EUROPEAN MICROFINANCE ACTORS WORKING IN DEVELOPING COUNTRIES DIRECTORY, MAIN TOPICS AND PRIORITIES 2013 EUROPEAN MICROFINANCE ACTORS WORKING IN DEVELOPING COUNTRIES DIRECTORY, MAIN TOPICS AND PRIORITIES 2013 EEuurrooppEEaann MMiiccrrooffiinnaannccEE aaccttoorrss -/ 22001133 FOREWORD We are very pleased to present you with this related issues. Existing cooperative ventures update of the ‘Directory of European Actors between e-MFP members have clearly shown the Working in Microfinance in Developing Countries’. relevance of joining forces and the benefits that It is the fourth edition of this important document; accrue to microfinance clients as a result. This earlier versions were published in 2005, 2009 Directory and more broadly the e-MFP, aims to and 2010. As the European Microfinance Platform facilitate the emergence of such collaboration. (e-MFP) continues to grow, both in number and The microfinance industry continues to face variety of members, it is appropriate to update volatile and uncertain financial systems and the Directory at this juncture. We anticipate that closer scrutiny from policy makers, the press and future adjustments will be added via our website, the general public on its impact, while its clients ensuring accurate and up-to-date information. operate in unpredictable environments of climate The primary purpose of this Directory is to change and income and price fluctuations. As the provide a ‘Who’s Who’ for microfinance. It offers microfinance sector has become highly diverse practitioners a tool with which they can ascertain in products, players and clients, it has in fact who is doing what in the microfinance sector, achieved a prominence that few of us would have where they are doing it, and through what means. envisaged a decade ago. That said, this Directory Our hope is that it will enhance cooperation and is also produced during a time of reflection on the coordination, one of e-MFP’s main aims - thus role of microfinance, fair practices, performance promoting synergy amongst e-MFP members and and financial inclusion. We have clearly seen this beyond our platform. in the priorities listed by our members in terms of social impact, interest rates and client protection. We are also pleased to note that we have welcomed Moreover, they also came forward with exciting many new microfinance actors into our network. Of new directions, such as; linking microfinance to the 114 full and associate members of e-MFP, 104 environmental sustainability, social business and provided information for this Directory; 37% NGOs, fair work, and continuing technological progress to 24% financial institutions, 17% consultants and facilitate the work of practitioners. support services, 10% government agencies 5% researchers and 8% other types of organisations. We invite you all to join e-MFP in taking the current The diversity and complementary nature of our challenges and their impact on microfinance membership makes e-MFP a unique platform for head-on. Our ambition is that by joining forces knowledge sharing and joint collaboration. This and identifying key challenges to be faced such can have a significant impact for the microfinance as increasing outreach to client groups that sector. continue to be underserved, we can harness our commitment to ensure that ever more people The Directory presents many useful insights; will have access to affordable and appropriate many members are active in areas such as rural financial services. Lastly, we wish to express our and value chain finance, social impact, client sincere appreciation to the Blue Rhino team who protection - indicating opportunities to build on compiled this Directory. synergies with others. Collaboration can improve the efficiency and effectiveness of interventions by compiling and making available the vast knowledge that is present among our members. At the same time, it is also clear that other areas or regions appear underserved and could be the focus of new activities, such as in microfinance for the poorest- Cécile Lapenu, e-MFP Acting Chairwoman of-the-poor, post-conflict development and health- Christoph Pausch, e-MFP Executive Secretary p. 3 EuropEan MicrofinancE actors - 2013 TABLE OF CONTENTS Foreword ..........................................................................................................................................................................3 Table of contents ...........................................................................................................................................................5 Executive summary .......................................................................................................................................................7 1. Introduction ............................................................................................................................................................13 1.1 Objectives .........................................................................................................................................................13 1.2 Methodology and process .............................................................................................................................13 1.3 Research team .................................................................................................................................................13 2. Introducing the e-MFP members .......................................................................................................................14 2.1 Institutional typology .....................................................................................................................................14 2.2 Countries of incorporation of e-MFP members ........................................................................................16 2.3 Resources .........................................................................................................................................................17 2.4 Networking ......................................................................................................................................................18 3. Regions of intervention ........................................................................................................................................20 3.1 Introduction .....................................................................................................................................................20 3.2 Africa .................................................................................................................................................................21 3.3 Latin America ..................................................................................................................................................24 3.4 Asia ....................................................................................................................................................................25 3.5 Europe ...............................................................................................................................................................27 3.6 Oceania and programmes open to all regions ..........................................................................................29 3.7 Global scores ...................................................................................................................................................30 4. Types of intervention ............................................................................................................................................31 4.1 Introduction .....................................................................................................................................................31 4.2 Investment products and financial assistance .........................................................................................31 4.3 Subsidies in staff time ..................................................................................................................................32 4.4 Expected contributions from interventions ...............................................................................................34 5. Main areas of intervention...................................................................................................................................37 