Microfinance Focus, Jan 30, 2010: IFC and the World Bank Institute are helping bankers develop financial products to improve access to finance for small and medium enterprises.

IFC, the investment arm of the World Bank, in collaboration with the government of Japan and the World Bank Institute, organized training for bankers in Dhaka from January 25 to January 28.  Thirty three bankers and trainers from 20 institutions from Nepal, Bhutan, Sri Lanka, India and Bangladesh participated in the program, which included sessions essential to building a sustainable SME banking business such as product design, credit risk management, and support functions.

Small and medium enterprises, accounting for more than 90 percent of registered companies in the world, are a major driver for economic growth and job creation.  Their role is even more important in the post-crisis period.  Yet small businesses often lack access to financial products and services, especially in developing countries.  IFC advises financial services providers on how they can profitably develop operations for small and medium businesses and increase their access to financial services.

“Supporting SMEs fosters sustainable economic growth and creates jobs,” said Ian Crosby, Manager, IFC Advisory Services in South Asia.

“In many countries the majority of jobs are provided by SMEs.  They are vital  to national economies and need access to financial services to increase productivity of their business, develop new markets, and hire more people.  said Peer Stein, Global Business Line Leader of IFC’s Advisory Services in Access to Finance. “These trainings provide banks working with SMEs the specific skills and knowledge to implement or enhance their SME Finance programs.

By Nagesh Narayana

Microfinance Focus, Jan 30, 2010: Zurich Financial Services Group (Zurich) has announced that its Z Zurich Foundation will support the International Labour Organization (ILO)’s Microinsurance Innovation Facility with a contribution of CHF 3 million (US$2.83 million) to facilitate innovative approaches to provide better insurance cover to low-income people.

The facility will provide grants to organizations involved in microinsurance. The grant applications will be reviewed using the facility’s existing selection process and the best 5 to 7 projects selected will be closely monitored over a 3 to 4-year period. Results and learnings will be widely disseminated to assure the broadest possible usage of the gained insights.

The Z Zurich Foundation aims to equip people with the knowledge and resources to better manage change and risk in their lives and in the world around them. On a strategic level it develops long-term partnerships with selected Non-Profit Organizations. The Foundation’s focus is on the inter-linked challenges of climate change, water scarcity, food security and economic development, combining Zurich’s global experience and risk management capabilities with the Non-Profit Organizations’ local knowledge and sustainable development expertise. Current partners are UK-based Practical Action, US-based Rainforest Alliance, and the Swiss-based International Federation of Red Cross and Red Crescent Societies (IFRC).

One of the major focus areas of microinsurance services is on streamlining and/or eliminating scale and efficiency challenges, specifically:
a) the enrolment and premium collection from persons in remote areas and /or who may not have bank accounts,
b) the management of large numbers of small policies and small claims, and
c) the integration of multiple actors who work together to provide the insurance service.

“We believe it’s critical to our long-term business success to play our part in delivering sustainable, long-lasting solutions to important and relevant economic, social and environmental challenges. In these difficult times of market recovery, it is important to underpin our commitment to corporate responsibility and actively support the development of better insurance services for the less fortunate”, said Martin Senn, Zurich’s Chief Executive Officer and Chairman of the Foundation’s Board.

Microfinance Focus, Jan 30, 2010: Microfinance leaders from 35 countries have already registered for the Africa-Middle East Regional Microcredit Summit to be held April 7-10, 2010 in Nairobi, Kenya.  The Summit will be the largest microfinance gathering ever held in Africa and the Middle East.  Her Royal Highness Princess Máxima of The Netherlands, one of the keynote speakers, will join Nobel Peace Prize Laureate Muhammad Yunus, BRAC Chair Fazle Abed, CARE CEO Helene Gayle, and Kenya’s Deputy Prime Minister and Finance Minister Mr. Uhuru Kenyatta at the Summit in Nairobi.   Last September, UN Secretary-General Ban Ki-moon appointed Princess Máxima as Special Advocate on Inclusive Finance for Development.

The Summit program, which will showcase microfinance innovations, has just added three new workshops: “Mobile Banking: What is the Cutting Edge?”, “Obtaining Funds from New Financial Instruments and Mechanisms for both the Fully Commercial and Emerging Microfinance Institution,” and “Process of Designing and Implementing a National Strategy for Financial Inclusion: Challenges and Lessons Learned.”

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Note: The Early Bird Registration deadline has been extended to February 10, 2010. For additional details on the Summit, and to register, please visit: www.regionalmicrocreditsummit2010.org.

