Types of Microfinance Institutions (MFIs).
MFIs as abbreviated are classified into three main categories in The Gambia:
- Village Savings and Credit Associations (VISACAs),
- Finance Companies (FCs),and
- Fiduciary Financial Institutions (FFIs).
Village Savings and Credit Associations (VISACAs)
These are community based MFIs that are owned and managed by its members. Different networks used to provide both financial and technical support for the VISACAs during their establishment to ensure sustainability. These networks were also called promoters including: MICROFIMS, AFET, FFHC and FORUT respectively.
With the formation of VISACA Apex, some of the challenges face by VISACAs will be gradually overcome including: poor governance, inside abuse and loan delinquency, capacity constraints among others. Its head office is located at Brusubi, West Coast Region headed by a manager. Each VISACA is automatically a member of the Apex body so as to empower them socially, economically and morally.
Finance Companies (FCs)
These are institutions owned by individuals who have subscribed for shares to form the company. The basic regulatory requirements that guide the operations of these institutions include: a Minimum capital of D50, CAR of 20%, Gearing Ratio of 10 times, Required Reserve of 8%, liquidity ratio of 30% and ROA of 1%.
Fiduciary Financial Institutions (FFIs)
This is the highest category of MFIs in The Gambia. Recently, SDF has been issued with a license in principle to operate as a FFI. In the meantime, FFIs would be also subjected to the same regulatory requirements as Finance Companies.