5.1 Macro level .......................................................................................................................................................38 5.2 Intermediate level ...........................................................................................................................................41 5.3 Micro level ........................................................................................................................................................45 5.4 Other themes ...................................................................................................................................................49 6. Expected returns on investment ........................................................................................................................51 6.1 Financial return ...............................................................................................................................................51 6.2 Social return ....................................................................................................................................................52 7. Conclusions ............................................................................................................................................................55 7.1 e-MFP – a platform in development ...........................................................................................................55 7.2 Microfinance – delivering results ................................................................................................................56 7.3 Microfinance – a widening scope ................................................................................................................56 7.4 Microfinance – providing the right support ...............................................................................................58 7.5 Microfinance – a continued need for cooperation ...................................................................................58 p. 5 EuropEan MicrofinancE actors / 2013 Appendix A: Regions of intervention ......................................................................................................................59 Africa .........................................................................................................................................................................59 Latin America ..........................................................................................................................................................59 Asia ............................................................................................................................................................................60 Europe .......................................................................................................................................................................60 Oceania .....................................................................................................................................................................60 Open to all regions .................................................................................................................................................61 Appendix B: Type of intervention ............................................................................................................................62 Equity ........................................................................................................................................................................62 Loans .........................................................................................................................................................................62 Guarantees ...............................................................................................................................................................62 Subsidies in money ................................................................................................................................................63 Subsidies: technical assistance / capacity building, evaluations ................................................................63 Subsidies: research / information dissemination ............................................................................................63 Subsidies: policy advice / development / lobby ...............................................................................................64 Subsidies: networking / (donor) coordination ..................................................................................................64 Appendix C: Areas of intervention ..........................................................................................................................65 Macro ........................................................................................................................................................................65 Intermediate ............................................................................................................................................................68 Mico ...........................................................................................................................................................................72 Other themes ...........................................................................................................................................................77 Appendix D: Organisation entries ...........................................................................................................................79 Member information – Organisation entries .....................................................................................................79 Associate members - individuals ......................................................................................................................193 Appendix E: Type of organisation .........................................................................................................................194 Consultants and support services .....................................................................................................................194 Government / public agencies ...........................................................................................................................194 NGOs .......................................................................................................................................................................194 Researchers ...........................................................................................................................................................194 Financial institutions ...........................................................................................................................................195 Other .......................................................................................................................................................................195 p. 6 EEuurrooppEEaann MMiiccrrooffiinnaannccEE aaccttoorrss -/ 22001133 ExECUTIVE SUMMARY 1. Key information was provided by 91% of the relative terms, NGOs especially have a strong e-MFP member organisations (104 out of the presence compared to their other peer groups 114 full and associate members) in order to in Africa, Asia and the Americas, while in compile this Directory. The questionnaires Europe, financial institutions and consultant they returned were used as the basis for this and support services are very active. Directory. Where necessary the data were 7. In general, members display a strong preference complemented with information from their for a select number of small or mid-sized websites and other online resources. countries. This is evident in Latin America 2. Although their share in total membership is where Central American and Andes countries changing, NGOs continue to be the largest draw substantial support. In Africa, most group of e-MFP members, followed by attention is focused on various francophone financial institutions, and consultants and West African countries, several fast growing support services. Several research institutes countries in Eastern Africa and South Africa. and government agencies are also part