Here you have a chance to get to know one of our newest providers, Fanikiwa Microfinance Company Ltd, a little bit better. We have received the below progress update in which Fanikiwa describes in more detail the organisational re-design process that the institution has undergone in the last 5 months.
As a social for-profit business, Fanikiwa is aiming to provide high quality financial products and services to rural clients in Tanzania by use of technologies such as mobile money transfer systems or Android tablets to increase our profitability and improve our clients’ convenience to access those.
Over the last 5 months, Fanikiwa went through an Organisation Re-Design process, which aimed at reducing costs while keeping the core structures in place so that new funding could be invested in a high-quality portfolio to break-even in the first half of 2014. The necessary steps to reduce costs were successfully implemented and new funding was obtained.
In a nutshell, here some selected achievements:
- We obtained a 1.25m USD loan from Gatsby Charitable Foundation (UK) which will help us to cover costs and grow the portfolio to break-even in the first half of 2014
- Développement international Desjardins (DID, Canada) granted us 20,000 CAN to develop and implement an agricultural value chain loan product adapted to the needs of rural communities in Tanzania
- Unfortunately, we had to retrench 20% of our personnel to reduce personnel expenses by 10%. We concluded this difficult process within only 2 months without any legal disputes
- End of July we finalized moving Arusha and Dar branches as well as head office to new premises which cut down rent expenses by 55%
- We sold assets worth 90m TZS to increase our cash position
Due to the Organisation Re-Design process, the Board of Directors of Fanikiwa made the strategic decision to focus on breaking-even to secure the future of the young MFI, and thereby to postpone the application for becoming a deposit-taking MFI until 2015. Since Mr Thaddeo Mashera, the current CEO, joined Fanikiwa in 2011 with the vision to drive the transformation of a credit-only to a deposit-taking MFI, the board and Mr Mashera decided amicably to part ways. Mr Mashera left Fanikiwa on 31st July 2013. The board appointed Mr Norbert Benker as Managing Director for the coming 12 months.
During the Organisation Re-Design process, the management team remained unchanged. Fact is that the fundamental core business of Fanikiwa is profitable and above world-wide industry standards: we have more demand than we can serve, and the money we give out comes back (low PAR). With the encouraging support of Gatsby Charitable Foundation, we will make good use of the funds available to break-even and grow Fanikiwa to a major player in the Tanzanian Microfinance market.