EUROPEAN 0 1 MICROFINANCE 0 2 Y ACTORS R O T C E R I D S WORKING IN R O T DEVELOPING C European Microfinance actors Directory is a publication of the European A Microfinance platform (e-Mfp). this edition has been prepared with the support E COUNTRIES of the Luxembourg Ministry of foreign affairs – Development cooperation. C N A GRAND DUCHY OF LUXEMBOURG N Ministry of Foreign Affairs FI DIRECTORY, O R Cooperation and Development Department C MAIN TOPICS I M copyright © European Microfinance platform, November 2010 N AND PRIORITIES A EuropEaN MicrofiNaNcE pLatforM E P 2 rue Sainte Zithe O L-2763 Luxembourg R tel: +352 2627 1355 g U ur [email protected] o E b www.e-mfp.eu m e x u L pt, e c n o c ISSN 2073-1531 3 12 Luxembourg, November 2010 this publication is protected by the law from the 18th april 2001 of the Grand Duchy of Luxembourg concerning copyright, databases and related laws. it is strictly forbidden to reproduce sections from this publication without the consent of the editor. the content is based on a survey on European microfinance actors working in developing countries and the information is taken from returned questionnaires for which the responsibility lies with the survey participants. EUROPEAN MICROFINANCE ACTORS WORKING IN DEVELOPING COUNTRIES DIRECTORY, MAIN TOPICS AND PRIORITIES ExEcutivE Summary 1. Key information was provided by 87 e-mFP members on their organisations in order to compile this Directory. NGOs continue to be the largest group of e-mFP members, followed by financial institutions, and consultants and support ser- vices. Several research institutes and government agencies are also part of the network. membership has both increased and diversified since the 2009 Direc- tory, with a particular rise in the number of consultants and support services. most members employ less than 20 staff, while almost a quarter employ more than 200. this signifies a higher staff-per-organisation ratio compared to 2009. 2. For most e-mFP members, either functioning as a network, providing a platform for networking, or being part of networks, is a vital aspect of their activities. currently, 23 organisations are networks themselves. additionally, many mem- bers are also active in various networks, on average three per member. this is less than in the 2009 Directory, due to the relatively smaller weight of NGOs in the total number of members. at the same time, many members also listed to cooperate with other e-mFP members. 3. in terms of regional focus, two thirds of all members are active in africa, fol- lowed by asia, Latin america, and finally Europe, where 40% of all members are active. many members have programmes that are open to all continents. cal- culated in number of actors per inhabitant, attention is fairly evenly distributed across Europe, africa and Latin america, while asia receives the least attention. the most prominent countries in this comparison are the comoros islands and montenegro, whereas china is the least covered. NGOs make up the majority of active members in all continents especially in africa where they have a strong presence compared to other peer groups. in Europe, financial institutions and consultant and support services are very active. 4. in general, members display a strong preference for a select number of small or mid-sized countries. this is evident in Latin america where central american and andes countries draw substantial support. in africa, most attention focused on various francophone West african countries and East africa. in asia, invest- ments by members centre on caucasus, central asian and several Southeast asian countries, such as the Philippines and cambodia. in Europe, investments are highly concentrated in the former yugoslav republics. it appears that larger states, notably Brazil, mexico, russia, Nigeria, india and china, receive relati- vely little attention. p | 3 EuropEan MicrofinancE actors 5. there is a correlation between member interest and countries’ poverty and development levels as indicated by their Human Development index ranking. However, this relationship is not straightforward, as more for-profit institutions have joined e-mFP and invest in countries where good returns on investment are achieved, be them rich or poor. at the same time, pragmatic considerations such as handling capacity on the ground and historical or cultural patterns of affiliation also play a role. 6. European actors employ a range of intervention types to achieve their aims. more than half of e-mFP members use investment products to do so, the majority of which are loans and equity. Guarantees also remain an important intervention type. the use of investment products is lower than in 2009, which is probably due to the higher number of consultancy and support services in e-mFP. Subsi- dies in money are also provided less often due to the higher number of commer- cial e-mFP members. available funding has a large range, from Eur 20,000 for the smallest grants, to Eur 450 million for loan or equity portfolios. 7. e-mFP members aim to make different contributions with their interventions, either towards mFi portfolios, to the organisation of the mFi they invest in, or to client satisfaction. the majority of contributions were aimed at investments in organisation, with specific contributions such as the organisation’s operation, and the development of appropriate systems and products. Within client satis- faction, business training and financial services were important aims. 8. interventions of e-mFP members are focused on different levels. On the macro level, members focus on areas such as regulation and supervision, but especially on capacity building for national microfinance sectors, client protection, suppor- ting networks and supporting national/regional microfinance support sectors. 