SPECIAL REPORT: How Oikocredit Leveraged SAM (Semaine Africaine de la Microfinance) to Expand Its Risk-management Program

Since Yves Komaclo, Oikocredit 2015, Dutch cooperative investor Oikocredit has offered a risk-management program for microfinance institutions (MFIs). Participating institutions have built action plans around efforts such as: (1) increasing their use of data from credit bureaux to reduce over-indebtedness; (2) adjusting loan officers’ workload and training to improve client service; and (3) surveying clients about product terms. When expanding the program to a new country, Oikocredit holds a workshop that is open to the entire sector to engage potential partners. From this pool of workshop attendees, those who demonstrate the greatest motivation and ability to make progress in risk management receive a package of consulting services lasting 18 to 24 months.

The program first was active in Benin, Ghana and Togo. As a result of Oikocredit’s sponsoring an event at the 2015 SAM in Dakar to increase awareness of its risk-management efforts, several institutions from other countries expressed interest in the program. One of these was the Association Professionnelle des Systèmes Financiers Décentralisés du Sénégal (APSFD/Senegal), whose members include 105 savings & loan associations, cooperatives, MFIs and other financial services providers.

At the 2017 SAM in Addis Ababa, representatives of Oikocredit discussed the risk-management program with staff from ICCO Cooperation, a group of entities that seek to “create profitable opportunities that lead to more employment and higher income for people” in low- and middle-income regions. Based on their work in 36 countries, ICCO Cooperation staff argued that Burkina Faso would be a prime market for Oikocredit’s program. After Oikocredit staff met with existing and prospective partner institutions from the country, such as Asiena, Prodia and the Federation des Caisses Populaires du Burkina (FCPB), they agreed that expanding in Burkina Faso would be fruitful.

Yves Komaclo, Oikocredit’s manager for West Africa, explains that, “We changed our order of priority as a result of SAM and upgraded Burkina and Senegal” to be part of the next phase of the risk-management program. Today, Oikocredit is working with ICCO Cooperation to expand the program to serve MFIs in Burkina Faso, Mali and Senegal.

In addition to its risk-management program, Oikocredit made progress on other efforts at SAM. For example, its staff discussed Oikocredit’s MFI Digitization Initiative in Burkina Faso with Agence de Crédit pour l’Entreprise Privée (ACEP) Burkina, one of the five members of ACEP International. This initiative involves facilitating access to finance for micro-, small and medium-sized enterprises by leveraging Oikocredit’s fintech experience to support MFIs in their adoption of mobile financial services.

Through speed-dating sessions and informal discussions at SAM, Oikocredit also identified partners interested in social audits and assessments of their client-protection practices. Among these was Réseau de Micro-institutions de Croissance de Revenus, a savings and credit union in Mali, and Mutuelle d’Épargne et de Crédit (MEC) Fadec Njambur of Senegal.

ADA, an NGO based in Luxembourg, co-organizes SAM every two years with the support of Luxembourg’s Ministry for Development Cooperation and Humanitarian Affairs. The SAM steering committee members are: ADA, Luxembourg’s Ministry of Foreign and European Affairs, the Microfinance African Institutions Network and the African Rural and Agricultural Credit Association. The Fédération des APSFD de l’Union Economique et Monétaire Ouest Africaine is about to join the steering committee as well. We invite you to read more about SAM at http://www.microfinance-africa.org/

This vignette is the first in a sponsored series demonstrating the value of SAM (the French acronym for African Microfinance Week), a major conference dedicated to financial inclusion in Africa. The first three SAMs were held in Arusha, Tanzania, in 2013; Dakar, Senegal, in 2015; and Addis Ababa, Ethiopia, in 2017. The next SAM will take place in 2019 in a location to be announced soon!

The goal of SAM is to provide a unified platform for addressing issues facing microfinance in Africa by bringing together investors, MFIs, researchers, banks, networks, innovators, governments and other stakeholders.

The 2017 SAM hosted 700 participants from 58 (mostly African) countries, including representatives of 200 MFIs; 25 exhibitors at the Innovation Fair; and 26 investors, who made 170 MFI contacts at the Investor’s Fair. The proceedings also included conference sessions presented by 60 speakers plus a menu of 20 training programs.

Similar Posts: