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PEACE MICROFINANCE S.C

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Core Function

PEACE MFI is engaged in the delivery of both Savings and loan services.  

Saving

National Bank of Ethiopia issued a directive in connection with GTP-2 which states the saving amount should be equivalent to the loan outstanding of MFIs in the final year of the Growth Transformation Plan.

Thus, it is high time to focus more on saving mobilization from the general public (voluntary saving) in addition to the existing saving products. Particularly, we need to provide different saving product options that satisfy the interest of clients.

The major objectives of the saving amendment is double fold firs to meet the GTP-2 plan and to fight the loan fund shortage as saving is the best source of fund for lending.

The proposed saving products are amended  here under:

1. Mandatory saving- 12% of the loan disbursement before loan disbursement, its deposit interest rate is 7%.

2. Regular Saving – Minimum of Br.30 for first cycle clients and its amount will be increased as clients transferred from one cycle to another cycle. The minimum additional amount shouldn’t be less than Br. 10 for each cycle. Its deposit interest rate is 7% clients are encouraged to deposit more than the minimum deposit amount.

3. Voluntary saving for adult minimum opening balance will be Br. 50; its deposit interest rate is 8%. Clients are encouraged to deposit more than the minimum deposit amount.

4. Lenege  Child  &  youth saving minimum opening balance is Birr 20, deposit interest rate is 8% ( For a child whose age from one day to 24 years old ). Clients are encouraged to deposit more  than  the minimum deposit. Parents of custodians can bring birth certificate, or evidence of birth from hospital, Clinic or health center.

5. Special purpose saving for children. Deposit for children and youth up to 18 years age, the deposit interest will be 9% annually. This saving is on agreement and will not be withdraw able before the children age reach 18 years. If the deposit is withdraw able before the age of child is 18 years of age the interest rate will be changed to 8%. The minimum account opening amount will be Birr 1000.

6. Box saving . Box will be distributed for potential and able clients to facilitate their daily saving at home. They will get into special agreement with branches to make permanent deposit at their convenient place. The deposit interest rate for this box saving will be 8% per annum.

7. Time deposit: Its opening balance will be Br. 10,000.

· · For a period of six months’ time for Br. 10,000 – 100,000, deposits interest rate will be 8.5% per annum.

· For a period of  12 months’ time for Br. 100,00 – 100,000, deposits interest  rate  will be 9%  per annum.

· F· For a period of six months’ time for Br. 100,001 – 500,000, deposits interest rate will be 9% per annum.

·Fa period of 12  months’ time for Br. 100,001 – 500,000, deposits interest rate will be 10% per annum.

· Fa period of   six months’ time for Br. 500,001  up Birr  1000,000, deposits interest rate will be 10% per annum.

For a period of   12 months’ time for Br. 500,001  up Birr  1000,000, deposits interest rate will be 11% per annum.

· For the amount deposited above Br. 1000,000 for the period of 12 months and above, the  interest rate will be 12% per annum.

8. Special event saving : It is a saving that will be deposited on regular basis monthly with a fixed amount of money regularly starting from Br.1000. It is a block account for agreed period of time between the client the clients and the Institution. The minimum agreed time will be for six months and the maximum will be agreed with clients.

In this saving type the deposit interest will be calculated 9% per annum on the existing balance which the client deposited.

All borrowers must pay the cost for passbook sales at time of account opening, while all other voluntary and time deposit savers will not require paying at time of opening. However, if savers close their account, the cost of passbook cost must be deducted from their balance.

 

This above is policy is approved by the Board of Directors to be effective from October 11 , 2017.

About Us

Savings use strategies
  • Do you have savings account with PEACE?
  • All respondents maintain two types of savings with PEACE MFI: mandatory (collateral) savings and regular savings.
  • A few clients also maintain voluntary regular savings over and above their mandatory savings. 

 
PEACE MF S.C and Its Context

PEACE MF S.C  and Its Context

 
Reasons for saving
  • Kuy Branch: 
    • Most Important reasons
    • To reserve for bad times – 27%
    • For construction, purchase and repair of house – 13%
    • To accumulate capital – 10%
    • To start and expand business – 10%
  • Ginir Branch
    • Most Important reasons
    • To Improve my living standard -19%
    • To access credit from PEACE -  19%
    • To use it for emergency - 19%
    • To improve my business  -12.5%
  • Robe- Goba Branch
    • Most Important reasons
    • As a reserve  for bad times 31 %
    • To expand my business 25% 
    • To access loan  12.5%
    • All in all the top three reasons for savings in order of importance are: reserve for bad times or emergency, starting or expanding of business and as a means to access loan from PEACE.

