Madagascar Madagascar

Situated between the Indian Ocean and Africa, Madagascar faces great economic, political and ecological challenges in order to reduce its poverty rate, one of the highest in the world.

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  • News


    Madagascar : propitious microfinance progress in 2012

    Many Malagasy households now use microfinance. In four years, the number of people who came to ask for microcredit has almost doubled, from 529 774 to 984 683 people.

    Today, the microfinance institutions are over banks in terms of coverage. Microfinance in Madagascar now affects 29.69% of households against 10% 4 years ago. The sector also affects almost 22 regions of the country.

  • News

    11.08.12  | Elisabeth

    Is there a place for microfinance in Madagascar?

    The UNDP reported on United Nations Lions Day that 8 out of 10 Malagasy have been living on a dollar a day since 2008.
    Madagascar suffers from extreme poverty. 50.5% of the Malagasy population are malnourished. Women and children are most affected by the phenomenon.
    The island looks unable to achieve the three objectives of the Millennium Development Goals: primary education, reducing child mortality and improving maternal health.

  • News

    10.29.12  | Thibault Lescuyer

    Microfinance in Madagascar: a tool to confront the crisis

    It is a beautiful country plagued by poverty. While only 4% of households have access to Malagasy traditional banking, microfinance has overcome these needs and support the local economy undermined by successive crises. Major challenges for local microfinance: reaching more Malagasy and professional.

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Social and Economic context

Situated between the Indian Ocean and Africa, Madagascar is one of the largest island countries in the world. It is slightly larger than France and it has a population of 21 billion Malagasy people. The Human Development Index (HDI) that measures literacy, education, life expectancy and standards of living for countries worldwide ranked Madagascar 145th out of 181 countries in the world.
The strong presence of NGOs and public support in many areas of economic life (health, education, ...) sometimes proves to be a last resort for isolated populations, but appears to have a perverse effect on Madagascar’s development in the long term as they should not substitute indefinitely the essential functions of the government.

Today Madagascar’s economic growth is dependent on the return of political stability. Still, there are a number of people in need of financial aid just to be able to survive the hardships that surround them.


Madagascar began to colonise late when humans arrived and settled there between 200BC and 500AD. The island continued to colonise until the time when European settlers came during the 15th century. Some settlers originated from West Africa.

Although Madagascar is off the African coast, the Malagasy population came to be of Austronesian origin following the arrival of people from the West Coast. The Austronesian population is made up of people who come from Oceania and Southeast Asia. There are two ways of living that the first inhabitants developed. “Those of the forest,” the Vazimba way of life and “those of the coast” the Vezo way of life. The Vazimba people settled on high plains and plateaus and made a living from hunting and the Vezo people settled on the coast and made a living from coastal fishing. The Malagasy language, and certain religious rites and ways of organizing society are direct legacies of the Austronesian origin of the Malagasy people.

In the second half of the second millennium the island saw ethnic groups come together and form kingdoms. During the same period, they had their first contact with the Europeans. These Europeans were the first French settlers who settled in Madagascar. They established their colony, Fort Dauphin. Fort Dauphin is now known as Tôlanaro. This European presence permanently changed the course of the Kingdom’s history with the beginning of slave trade, the introduction of firearms and the Latin alphabet and the construction of schools by protestant missionaries.

There was a period of peace during the 19th century when there was an endorsement of agreement between the kingdom of Madagascar and France. However, the peace did not last. In 1896, General Joesph Gallieni who was a French soldier, military commander and administrator in the French colonies lead an army of 50,000 soldiers who conquered an colonised what we now know as Madagascar.

The French colonial period lasted until 1960. There were many things, which marked this specific period’s infrastructure. They include, roads, an embryonic industry, institutions, violent repression against nationalist movements and resistance towards colonial domination.

Madagascar gained its independence on the 26TH of June 1960. A period of instability followed until Didier Ratsiraka was elected president in 1975. This led Madagascar to be a socialist country as its political position came to be part of the soviet bloc.
Towards the late 1990s there were disputes of power between different groups because elections were often contested and there were reversals of government by the army or revolution.
The state of political instability has not allowed the country to address sustainability with major economic development challenges in its path. These challenges are

  • A deficit in its trade balance
  • The high poverty rate. This is due partly to the isolation of population
  • The strong dependence of the agricultural sector and raw material prices
  • The energy dependence of oil
  • The development of new, high potential sectors such as, light industry, textile, tourism, etc.

Culture in Madagascar

More than 50% of the Malagasy population is made up of Christians. Most of the population still practice ancestral rites from the Austronesian culture. Events allow families and communities to practice ancestral rites even today.