By Nagesh Narayana

Microfinance Focus, Jan. 30, 2010: In the past, microfinance services have helped to empower and provide stability for poor Haitians but the need is far greater now with the 7.0 magnitude earthquake devastating the nation on January 12 and leaving 200,000 dead. Those who survived were left without food and water for days and many children became orphans overnight.

Interestingly, many microfinance institutions were among the first to take up the task of providing relief to survivors and coordinate relief efforts all over the Carribeean nation. Grameen Foundation and their local Haiti partner Fonkoze have successfully helped families recover from the natural disaster in Haiti.

Despite the devastation, Fonkoze has been able to quickly reopen 37 of its 42 branches, including the main branch in Port-au-Prince. Within the first week of re-opening these branches, Fonkoze delivered more than $1 million in remittances and savings to Haitians. The MFI’s tenacious leader, Anne Hastings, worked quickly to bring in an additional $2 million from its account at the City National Bank of New Jersey, working through a unique collaboration of the United Nations, USAID, the U.S. State Department, the U.S. Department of Defense, and City National Bank.

Overcoming insurmountable odds, the U.S. military and the United Nations then helped Fonkoze devise a plan to drop bags of money at designated rural locations for pick up by Fonkoze’s rural branches. The money traveled from City National Bank of New Jersey to Miami where it was picked up by a military C-17 en route to Port-au-Prince. Helicopters were used to drop discretely packed boxes of money to Fonkoze branch locations. The deliveries enabled branches to continue to pay out money sent from abroad and withdrawals from savings accounts.

ACCION joins Haiti partner SOGESOL

ACCION too responded to the devastation in Port-au-Prince. “The capital is no more,” said Cassandre Dupont, ACCION Resident Advisor to our Haitian microfinance partner SOGESOL, who was fortunate to escape from SOGESOL’s headquarters in Port-au-Prince during the devastating earthquake. Unfortunately, the quake has left no one untouched. ACCION and SOGESOL are now working hard to search for missing staff members and locate the institution’s thousands of microentrepreneur clients to help them rebuild their shaken futures.

WORLD VISION never lost sight of child victims

Another microfinance institution World Vision, a Christian humanitarian charity organization that is dedicated to working with children, families, and their communities worldwide moved in and despatched its staff to rescue people still caught in the debris. World Vision began distributing relief supplies less than 24 hours after Haiti’s 7.0 magnitude earthquake struck January 12. The organization continues to distribute food and supplies, as well as support medical efforts and encourage the protection of children following the crisis. In the United States, World Vision is appealing to Americans to raise $50 million to fund relief and rebuilding efforts in Haiti.

FINCA International intensifies relief efforts

Realizing that Haiti is in great need of financial assistance and guidance as the country recovers from the earthquake and rebuilds, FINCA International with 20 years of presence in Haiti serving clients with their Village Banking method. Members of their offices were evacuated from Port-au-Prince and Fortunately all their 180-memeber staff were safe, and showed up for work the day after the quake to help their clients. As relief efforts unfolded, companies who contribute to FINCA’s microfinance programs share that optimistic view and stand by FINCA and it’s clients, anxious and hopeful that this disaster has not damaged Haiti’s newly found entrepreneurial spirit.

Economic growth has been challenging in Haiti, years of civil unrest, government corruption, and natural disasters have taken a significant toll. “It has often been difficult to raise money for Haiti as the country is so poor. Ironically, the need is so, so great,”

said Diane Jones, FINCA’s Communications Manager. “In many ways, the world had turned it’s back on Haiti until recently.” A slight increase in Haiti’s GDP in the last few years is attributed to intervention from non-governmental organizations which aid in the stabilization of government. However, a majority of Haiti’s population still exist in abject poverty made more desperate by the devastation caused in the 7.0 earthquake.

“The relief effort is intense right now, and we know that Haiti needs food, water and medicine immediately, but Haiti will also need foundational support for it’s economy,”says Kat Fitzgerald, Director of Communications at Brown Paper Tickets, one of FINCA’S contributing companies. “Brown Paper Tickets has chosen microfinance as part of our corporate giving program because it brings about such a fundamental change, one that we hope makes a society more resilient even at times like these, but really it’s a long term investment. We know it can never replace the critical humanitarian efforts to bring food, water, and shelter to a desperate people. In the long term, we believe microfinance will empower the Haitian people to grab opportunity, rebuild, and turn the rubble into a future for their children.”

