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DID’s specialized solutions
Mobilization Agricultural Technological Training Surveillanceof savings Finance Solutions
Financing Microinsurance Housing Loans for Investmentsfor entrepreneurs Finance Schooling
MOBILIZATION OF SAVINGS
Offer leverage for economic development and autonomy
• DID assists its partners (MFI, central banks, etc.) in the design, delivery and marketing of savings products and services
• DID provides MFI the adequate coaching : management of financial risks, technology, training, internal controls and infrastructure
• DID offers education about savings to the population in general
AGRICULTURALFINANCE
Sustain economic development, profitability of agricultural activities and food security
•A diagnostic tool to determine the offer for agricultural credit
•A methodology for analyzing the potential of a supply chain
•Specific training programs for agricultural financing
•Financial services adapted to the various needs of the rural clientele:
-Operating , warehouse, investment credits
-Loan life insurance plan
-Indexed crop insurance
TECHNOLOGICAL SOLUTIONS
Improving performance for financial institutions but also, increasing security and
accessibility of financial services
•SYSDE-SAF transactional program
•Mobile application for information on operations (AMIO)
•Stratego decision-making support system
•Computerized data processing centre (CTI)
•Smart cards
•Intercoop transaction system
•MFI Outlets in town/village market(s)
•Credit+ tool for risk analysis
TRAINING
Develop quality services for members and clients
• Toolkits for setting up a training service within an MFI
•International and institutional seminars (strategic financial management, governance, challenges or training for MFI operators, etc.)
•Specialized international seminars on operational and critical management issues
•Task-based training programs for managers, loan officers and tellers
•Training program for managing and operating savings and credit cooperatives
SURVEILLANCE
Increase the confidence of depositors in microfinance institutions
Our expertise:
Prevention• Legal and regulatory framework
Supervisory activities• Internal control systems• Inspection• External audit
Protection• Security fund
FINANCING FOR ENTREPRENEURS
Supporting the business projects of small and medium entrepreneurs
Two specific business models for SMEs are offered in these two financial institutions models:•EFC Alliance•EFC operator-investor : build, operate and transfer
•Entrepreneurs benefit from sustainable access to financial services adapted to their specific needs.
•Financial institutions gain access to specialized expertise in financing for entrepreneurs
MICROINSURANCE
Reduce the vulnerability of families in the event of unexpected situations
Our adapted tools:
•Loan insurance
•Health insurance
•Indexed agricultural insurance
•Funeral insurance
Desjardins: number one insurer in Québec
HOUSINGFINANCE
Facilitate access for families to healthy and secure housing
Our expertise
•Start up of specialized units dedicated to housing finance within MFIs
•Implementation of decision support systems• •Market analysis and definition of housing finance products and services
•Market positioning, business models and commercialization
•Evaluation of government policies and programs
•Definition of a sector-based approach
LOANS FORSCHOOLING
Facilitating access to education and improving conditions for success
DID helped Haitian financial cooperatives to design, deploy and manage this financial product: schooling loans.
The role of DID consists of:•Establishment of coordination among schools, school officials, parents and the financial cooperatives
•Product design and methodologies to deliver and oversee credit for school fees
•Production of the toolkit related to product design and follow-up
•Training of the staff in the financial cooperatives offering the product
•Monitoring of results
INVESTMENTS
Support the growth and development of microfinance
Our experts analyze applications received, proceed with necessary due diligence, propose terms and conditions for loans or investments and establish partnerships that make it possible to conclude these operations.
The institutions financed receive the support of our experts during investment follow up.
DID manages two funds that promote access to financial resources and thereby provide leverage for development and growth in the microfinance sector.
Partnership Fund(capitalization: CAN$22 million)
Desjardins Fund for Inclusive Finance(capitalization: CAN$10 million)
FINANCING FOR ENTREPRENEURSSupporting the business projects of small and medium entrepreneurs
DID’s Entrepreneurs
Financial Centres (EFC)
How DID contributes to MSME finance and its challenges?
Our answer: Implement business centres specifically for entrepreneurs/MSME, called “EFC”.
• Two business models are offered:
– Affiliated EFC
– EFC operator-investor : build, operate and transfer
• Entrepreneurs benefit from sustainable access to financial services adapted to their specific needs.
• Financial institutions gain access to specialized expertise in financing for entrepreneurs.
What is a EFC?• Entrepreneurs Financial Centres
– Based on Desjardins Group’s initiative– A specialized department within a network of savings
and credit cooperatives– a local microfinance institution offering financial
services for the SME market
• Local and collective ownership• In addition to financial experts (credit, savings)
– Experts in housing finance– Experts in insurance– Etc.
Affiliated EFC EFC operator-investor
Burkina Faso Panama
Mali Tanzania
Senegal Uganda
Zambia
EFC in operation, with DID’s collaboration
What is an Affiliated EFC ?
• It’s an extension of an already existing financial institution
• It increases the range of services offered to the members and clients
• It maximizes staff performance
• It optimizes the quality of service delivered to entrepreneurs
Sample Organization Chart of an Affiliated EFC
FI FI FIFIFIFI
Coordinating Committee
EFC Technical Director
Personnel
Regional Union
Federation
Hiring and oversightMonitoring of budget, financial results and business plan
Credit Committee
Supervision and support for the financial institutions (FI)
Characteristics of an Affiliated EFC
• The EFC works for and on behalf of its participating financial institutions :– The member can do business with its financial
institution and the EFC at the same time: One financial institution can then respond to its personal and professional needs.
