigm shift for partner

Prior to working with WEDP, none of our partner MFIs conducted

MFIs. Previously, the MFIs used only collateral as a benchmark

analyses of their portfolios. Through the post-loan review, WEDP

for loan making decisions. With this new tool, the focus for

created two tools for Ethiopias microfinance industry:

analysing a business is on the cash flow rather than collateral.

Partner MFIs are also using the tool to identify appropriate loan

WEDPs Portfolio Analysis provides feedback to the MFI on the

sizes and terms.

profile of their WEDP borrowers. This feedback can be used to

further refine their loan product, market to new clients and

necdotally, MFIs have told us the tool will be used to analyse

reinforce their lending methodology.

loans outside the WEDP portfolio, and MFI partners, ACSI, Aggar,
Meklit and Metamamen have requested training for their non-

WEDPs Industry Booklet provides MFI loan officers with local,

WEDP branch loan officers. DECSI is considering use the tool for

MSME frames of reference on industry standards for a particular

all of their business loans.

businesss financial situation. This tool can be used across the

MFI industry as a benchmark for each major type of business

SAVINGS

which the WEDP borrowers are engaged.

Pre-WEDP savings mobilization by partner MFIs was passive. Due

COLLATERAL ALTERNATIVES

to WEDP TA, the MFIs have developed well-crafted marketing

strategies such as word of mouth, using opinion leaders in
communities, and designing a savings product message. Using
these strategies, partner MFIs are now targeting net (i.e.
voluntary) savers.

Not only has collateral coverage dropped from 200% to 125% of

the loan, but MFIs are experimenting with alternative forms of
collateral. 46% of collateral utilized by MFIs is non-traditional,
e.g. salary guarantees, time deposits, post-dated cheques and a
mix of collateral.

DBE APPRAISAL SYSTEM

ABOUT WEDP

WEDP created both quantitative and qualitative tools for DBE to

The Women Entrepreneurship Development Programme, or WEDP,

use in its analysis of MFIs. This system can be replicated to

supports 12 microfinance institutions (MFIs) and the

other funding sources DBE accepts.

Development Bank of Ethiopia with technical assistance and $42

s an outcome of the

utilization of these tools, for the first time in the history of DBE,
the institution recycled reflow payments from the MFIs as credit
lines to MFIs. As a result, more MFIs will have access to credit,
leading to more jobs created.

million in lending capital to facilitate lending to individuals.