Poor documentation of land rights and lack of access to finance have historically been significant challenges for farmers in Ethiopia, limiting their productivity and constraining growth.

The Department for International Development (DFID) of the United Kingdom established the Land Investment for Transformation (LIFT) programme in Ethiopia to promote land certification and improve land tenure security for farmers. A goal of the programme has been to increase access to credit, with the LIFT programme generating over 4,000 on-farm and off-farm loans to date, in part due to improvements in land certification.

Many microfinance institutions (MFIs) in Ethiopia, however, continue to have weaknesses in their default management capacities. As part of a DAI-led consortium, IPC was contracted to provide advisory support to five participating MFIs in the programme in enhancing their default management practices.

In this role, IPC experts:

• reviewed relevant laws and regulations including central bank requirements, bankruptcy law, and federal and regional proclamations related to loans linked to second level land certificates (SLLCs)
• met with the LIFT team, MFI staff at management and branch level, experts and MFI clients on the ground
• conducted an assessment of the five participating MFIs including policies, procedures, MIS, underwriting, risk management, gaps and needs, mapping of default journey, etc.
• designed a default management process and guide for SLLC-linked loans tailored for each implementation region
• prepared workshop material and provided input during workshops to management and legal staff of each MFI
• presented a post-delivery assessment, including key recommendations
• submitted final default management guides to the LIFT team