ADA supports African MFIs in helping their clients adopt good money management practices

From 2018 to 2021, ADA supported the Microfinance African Institutions Network (MAIN) in helping clients of its member microfinance institutions (MFIs) adopt best practices in money management through financial education. 

The financial education courses provided aimed at giving MFI customers information and skills to understand, compare and make fully-informed choices about the products they are offered. It was agreed that MFI staff would first be trained in financial education modules on savings, budgeting, credit management, financial services and digital finance so they could then provide the same training to their clients on an independent basis. 

Among the 120 MFI members of MAIN, eight MFIs in four African countries received support from ADA and MAIN to implement financial education programmes for their clients: 
• in Togo: Millenium Microfinance, COOPEC-AD and MECI; 
• in Chad: UCEC-MK; 
• in Burkina Faso: MUFEDE-B, MIFA SA and ASIENA; 
• in Benin: ACFB. 

A total of 128 people from these eight MFIs were trained in financial education, and they in turn trained 12,282 clients. 

A survey to analyse the effects of training on customers 
Following the project, a survey was conducted among the customers of four of the eight MFIs that received training. The survey aimed to provide a better understanding of what the training had brought to the customers, in particular in terms of the appropriation of financial knowledge, the adoption of new practices and any positive effects on the management of their money and their living conditions, and to identify aspects that could be improved. 

MFI customers changed their money management practices following the training 
99% of customers surveyed who received the training said they have changed their money management practices, for example by comparing prices before making a purchase (63%), keeping a written budget for household expenses (58%) or saving more than before (48%). For 52% of respondents, these new practices have significantly improved their household’s financial situation.  

"Now I don’t spend my income like I used to. I first save money for the loan, make some savings and then spend the rest on my needs."
Training recipient in Togo

"Before the training, I didn’t know the difference between profit and working capital. Now I know what I put into my business as money and what I take out
of it as profit."
Training recipient in Burkina Faso

Customers who save do not always use formal financial institutions 
While the survey showed positive changes in customers’ lives, it also helped identify areas for improvement. Although 93% of MFI customers put aside savings, they do not always use formal financial institutions, but instead keep their money at home, in tontines or elsewhere. One of the ways to increase formal savings would be for MFIs to make it easier for their customers to deposit and withdraw money, for example by providing digital payment solutions or local services. 

Learn more about the survey findings and lessons learned.