RUFIP-II Rural Financial Intermediation Programme II (RUFIP II) has been designed to scale up the remarkable achievements made under RUFIP I in promoting rural finance in Ethiopia. Despite the effective delivery of financial services coverage to more than 2.7 million borrowers, there is still huge unmet gap in demand in rural Ethiopia. RUFIP II has the target of delivering financial services to 6.9 million poor rural households over a seven-year period. Programme interventions have been developed based on detailed proposals prepared by participating institutions and intensive consultations with the stakeholders, including GoE.

The programme comprises of four main components:

(a) institutional development in the microfinance and cooperative sub sectors including knowledge management;

(b) improved regulation and supervision of MFIs and RUSACCOs;

(c) credit funds to bridge the liquidity gaps for MFIs and RUSACCOs; and

(d) programme coordination and management

The institutional development of MFIs encompasses the following elements: technology up gradation for stream lining accounting, MIS and operational processes-both software and hardware introducing sound risk management practices initiation of Social Performance Management and responsible finance practices design and diversification of product portfolio- in saving, credit, insurance and money transfers introduction of international best practices in corporate governance and management strengthening skills and competence of staff at different levels.

The key planned outcomes include:

(i) a sustainable, dynamic and vibrant Rural Financial Institutions (RFIs) comprised of at least 30 MFIs and 5500 RUSACCOs;

(ii) an institutionally sustainable rural financial system capable of expanding outreach in depth and breadth;

(iii) a micro insurance policy framework in operation;

(iv) improved regulation and supervision;

(v) self-regulation covering (a) customer protection and fair practices code, (b) disclosure standards, and (c) grievance redressing mechanisms;

(iv) effective linkages with commercial banks;

(v) improved governance code of MFIs;

(vi) a well established policy dialogue and consultative process amongst stakeholders;

(vii) a well-functioning separate department for rural financial cooperatives at all levels; and

(viii) a robust MIS system.

The role of AEMFI/EIFTRI in line with the above facts, AEMFI is uniquely positioned to implement some aspects of the institutional development. Capacities of AEMFI would be augmented to take up implementation of ICT related interventions, Training and skill building of staff of MFIs including support to training institutions of MFIs, introduction to Social Performance Management, product development, policy research and advocacy and developing a certification arrangement for professionals in the sector. Contacts: RUFIP-II Coordinator: Bethlehem Girma

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