Assessment of Credit Management System

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Assessment of credit management system case study in commercial Bank of Ethiopia, Gondar branch

The Amhara Credit and Saving Institution
(ACSI)

[pic]

Institutional Profile, Current Status and Future Strategy

Bahir Dar
May 2004

TABLE OF CONTENTS

FORWARD

1. BACKGROUND: VISION, MISSION, OBJECTIVES

2. GOVERNANCE & OWNERSHIP

3. PRODUCTS

4. TARGETING PRINCIPLES

5. OPERATIONAL MODALITIES

6. OUTREACH

7. FINANCIAL PERFORMANCE

8. FUTURE STRATEGY

9. CHALLENGES & RISKS

10. ANNEXES

• Performance Reports
• External Audit Report

FORWARD

The Amhara regional state is one of the regions in the country where the rate of poverty is the highest. The Federal Rural Development Strategy put very high emphasis on microfinance as a key force in the poverty reduction struggle. ACSI believes that, with the support of its stakeholders, it can successfully dispose the heavy responsibilities it is being charged with in this struggle.

ACSI is currently reaching 8-10% of the economically active poor that is looking for microfinance service in the region, and with good repayment rates over the years. Some rightly argue how microfinance can be successfully run in regions like ours, serving very poor people, with little education, limited marketable skill, engaged largely in agriculture which is little served by modern technology and for the most part dependant on unreliable climate, facing very poor infrastructure (particularly the rood network), small and fragile market, with people earning very precarious income inflows, etc.

Some of the success stories can be attributed to the shared vision, commitment of staff, starting from the board all the way down to the Sub Branch officer, who work in a learning environment and also because of the all-round support ACSI can manage from those in rural areas: government, NGOs, community, etc. We hope this will continue. The outreach attained is, indeed, very high for a single MFI, yet the large majority of the poor in the region is still outside of the reach of any modern financial services. ACSI looks forward to reaching these needy people!

This document thus clarifies many issues. It shows how ACSI starts, where it is now, what problems it faced, and the future strategy as we target to achieve the seemingly irreconcilable objectives of impact and institutional sustainability. External audit report is also attached. While the 2003 external audit is underway presently, the one that is attached is a complete audit report of ACSI’s position as of Dec. 2002.

The document targets at all who wish to join hands with us in the fight against poverty and food in-security in this very unfortunate region. Constructive comments and feed backs are very welcome (at --- acsi@telecom.net.et).

Mekonnen Yelewumwosen

G/Manager

1. BACKGROUND: VISION, MISSION, OBJECTIVES

History:

The operation of ACSI is traced back to 1995 when it was initially initiated by the Organization for the Rehabilitation and Development in Amhara (ORDA), an indigenous NGO engaged in development activities in the Amhara region. ACSI had undertaken its pilot activities in 1996, and was licensed as a microfinance share company in April 1997.

Vision:

ACSI aspires to see a society in which people are free from the grips of abject poverty, with all the power determining their future in their own hands.

Mission:

Given the level of poverty in the region, ACSI’s primary mission is to improve the economic situation of low income, productive poor people in the Amhara region primarily through increased access to lending and saving services. It will maintain cost effectiveness in service delivery, and integrates its activities with government and NGOs working towards achieving food security and poverty alleviation in the region.

Values and...
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