Brown Paper Tickets donates 5% of it’s profits to charitable organizations and FINCA, allows customers to participate in the giving process at the end of each online transaction when ticket buyers select a charitable category. By selecting microfinance, a portion of those funds are directed to FINCA and similar organizations. “These monies won’t stop after helping one group or even one city,” says Fitzgerald. “As the loans are repaid they are re-loaned making a difference with the same dollar over and again. When a customer allocates 5% of a ticket sale’s profit to microloans it may not seem like much, but when it stays in the microloan system, the pennies add up and it can help thousands of people climb out of poverty and then raise up their communities. That’s the power village banking holds for Haiti.”

ESPARANZA raises funds from sports bodies

As the impact of Haiti’s earthquake became known to the entire world, even sportspersons and Hollywood actors came out to lend a helping hand to the tiny nation. Major League baseball players on Thursday pledged their long-term support of relief and recovery efforts in Haiti by committing up to $ 1 million from the Major League Baseball Players Trust. Beginning with immediate $100,000 contributions each to Esperanza International and Medicines for Humanity, over the next five years the Players Trust will provide grants totaling up to one million dollars to support the efforts of non-profit organizations working to help Haiti recover from the devastating effects of the earthquake.
Esperanza has been working in Haiti since 2005 and is leading a coordinated rapid response effort of over 150 local organizations, providing food packs, water, bedding and hygiene kits to thousands of families. Esperanza plans to help Haiti’s economic development efforts by growing their established microfinance program and providing housing and educational opportunities to the children.

Actor Jackman joins hands with World Vision

Hollywood actor Hugh Jackman has taped a series of public service announcements urging support for humanitarian agency World Vision’s Haitian earthquake relief response. The announcements will air on television stations and on social media platforms in the United States, Australia, the United Kingdom, Canada and other countries where the aid group is fundraising for its Haiti response.
“The earthquake in Haiti left thousands of children homeless and vulnerable,” said Jackman. “World Vision aid workers have been rushing life-saving relief to survivors. Join me in standing with the people of Haiti.” In the United States, World Vision is appealing to Americans to raise $50 million to fund relief and rebuilding efforts in Haiti.

By Nagesh Narayana

Microfinance Focus, Jan 29, 2010: Australia will provide $2 million over the next three years for the Pacific Financial Inclusion Program (PFIP) to facilitate micofinance and help increase access to financial services among low income, rural and remote households in Pacific Island communities.

PFIP is a Pacific-wide program helping provide sustainable financial services to low income and rural households. It was established in 2008 with funding from the United Nations Capital Development Fund, European Union and the United Nations Development Programme.

The Program works with microfinance institutions and financial service providers to help them deliver better quality services to more people, including the poor, many of whom have not had access to banking before.

Access to microfinance and banking services, including savings and deposit services, credit and loans and insurance services is increasingly being seen as important to reducing poverty and achieving the Millennium Development Goals. Greater access to banking services also allows for more cost effective remittance flows to Pacific households from places like Australia and New Zealand.

‘I have been impressed with the support provided already through this Program to increase Pacific Islanders’ access to financial services, such as savings, credit and money transfers,’ Parliamentary Secretary for International Development Assistance Bob McMullan said.

‘Australia’s support for this Program demonstrates our commitment to help broaden access to financial services across the Pacific,’  McMullan said.

Australia’s assistance for the Program is consistent with the 2009 Cairns Compact on Strengthening Development Coordination in the Pacific, which recognises that private sector-led growth is essential to development progress, and notes that donors should encourage the private sector, including through microfinance.

By Nagesh Narayana
Microfinance Focus, Jan. 29, 2010: The  First MicroFinance Institution, part of the Aga Khan Agency for Microfinance, has opened its Syria’s (FMFI-S) newest branch in Maysat, in the northern part of Damascus, on Thursday.

The new branch will expand services offered to marginalised segments of the population with the aim of providing more poor people with financial services. According to studies undertaken by the International Finance Corporation (IFC) and KfW Bankengruppe (KfW), an estimated 260,000 to 420,000 households in Syria require access to microcredit for business purposes. One million households require credit for non-business purposes such as housing, education and medical care. FMFI-S is the largest provider with over 14,500 loans.

“This is another forward step in our plan to focus on making financial services accessible to everyone, helping to include the poor and marginalised segments in the economic cycle,” said Jacques Toureille, General Manager of the Aga Khan Agency for Microfinance (AKAM) who also attended the opening ceremony.

