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How To Apply

How To Apply

Eligibility Criteria For

Criteria of eligibility for Partners Finance Institution

Criteria of eligibility for Clients


Criteria of eligibility for Partners Finance Institution

Lenders shall be registered with the appropriate body e.g. Central Bank, Ministry of Industry, Ministry of Social Affairs, etc. under the Republic of Yemen.

The MFI shall provide all founding and governing documents, including articles of association and by-laws; detailed information on the founders, administrators and sponsors; a business plan and projections for the operations of the MFI.

The MFI shall at all times make best efforts to be in compliance with the prevailing laws and regulations of Yemen relating to taxation, health, safety and environmental protection. Environmental guidelines will be in compliance with any requirements in law or as provided in any source funding document by donors, e.g. World Bank, USAID, DFID, etc.

The MFI shall not engage in illegal or illicit activities, including money-laundering or other criminal activity.

The MFI's percentage of aged portfolio (at risk), i.e. > 30 days, must not exceed:

  • 10% of new portfolios formed after the current war in Yemen 2016.

  • 3% when things settle completely.

The MFI shall have a good governance, a clear written mission and vision, a strategic plan and a clear reporting, financial and operation systems.

The MFI's SEEP report must be issued in time and reviewed by the YLG as an important selection criterion.

A solidarity fund and an approved list for writing off debts in place. The solidarity manual and the bylaws for writing off debts at the institution will be reviewed before the credit guarantee agreement is signed with the institution.

The MFI must develop a feasibility study, field visit and ensure the YLG's client selection criteria are met for each candidate and make evidence of this process accessible to the YLG.

The MFI must have a clear risk management plan as well as a clear mechanism to deal with defaulted loans.

The MFI should provide evidence of good performance, stable lending capacity and institutional viability.

The MFI should provide external annual audit reports before signing the agreement with the YLG for review.

The % of acceptable portfolio at risk PAR for any MFI should not exceed 10%.

The MFI should be updating its clients' database in the credit bureau in a regular basis.

The MFI should have an approved loan write-off policy.

The overall repayment rate of the lender should NOT be less than 80%.

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Criteria of eligibility for Clients

The client must be a resident of Yemen and legally able to 'contract'.

The client has an acceptable ID (ID card, passport, etc.).

The client has a good reputation.

The client has no criminal record including crimes involving dishonesty and breach of trust.

The client resides within the geographical scope of the micro and small finance entity to which he/ she applied for a loan.

The client is the owner of the enterprise or has at least a 70% equity.

The enterprise must not be located where there are constant armed clashes.

Value of required finance (principal) must not be less than YR 500,000 and not more than YR 15,000,000

The client must have a traceable domicile\business location(s).

The client should not be a 1st, 2nd or 3rd degree relative of a staff member of the Lender applying for the guarantee or the YLG\SFD staff in order to minimize any chance for a conflict of interest.

The application for a guarantee for an enterprise must have economic feasibility, complete data and supporting documents.

The client must not have another outstanding credit or loan with another entity.

The client should have a clear profile in the credit bureau database i.e. is not black listed by any MFI or financial entity.

In case it is a repeated client, the client should have completely paid off his previous loans.

In case it is a repeated client, the client should have completely paid off his previous loans.

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