Europe, Middle East & North Africa

IFC Films Highlight Impact and Challenges of Microfinance in ECA

Microfinance has been a lifeline for many people living at the base of the pyramid. A new set of films developed by IFC in Bosnia and Herzegovina, Tajikistan, and the Kyrgyz Republic shows how microfinance can help people recover from conflict, empower women, and support rural development—and how the sector is addressing its challenges.

“Everything was just wiped out. In the post-war period, it was very difficult to get hold of any funds needed to start something up--any kind of business,” recalls Firenta Dzinic, a seamstress from Bosnia and Herzegovina who features in the films. “Our lives would look totally different if microfinance wasn’t there.”

Dzinic is one of the many micro business owners featured in the set of four short films, available on IFC’s youtube page, highlighting the impact that microfinance has had in some of the most challenging markets in Europe and Central Asia (ECA). The films also showcase the success stories of Taalaibek Gaipberdiev, who runs a costume business in the Krygyz Republic, and Mastura Asoeva, who started a basket-weaving business in Tajikistan.

The films draw on industry experts to provide a realistic assessment of the impact of the sector but also to discuss how the industry is addressing the challenges it faces. In Bosnia, where over-indebtedness has been a major problem, IFC and others established the region’s first debt counseling center and are launching the SMART certification program for responsible lending. In Kyrgyzstan, the industry has addressed the challenge of lending to people in rural areas with limited collateral.

Lars Thunell, who features in the films, highlighted the scope for the sector to expand. “Microfinance will continue to be very important. So far we have only reached perhaps 20 percent of the people that could use microfinance. What we see now is [microfinance institutions offering] other products – savings and micro insurance – products that a normal consumer anywhere would use because these people have the same needs as anybody else.”

The films were the brainchild of Rolf Behrndt, Regional Business Line Manager – Access to Finance in ECA. IFC Advisory Services in ECA works with a number of microfinance institutions across the region helping them transform into deposit-taking organizations and strengthen and expand their businesses, with policymakers and industry bodies to improve the regulatory environment for microfinance, and recently with the microfinance industry to introduce responsible lending practices.

The films will be broadcast on national and regional TV channels and at events in Central Asia and distributed to policymakers, journalists, donors, and other audiences. The making of the film was featured in a Euromoney article - alongside an article on Thunell’s vision for microfinance--that provided an in-depth answer to the question regarding what people’s lives would be like in Central Asia if microfinance didn’t exist.