Microfinance Associations: The Case of Microenterprise Alliance (MEA), South Africa

This paper discusses the Micro Enterprise Alliance (MEA) within the context of South Africa's diverse financial system. MEA was incorporated in 2000 as a network of providers of financial services, business development services (BDS) and NGOs. It seeks to build a thriving micro enterprise sector in South Africa and enhance the capacity, efficiency and effectiveness of micro enterprise development agencies. Its services include:

• Advocacy and capacity building;
• Networking and information dissemination;
• Development of operational standards based on best practices.

The paper presents some of the constraints that MEA faces:

• Limited outreach;
• Excessive dependence on donor funding;
• Absence of a policy on service charges.

The paper states that MEA has been able to build a good rapport with the government as well as donor agencies that bear 86% of its operational expenses. It presents some of MEA's strengths:

• Expertise in advocacy;
• Relations with donors;
• Organizational set up and human resources.