by the MicroCapital Team -

SPECIAL REPORT: The “Financial Inclusion Compass 2019”: e-MFP to Launch 2nd Annual Survey of Financial Inclusion Trends

TrendsEuropean Microfinance Platform trends, trends, everywhere. Discussions about the trends underway in the financial inclusion sector dominate workshops and panel debates at all major conferences, as experts peer into crystal balls and extrapolate from what is currently happening in the sector to predict what will change in the years to come.

But too often, this sort of discussion just exists in that moment, for an audience in the room, and then vanishes into the ether. What if there was a more structured way to ask stakeholders what they see as the current and future trends, capture those responses and track them over time?

The e-MFP Survey of Financial Inclusioninaugural European Microfinance Platform (e-MFP) survey of financial inclusion trends was launched as a response to this question during the summer of 2018. The Financial Inclusion Compass 2018 – the paper that presented the findings from that survey of e-MFP members and other financial inclusion stakeholders – was released during European Microfinance Week (EMW) 2018 last November.

The Compass was conceived as a way to leverage e-MFP’s unique position as a knowledge hub within the sector, including by distilling some of the best debate from the annual EMW workshops. It gave a wide array of practitioners, investors, donors, academics and support service providers the opportunity – via a mixed-methodology online survey – to: (1) score and describe the importance of various Trends; (2) evaluate and give opinions on New Areas of Focus; and (3) provide open-ended qualitative input on sector challenges, opportunities, medium-term forecasts, financial service providers of the future, a policy-making “wish list” and longer-term hopes.

The results of the survey are

by the MicroCapital Team -

SPECIAL REPORT: Christoph Pausch on Why You Should Complete a (Simplified!) Application for the $112k European Microfinance Award 2019: Resilience to Climate Change

MicroCapital: European Microfinance PlatformWhy did you choose “Strengthening Resilience to Climate Change” as the theme of the 2019 European Microfinance Award?

Christoph Christoph Pausch, e-MFPPausch: Climate change is the biggest issue we face as a society today. At the mitigation level, action is slowly (too slowly) being taken to reduce global emissions. However, a sensible response must include adaptation too. How do we live – and more importantly, help the most vulnerable to survive – in a world with a very different climate than we’ve been used to?

We have chosen “Strengthening Resilience to Climate Change” as the theme of the Award this year because resilience to the consequences of climate change is critical for the groups who will be most affected by these consequences. These groups are largely financially excluded, and they overwhelmingly live in places that will be most affected by worsening flooding, drought, storms, erosion or pests. Climate change also disproportionately affects those who make their livelihoods from agriculture, forestry, livestock husbandry and fishing.

While this is an immense challenge, we recognize the

by the MicroCapital Team -

SPECIAL REPORT: Short-form Applications for $113k European Microfinance Award for Climate Resilience Due April 9

With European Microfinance Platforma new two-stage application process, the European Microfinance Platform (e-MFP) has opened the 2019 European Microfinance Award competition, which is themed “Strengthening Resilience to Climate Change.” Both financial institutions and their non-financial partners that serve vulnerable communities may apply through April 9 for the award, which includes a cash prize of EUR 100,000 (USD 113,000). Successful applicants will be invited to submit second-tier applications in early May. The winner will be announced during the 2019 European Microfinance Week, which will be held in

by Tiannah Steele -

SPECIAL REPORT: “Conference Report: European Microfinance Week 2018,” published by European Microfinance Platform (e-MFP)

This is a summary of a report presented by Laura Hemrika and Christoph Pausch; published by the European Microfinance Platform (e-MFP); March 2019; 92 pages available at:
http://www.european-microfinance-week.eu/_dbfiles/lacentrale_files/1000/1085/e-MFPrapport-2018-web.pdf

European Microfinance Week 2018 featured 450 attendees from 69 countries discussing a wide range of topics, focusing on “digital inclusive finance.” This included how to expand and improve

by the MicroCapital Team -

SPECIAL REPORT: European Microfinance Week; November 20 – 22, 2019: Save the Date

The European Microfinance PlatformEuropean Microfinance Platform (e-MFP) will hold the next European Microfinance Week from November 20 through November 22, 2019, at the Abbaye de Neumunster in Luxembourg. This will include the presentation of the European Microfinance Award. Details on how to participate

by the MicroCapital Team -

SPECIAL REPORT: Using SAM to Align Financing Needs, Social Impact in Mozambique

When Francisco Cuamba, Microbanco ConfiancaFrancisco Cuamba, the Finance Director of Mozambique’s Microbanco Confianca (pictured at left), came to Luxem­bourg for European Microfinance Week in November, he was very pleased to win a free registration to the 2019 SAM, which will be held in late October in Ouagadougou, Burkina Faso. Reflecting on the 2017 SAM in Ethiopia, he said, “My participation in SAM was an extremely important opportunity to meet different organizations from all over the world to share different experiences and meet some investors to which to present my organi­zation…. The type of investors we sign should be social investors that are not only concerned with the profitability of the investment, but also our extensive involvement in the development of

by the MicroCapital Team -

SPECIAL REPORT: Despite a “Solid” Willingness to Invest in Microinsurance, a “Terrifying” Lack of Coverage