– The EFC’s powers and responsibilities are defined legally and are validated by Board of Directors of the financial institution
– Managers, Union and Federation are all responsible for global management follow-up of the financial institution
Affiliated EFC: Conditions of success
• Continuous commitment of the managers
• Trust relationship between the managers and the supervision structures
• Commitment to action and openness to change
• Common vision and shared business objectives
• Customer-loyalty approach, business development and adequate consulting expertise and techniques
• EFC visibility and its positioning in the market
In the end, the Affiliated EFC is a solution that:
• Reaches the market needs
• Increases financial institutions profitability
• Increases the cooperative character of the network
• Allows the women and the young people to have access to credit
EFC-O/I : DID’s Strategy
• Establish local financial institution with the mission to supply suitable financial products and services to local MSMEs
• Offer financial products adapted to the needs of the local MSMEs
• Encourage the development of the private sector• Community-owned and managed EFCs• Transfer of expertise (build, operate, transfer)• Set-up mechanisms to allow “clients users” of
the EFCs to become owners
EFC O/I vs local ownership: two ways to consolidate
• Employee share ownership programs (ESOP) • Client share ownership programs (CSOP)
The EFCs have a considerable impact in their milieu, because they contribute to:• Growth for MSMEs and the feeling of pride that results• Job creation• Economic development in communities• Improved credit management practices in financial
institutions • Increased management capacity• Growth and profitability for financial institutions linked
to the EFC
Lessons learned: Affiliated EFC and EFC-O/I
• To be implemented successfully, the EFCs require:
– A good start-up
– An organizational governance
– An operational governance
– Operations (marketing, credit, administration, management)
– Adequate technological solutions
– A good marketing approach
– Continuous training for officers and managers
Lessons learned: Affiliated EFC and EFC-O/I
• Deploying EFCs take…
– Time • Identify, analyze and conclude in the potential,
install the institutional capacity. • Identify and mobilize resources• Adapt the tools and methodology to the country
– Resources• Human, financial and technological ones
AGRICULTURE FINANCEAccompany farmers facing the challenges of modernization and diversification
Other challenges:
DID’s service offer in
Agricultural Finance
AGRICULTURE FINANCEAccompany farmers facing the challenges of modernization and diversification
What we do…
•Diagnosis the agricultural credit offer
•Analysis of the potential of a supply chain
•Human resource planning
•Specific training programs for agricultural financing
•Financial services adapted to the various needs of the rural clientele:
-Operating credit
-Warehouse credit
-Investment credit
-Loan life insurance plan
-Indexed crop insurance
The equilibrium principle
Fin
anci
al
serv
icesTe
chni
cal
expe
rtis
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Mar
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g Ris
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itiga
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AGRICULTURAL DEVELOPMENTEQUILIBRIUM
Agricultural development will be more sustainable if all pillars are strengthened, but also if there are reinforcements of the links between each pillars
The pillar of financial services
The equilibrium principleDID considers that access to adapted financial services must be increased in order to support the development of the agricultural and agri-food sector, but also recognizes that strengthening the financial institutions, albeit essential, cannot support the development of the sector on its own .
The “pillars of equilibrium”
APPROPRIATE LEGISLATION to SECURE ACCESS to LAND and
WATER
Technical expertise
MarketingFinancial services
Risk mitigation
Offer agricultural finance services with DIDFulfill your mission to rural and disadvantaged communities in every way
Know the sector’s needs, capacity and risks
Organize the agricultural credit department
Develop and offer financial services adapted to the agricultural sector
Develop and apply risk management mechanisms
Specialize the staff and organize the agricultural credit department
Understand how agricultural production chains function and assess the financing needs of stakeholders
Define and introduce internal risk management strategies for agricultural loan portfolios
Develop and introduce agricultural credit products:•Supplier's credit•Seasonal credit•Investment credit•Marketing credit
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Go
al
Know the needs Specialize the staff Mitigate risks
• CFIs have specialized staff who can design and offer agricultural credit products
• Specialized staff understand inherent risks in the agricultural sector
Ou
tco
me
• CFIs are more familiar with opportunities and constraints in the sector
• CFIs can develop a financial service offer that is better adapted to the sector
• CFIs have a range of credit products adapted to the agricultural sector
• CFIs contribute to establishing an integrated approach to development of the agricultural sector
• Prudent financing norms and appropriate strategies limit the impact of risks on agricultural loan portfolios
• Agricultural credit risks are shared with external structures
Clie
nte
le • CFIs that serve or wish to serve the agricultural sector
• Base CFIs • EFC / CFA • Apex organization • Government authorities
V3
Establish partnerships with organizations that offer technical support to producers or to those involved in marketing agricultural products
Partnerships
Specialize the products
Sa
tisfy
ing
ne
ed
s a
nd
ma
kin
g th
e o
ffer s
us
tain
ab
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Develop and introduce external mechanisms for managing and sharing agricultural credit risks
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