| Buusaa Gonofaa MFI is a microfinance institution in Ethiopia that provides financial services such as savings and loans, mainly to low- and middle-income clients, micro-entrepreneurs, and rural communities. 1.Compulsory (Mandatory) Savings •Required for clients who take loans •A fixed percentage of the loan amount is saved •Acts as collateral/security •Earns interest •Withdrawable after loan completion (according to policy) 2•Voluntary Savings •Open to members and non-borrowers •No fixed deposit requirement •Flexible deposits and withdrawals •Encourages personal saving habits •Earns interest based on balance 3•Time Deposit Savings •Money deposited for a fixed period •Higher interest rate than regular savings •Withdrawal allowed at maturity date •Suitable for clients with surplus funds 4•Group Savings •Members save regularly as a group •Used for internal lending or future investment •Strengthens financial discipline and teamwork |
| BG MFI will realise its mission through the delivery of poor-friendly micro-loans and saving mobilization services that meet the needs and capacities of its target market. BG will render its services by building an institution that is efficient, profitable, transparent and responsive to the needs of its clients. The institution is developing multiple financial products and service delivery mechanisms to fulfill the changing needs of its target clients over time. Currently, Buusaa Gonofaa provides multiple loan products and saving services that meet the needs and livelihood priorities of its target clients. LOAN PRODUCTS 1. Group Loan - Regular Targets: Women & petty traders Loan Purpose: Working capital Maximum Initial Loan Size: Birr 3,000 Group Size: 5–10 Interest Rate & Calculation Method: 18% per annum, flat Minimum Loan Size: Birr 200 Maximum Loan Size: Birr 10,000 Repayment Modality: Weekly / Biweekly / Monthly installment Compulsory Saving: 10% of the loan disbursed + monthly deposit of Birr 10 Service Charge: 0.5% of the loan disbursed 2. Group Loan - Term Targets: Smallholder farmers Loan Purpose: Farming activities, animal rearing and fattening Maximum Initial Loan Size: Birr 2,000 Group Size: 10–25 Interest Rate & Calculation Method: 24% per annum, flat Minimum Loan Size: Birr 200 Maximum Loan Size: Birr 6,000 Repayment Modality: End of loan term; interest portion paid monthly Compulsory Saving: 10% of the loan disbursed + monthly Birr 10 Service Charge: 0.5% of the loan disbursed 3. Group Loan - Employee Targets: Salaried employees of government & non-government organizations Loan Purpose: Consumption and income generating activities Guarantee: Employer commitment to deduct from payroll Group Size: 3–10 Interest Rate & Calculation Method: 12.6% per annum, flat Minimum Loan Size: Birr 500 Maximum Loan Size: 1/3 of monthly salary but not exceeding Birr 10,000 Repayment Modality: Monthly installment Compulsory Saving: 5% of the loan disbursed Service Charge: 2% of the loan disbursed 4. Individual Loan Targets: Smallholder farmers Loan Purpose: Irrigation farming, small ruminant fattening Guarantee: Personal guarantors Interest Rate & Calculation Method: 18–24% per annum, flat Minimum Loan Size: Birr 1,000 Maximum Loan Size: Birr 50,000 Repayment Modality: End of loan term Compulsory Saving: 10% of the loan disbursed Service Charge: 1% of the loan disbursed 5. Individual Loan - SME Loan Targets: Micro & small enterprises Loan Purpose: Service, trade, manufacturing & agriculture Guarantee: Personal guarantors & property Interest Rate & Calculation Method: 15% per annum, flat Minimum Loan Size: Birr 10,000 Maximum Loan Size: Birr 100,000 Repayment Modality: Cash flow based Compulsory Saving: 10% of the loan disbursed Service Charge: 1% of the loan disbursed |
| MICRO INSURANCE Rainfall Based Crop Insurance Rainfall based crop insurance is a newly diversifying product in some developing countries. Ethiopia is one of the countries currently providing this product. In Ethiopia, many institutions provide rainfall based insurance products to customers in different parts of the country. Among these institutions, BG MFI provides rainfall based crop insurance for farmers. BG was rated two years after it started providing this product to poor farmers in collaboration with EFPRI. The product was first introduced in three selected areas of the country: Adaama, Bako, and Shashamane. The following year (2012), BG continued providing the same product with some modifications to the previous policy for farmers in the same locations. PRODUCT DETAILS Types of Products: Severe and Moderate Target Clients Severe: Groups and Individuals Moderate: Groups and Individuals Premium Rate (ETB) Severe: 75.00 Moderate: 125.00 Sum Insured (ETB) Severe: 500.00 Moderate: 500.00 Period (Months) Severe: 1 to 3 Months Moderate: 1 to 3 Months |