9. On the intermediate level, several focus areas are distinguished, mostly around rural finance and value chain development. attention to rural development has greatly increased compared to the 2009 Directory. in addition to this, commu- nity finance, social impact, gender and urban finance also remain important. Less attention is focused on working with issues relating to health and Hiv/aids. Other difficult-to-serve populations, such as the ultra-poor or youth, mostly re- ceive attention from NGOs. also, compared to earlier years, the strong focus on social performance management appears to be reduced. 10. On the micro level, important intervention areas of members are financial pro- duct development, performance, mFi operations, and management information systems which are often related to providing capacity building and technical assistance. marketing, ratings, audits and graduation are areas of intervention p | 4 which are mentioned by fewer members. in addition to these three levels, aca- demic research, impact studies, and evaluations are core areas of intervention for some members while for others, such studies support programme activities by providing the information necessary for their investment strategies. 11. members expect different returns from their investments, which were grouped in terms of financial returns, either on equity, on interest, or in social returns. Social returns focused on two areas: sector deepening, with a specific focus on farmers and women; and social embedding of microfinance, where education and community work were frequently mentioned as the desired return. 12. the European microfinance offer is developing in two main directions: in depth and in breadth. in breadth, more organisations are entering the microfinance arena, in more markets, and in more areas of intervention. this diversity indi- cates comprehensive investment and support strategies. a potential downside is a lack in industrial coordination and institutional specialisation. at the same time, e-mFP members are striving to deepen the sector by piloting innovative new products and delivery methods, by researching impacts, by better integra- ting social performance, and through new partnerships and platforms for coo- peration. e-mFP has an important role to play in both developments: to improve coordination in an increasingly broad industry; and to facilitate innovative colla- boration and learning. p | 5 FOrEWOrD i am very pleased to present you with this update of the Directory of European actors working in microfinance in developing countries. this is already the third version of this important document; earlier versions were published in 2005 and 2009. as our platform continues to grow, both in number and variety of members, it is appropriate to update the Directory at this juncture. We anticipate that future adjustments will be added via our website, ensuring accurate and up-to-date information. the primary purpose of this Directory is to provide a ‘Who’s Who’ for microfinance. it offers practitioners a tool with which they can ascertain who is doing what in the microfinance sector, where they are doing it, and through what means. Our hope is that it will enhance cooperation and coordination, thus promoting synergy amongst e-mFP members and beyond our platform. i am also pleased to note that we have welcomed new microfinance actors into our network. the diversity and complementary nature of our membership makes e-mFP a unique platform with significant impact for the microfinance sector. Nevertheless, the Directory also indicates that some members continue to work in isolation; so- metimes on topics or in areas where collaboration can improve the efficiency and effectiveness of interventions. at the same time, other areas or regions appear under- served. Existing cooperative ventures between e-mFP members have clearly shown the relevance of joining forces and the benefits that accrue to microfinance clients as a result. this Directory and more broadly the e-mFP, aims to facilitate the emergence of such collaboration. the microfinance industry continues to face volatile and uncertain financial systems, while its clients operate in unpredictable environments of climate change and in- come and price fluctuations. as the microfinance sector has become highly diverse in products, players and clients, it has in fact achieved a prominence that few of us would have envisaged a decade ago. that said, this Directory is also produced in a time of reflection on the role of microfinance and we have clearly seen this is in the concerns and priorities listed by our members. However, they also came forward with exciting new directions, alliances that have been built, and continuing technological progress facilitating the work of practitioners. p | 7 EuropEan MicrofinancE actors i would like to invite you all to join e-mFP in taking the current challenges and their impact on microfinance head-on. Our ambition is that by joining forces, we can harness our commitment to ensure that ever more people will have access to affordable and appropriate financial services. Lastly, i wish to express my sincere appreciation to the Blue rhino team and the e-mFP Secretariat who compiled this Directory. axel de ville chairman e-mFP p | 8