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What is Microfinance
Microfinance refers to loans, savings,
insurance, transfer services and other financial and
non-financial products targeted at low income clients.
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is Wasasa Microfinance S.C
Wasasa MFI is one of the fast growing microfinance
institution in Ethiopia and found in “Large MFIs”
category as per National Bank of Ethiopia’s rank. It was
established in the year 2000 G.C as a “Share Company”
under the Commercial Code of Ethiopia and licensed by
the National Bank of Ethiopia as a “Microfinance
Institution” under Proclamation No. 626/2009, issued for
licensing and supervision of micro-finance institutions.
The objective is to provide diverse range of financial
services and non-financial, including Savings, Credit,
micro insurance and advisory services to all such
segments who do not have access to such services from
the mainstream banking.
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What is the operational area of Wasasa and where are
the branches located?
Wasasa Operates in rural and semi-urban areas of Oromia
Region in Ethiopia. Currently Wasasa has 1 Head Office,
4 Regional Offices , 37 branch offices and 24 rural
Banks, spread across remote areas in 10 zones , 57
woredas and above 708 kebeles.
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What is the Vision of Wasasa?
The vision of Wasasa MFI is to make money/capital no
more a constraint for the poor.
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What is the Mission of Wasasa?
The mission of Wasasa MFI is to provide sustainable
financial services to the active poor in order to employ
capital for poverty alleviation.
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What are the products offered by Wasasa?
Loan Products:
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Micro Loan to Large groups,
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Energy loans(Biogas, solar and cook stove)
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Micro irrigation loan
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Individual loan for Agricultural transformation
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Association and Cooperative loans
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Honey, Malt Barley
and Coffee Value chain loans
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Term loan
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Small and
Enterprise Loan
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Individual Loans to farmers, petty traders and Low
Income Employees,etc.
Savings Products:
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Mandatory Savings for borrowers
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Voluntary Savings for all customers:
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Passbook Savings account
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Time Deposit and
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Planned Time Deposit, etc.
Micro Insurance:
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Credit Life Insurance for borrowers
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Why do people need micro loans from
Wasasa MFIs?
Microcredit is seen as a
way to provide poor people with the means to participate
in the economy and generate their own income. They may
even become to increase their productivity, modernized
their farming approach, micro-entrepreneurs and set up
small businesses. However, microloans are used for many
other purposes as well.
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How is WASASA different from other MFIs?
At Wasasa, the focus is on enabling the economically
active poor to save small amounts out of their incomes
and provide them a mitigation mechanism to cope with
risks such as loss of income at a later date due to
unforeseen events such as drought, disability etc. the
poor are encouraged to save in small amount for their
future requirements as well. This is done by offering
simple and easy to understand products with competitive
interest rates, providing excellent customer service and
also by creating awareness among clients through
customer education programmes. Wasasa also provides
loans to the needy customers through its varied loan
schemes, thus playing the role of a true financial
intermediary, as desired by the regulators.
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Why Voluntary Deposits are important to WASASA?
Wasasa is licensed as a deposit taking financial
institution and the savings collected will help Wasasa
to assist more and more economically active poor in
promoting agriculture, small business/enterprise, which
in turn helps the society to generate income and
employment.
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Difference between Voluntary and Mandatory
Savings?
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Mandatory Savings |
Voluntary Savings |
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The amount is
collected to serve as collateral for the
loans disbursed by Wasasa.
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Group borrowers would
be required to deposit amount equal to 10%
to 15% of the loan amount as a security for
the loan, which can be withdrawn only at the
end of the loan cycle on full repayment or
towards adjustment of final installment.
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Interest is credited
to the account at monthly intervals at 7%
per annum.
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The voluntary savings
products are offered to encourage saving
habit among the poor and to provide them an
opportunity to save small amounts as per
their convenience, either as a shield
against future risks or to accumulate larger
sums for specific future uses.
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Products have been
designed to suit various customer needs.
Passbook savings offers full liquidity and
the customer can deposit any amount when
they have surplus and withdraw any amount at
any time based on their need. Time deposit
and Planned time deposits enable the
customers to save for future use. They offer
higher interest rate than the passbook
accounts.
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These products are
purely voluntary and are not linked to
loans, hence can be utilized by both
borrowers and general public.
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Interest rates are 7% per annum for pass book
accounts, 7% to 8% for planned time deposits
and 7% to 8% for time deposits depending on
the period of deposits and negotiation
based.
