In the latest installment in the Microfinance Matters Interviews series, reporter Lucy Conger speaks with Anne-Marie Chidzero about her career in Africa’s microfinance industry, the developments it has undergone in recent decades, and the work of AfriCap, where she serves as CEO. An edited transcript of the interview follows.

How did you get started in international development?

My passion for development work stems from my upbringing. My father, a native of Zimbabwe (then Rhodesia), worked for the United Nations for a long time. As we could not live in then-Rhodesia because my parents were a mixed couple, we lived in Ethiopia, where I was born, Kenya, then Switzerland. My father always spoke of his dreams for Rhodesia. Later, my father became finance minister of independent Zimbabwe and that greatly influenced my desire to contribute to the African continent from an economic perspective. There was a slow shift at that time away from a more socialist to a more capitalist approach to development and the private sector was seen as the engine of growth. At the United Nations, I worked with transnational corporations in developing countries, creating links between small businesses and corporations as part of the value chain.

You were directly involved with the World Bank’s initial forays into microfinance and with the launch of CGAP. What was your role there?

At the CGAP, I traveled to African countries to identify the World Bank role in microfinance. At the World Bank, microfinance was seen as a tool for poverty alleviation. They understood the importance of getting this right. My role was to share best practices with country offices in Africa and to feed microfinance into the strategies for the financial sector and the Bank’s country assistance plans. I always believed the private sector was the way to do this; that is a thread throughout my career.

What are the landmarks in the development of the microfinance industry in Africa?

When I began working, microfinance in Africa took the form of either large, informal savings clubs or non-governmental organizations (NGOs) providing revolving funds and not focusing on interest and repayments. When we engaged with policymakers, they couldn’t understand how you charge interest on loans for the poor. Equity Bank of Kenya was a landmark, it convinced people that one can profitably serve this market, and Equity Bank is run by Africans. Now, there is a real understanding among policymakers that microfinance is part of the financial sector and policies and regulations must provide an enabling environment for microfinance to grow and for the development of more inclusive financial sectors. And also to support innovation in the financial sector to the benefit of those that do not have access to financial services.

What is Africap’s strategy for investing in MFIs?

We’re fully invested, so our strategy now is to build our institutions and create shareholder value. Twelve investments are MFIs at various stages of growth, one is a payment platform, another is a bank working in the cell phone transactions space. We are also looking for opportunities to exit [from] some of the investments.

How do you strengthen the institutions, and how is capacity-building financed?

AfriCap takes an active role in the operations of its portfolio companies.  Through its technical assistance facility, Fintech Africa, it is able to provide capacity-building support and TA to AfriCap portfolio companies. FinTech provides technical assistance in areas like management information systems, and it trains investee staff in risk management, financial analysis, governance, accounting principles, and skills for loan officers. FinTech also places experienced technicians in MFIs for two years and there they train operations managers, finance directors, and audit managers. FinTech allows us to accelerate institution-building. The costs are shared, with 40 percent coming from the MFI and FinTech providing the remainder with funds provided by international donors.

To read the rest of the interview, head over to the CFI site.

Image credit: World Economic Forum

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