On European Microfinance Platformthe last day of European Microfinance Week, Katharine Pulvermacher of the Luxembourg-based Microinsurance Network led a discussion on insuring people with daily incomes of USD 2 to USD 20. Those with lower incomes, she argued, will have to be covered by government safety nets.

Anup Singh of India-based consultancy MicroSave described the path to success in microinsurance as

by the MicroCapital Team -

SPECIAL REPORT: 15k Refugees in Uganda Receive Assistance via AirTel Mobile Money, Cutting Delivery Costs by 47%, Boosting Speed by 42%, Reducing “Money Truck” Problems: UNCDF Reports at European Microfinance Week

At European Microfinance Platformthis month’s European Microfinance Week in Luxembourg, Pamela Eser of the UN Capital Development Fund described her team’s rollout of mobile money to 15,000 refugees in Uganda and 1,800 in Zambia. Most refugees in these countries lack mobile phones, and very few of the participants had

by the MicroCapital Team -

SPECIAL REPORT: RUFI Crosses Border with Refugees from South Sudan, Opens Doors in Uganda; Breaking MFIs’ Stereotypes About Victims of Conflict – Insights from European Microfinance Week

Friday European Microfinance Platformat European Microfinance Week, Resi Janssen of Dutch NGO Cordaid described her institution’s Rural Finance Initiative (RUFI), which had been working in South Sudan when violence in 2016 caused most of its clients to flee to Uganda. With no license to accept deposits in Uganda, RUFI became an agent of Centenary Bank so it could continue to provide savings and other services to its customers – albeit in a different country – at a time of great need.

Not long after relocating, some of RUFI’s customers started asking how they could keep their children from being recruited as fighters. RUFI secured

by the MicroCapital Team -

SPECIAL REPORT: Savings Groups Notch Higher Returns When Not Supported by NGOs; Bank Linkages Correlate with Lower Repayment, More Dropouts

At European Microfinance PlatformThursday’s session on savings groups at European Microfinance Week, Roy Mersland of the Norway-based Center for Research on Social Enterprises and Microfinance (CERSEM) discussed the preliminary analysis his team made on the SAVIX database when it held information from 200,000 savings groups, drawing on data from 1,200 support projects.

The database has since grown to cover 424,000 savings groups – also known as village savings and loan (VSL) associations – with 9 million members in 75 countries, according to Hugh Allen of VSL Associates, the Germany-based coordinator of SAVIX. He estimates that a total 786,000 savings groups owned by 17 million members have been initiated by NGOs in 76 countries. An unknown number of additional

by the MicroCapital Team -

SPECIAL REPORT: Advans Cote d’Ivoire Wins $113k European Microfinance Award for Inclusive Finance Through Technology

Last European Microfinance Platformnight, Advans Cote d’Ivoire (CI), a microfinance institution in Cote d’Ivoire, won the European Microfinance Award 2018, which was themed “Financial Inclusion through Technology” and includes a cash prize of EUR 100,000 (USD 113,000). Advans CI, a member of the Advans Group, offers payment, saving and credit services that can be linked to MTN mobile money accounts. The cocoa farmers who are customers of Advans CI were having trouble with traceability and safety issues related to being paid by cooperatives in cash. They were also having trouble saving money from harvest time until the school year begins, resulting in low school enrollment. Advans CI responded by creating a

by the MicroCapital Team -

SPECIAL REPORT: Randomized Controlled Trial Shows Significant Impact from Financial Education in Uganda

On European Microfinance Platformthe first day of conference sessions at European Microfinance Week (EMW), Esther Nanjovu of German development agency GIZ demonstrated a portion of a two-hour financial training program that has been shown to benefit attendees in several ways. The program is participatory, with stations addressing personal financial management, savings, investment, debt management and the usage of financial services providers. The personal financial management component is taught using a display board on which learners can place and move cards representing various expenses and income sources. As a team, approximately 25 learners work together to create a prioritized list of expenses to help them appreciate the significance of their choices. In some cases, they even argue over whether certain cards – such as sports betting – are expenses or

by the MicroCapital Team -

SPECIAL REPORT: Matching Rules of Thumb with Clients in Eastern Europe and Central Asia: Financial Education at EMW

Today European Microfinance Platformat European Microfinance Week (EMW), Ewa Bankowska of the Microfinance Centre (MFC), a Poland-based network of approximately 100 microfinance institutions (MFIs), described her organization’s response to lackluster results from the financial education it has delivered to 200,000 people in 22 countries over 15 years.

