Presented by ACCION International and K-REP Advisory Services August 5-16, 2002

As microenterprise finance institutions grow and become part of the regulated financial system throughout Eastern and Southern Africa, banking authorities are facing the need to learn more about this important financial activity. In order to develop appropriate norms and regulations, policy setters must understand how microfinance differs from conventional banking, and in order to supervise microfinance effectively, bank supervisors need specialized training on assessing the performance of microfinance institutions (MFIs). To address these needs, ACCION International and K-REP Advisory Services are providing a conference and training course on the regulation and supervision of microfinance in Southern and Eastern Africa, which will be held in Nairobi, Kenya in August 2002.

The event will consist of a two-day conference aimed at policy makers on the broad issues of microfinance and its regulation and supervision, followed by an intensive training course for bank supervisors in the use of the ACCION CAMEL evaluation instrument for assessing MFIs.

The conference will be a high-level policy workshop aimed at government officials and senior policy makers from central banks in the East and South African region. It will introduce issues related to microfinance and the supervision of microfinance institutions. Invited speakers, who include experts in the field of microfinance internationally, as well as high level personnel from banking superintendencies in the region, will share challenges specifically related to the regulation and supervision of microfinance in Africa. Presentations and discussions will include topics such as: defining microfinance; reasons to regulate microfinance institutions; minimum capital requirements and capital adequacy; asset quality; and case studies of regulated microfinance institutions.

The training course will be aimed specifically at personnel with supervisory and analytical responsibilities within central banks and development banks lending to MFIs. It will be an eight-day hands-on, technical training course on the ACCION CAMEL assessment tool for microfinance institutions. The ACCION CAMEL measures the Capital adequacy, Asset quality, Management, Earnings and Liquidity of MFIs and provides a scoring system for judging the quality of performance in each of these areas. The original CAMEL was developed in 1978 by the U.S. Federal Reserve to assess the solvency of U.S. banks. In 1993, ACCION International adapted the CAMEL to microfinance. Since then, ACCION has completed over 40 CAMEL evaluations and has become a pioneer in setting standards for the microfinance industry.

The ACCION CAMEL is widely recognized as one of the most complete and reliable MFI assessment tools around the globe. For instance, ACCION trained the Superintendency of Banks of Bolivia in the use of the CAMEL as an evaluation tool for regulated microfinance institutions. It is used as a due diligence tool for the Banco Centro Americano de Integración Económica based in Honduras. Most recently, ACCION has trained field staff at the Small Industries Development Bank of India's (SIDBI) Foundation for Microcredit on the use of the CAMEL in the evaluation of MFIs applying for credit.

The CAMEL training course includes eight days of classroom training (including a visit to an MFI) covering overall concepts, variables measured by the CAMEL instrument, as well as the required financial statement adjustments and the analysis of key and supporting indicators used in the evaluation. The course provides theoretical presentation of concepts, practical exercises and active discussions. Simulations will allow participants, working in teams, to gather data, make relevant financial adjustments, interview key MFI staff, and perform CAMEL analyses. Participants in the CAMEL course are expected to attend the initial conference as well, to gain an understanding of the overall context for application of the CAMEL.

These two linked events will be held at the Kenya School for Monetary Studies, from August 5 - 16, 2002. The conference will be August 5-6, and the CAMEL training course will begin August 7 and run through August 16, 2002. Basic accounting skills and ability to use Microsoft Excel are requirements for participation in the longer course. It would be highly desirable for participants from bank supervising agencies to attend. Fees for the course are US$50 for the first two days, and US$450 for the full two- week program. These costs cover venue, course materials, equipment, and refreshments only. Funding for course preparation and instructor time has been graciously provided by the United Nations Capital Development Fund, Special Unit for Microfinance.

Space is limited and priority for the CAMEL course may be given to Eastern or Southern African central banks which send a group of participants and which evidence a commitment to implementing the assessment methodology in their institutions. Deadline for registration is July 26, 2002 (or when spaces are filled, if earlier). Registration will be confirmed upon receipt of course fees. Payments should be made to: Commercial Bank of Africa, Limited, Branch address: Wabera Street, P.O.Box 30437, Nairobi. Account number: 0100430061, Client K-Rep Advisory Services, Limited. Swift Code: CBAFKENX, with written confirmation of payment by fax (2542 564053) or email (kas@k-repconsulting.com). In case of any clarifications, please contact John Kashangaki or Sharon Maviala at K-Rep Advisory Services, Nairobi, Kenya (Phone: 2542 572387 or 718301 or 0722730550; email: smaviala@k-repconsulting.com).