Ethical Finance

IN OCTOBER 2022, the African Microfinance Ethical Network (AMEN) began its mission to empower vulnerable communities in nine Sub-Saharan African countries: Togo, Kenya, Senegal, Tanzania, Rwanda, DR Congo, Burkina Faso, Ghana, and Uganda. The project, inspired by the principle of “integral human development,” aimed to strengthen microfinance institutions (MFIs) in these regions. By providing financial support, training, and network-building opportunities, AMEN fostered financial inclusion and sustainable development, significantly impacting the lives of those in need.

AMEN is a collaboration between Caritas Africa, Banca Etica, and microfinance institutions (MFIs) in the nine countries. Caritas Africa, a network of Caritas organizations across the continent, coordinated the project. It worked with national Caritas branches and MFIs to assess training needs and share ethical financial practices. Its experience in promoting social justice and supporting vulnerable populations made it well-suited for this role. The project’s goal was to create a network that facilitated financial inclusion through microloans and support for communities lacking access to financial services.

Banca Etica, an Italian bank committed to ethical finance, also played a key role. It provided technical support, contributed to training programs, and extended credit to the MFIs within the network. From 2020 to 2022, Banca Etica offered credit totalling over €2 million to four of the nine MFIs involved, boosting their operational capacity. Its partnership with Caritas Africa reflected a shared mission of using finance for social good.

€50,000 contribution

While the groundwork for AMEN began earlier, the project’s expansion required additional financial support to cover its total cost of €241,800. In mid-2022 Caritas Africa sought funding from St. Anthony’s Charities. In September 2022, St. Anthony’s Charities approved a €50,000 contribution, enabling the project to move forward with its planned activities.

The project officially launched in October 2022. In its first phase AMEN focused on building the network’s foundation by offering training sessions and preparing MFIs to participate in key events. This included the African Microfinance Week (SAM), an important platform for knowledge exchange and networking in the microfinance sector. However, there were challenges; the registration process for African Microfinance Week (SAM) faced delays due to technical issues with the event’s website. Despite these setbacks, the project persisted, ensuring that MFIs could still participate and benefit.

Annual gathering

African Microfinance Week (SAM) is an annual gathering for microfinance professionals across Africa. It facilitates discussions on common challenges and solutions to promote ethical finance. In 2023 SAM was held in Lomé, Togo. Caritas Africa, in collaboration with Banca Etica and Caritas Italiana, organized a seminar titled Faith-Based Microfinance Institutions Addressing Climate Change by Promoting Sustainable and Inclusive Human Development in Africa. The seminar drew 48 participants, who discussed how faith-based microfinance could support community resilience. The event also featured training sessions focused on the Universal Standards for Social and Environmental Performance Management (USSEPM), equipping MFIs with the tools to align their operations with ethical principles.

The Universal Standards for Social and Environmental Performance Management (USSEPM) guides MFIs to prioritize social impact, customer protection, and environmental stewardship alongside financial success. Training sessions in Lomé, facilitated by experts like Mohamed Attanda, an auditor certified by CERISE+SPTF, were key to helping MFIs adopt these standards. “The formation in Lomé was essential in preparing the MFIs to adopt and implement ethical financial practices across their operations,” said Attanda. This approach ensured the project expanded its reach while maintaining its ethical finance values.

In early 2024 the project entered its final phase, concentrating on consolidating achievements and evaluating the MFIs’ progress in adopting the USSEPM. Representatives from the MFIs met in Nairobi, Kenya, to review their outcomes, share best practices, and celebrate their successes. The final phase concluded in July 2024, marking the end of a nearly two-year journey of collaboration, learning, and impact.

The project’s success is evident in its reach, benefiting over 500,000 individuals across the participating countries. These beneficiaries include men, women, and youth who accessed financial services and loans through the MFIs. For many, these services opened up opportunities to start or expand businesses, support their families, and invest in their communities.

A widow

One such story comes from Togo, where Fedelao Afi joined the local MFI. Fedelao, a widow with three children, faced economic challenges after the loss of her husband. She received a small loan which allowed her to start a modest business selling food items. With financial literacy training and ongoing support from the MFI, Fedelao was able to grow her business steadily. Today, she has expanded her operations to include a small shop, enabling her to support her children’s education and build a more secure future for her family.

Another success story comes from Kenya, where Caritas Nairobi implemented a dairy empowerment initiative. Through this program, 48 women received dairy cows, creating a sustainable income model. The initiative not only provided livestock but also established a system where each cow’s first offspring was passed on to other women in the community. This ripple effect empowered more families and built community resilience.

By fostering ethical financial practices, the AMEN project has set a precedent for using microfinance as a tool for positive social change in regions where financial exclusion is common. It has provided a sustainable model for MFIs to operate responsibly, focusing not only on financial gains, but also on clients’ well-being and environmental care.

Gratitude expressed

Caritas Africa, reflecting on the project’s completion, expressed gratitude for the support that made this initiative possible. “We are immensely grateful to our partners, including Banca Etica, St. Anthony’s Charities, and Caritas Africa, for the support in strengthening our capacities and contributing to building resilient communities,” it stated in the final project report. This acknowledgment underscores the collaborative nature of the project and the impact of contributions from St. Anthony’s Charities and others.

With the project now complete, the AMEN network is poised for growth and continued impact, welcoming new partners and beneficiaries as it continues to promote ethical finance and economic inclusion across the continent. The groundwork laid will allow the network to sustain itself through membership fees from participating MFIs and efforts to attract new funding. The experience and training provided have equipped the MFIs to operate ethically and inclusively, ensuring that their services remain vital for communities in need, thanks in part to the contribution from St. Anthony’s Charities and the readers of the Messenger of Saint Anthony.