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Why should we deposit with Wasasa?
Wasasa has a long and proven track record of reliability
and excellent customer service. The customer confidence
in Wasasa is indicated by the continuously growing
number of customers, which are now more than 141,046!
The money saved by customers at home/informal sources/
friends and relatives is relatively unsafe and does not
yield good returns. Investment in assets, though
yielding good return, is prone to risks and the value
may come down in case of a urgent need and forced sale.
However, money saved with Wasasa is safe, secure, grows
with the good interest paid by Wasasa and can be
conveniently withdrawn as when needed by the customer.
Further, money saved with Wasasa is also useful for the
society as it is used by Wasasa to help the poor and
needy customers to provide small loans to
increase/improve their incomes by investing in
agriculture, business/enterprises.
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What is the ownership of Wasasa?
Wasasa is promoted by OSRA (Oromo Self-reliance
Association), an NGO actively engaged in the social
development and assisting rural poor in Oromia region in
improving their incomes and reduction of poverty.
Reputed international Development Organizations and
local Banks such as WSM, Ethio-Italian Development
Cooperation, Terrafina, Cordaid, UNCDF, Commercial Bank
of Ethiopia and Awash Bank etc., support Wasasa in its
objective of serving the poor through provision of
financial services. The Rural Financial Intermediation
Programme (RUFIP) of Govt. of Ethiopia, IFAD and other
agencies is also extending support to Wasasa both
through Loan Funds and Technical support.
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Will you pay the money when I need it?
Wasasa has designed its savings products based on the
analysis of different needs of customers. The passbook
savings accounts offer unlimited deposits and
withdrawals depending on the need of the client. The
time deposits and planned time deposits, though designed
to accumulate larger sums for future use, can be
withdrawn at any time before their maturity subject to a
small penalty of interest and advance notice in case of
higher amounts. To protect the interest of customers,
only small withdrawals will be permitted in the field,
where as to withdraw larger amounts, customers need to
visit the branch.
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What is difference between Commercial Banks & Wasasa?
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Wasasa |
Commercial Banks |
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Wasasa operates in
many remote locations in Oromia Region.
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Works with Poor
people.
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Service at door steps
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Personalized, Fast and
secure service
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Higher rate of
interest on Deposits.
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Collects small amounts
of savings from near to customer location.
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Loans are offered in small amounts which are
suitable for most customers in rural areas.
The collections are done at customer
locations.
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Banks generally offer
their services in bigger towns and to urban
and semi urban clients.
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Door step services are
not available
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Loan processing and
Deposits take longer time. Loans are
generally for large amounts, require
collateral
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Customer must be visit
to branch location for deposit purpose also.
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Lower rate of interest
on Deposits.
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Planned time deposit
facility at door step facility not available
at banks
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What is Wasasa’s approach to encourage
savings by its clients?
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Savings is one of the major products of Wasasa.
The company pays due emphasis on the importance
of regular savings. Borrowers must demonstrate a
pattern of savings as part of their
qualification for loans. Savings are required
during the life of each client’s loan
relationship with Wasasa. Wasasa also encourages
voluntary savings both from borrowers and
non-borrowers. To encourage the saving habit of
the society, Wasasa pays interest up to 8% and
above, which is generally higher than the
interest offered by commercial banks. Wasasa
also provides customer education to improve
their savings habits, and manage their loans
properly without falling into debt trap.
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How does Wasasa make money?
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Though Wasasa is established with profound
social objectives, it believed in financial
viability from the beginning. It ensures that
all its activities are financially sustainable,
so that it can remain in service of the poor.
The sources of funds for Wasasa have been,
savings mobilization from the puplic,
contributions of shareholders, grant funds, bank
loans and surpluses generated by Wasasa through
its operations. Till date, no dividend has been
paid to shareholders and all the profits have
been ploughed back into the business to enable
it to provide loan capital to more new clients.
Wasasa ensures that its services are properly
priced to yield a fair margin for Wasasa to
cover the costs of the funds mobilized, the
costs of services being provided, offer a fair
return to investors. Since its vision is to
become self-sustained organization that supports
itself, the company gives due attention to
saving mobilization.
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How do I approach Wasasa to open a Savings
a/c?
Please contact your nearest branch or Rural
Banks. Further, we have a large number of field
staff covering distant and remote areas, which
you can approach. The branches and the field
staff would advise you on products suitable to
you and help in completing the minimum
formalities to start saving with Wasasa. |
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