Tuesday 30th January 2024
MicroFund for Women (MFW) is Jordan’s leading not-for-profit microfinance company. Established in 1996 and licensed by the Central Bank of Jordan in 2018, it is dedicated to growing financial inclusion by empowering small businesses, with a particular focus on women entrepreneurs. Among its 138,000 active customers, 95 percent are women. As the largest microfinance provider in Jordan, it has US$113 million outstanding portfolio and 63 branches in underserved communities across the country, many of them rural.
The Alliance spoke to the organization’s CEO, Lama Zawati, about MFW’s mission to grow financial inclusion by supporting women entrepreneurs and other under-banked communities.
Alliance: What is MFW’s value proposition for women entrepreneurs?
[MFW]: MFW takes a holistic approach to empowering female entrepreneurs through an array of financial and non-financial services designed to grow her business, sustain her income, upgrade her standards of living, and support her family. In addition to our many microenterprise financing options, we also help women secure their livelihoods through products like Maternity Loans, Educational Loans and Micro Insurance. All our financial services are complemented by needs-based capacity-building, training, and development opportunities, which have been expanded through the flagship Learning Academy, as well as a vast network of diverse and specialized partners. Normalizing and celebrating women as entrepreneurs is especially important in the Jordanian context, which is why on our website you can find more than 100 beneficiary success stories.
Alliance: Where do you see future opportunities for MFW to build on its success?
[MFW]: A growing area of focus for us is helping microfinance entrepreneurs scale up into successful SMEs. We support their transition by funneling high-growth enterprises into our sister company, Sanadcom, which offers higher loans (from US$10,000 up to US$110,000) with favorable terms secured by donor financing, as well as a loyalty program and various non-financial supports. We first piloted this program with 100 individuals, and it has since expanded to 600.
MFW is also keen to further increase its impact by continuously targeting new segments of the population, including refugees and startups, which in turn allows the organization to steadily lower the interest rates it charges beneficiaries.
Alliance: With digital services being key to your business model, what are MFW’s latest technology innovations?
[MFW]: We are continually looking for ways to use technology to make financial services more accessible to the communities we serve. For instance, we ran a pilot among our Biashara members to use a new credit decisioning algorithm that enabled us to disperse loans with 24 hours.
We’ve also established and expand The Learning Academy, which provides a wide range of customized non-financial services, including educational courses and e-learning programs, and we’re encouraging customers to access new features, such as networking that enables sellers to connect and offer their products and services to one another.
Alliance: Collecting sex-disaggregated data is critical to measuring success, but it’s often challenging to define and track women-owned/led businesses. What’s your approach?
[MFW]: Even if a business is jointly owned by husband and wife, we encourage the woman to register the business in her name. This opens up financing options and helps women to see themselves as entrepreneurs, and it’s a key step to tracking their growth. We also use data on the businesses we serve, as well as the knowledge of our field staff, to identify high-growth enterprises that can benefit from higher loans from our SME sister company. We have maintained zero percent risk in this portfolio so far, which speaks to our ability to segment and serve our customer base.
Alliance: Among MFW’s employees, are women strongly represented?
[MFW]: Internal diversity has always been key to fulfilling our mission of empowering women entrepreneurs. Women make up 76 percent of our staff, 72 percent of managers (across both home office and branches), and 70 percent of board members. Strong representation of women at all levels not only helps our women customers to feel comfortable; and it also demonstrates our commitment to gender equity to the industry and the central bank.
Alliance: How did you first hear about the Alliance and why did you decide to join?
[MFW]: After learning more about the Financial Alliance for Women at the SME Finance Forum, its mission resonated strongly with us. We look forward to connecting with and learning from others in the global network.