 
  • Similar to HH income trend  most of the clients experienced  increased income over the last 12 months . 75.2% of the existing clients and 56.3% of new clients reported so while  about10”% of  clients from both groups have experienced decrease in their income.
  • Here the female clients seem to enjoy more positive impact of the program in increasing their income. 
  • 75% of existing female clients indicated their income has increased as opposed to only 12.1% of the existing male clients. Similarly, 3.9% of existing female clients felt their income has greatly increased while none of the existing male clients felt the same 
  • the same proportion (7.7%) of the existing clients attribute the decrease their income to sickness or death of a household member, natural disaster and poor agricultural season. On the other hand, 38.5% and 23% of the existing client’s income decreased due to poor sales and poor agricultural season 
  • the reasons for the decrease of income for new clients is accounted on various factors: natural disaster (11.1%), poor agricultural season (11.1%), poor sales (33.3%), could not collect credit (22.2%) and others (11.1%) 
  • With regard to the reasons given for the increase in the income relatively higher proportion of both existing clients (30.3%) and new clients (30.0%) account the increase of their income for increase of demand for their products or sales almost the same percentage (28% and 34.3% respectively) were able to increase their income for they expanded the existing enterprise 
  • The above observation, in general, indicates the positive impact of participating in PEACE by enabling the clients to expand their enterprise activities 

 
Core Function Services
PEACE MFI is engaged in the delivery of both Savings and loan services.

Loan products: There are two major categories of loans: agricultural loans and non-agricultural loans. Non-agricultural loans are provided for clients engaged in petty trade, local beverage production, artesian, hairdressing and barber, transport services using carts, etc. Agricultural loans are taken for goat and sheep rearing, purchase of oxen, fattening, purchase of select seed, fertilizers, dairy cow, etc.
All loans are provided on the basis of group guarantee and joint commitment of group members.

 
Core Function Services

PEACE MFI is engaged in the delivery of both Savings and loan services.  

Saving

National Bank of Ethiopia issued a directive in connection with GTP-2 which states the saving amount should be equivalent to the loan outstanding of MFIs in the final year of the Growth Transformation Plan.

Thus, it is high time to focus more on saving mobilization from the general public (voluntary saving) in addition to the existing saving products. Particularly, we need to provide different saving product options that satisfy the interest of clients.

The major objectives of the saving amendment is double fold firs to meet the GTP-2 plan and to fight the loan fund shortage as saving is the best source of fund for lending.

The proposed saving products are amended  here under:

1. Mandatory saving- 12% of the loan disbursement before loan disbursement, its deposit interest rate is 7%.

2. Regular Saving – Minimum of Br.30 for first cycle clients and its amount will be increased as clients transferred from one cycle to another cycle. The minimum additional amount shouldn’t be less than Br. 10 for each cycle. Its deposit interest rate is 7% clients are encouraged to deposit more than the minimum deposit amount.

3. Voluntary saving for adult minimum opening balance will be Br. 50; its deposit interest rate is 8%. Clients are encouraged to deposit more than the minimum deposit amount.

4. Lenege  Child  &  youth saving minimum opening balance is Birr 20, deposit interest rate is 8% ( For a child whose age from one day to 24 years old ). Clients are encouraged to deposit more  than  the minimum deposit. Parents of custodians can bring birth certificate, or evidence of birth from hospital, Clinic or health center.

5. Special purpose saving for children. Deposit for children and youth up to 18 years age, the deposit interest will be 9% annually. This saving is on agreement and will not be withdraw able before the children age reach 18 years. If the deposit is withdraw able before the age of child is 18 years of age the interest rate will be changed to 8%. The minimum account opening amount will be Birr 1000.

6. Box saving . Box will be distributed for potential and able clients to facilitate their daily saving at home. They will get into special agreement with branches to make permanent deposit at their convenient place. The deposit interest rate for this box saving will be 8% per annum.

7. Time deposit: Its opening balance will be Br. 10,000.

· · For a period of six months’ time for Br. 10,000 – 100,000, deposits interest rate will be 8.5% per annum.

· For a period of  12 months’ time for Br. 100,00 – 100,000, deposits interest  rate  will be 9%  per annum.

· F· For a period of six months’ time for Br. 100,001 – 500,000, deposits interest rate will be 9% per annum.

·Fa period of 12  months’ time for Br. 100,001 – 500,000, deposits interest rate will be 10% per annum.

· Fa period of   six months’ time for Br. 500,001  up Birr  1000,000, deposits interest rate will be 10% per annum.

For a period of   12 months’ time for Br. 500,001  up Birr  1000,000, deposits interest rate will be 11% per annum.

· For the amount deposited above Br. 1000,000 for the period of 12 months and above, the  interest rate will be 12% per annum.

8. Special event saving : It is a saving that will be deposited on regular basis monthly with a fixed amount of money regularly starting from Br.1000. It is a block account for agreed period of time between the client the clients and the Institution. The minimum agreed time will be for six months and the maximum will be agreed with clients.

In this saving type the deposit interest will be calculated 9% per annum on the existing balance which the client deposited.

All borrowers must pay the cost for passbook sales at time of account opening, while all other voluntary and time deposit savers will not require paying at time of opening. However, if savers close their account, the cost of passbook cost must be deducted from their balance.

 

This above is policy is approved by the Board of Directors to be effective from October 11 , 2017.

 
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Partners & Linked Organizations

Agriservice Ethiopia

Oxfam NOVIB

Women's World Banking

TRIPLE Jump

Microfinance Information Exchange

Planet Rating 

Micro Finance African Institution Network (MAIN)

http://www.mainnetwork.org

Association of Ethiopia Microfinance Institution

http://www.aemfi-ethiopia.org

http://www.mossict.com

Existing Clients

PEACE Achievements

PEACE has achieved a competitive position in the Ethiopia MF sector through a focus strategy that targets rural low income women.  It has experienced significant growth during the past years and the market still has a high level of unmet demand.