To ask the Secretary of State for International Development pursuant to the answer of 14 January 2008, Official Report, column 1079W, on Kenya: financial institutions, what direct assistance his Department is giving to assist existing microfinance businesses in Kenya where the owners need immediate help.

holding answer 21 January 2008

DFID is providing direct assistance to the multi-donor Financial Sector Deepening (FSD) Trust, which is working in partnership with the Kenya Association of Microfinance Institutions (AMFI) on assisting existing microfinance businesses in Kenya which need urgent help. FSD is providing technical assistance to AMFI, to assess and design emergency programmes and to secure financial resources for these. DFID has allocated £11.3 million to the FSD Trust, with other donors making up the total budget of £19 million.

AMFI is leading the industry response to the crisis, looking at three areas of potential support: (i) micro-finance institutions (MFIs) using their strong grassroots involvement in affected communities to build peace and reconciliation between people and mitigate ethnic tensions, (ii) an emergency liquidity facility to support MFIs facing liquidity constraints as a result of the crisis, and (iii) cash transfer schemes targeting people with micro-enterprises who have suffered catastrophic losses, to provide a base from which to rebuild their livelihoods.