In the music industry, contemporary and modern genres were very popular and because of the popularity, Madagascar had received international recognition in this industry.
Madagascar is specifically known for its craft of wood that the Vazimba culture “those of the forest” originated. There are many species of precious wood that Madagascar is home to. Two of these species include rosewood and ebony. Today, wood craft is still an important economic activity on the island.

The local cuisine is influenced by European, Chinese, African, Indian and Southeast Asian migrants who settled on the island. But what they use in many traditional dishes is Zebu meat, Zebu being a type of domestic cattle that originated in Southeast Asia.

Microfinance in Madagascar

Microfinance is still in its prime on the island and the needs and development of the island are still a big challenge for the people living there. Two

  • thirds of the population still live under the poverty threshold.
    By the mid 1990s, a dozen microfinance institutions had emerged. The government showed its support to the development of microfinance by establishing a regulated framework that explains how different MFIs are categorized. This type of regulation provides a flexibility of operations, which allows the most advanced MFIs to provide a comprehensive range of services, one of them being managing saving deposits from their clients.
    Our MFI partner, MicroCred Madagascar belongs to the highest category, which entitles them to provide the most comprehensive services such as providing microcredit to collecting savings.

  • Republic of Madagascar
    Repoblikan'i Madagasikara
    République de Madagascar
    Flag Seal
    Motto: Fitiavana, Tanindrazana, Fandrosoana  (Malagasy)
    Amour, patrie, progrès  (French)
    "Love, Fatherland, Progress"
    Anthem: "Ry Tanindrazanay malala ô!"
    Oh, Beloved Land of our Ancestors!

    Location of Madagascar
    Location of Madagascar
    (and largest city)
    18°55′S 47°31′E / 18.917°S 47.517°E / -18.917; 47.517
    Official language(s) Malagasy, French
    Demonym Malagasy
    Government Caretaker government
     -  President of the High Transitional Authority Andry Rajoelina
     -  Prime Minister Omer Beriziky
    Legislature Parliament
     -  Upper house Senate
     -  Lower house National Assembly
    Independence from France 
     -  Date 26 June 1960 
     -  Total 587,041 km2 (47th)
    226,597 sq mi 
     -  Water (%) 0.009%
     -  2011 estimate 21,926,221 (53rd)
     -  1993 census 12,238,914 
     -  Density 35.2/km2 (174th)
    91.1/sq mi
    GDP (PPP) 2011 estimate
     -  Total $20.400 billion
     -  Per capita $933
    GDP (nominal) 2011 estimate
     -  Total $10.025 billion
     -  Per capita $458
    Gini (2001) 47.5 (high
    HDI (2010) increase 0.435 (low) (135th)
    Currency Malagasy ariary (MGA)
    Time zone EAT (UTC+3)
     -  Summer (DST) not observed (UTC+3)
    Drives on the right
    ISO 3166 code MG
    Internet TLD .mg
    Calling code +261
    MicroCred Madagascar

    MicroCred Madagascar


    MicroCred Madagascar began their microfinance activities in 2006 in peri-urban areas of the capital Antananarivo The institution has grown rapidly and established a network of 14 branches covering much of the vast territory of the island. Their purpose is to provide financial services to a wide range of people who are excluded from the banking system. The kinds of people they help range from the micro-entrepreneur with an informal activity (trade necessities, small artisans, ...) to SMEs established


    MicroCred Madagascar aims to provide financial services to micro, small and medium Malagasy enterprises who are excluded from traditional banking systems. With this aim, they intend to improve the living conditions of their clients and their families and so hope that the economic development increases through this.


    It was determined on 30 June 2006 that MicroCred Madagascar was a limited company. Being a limited company means that there is a limitation to what investors and subscribers of the limited company have invested or guaranteed. This has enabled MicroCred Madagascar to start their microfinance activities and disburse their first loans. Their rapid development made them become the largest microfinance institution in Madagascar in terms of portfolio size and number of borrowers.

    In 2012, MicroCred Madagascar was granted a bank license, which enabled them to expand their business by offering savings, microinsurance and money transfer services to their customers.


    MicroCred Madagascar is present in major urban and peri-urban areas of Madagascar. Their range of services, include credit for micro, small and medium enterprises, savings accounts, microinsurance and money transfers.

    The profile of entrepreneurs

    Much of Madagascar’s population work in the informal sector. This means their activities are unregistered, insecure, and done from home (artisans) or itinerant (retailers). Woodworking is a popular activity that spans across the island and many customers of Microcred Madagascar are woodworkers. Trade is often organised in the areas where there are markets, near the main city entrances (for the movement of goods), thus giving MicroCred Madagascar many clients with stalls selling food products in the shopping areas.
    Key figures
    Legal status Territorial Bank
    Number of borrowers 16 630
    Gross loan portfolio 12 955 629 EUR
    Average loan size 1 210 EUR
    Average interest rate for borrower 3,6 % per month
    Number of loan officers 140



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