There have been several interventions in the microfinance sub-sector either by direct fund injection or capacity building aimed at making the sub-sector achieve the intended social impact and to also operate sustainably. However, there are gaps still in capitalization, liquidity, governance and capacity.
Microfinance Development Company Limited (MDCL) is a private-sector led Special Purpose Vehicle (SPV) conceived by the operators to address primarily the problems of liquidity and capacity in the industry.
The envisaged social impact of MfBs (especially in financial inclusion) will only be realized if the smaller unit MfBs that are large in number are able to access funds other than equity (which is limited) and deposits (which poor market perception puts beyond them).
MDCL is an initiative of the National Association of Microfinance Banks (NAMB) aimed at creating:
An institutional platform that can access borrowed and special intervention funds for the microfinance sub-sector, and thus leverage the performance, impact and sustainability of the unit MfBs.