Design and Implementation of Portfolio Guarantee Model

Area of Operation: Yemen

Duration of Assignment: March 2019 – September 2020

Name of Client: Finance in Motion GmbH; Yemen Loan Guarantee Program (YLG)

Project Description:

The Social Fund for Development (SFD) of Yemen is the main supporter of the micro-finance sector in Yemen. Mobilizing donor support from the World Bank, DFID, KFW, Islamic Development Bank, the SFD launched the Yemen Loan Guarantee Program (YLG); a not-for-profit guarantee provider operating under the legal identity of the SFD.

YLG aimed to facilitate accessibility for financial services to target segments with insufficient collateral through the provision of guarantees products and services. It provided partial guarantees on loans made by lenders (banks and MFIs) to micro and small enterprise borrowers located in the region.

YLG also aimed to introduce portfolio guarantee model to increase business volume, especially that of selected target groups defined by YLG donors, and geographical footprint.

Our Services:

  • Carried out a sounding of YLG’s structures within their existing operations.
  • Assessed the needs and targets of the partner institutions (PIs) and conducted an assessment of their portfolio.
  • Advised YLG on the introduction of the blanket guarantee model to act as a transitional model.
  • Developed the portfolio guarantee model with appropriate pricing structures, action plan for implementation including the required updates to the internal manuals, templates, and tools for implementing the model.
  • Provided support to YLG management in executing the action plan thorough workshops and periodic follow-ups.
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