Partnerships in Microfinance Understanding the Opportunities and Challenges Elisabeth Rhyne,...
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Partnerships in Microfinance Understanding the Opportunities and Challenges Elisabeth Rhyne, Managing Director Center for Financial Inclusion at ACCION
Partnerships in Microfinance Understanding the Opportunities
and Challenges Elisabeth Rhyne, Managing Director Center for
Financial Inclusion at ACCION Global Partnerships in Microfinance
University of Greenwich September 6, 2010
Slide 2
2 Introducing: The Center for Financial Inclusion High-quality
financial services for all low income people Services that improve
the quality of life and build assets A sustainable, commercial
inclusive finance industry The Center for Financial Inclusion at
ACCION International is an action, research center that works on
behalf of the microfinance industry as a whole and leverages
private-sector interest in microfinance. Collaborators MFIs Banks
Investors Technology Firms Regulators Universities Others Tools
Convening Coalition building Research Publication Education
Piloting
Slide 3
The Center for Financial Inclusion leads through collaborative
projects 3 Energy Links: microfinance as a platform for access to
pro-poor clean energy. Microfinance for Bankers and Investors:
spotlights private companies leading the way in serving low income
people. Council of Microfinance Equity Funds: convenes the private
funds that make equity investments in microfinance institutions.
HBS-ACCION Program on Strategic Leadership in Microfinance:
management and leadership for CEOs and other leaders of
microfinance. The Smart Campaign: a global effort to embed Client
Protection Principles throughout the microfinance industry.
Slide 4
Financial Services Address the Lives of the Poor 4
Vulnerability Opportunity
Slide 5
CreditSavingsInsurancePayments PERSONAL CONSUMER Credit card
Education Mortgage Home improvement MICROENTERPRISE Business fixed
assets SAVINGS ACCOUNT CHECKING ACCOUNT Certificate of Deposit
Pension Youth savings Programmed savings LIFE Health Property
Disability Crop Credit life MONEY TRANSFERS REMITTANCES Payments
Government benefit payments Salary payments Debit/ATM card
Electronic payments Full range of financial services with Quality
5
Slide 6
How Many People Are Financially Excluded ? 2.5 billion
(Financial Access Initiative) 2.8 billion (CGAP) 3.2 billion
(Alliance for Financial Inclusion) Over 2 billion (UK DFID) 6
Slide 7
(% households)Mexico Spain Colombia Peru Savings 37925325
Credit26772315 Life Insurance18NA11NA Branches per 100,000 people
89694 Branches per 1,000 Km. 47941 Financial Inclusion across
selected countries 7
Slide 8
Partnerships.Because Few Institutions Have It All 8
Understanding of the Market Distribution, Points of Contact Banking
Capabilities Investment Funds Financial Services for the BOP
Slide 9
Five Kinds of Partnerships 1. Learning Partnerships: Vodafone
and Faulu (Kenya) ACCION and Banco Pichincha (Ecuador) 2.
Distribution Partnerships: VISA and Government Payments (South
Africa) Banco Bradesco and the Postal Service (Brazil) 3. Financing
ICICI Bank Partnership Model Citi Microfinance 4. Social
Connections Equity Bank and schools 5. Collaborations The Smart
Campaign Examples drawn from Microfinance for Bankers and
Investors
Slide 10
M-Pesa: Vodafone/Safaricom and Faulu Kenya Safaricom initiates
mobile money transfers: After only 2 years: 5 million subscribers
Partnership with Faulu Kenya in pilot Faulu withdrew: Why???
Slide 11
Banco Pichincha and ACCION International Created Credife, a
successful microfinance service company in Ecuador (~100,000
clients) ACCIONs role evolved over time ACCIONs experience with
service company model has varied depending on quality of
partnership
Slide 12
Distribution Partnerships Banco Bradesco and Brazils Postal
Service Pioneered the Banking Agent model Closed the location gap
in Brazil -- From 1590 unserved municipalities to zero Great
alignment of interests and capabilities VISA Government of South
Africa ABSA Bank The Sekulua Card distributes Government benefits
Starts to create the ecosystem for electronic payments Brings new
clients to financial system Government push required
Slide 13
ICICI Partnership Model ICICI engineered the take-off of
microfinance in India Strategic choice to go wholesale rather than
retail Partnership model; funding MFIs through service agreements
and securitization Committed $1 billion to MF Withdrawal from
microfinance Due policy and regulatory issues Question: Has ICICI
been a good partner for microfinance?
Slide 14
Citi Microfinance Shaping strategy to incorporate social
responsibility Banker to the microfinance industry
Slide 15
Equity Bank and Reaches Out to Schools Schools as Nodes for
banking services Education entrepreneurs Teachers Students and
their Parents Equity Bank Foundation Scholarships Capacity building
grants for schools
Slide 16
www.smartcampaign.org The Client Protection Principles 1.
Avoidance of over- indebtedness 2. Transparent and responsible
pricing 3. Appropriate collections practices 4. Ethical staff
behavior 5. Mechanisms for redress of grievances 6. Privacy of
client data The Smart Campaign Commitment: by all major MFIs and
supporting organizations Develop norms, standards and guidance and
get them into use Build capacity of networks and investors to
ensure their MFIs apply client protection practices Create
processes for certifying financial institutions Ultimately, to
protect millions of clients of microfinance
Slide 17
Reflections Partnerships can create leaps Microfinance
game-changers Partnerships evolve Learning partnerships naturally
come to an end Alignment of interests Internal competition within
the partnership breaks it apart The 3 Rs of Partnerships Risk
Responsibility Returns
Slide 18
Stay Connected with the Center for Financial Inclusion
Microfinance for Bankers and Investors available on Amazon Follow
the CFI Blog: ww.centerforfinancialinclusion.org
ww.centerforfinancialinclusion.org Endorse the Smart Campaign:
www.smartcampaign.org www.smartcampaign.org Thank you for your
interest! We welcome your feedback.