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1
Centre for Microfinance – University of Pretoria:
Centre for Microfinance – University of Pretoria:
Reaction to a unique market
Gerhard Coetzee and Chiara Chiumya
Reaction to a unique market
Gerhard Coetzee and Chiara Chiumya
2
Outline
The problem
The challenges
The reaction
Resource mobilisation
Learning and adjustments
3
The problem
Market assessment as part of original proposal
Market training demand workshops with industry representatives
Course offerings and curriculum based on workshop outcomes
Thus research and training offerings in reaction to market challenges
4
Challenges – Development Finance
Understanding of clients real market research
Expansion of products, expanded options
SMME finance – attacking the self employed market Regulatory environment - heavy burden of “red tape”
Registry of security interests
Explicitly target productive uses of microfinance
Transformation of NGO MFIs
Business Development Services
Commercial banks – already in there, but more focus needed
5
Challenges – Asset accumulation
Savings and investment products
Targeted savings products
Smooth consumption, raise repayment, minimize risk
Are the banks making money, threat of cannibalization
Addressing negative real interest rates on savings instruments
Need for bundling lending and saving instruments.
Housing: embryonic township markets
Other investment products
6
Challenge – Rules and enforcement
National Credit Regulator – impact on the market?
Other rules and impact on access?
Harmonisation of policy and legislation?
Main challenge – enforcement?
7
Challenge – Information
Need for even better data and information Better credit scoring and pricing models
Having better information on individuals, households and firms applying for / using credit for policy development
Training and capacity building Major need, no recognition, not willing to pay
Short sighted – need to invest in most strategic asset
Consumer education Need for improved outreach
Focus on lower income strata
Distinct lack of innovation
Use of CE as a monitoring tool
Pricing issues, competition, monitoring
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Challenge – Management
Depth in Management
Numbers in Management
Understanding the market
Understanding reactions to the market
Understanding banking
9
Challenge - Market Profile
Market status →↓Institutional status
Developing (SMME finance)
Developed (Personal finance)
Start-ups: Enterprise Consumer Mixed
XXX
Growth phase: Enterprise Consumer Mixed
XXX XXX
Mature and refocus: Enterprise Consumer Mixed
XXX
10
Reaction – Centre for Microfinance
“Creating Inclusive Financial Markets Against Poverty”
Integrated approach
Stakeholder involvement
Functional areas (products)
Education
Research
Dissemination
Support
11
Head of the School of
Management Science
Head of the School of
Management Science
Director:Gerhard Coetzee
Assistant Director:
Chiara Chiumya
Director:Gerhard Coetzee
Assistant Director:
Chiara Chiumya
EducationEducation Research Programmes
organised according in focus
areas with dedicated senior research leaders
Research Programmes
organised according in focus
areas with dedicated senior research leaders
Dissemination•African Microfinance Conference “Series”
•Round Table•Research Publications
•Invited and other conference papers
Dissemination•African Microfinance Conference “Series”
•Round Table•Research Publications
•Invited and other conference papers
Executive Management Programme
Executive Management Programme
Certificate ProgrammesCertificate
Programmes
Academic leader:
Gerhard Coetzee
Academic leader:
Gerhard Coetzee
Admin
support:Katherine Blaine
Admin
support:Katherine Blaine
Centre Advisory Board 4 Academics and 4 Industry
Representatives
Centre Advisory Board 4 Academics and 4 Industry
Representatives
Support to other
Institutions
Demand AnalysisAssessment
DevelopmentEvaluation and
Monitoring
Support to other
Institutions
Demand AnalysisAssessment
DevelopmentEvaluation and
Monitoring
MBA ElectivesMBA Electives
M Course in Post Grad
School for Rural & Ag Dev
M Course in Post Grad
School for Rural & Ag Dev
Masters and PhD in
Entrepreneurship
Masters and PhD in
Entrepreneurship
12
Education
Certificate Programme in Microfinance
Certificate Programme for Microfinance Managers
MBA Electives
Masters Course in Post-Graduate School for Rural and Agricultural Development
Masters and PhD Course in Entrepreneurship
Executive management course
Project Based: Swaziland Microfinance Sector Training (15) BankSeta Unemployed (30)
13
Education: Certificates
Certificate Programme in Microfinance
Fundamentals of microfinance
Loan Officer
Market research for microfinance (MicroSave material)
Introduction to management in context
Certificate Programme for Microfinance Managers
Operational management
Financial management (using Microfin)
Strategic planning and budgeting
Strategic marketing
14
Research Policy, Legislation and Regulation
National Credit Act Regulatory Impact Assessment study design (completed) National Credit Act Regulatory Impact Assessment Academic publication – Introduction to the National Credit Act (Juta) Assessing the possible regulatory impact of the National Credit Act on
microfinance institutions: A case study of a small to medium size consumer credit provider (completed)
The potential effect of the National Credit Act on the future of selected, specialised micro-lending institutions in South Africa
Comments on the Financial Cooperatives Bill (completed) FAIS and FICA impact on Financial Cooperatives Credit information sharing: Guidelines towards credit information market
development in Africa (completed) Member based financial services
Informal finance for middle and high income individuals in South Africa: A case study of high budget "stokvels" in Pretoria (completed)
Case study of Yebo multi-purpose cooperative Rural Finance
Review of the Rural Finance Learning Centre of the FAO (completed) Enhancing livelihood strategies of rural communities prone to climate risk in the
Caprivi region of Namibia
15
Research (2) Market integration / inclusion
Microfinance in rural and urban Africa: Reality, Context and Challenges Inclusive financial sectors and market integration: Some evidence from
Africa (completed)
Financial services and channels Social protection cash transfers: Learning from microfinance delivery
systems The Mzansi account: A response to the access challenge of the financial
sector charter in South Africa (completed) Demand analysis of life insurance products in LSM 3-5 in Tembisa Investing behavior and product needs for the poor: A case study based
on Alexandra residents Agricultural finance products for small-scale cane growers Small-scale property entrepreneurs: A South African perspective
(completed)
16
Dissemination
Publications
Roundtable
Website
Conferences
Attend and speak (several)
Organise / Support
• 2007 African Microfinance Conference – Kampala
• 2007 Conference on the measurement of impact of microfinance
• 2005 African Microfinance Conference – Cape Town
• 2003 African Microfinance Conference – Johannesburg
17
Support
Development Phase – culminating in Support Support Toolkit Assessment
Context, Market demand, Human resources, Material
Development of curricula Electives, Short courses
Course development and implementation Provide material as input, Training of personnel
Course Quality Assessment Monitoring and evaluation
Not sure whether we can continue with this…
18
Resource mobilisation Human
Core permanent staff
• Chiara Chiumya, Katherine Blaine, Jacob Nyambe
Part-time staff
• Gerhard Coetzee
• Teaching (6)
• Research (4) plus the MBA, Masters and PhD students
Financial Sponsorships
• MFMI initial financing establishment (2004 – 2007)
• SA Banking Sector Education and Training Authority (2007 – 2010)
• Other private sector support (ABSA, MFSA, etc)
Income from courses
Income from research
Break-even approach
19
Lessons and adjustments
Clients not eager to pay for training – use learnership system in SA
MBA domain vs. electives – interest vs. uptake
Integration now easier in new home
Need adjustment for countries outside southern Africa
Need good permanent human resources
Takes time to set up the Centre
Learned what is core need in terms of resources and structure – base and incremental
In general, successful structuring and operation