Development of Microfinance Associations as Apex Institutions by

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Development of Microfinance
Associations as Apex Institutions
Abuja, Nigeria
January 18th, 2011
1
Importance of Microfinance
Associations
70+ microfinance associations
2
Importance of Microfinance
Associations
70+ microfinance associations
60 million microentrepreneurs affiliated
3
Importance of Microfinance
Associations
70+ microfinance associations
60 million microentrepreneurs affiliated
Almost all are connected through the SEEP Global
Network of Networks
4
Mission
Connecting practitioners
in a Global Learning Community
Vision
A Sustainable Income in
Every Household
5
Values
Member-Driven
Practitioner-Based
Sustainable
Transparent
Innovative
Inclusive
6
Importance of Microfinance
Associations
70+ microfinance associations
60 million microentrepreneurs affiliated
Almost all are connected through the SEEP Global
Network of Networks.
Associations can promote and guide
entire microfinance industries.
7
Areas of Network Effectiveness
Governance
Operations
Human Resources
Financial Viability
Service Delivery
External Relations
Areas of Network Effectiveness
Governance
Operations
Human Resources
Financial Viability
Service Delivery
External Relations
External Relations
Contacts-The association works with a diverse range of microfinance industry
stakeholders to achieve its organizational objectives.
10
External Relations
Contacts-The association works with a diverse range of microfinance industry
stakeholders to achieve its organizational objectives.
External Communications-The association has a clear communications strategy
that effectively targets a diverse range of microfinance stakeholders.
11
External Relations
Contacts-The association works with a diverse range of microfinance industry
stakeholders to achieve its organizational objectives.
External Communications-The association has a clear communications strategy
that effectively targets a diverse range of microfinance stakeholders.
Credibility-The association is recognized as an important and capable
representative of the microfinance sector and effectively advocates on behalf of
its members.
12
External Relations
Contacts-The association works with a diverse range of microfinance industry
stakeholders to achieve its organizational objectives.
External Communications-The association has a clear communications strategy
that effectively targets a diverse range of microfinance stakeholders.
Credibility-The association is recognized as an important and capable
representative of the microfinance sector and effectively advocates on behalf of
its members.
13
Areas of Network Effectiveness
Governance
Operations
Human Resources
Financial Viability
Service Delivery
External Relations
Service Delivery
Market Responsiveness-The association is market oriented and
responsive to changing conditions.
15
Expanded Product Lines
“$2 a day”
Emphasis: incomes are low
Findings:
incomes are low
incomes are irregular
incomes are unpredictable
16
Expanded Product Lines
NEED
Helping poor households with
day-to-day cash flow
management
PRODUCT
Savings of any value at any time
with ready access
17
Expanded Product Lines
NEED
PRODUCT
Helping poor households with
day-to-day cash flow
management
Savings of any value at any time
with ready access
Helping them borrow for all uses
Tiny loans quickly, when needed
and repaid in small, possibly
irregular installments
18
Expanded Product Lines
NEED
PRODUCT
Helping poor households with
day-to-day cash flow
management
Savings of any value at any time
with ready access
Helping them borrow for all uses
Tiny loans quickly, when needed
and repaid in small, possibly
irregular installments
Helping them build savings over
the long term
Structured opportunities for
long term savings
19
Expanded Product Lines
NEED
PRODUCT
Helping poor households with
day-to-day cash flow
management
Savings of any value at any time
with ready access
Helping them borrow for all uses
Tiny loans quickly, when needed
and repaid in small, possibly
irregular installments
Helping them build savings over
the long term
Structured opportunities for
long term savings
Helping them manage risks
Insurance products
20
Expanded Product Lines
NEED
PRODUCT
Helping poor households with
day-to-day cash flow
management
Savings of any value at any time
with ready access
Helping them borrow for all uses
Tiny loans quickly, when needed
and repaid in small, possibly
irregular installments
Helping them build savings over
the long term
Structured opportunities for
long term savings
Helping them manage risks
Insurance products
21
Expanded Product Lines
US$ Millions
Bank Rakyat Indonesia
3,000
18 million small savers
Savings
2,000
Average < US$200
1,000
Loans
0
84 85 86 87 88 89 90 91 92 93 94 95 96
22
Service Delivery
Market Responsiveness-The association is market oriented and
responsive to changing conditions.
Member Focus-The association is driven by the needs and demands
of its members.
23
Service Delivery
Market Responsiveness-The association is market oriented and
responsive to changing conditions.
Member Focus-The association is driven by the needs and demands
of its members.
Service Mix-The association's core services are well designed and
reflect its comparative advantage.
24
Financial Viability
Financial Planning - Financial planning is an integral part of short- and
long-term organizational plans, and appropriate financial performance
measures are used to set goals and monitor performance.
Financial Performance - Earned income, institutional reserves,
operating efficiencies are strong and show positive trends
Financial Administration - Financial administration processes are
transparent and provide the necessary level of control to ensure that
resources are used efficiently and for their intended purpose.
25
Governance
Democratic Participation- The association has a participatory
decision-making process governed by transparent and consensusoriented systems.
26
Governance
Democratic Participation- The association has a participatory
decision-making process governed by transparent and consensusoriented systems.
Board of Directors-Each association has a board of directors that
is accountable to its membership and provides effective
leadership in fulfilling the association's mission.
27
Governance
Democratic Participation- The association has a participatory
decision-making process governed by transparent and consensusoriented systems.
Board of Directors-Each association has a board of directors that
is accountable to its membership and provides effective
leadership in fulfilling the association's mission.
Membership- Association membership is representative of the
market and is defined and held accountable by common standards
of performance and practice.
28
“Doing Bad by Doing Good?
Theft and Abuse by Lenders
in Inadequately Regulated Microfinance Markets”
Catherine Duggan
Harvard Business School
Membership- Association membership is representative of the
market and is defined and held accountable by common standards
of performance and practice.
29
SMART Campaign
1.
2.
3.
4.
5.
6.
Avoidance of Over-Indebtedness
Transparent and Responsible Pricing
Appropriate Collections Practices
Ethical Staff Behavior
Mechanisms for Redress of Grievances
Privacy of Client Data
Membership- Association membership is representative of the
market and is defined and held accountable by common standards
of performance and practice.
30
Defining and Measuring
Ultimate Impact
31
Statement of Success
A vibrant and inclusive financial sectors
providing appropriate services
to poor and low-income people
• A strong, sustainable association that provides demand
driven products to their member base;
• A range of healthy, sustainable microfinance institutions
that offer a wide range of quality services to clients at
competitive prices;
• A transparent business environment that ensures fair
competition and protection for consumers.
32
Association Performance
33
Member Results
34
Industry Quality
35
Industry Quality
36
SEEP Documents for Nigeria
Savings Groups
Steps in Advocacy Planning: A workbook for Microfinance Associations
Effective Governance: A toolkit for Microfinance Association Boards
Performing a State of the Sector Analysis: A Guide for Microfinance Associations
Investment Readiness and Microfinance Associations: Bridging the Financing Gap
Measuring Financial Performance: Practitioners guide for Microfinance Associations
Donor Strategies for Advancing Social Performance through Microfinance Associations
Promoting Credit Bureaus: The Role of Microfinance Associations
Product Costing and Performance Analysis: A toolkit for Analyzing Associations’ Service Offerings
Managing Your Association’s Brand: The Strategic Importance of Integrated Marketing Communications
Training Strategies: A Technical Note for Microfinance Associations
How to Promote Industry Innovation: A Technical Note for Microfinance Associations
37
Thank You!
38
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