Transcript Diapositive 1

DID’s specialized solutions
Mobilization
of savings
Agricultural
Finance
Technological
Solutions
Training
Surveillance
Financing
for entrepreneurs
Microinsurance
Housing
Finance
Loans for
Schooling
Investments
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
MOBILIZATION
OF SAVINGS
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
AGRICULTURAL
FINANCE
-Indexed crop insurance
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)
TECHNOLOGICAL
SOLUTIONS
•Credit+ tool for risk analysis
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
TRAINING
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
SURVEILLANCE
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
FINANCING FOR
ENTREPRENEURS
Reduce the vulnerability of families in
the event of unexpected situations
Our adapted tools:
•Loan insurance
•Health insurance
•Indexed agricultural insurance
•Funeral insurance
MICROINSURANCE
Desjardins: number one insurer in Québec
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
HOUSING
FINANCE
•Definition of a sector-based approach
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
LOANS FOR
SCHOOLING
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)
INVESTMENTS
DID’s
Entrepreneurs
Financial
Centres (EFC)
FINANCING FOR ENTREPRENEURS
Supporting the business projects of
small and medium entrepreneurs
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.
EFC in operation, with DID’s collaboration
Affiliated EFC
Burkina Faso
Mali
Senegal
EFC operator-investor
Panama
Tanzania
Uganda
Zambia
DID’s
Affiliated EFC
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
Federation
Regional Union
Supervision and support for the financial institutions (FI)
FI
FI
FI
FI
FI
FI
Coordinating Committee
Hiring and oversight
Monitoring of budget, financial results and business plan
EFC Technical Director
Personnel
Credit Committee
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
DID’s
EFC « operatorinvestor »
(O/I)
Deployment of CFE-O/I : Prerequisites
Capital and technical assistance financing
Human Resources
Partnerships
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 impacts on
both EFCs
business models
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
Other
challenges:
DID’s service
offer in
Agricultural
Finance
AGRICULTURE FINANCE
Accompany 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
AGRICULTURE FINANCE
Accompany farmers facing the challenges
of modernization and diversification
-Loan life insurance plan
-Indexed crop insurance
The equilibrium principle
The pillar of financial services
Agricultural development will be more sustainable if all pillars are strengthened,
but also if there are reinforcements of the links between each pillars
Risk
mitigation
Financial
services
Technical
expertise
Marketing
AGRICULTURAL
DEVELOPMENT
EQUILIBRIUM
The equilibrium principle
DID 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”
Financial
services
Technical
expertise
Marketing
APPROPRIATE LEGISLATION to
SECURE ACCESS to LAND and
WATER
Risk
mitigation
Offer agricultural finance services with DID
Know the sector’s
needs, capacity and
risks
Organize the agricultural
credit department
Develop and offer financial
services adapted to the
agricultural sector
3 Develop and introduce
1
Understand how
agricultural production
chains function and assess
the financing needs of
stakeholders
2
Specialize the staff and
organize the agricultural
credit department
Outcome
Clientele
Partnerships
• CFIs that serve or wish to
serve the agricultural sector
Know the needs
5 Define and introduce internal
risk management strategies
for agricultural loan
portfolios
agricultural credit products:
•Supplier's credit
•Seasonal credit
•Investment credit
•Marketing credit
4 Establish partnerships with
organizations that offer
technical support to producers
or to those involved in
marketing agricultural
products
6
Develop and introduce
external mechanisms for
managing and sharing
agricultural credit risks
• Base CFIs
• EFC / CFA
• Apex organization
• 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
Develop and apply risk
management mechanisms
• CFIs have specialized staff who
can design and offer agricultural
credit products
• Specialized staff understand
inherent risks in the agricultural
sector
Specialize the staff
• Government authorities
• 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
Specialize the products
• Prudent financing norms and appropriate
strategies limit the impact of risks on
agricultural loan portfolios
• Agricultural credit risks are shared with
external structures
Satisfying needs and making the offer sustainable
Goal
Fulfill your mission to rural and disadvantaged communities in every way
Mitigate risks
V3
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