- Date of agreement: October 23, 2009
- Current volume of the fund: Euro 6.14 million
- Financial contributors: France (Euro 6 million) and IFAD (US$ 0.2 million)
Background and Objectives
The reduction of costs of remittances and their mobilization, in addition to other financing sources, is a topic of increased interest for the African Development Bank (AfDB). In this context, AfDB has engaged with several partners, in particular with France, to explore the ways and means for mobilizing these funds and to promote the positive impacts of their use not only for beneficiaries, but also for the development of recipient countries. In this regard, AfDB established a multi-donor fund with the objective of promoting and assisting local initiatives and those emerging from Diasporas that aim to reduce transfer costs and better use transferred funds.
Areas of Focus / Sub-Sectors
- Information and knowledge of migrant fund flows;
- Regulation of the operations of fund transfers;
- Products and financial intermediaries;
- Assistance in the creation of enterprises and local development.
Migrants, their beneficiaries, and communities in their country of origin.
Results and Milestones
- Enhance the availability of information and assist different stakeholders working in the field of fund transfers. This component seeks to enhance knowledge in order to design targeted activities and promote competition through better information of the stakeholders. It entails the mapping of fund transfers and the dissemination of information.
- Assist the reform of regulatory frameworks. By modernizing regulatory frameworks and operators, this component aims to enhance financial markets for the benefit of migrants and beneficiaries.
- Development of new financial products. Developing and testing new financial products that respond better to the needs and capacities of migrants and beneficiaries can be considered risky and expensive for financial intermediaries, particularly microfinance institutions. One main objective of this component is to promote the financial intermediaries engagement through cofinancing or other forms of support for developing financial products.
- Promotion of productive investment. This component aims to assist migrants in the creation of SMEs and, promote the creation of private equity and investment funds for advancing innovative SME projects that involve migrants and local entrepreneurs.
- Promotion of local development. This component seeks to promote projects that mutualize healthcare costs as well as cofinance infrastructure projects in the areas of education, health, small hydro scheme and renewable energy.
Administration and Governance Structure
The governance and administrative structure is composed of a coordinator, a technical review committee and an oversight committee.
- Coordinator: Rafael Jabba, Private Sector Department (OPSM.4) is the AfDB Fund Coordinator. He is responsible for receiving and screening financing requests, coordinating the preparation of projects or activities and ensuring their supervision.
- Technical Review Committee: composed by relevant AfDB staff and presided by a Vice President. Responsible for approving all operations submitted by the coordinator for amounts under USD 500,000.
- Oversight Committee: composed by an AfDB representative and representatives of the financing partners. Responsible for approving the operational guidelines of the Fund as well as verifying the conformity of the use of resources in accordance with the objectives of the Fund. The committee approves operations with budgets between USD 500,000 and USD 1 million.
- Operations of over USD 1 million have to be submitted to AfDB Board of Directors for approval.
Major Activities in 2011-12 / Additional Resources Required
- Closed the first Call for Proposals in January 2011 – Over 600 institutions registered and 250 applicants applied for a grant. The approximate value of the Grant Request was over Euro 50 million;
- Review and enhance first batch of projects (2nd Quarter 2011);
- Initial Disbursements (3rd Quarter 2011);
- Promotion of the Fund to attract additional partners.
Technical Department and Task Manager
Rafael Jabba, Principal Investment Officer, Financial institutions Division, Private Sector Department
Tel.: +216 71 10 24 67
Partnerships and Cooperation Unit Focal Point
Belinda Chesire, Senior Cooperation Officer
Tel.: +216 71 10 36 11