FMFI-S is the leading private-sector microfinance provider in Syria. Originally established in 2003 as a microfinance programme, FMFI-S completed its transition to a deposit-taking institution in October 2008. Over the next five years, FMFI-S’s network will grow to 23 branches throughout the 14 Syrian Governorates. Its network-wide portfolio is also expected to grow to over 86,000 loans.

In order to enable the bank’s expansion, the government has recently approved the entry of capital from foreign entities into FMFI-S. In the coming months, KfW, the International Finance Corporation, and the European Investment Bank will become shareholders of the institution so that FMFI-S can expand its financial services to the poor in Syria.

FMFI-S is a part of AKAM, which currently operates microfinance institutions in 14 countries throughout Asia and Africa. AKAM is a private, international, non-denominational and non-profit development agency that strives to assist vulnerable populations by providing them with a range of financial services. AKAM’s ultimate aim is to help enhance the quality of life and improve economic security.

Syrian Deputy Prime Minister Dr. Abdullah Dardari opened the branch in the presence of the Governor of the Central Bank of Syria, Dr. Adeeb Mayaleh, and the Aga Khan Development Network (AKDN) Resident Representative in Syria, Mr. Mohamed Seifo, said a press release.

Microfinance Focus, Jan. 29, 2010: IFC, the World Bank’s investment arm, has signed a long-term agreement with Sistema Integral de Abasto Rural, SA CV (Mi Tienda) to help the Mexican distribution company, known as Mi Tienda, expand its operations.

IFC’s $2.5 million investment will help create more than 900 direct jobs and sustain the livelihoods of more than 25,000 rural retail store owners, most of whom are women.

The proposed project consists of the expansion of Mi Tienda through the development of 36 distribution centers. The centers will target rural retail stores located in 14,740 villages with average populations of less than 5,000 inhabitants, reaching a total of 4.7 million Mexican households.  IFC will provide long- term equity financing to support the company’s expansion and affiliation program.

The project is expected to have a high development impact on micro, small, and medium enterprises  in the rural parts of Mexico.  It will contribute to the development of rural retail stores by expanding the assortment of products and providing new store layouts.

“This innovative retail project has an immense potential for a high development impact by reaching out to the rural population and enhancing access to finance for women MSME entrepreneurs,” said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.

The affiliation program will foster private sector development by providing training in inventory management, accounting, and working capital management.  It also will reduce working capital needs and provide access to credit by offering payment facilities to the stores.  While catering to the basic  needs of the population such as food and consumer goods, Mi Tienda’s distribution system also will also provide a platform for services such as insurance, payment of utility bills, branchless banking, and micro-credit.

Jose Ignacio Avalos, Mi Tienda’s founder , said, “We value highly  IFC being part of the Mi Tienda project.  IFC’s investment will help us generate a systemic change in Mexican retailing, resulting in improved services and accesibility to a wider range of products at affordable prices for rural communities: the underserved  populations.”

By Nagesh Narayana
Microfinance Focus, Jan. 29, 2010: World Bank’s investment arm IFC has announced a $100 million equity investment in Lebanon’s Byblos Bank to help increase access to finance for small and medium enterprises and to expand the bank’s operations to frontier countries in the Middle East and Africa.

This investment will help Byblos pursue its strategy of becoming a significant financial group, with a broader network of banks and financial institutions in frontier and emerging markets. IFC also plans to further support Byblos by providing trade finance guarantees and helping strengthen the bank’s corporate governance.

“IFC’s investment in Byblos Bank shows IFC’s confidence in the strength of our bank and its management,” said Dr. Francois Bassil, Byblos Bank Chairman. “Byblos Bank enjoys a high capital adequacy ratio, both by Lebanese and international standards, and IFC’s investment will further strengthen our bank’s capital base and allow us to pursue our expansion strategy on solid grounds.”

Michael Essex, IFC Director for the Middle East and North Africa, said, “Access to long-term finance for the private sector in Lebanon remains limited. We hope our investment can act as a catalyst to bolster confidence and encourage needed investment in the Lebanese financial sector, which in turn will increase access to finance for individuals and entrepreneurs.”

Byblos Bank is the third-largest bank in Lebanon and has 10 overseas locations. It is looking to expand further into markets in the Middle East and in Africa, particularly in frontier regions.

IFC has been active in Lebanon’s financial sector in recent years, providing trade finance lines to a number of banks and investment and advisory services. In fiscal 2009, IFC committed over $184 million in trade finance to Lebanese banks.