Evidence suggests that changes in financial behavior are more likely when learners are given simple “rules of thumb,” such as putting a euro in a jar after every shopping trip. Based on this idea, MFC is developing a system to determine which rules of thumb should be suggested to which clients. The organization has drafted an online tool with 13 questions that categorize users into one of four categories. Based on the person’s category, she is given a

by the MicroCapital Team -

SPECIAL REPORT: Measuring the Impact of Energy Access, Bringing Climate Data into Agricultural Lending Methodologies with the Yapu App at European Microfinance Week

During European Microfinance Platformthe first day of European Microfinance Week, Natalia Realpe Carrillo of Germany-based social network platform Hedera and Giulia Corso of Germany-based MicroEnergy International discussed the World Bank’s Multi-Tier Framework for Measuring Energy Access and the Progress out of Energy Poverty Index. Key factors include whether energy sources are adequate, reliable, legal and safe. To address impact, it is important to consider factors such as families’ energy spending, income generation and reduction of carbon dioxide emissions. These frameworks also align with the work of the Netherlands-based Global Off-Grid Lighting Association.

Davide Forcella of the Centre for European Research in Microfinance (CERMi) walked attendees through a simulation using the Yapu app to make lending decisions for a smallholder farmer with and without crop and climate data. For example, the agricultural data included

by the MicroCapital Team -

SPECIAL REPORT: Green Inclusive and Climate Smart Finance Action Group Convenes on First Day of European Microfinance Week Regarding Its Green Index, Study Tour, Impact Measurement

The European Microfinance Platform60-member Green Inclusive and Climate Smart Finance Action Group, one of the European Microfinance Platform’s (e-MFP’s) five Action Groups, met today to drive forward agenda items such as the increased adoption of the Green Index. The Green Index is a tool for assessing the performance of microfinance institutions (MFIs) in four areas: policy and strategy; internal risk; external risk; and green loan products offered. Green loans can fund a range of purchases, from solar panels to waste management systems.

The coordinators of the Action Group also solicited ideas on new projects to take on during the next two years. Andre Harriman, CEO of the Zimbabwean arm of the UK-based Microloan Foundation, said that the rural women his institution serves are very interested in solar and other green products. However, he is wary of

by the MicroCapital Team -

SPECIAL REPORT: A Model from Cambodia for Preventing Overheating – Not Just Multiple Lending; to be Presented at European Microfinance Week; November 14-16, 2018

Since European Microfinance Platform2016, the 95-member Cambodia Microfinance Association (CMA), Incofin, MIMOSA, the Credit Bureau of Cambodia, and several other stakeholders have been developing the CMA Lending Guidelines, under which microfinance institutions (MFIs) are working together to prevent over-indebtedness in Cambodia. The project is funded by Incofin, PROPARCO, BIO, FMO and ADA.

MicroCapital: How long have you been concerned about possible overheating in the Cambodian microfinance market?

Kea Borann: Concerns of the market overheating started at least as early as 2015. Since then, the total outstanding portfolio of the industry has been growing at an average of 25 percent per year, even as the number of loans has remained unchanged at 2.3 million. This seems to mean that the same clients are taking on more debt when their loans are renewed. The average loan size grew from USD 1,691 to

by the MicroCapital Team -

SPECIAL REPORT: Advans Cote d’Ivoire, ESAF Small Finance Bank, KMF Are Finalists for European Microfinance Award on Financial Inclusion Through Technology

On the 20th of September, the Selection Committee for the European Microfinance Award 2018 on “Financial Inclusion through Technology” chose the three finalists that will go on to compete for the EUR 100,000 (USD 118,000) prize: Advans CI of Ivory Coast, ESAF Small Finance Bank of India and KMF of Kazakhstan.

This year, the Award has highlighted the role of technology in advancing financial inclusion, showing how technology-enabled services and solutions can help financial services providers such as microfinance institutions increase outreach to low-income and vulnerable segments, offering products and services capable of responding to clients’ needs for trust, speed, low cost, security, usability and

by Michelle Fleming -

MICROCAPITAL BRIEF: UNCDF, EU, Private Sector Foundation of Uganda, Uganda Development Bank Financing SMEs via “Support to Agricultural Revitalization and Transformation” (START) Program

The UN Capital Development Fund (UNCDF), the EU, the Private Sector Foundation of Uganda and the Uganda Development Bank recently launched the Support to Agricultural Revitalization and Transformation (START) program to finance small and medium-sized enterprises (SMEs) involved in agriculture in northern Uganda. The goals of the program include addressing the