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Fofana Says GOTG Is Aiming to Promote Growth of Microfinance Sub-Sector

September 3, 2014

Arfang Ms Camara

The general manager of Social Development Fund has said that the government of The Gambia (GOTG) aims to promote the orderly growth of the country's microfinance sub-sector; showing the need for a National Microfinance Policy to guide the operations of the sub-sector.

He revealed that the first attempt at this was in 2005, when a National Microfinance Strategic Framework Paper was prepared with support from the Rural Finance and Community Initiatives Project.

Sonko B Fofana made this disclosure at a daylong stakeholders meeting, organised by the Gambia Microfinance Network (GAMFINET) aimed at improving the Policy and Regulatory Framework of Microfinance Services in The Gambia.

The meeting held at a local hotel in Kololi, was centred on the theme; "Improved Policy, Legal and Regulatory Framework is Key to Microfinance Development."

The forum is meant to share experiences and build consensus on a better Tier Supervision System for the micro-finance subsector.

Speaking during his presentation at the meeting, Fofana said that "it had been realised that it is important to have a common vision and an enabling economic environment for the development of micro-finance in the country. "

"The drafting of a National Micro-Finance Policy (NMFP) for The Gambia is part of the outputs of the Entrepreneurship Promotion and Microfinance Development Programme (EPMDP), funded by the African Development Bank (ADB)," he revealed.

The general manager of Social Development Fund said the government of The Gambia, as part of its commitment to the development of the country's microfinance sub-sector, saw the need to formulate a National Microfinance Policy.

He added that a National Microfinance Policy is in line with the GOTG's long-held desire of formulating and formalising a common vision and an enabling economic environment for the development of micro-finance in the country.

According to Fofana, the National Microfinance Policy is considered a qualification for augmenting opportunities for job creation, ensuring active private sector involvement in sustainable economic growth and developing appropriate leadership skills, managerial capabilities, utilisation of indigenous and scarce resources, as well as increasing capital formation.

He also said that the National Microfinance Policy would endeavour to promote and support the development of a viable micro-finance sub-sector, through the creation of a clear and unambiguous regulatory and supervisory framework to use micro-finance, as a poverty reduction and wealth creation strategy to enhance the achievement of the MDGs.

For her part, Mariama O Ashcroft, a consultant revealed that a sound regulatory environment is important, because a well-functioning financial sector is a basic requirement for sustainable economic growth, eradication of poverty and, hence, prosperity for all people.

According to her, it also helps in financial services to low-income households, by increasing employment, income, consumption and the empowerment of disadvantaged groups.

Ashcroft affirmed that it also helps to safeguard the health of the financial system, while encouraging access to financial services.

"The financial sector is instrumental not only in fostering investment and growth, but also in mobilising resources and enabling poor people have some control over risks in their lives," she said, adding that underdeveloped financial markets limit efficient reallocation of resources, especially in those sectors and enterprises that are less linked to the financial system.

For his part, Kebba L. Jarju, a senior Microfinance Officer of Microfinance Department, Central Bank of The Gambia defined micro-finance as the provision of banking services to lower-income people, especially the poor and very poor.

He said that Prudential Regulation and Supervision is aimed at protecting the financial system as a whole, as well as protecting the safety of small deposits in individual institutions.

Modou Lamin Touray from Agriculture Business Services, who made a presentation on Governance and Legal Standards for Cooperative Credit Unions stated that a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social cultural needs and aspirations, through a jointly owned and democratically-controlled enterprise.

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Source: AllAfrica

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