By Nagesh Narayana
Microfinance Focus, Jan. 28, 2010: PlaNet Finance, the Banque Populaire Group and Sogeti will organize the Second Global Conference on Microfinance and New Technologies on March 11 and 12, 2010 in Marrakech.
“New technology represents a key driver for the evolution of the microfinance sector: its use could result in doubling the number of microentrepreneurs, beneficiaries of microfinance, to 300 million worldwide, said a statement from the organisers.
The microfinance market in Morocco appears promising for providers of technology solutions attracted to the sector.

The venue is Royal Mirage Hotel in Marrakech on the theme “Which models are best placed to increase access to financial services for the unbanked?”
An international ideas exchange and networking event for leading decision makers in new technologies and microfinance fields.
The second Microfinance and New Technologies Summit (MFNT) is a key event for decision-makers in the technology and microfinance fields.
After the inaugural event in India in 2008, its principal objective is to reinforce the synergies between the two sectors in order to develop the use of Information and Communication Technologies (ICT) in the
microfinance sphere.
The summit will try to address the subjects like:
- Which management information systems for microfinance?
- What technological solutions are available to improve microfinance institutions’ performance?
- Mobile banking and microfinance: what is the most efficient use?
Around 50 international experts are expected to speak at the conference, including representatives and consultants from
microfinance institutions, IT and telecommunications companies, banking and money transfer sectors, regulatory authorities, public and private investors and international development agencies.

Around 250 decision makers from around the world are expected to attend.
Both national and international exhibitors will be showcasing their products and services, said the statement.

By Nagesh Narayana
Microfinance Focus, Jan. 28, 2010: The U.S. government has put cash in the hands of Fonkoze, the largest microfinance institution in Haiti, in a mission that required close cooperation of the U.S. military, the United Nations and multiple U.S. government agencies, said posting on US government website.

In the wake of the devastating earthquake that hit Haiti on January 12, Fonkoze was the only bank able to stay open for customers making withdrawals and receiving money transfers. While goods were available for purchase in Port-au-Prince and other locations, many people had no money and commercial bank automatic teller machines were not functioning, according to news reports.

As Fonkoze grew short of cash, its chief executive, Anne Hastings, developed a plan to retrieve $2 million in its reserves from City National Bank of New Jersey (CNB) and distribute the cash to the 34 Fonkoze branches still operational in Haiti. The plan would require tight logistics and a military escort.

“We got an urgent request for help” on Friday morning, said Jennifer Harris, a member of Secretary of State Hillary Rodham Clinton’s policy planning staff. Fonkoze wanted to withdraw the cash that day, before the banking window closed at 5 p.m.

The mission was approved at 4:52 p.m. on Friday, with consent from officials from the U.S. military, the United Nations and the U.S. Agency for International Development (USAID) and with advice from the Federal Reserve, Harris said. By 5:17 p.m., funds had been transferred from CNB to JP Morgan Chase in Miami, divided into 34 packets of cash and placed in office supply boxes to camouflage the contents.

An armored truck took the boxes to Homestead Air Force Base in Miami, where a C-17 military aircraft picked them up and took them to Haiti overnight, for distribution by military helicopter on Saturday morning.

“We are indebted to many individuals and government agencies that helped make this happen,” Fonkoze President John Mercier said in a statement on the Fonkoze Web site. Mercier mentioned “unprecedented cooperation from civilian government, the military and civil society, including Fonkoze — toward the end of ensuring that rural Haitians have access to their own resources so they could begin the process of rebuilding their country.”

While $2 million may not seem like much, Fonkoze’s distribution network is unmatched in reaching into the population of Haiti, especially the poor and underserved, Harris said. Fonkoze serves more than 55,000 women borrowers, more than 175,000 savers and 1 million families who receive remittances from relatives and friends abroad.

“Fonkoze is essentially the way in which Haiti’s most vulnerable populations get cash,” Harris said. “They have a reach in that population that it would take years to recreate if they went under. As a priority of stabilizing the banking sector, Fonkoze matters as much, if not more than … the Citibanks and Sogebanks.”

Traditional commercial banks have begun to reopen in Port-au-Prince, and at least one was limiting withdrawals in order to have enough cash for the long lines of customers, according to news reports. The earthquake killed at least 111,400 people and displaced 1 million, according to a fact sheet from USAID, which has been distributing blankets, kitchen sets, water purification tablets, fuel and other relief supplies. Food prices outside Port-au-Prince have doubled.

Harris expressed gratitude for the efficient military response to Fonkoze’s request for help. “They jumped in, and it was amazing to see them turn this around on absolutely zero formal notice,” she said.