of the In Asia, investments by members centre on network. Membership has both increased Caucasus, Central Asia and several Southeast and diversified since the 2010 Directory, Asian countries, such as the Philippines and with a particular rise in the number of Cambodia. In Europe, although investments financial institutions and several new types are still concentrated in the former Yugoslav of consultancy and support services such as republics and the Balkans, there is a decrease technology providers and an increase in the in the numbers of e-MFP members active number of rating, accounting and law firms. when compared to the 2010 Directory. We are happy to inform that there is now also a focus 3. Most e-MFP members are incorporated in on a substantial number of countries which Northern Europe, with more than 50% located were still “white spots” (where there is little in Luxembourg, The Netherlands, France and or no microfinance activity) in 2010: Bhutan, Belgium. Many members are also based in Myanmar, Trinidad & Tobago, Liberia, the Germany, Italy, Switzerland and the UK. Central African Republic, Sao Tome & Principe, 4. e-MFP membership is very diverse in terms of Mauritius, Botswana, and Reunion. resources. More than half of e-MFP members 8. Calculated in number of members per employ fewer than 50 staff members, while inhabitant, attention is fairly evenly distributed one third employ more than 200. For more than across Africa, Oceania and Latin America, half of the organisations, especially the smaller while Asia receives relatively less attention. The ones, most of their resources are dedicated to most prominent countries in this comparison microfinance activities. are Montenegro and Kosovo in Europe; Cape 5. Networking, either providing a platform Verde, Comoros, Benin, Togo and Senegal in for networking, being part of networks, or Africa; Nicaragua, El Salvador, Honduras and supporting networks is a vital aspect of the Bolivia in Latin America; and Mongolia and activities for many e-MFP members. Currently, Timor Leste in Asia. Larger states, notably 26 organisations have their own network. Brazil, Mexico, Russia, Nigeria, India, Pakistan Additionally, many members are also active in and China, receive relatively less attention. various networks, on average 3.2 memberships 9. There is a correlation between member interest per organisation. and countries’ poverty and development levels 6. 70% of the respondents are active in Africa, as indicated by their Human Development followed by Asia, Latin America, and Europe, Index ranking. However, this relationship is not where 45% of all members are active. In straightforward, as more for-profit institutions addition, many members have programmes have joined e-MFP and invest in countries that are open to all continents. Although be they rich or poor, where good returns on Africa remains the continent where the highest investment are achieved. Examples include share of members is active, this share has Ghana, Kenya, Egypt and South Africa in decreased compared to the 2010 Directory. In Africa; and Argentina, Mexico and Costa Rica contrast, there is an increase in the number of in Latin America. At the same time, pragmatic organisations focusing on Europe, as well as, considerations such as handling capacity on Oceania. NGOs make up the majority of active the ground and historical or cultural patterns of members in all continents, except Oceania. In affiliation also play a role. p. 7 EEuurrooppEEaann MMiiccrrooffiinnaannccEE aaccttoorrss // 22001133 10. European actors employ a range of intervention microfinance was included for the first time as types to achieve their aims. Almost half a topic, with 24% of total respondents being of e-MFP members work with investment active, mostly NGOs. products, the majority of which are loans and 14. On the micro level the concentration in equity. Subsidies in money and guarantees specific areas of intervention is less strong. also remain an important intervention type. In The main intervention areas of e-MFP comparison to the 2010 Directory, equity is members are financial product development, becoming relatively more important. However, MFI operations, performance, and strategic in general the percentage of members offering planning. Graduation of MFIs, and, ratings and investment products is lower than in 2010, external audits are areas of intervention which which could be due to the high number of are mentioned by fewer members. Particularly consultancy and support services in e-MFP. management information systems are less Subsidies in staff time also showed a decrease, often mentioned by the e-MFP members most likely because of the inclusion of more in comparison to the 2010 survey. Energy for-profits in the platform. These subsidies in products were included for the first time. staff time are often provided in the form of 31% of e-MFP members engage with energy technical assistance and capacity building. products. Funding available for these interventions shows a large range. 15. In addition to these three levels, impact, and, evaluation studies, as well as, academic 11. e-MFP members aim to make different research, are core areas of intervention for contributions with their interventions, either some members while for others, such studies towards MFI portfolios, to the organisation of support programme activities by providing the the MFI they invest in, or to client satisfaction. information necessary for their investment The majority of contributions were aimed at strategies. e-MFP members engage more in investments in MFI organisation, with specific both academic research as well as in impact contributions such as the organisation’s and performance studies. operation, and the development of appropriate systems and products. Within client 16. Members expect different returns from their satisfaction, support to social performance investments, which were grouped in terms of and financial literacy were considered most financial returns, either on equity or on interest, important. Next to this, direct additions to loan or in social returns. Social returns focused on capital also continue to be an important aim for two areas: sector deepening, where members members, especially of financial institutions. showed a specific focus on farmers and women; and social embedding of microfinance, where 12. Interventions of e-MFP members are education and community work were frequently focused on different levels. On the macro mentioned as a desired return. level, members focus especially on capacity building for national microfinance sectors, 17. The European microfinance contribution is supporting networks and associations, client developing in two main directions: in depth protection, and strengthening the microfinance and in breadth. In breadth, more organisations, support sector. Particularly strengthening the both commercial and non-profit, are entering microfinance support sector, client protection additional areas of intervention at different and interest rates & rate caps increased strongly levels and take on more diverse issues compared to 2010. within these areas. This diversity indicates comprehensive investment and support 13. On the intermediate level, several focus areas strategies. At the same time, e-MFP members are distinguished. e-MFP members give most are striving to deepen the sector by piloting attention to social impact and rural finance. innovative new products and delivery methods, In particular, attention to social impact and linking microfinance with other development youth has greatly increased compared to the goals, as well as, putting efforts into research 2010 Directory. In addition to this, value chain and impact evaluation studies. Moreover, there development and gender remain important seems to be an increased focus on social while business development services activities impact, both from non-profit and commercial increased. Less attention is focused on working organisations. e-MFP has an important role with issues relating to health and HIV/Aids. to play in both developments: to improve Other difficult-to-serve populations, such as coordination in an increasingly broad industry, the ultra-poor or youth, mostly receive attention and to facilitate innovative collaboration and from NGOs. However, it is interesting to note learning. that for youth, there has been a marked increase in activities compared to 2010. Environmental p. 8