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FINCA International and USAID PACE Launch FINCA Forward, a Fintech Innovation Platform

Posted By Michael Leen, FINCA International, Thursday, October 4, 2018

Global microfinance pioneer FINCA International, in partnership with USAID, announces the launch of FINCA Forward, a fintech innovation platform. This two-year pilot will facilitate collaboration between early-stage financial technology enterprises and microfinance institutions (MFIs) to help small and growing fintech businesses overcome the pioneer gap and to enable MFIs to better reach underserved and underbanked populations, especially women. Participating fintechs will run proof-of-concepts in close collaboration with MFIs in Africa and Latin America, which will include tailored pre-investment support and the opportunity to access investment capital. For more information, visit www.FINCA.org/finca-forward/.

FINCA-Forward-Fintech-Innovation-Platform

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Tags:  Financial Inclusion  Fintech  innovation  Microfinance  SGBs 

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Crowdsourcing innovations that enhance economic stability. Submit by September 15!

Posted By Phil Psilos, FHI 360, Wednesday, August 16, 2017

Have your organization, investees, or clients created a product, program, or policy that enhances economic stability for poor and vulnerable people?  We'd like to hear about it!

FHI 360 is working with support from The Rockefeller Foundation to surface global innovations that improve economic stability for individuals, communities, local governments and businesses .

The research team is looking for innovations that enhance several dimensions of economic stability: (1) income and asset stability through more consistent employment, wages, and safety nets; (2) specific financial products, skill development approaches, or other means that help people plan for and invest in the future (3) innovations that improve people’s confidence in economic management, regulatory quality, and dispute resolution, or allow them to participate more effectively in shaping these environments in ways that enable better decisions at the household and business levels.  

Top innovations will be featured in an Atlas of Stability Innovation published by FHI 360 in early 2018, in our online media campaigns, and promoted in global media.

Please submit your innovations by September 15, 2017 at at the submission page or visit the project website to learn more. You can also reach us at innovation4stability at gmail dot com          

Tags:  crowdsourcing  emerging markets  Global. Development  inclusive business  inclusive innovation  innovation  Microfinance  social enterprise  social innovation 

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Research Meets Africa: the Call for Papers is open!

Posted By María Belén Zambrano, Appui au Développement Autonome, Tuesday, May 2, 2017
Updated: Tuesday, May 2, 2017

Call for Papers: Research Meets Africa

9th October 2017, Addis Ababa, Ethiopia

Research Meets Africa aims to promote research and innovation on inclusive finance in Africa. It encourages collaboration between researchers and practitioners of the sector by involving universities from Africa and around the world. The event will be held on the 9th of October 2017 in Addis Ababa, Ethiopia alongside African Microfinance Week.

 Researchers are invited to submit their research papers on this topic:

                        "What solutions respond to the growth needs of MSMEs in Africa?" 

For any question, please contact the Conference Team:rmateam@ada-microfinance.lu

Or visit our website: http://www.ada-microfinance.org/en/events/african-microfinance-week/research-meets-africa

 The submission deadline is 30th May 2017!

 

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Tags:  access to finance  Africa  capacity development  conference  Microfinance  Research  SMEs 

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Presenting the report Moving the Needle: Critical Success Factors for Scaling Asset Finance

Posted By Paula Rodriguez, InspiraFarms, Monday, October 17, 2016

A new report by Epven, with support from the Shell Foundation and the Small Foundation, explores the challenges and emerging solutions to scaling asset finance options for small and growing agribusinesses (SGBs) in developing countries.

 The investment opportunity in agribusiness assets in emerging economies runs into the billions of dollars. The social and environmental benefits that can be gained by reducing food losses, increasing employment and enterprise sustainability, as well as empowering women and rural communities, are equally significant.

 Despite this opportunity, most small-scale agribusinesses in developing countries lack access to reasonable financing options for acquiring such assets, falling into the “missing middle” and facing a combination of unrealistically high collateral requirements and unaffordable interest rates. It s estimated that formal financial institutions meet less than a sixth of the $200 billion in demand for financing from smallholder agribusiness globally.

 Asset financing is one form of finance that is quickly emerging as a promising new model with a growing number of providers diversifying into the sector. The report Moving the Needle: Critical Success Factors for Scaling Asset Finance examines the potential of asset finance to reverse this financing gap. Reflecting the first-hand experiences, innovations and perspectives of over 70 asset finance experts in Kenya, Guatemala, and India—the “coal-face” of the industry—the report highlights four critical success factors that drive scale in asset finance:  

1.     The asset must be liquid to act as its own collateral. There must be a market for the asset, and resale value must be measureable.

2.     SGBs must demonstrate their capability to effectively utilize the asset. The use of cash flows is recommended for the calculation of financial viability and creditworthiness.

3.     SGBs must have a stable and secure market for the expected outputs of the asset. Having secure contracts from buyers in the agricultural sector is a positive incentive for financial institutions and for securing a stable stream of revenues for SGB’s.

4.     Network organizations like ANDE, the GIIN and the Sustainable Food Lab support more and better ecosystem collaboration between technology companies, financial service providers and producers and buyers along the agricultural value chain.

The report summarizes key roles for the main actors of the asset finance ecosystem, followed by detailed recommendations for capacity developers, 2nd tier investors, donors, DFIs and foundations, technology companies, and the financial service providers at the coal face.

 

To read and download this report by Epven, with support from the Shell Foundation and the Small Foundation, please visit http://www.inspirafarms.com/articles-publications/

TITLE: Moving the Needle: Critical Success Factors for Scaling Asset Finance

Authors: Tim Chambers and Jack Luft

Contact Person: Tim Chambers (tchambers@epven.com)

 

 

 

Tags:  Access to Finance  Agriculture  ANDE Members  asset finance  farming  impact investing  impact investment  inclusive business  innovation  Investors  microfinance  post-harvest  small and growing agrobusiness  value addition 

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Hurricane Matthew: Fonkoze's update and response

Posted By Natalie Parke, Fonkoze, Friday, October 14, 2016
Updated: Friday, October 14, 2016

As Fonkoze launches its response to Hurricane Matthew, we are mindful of the critical importance we can play as a local institution with an unprecedented network of infrastructure and clients. The 2010 earthquake in Haiti proved that effective recovery and relief comes from local, on-the-ground organizations that can respond with contextual experience and knowledge. Fonkoze is a 22-year-old Haitian organization with 45 branches, 950 employees, and more than 200,000 clients and members in every corner of the country. Fonkoze is committed to providing support to clients that will help them to rebuild their homes and livelihoods in a sustainable manner. Fonkoze’s assessment of Hurricane Matthew’s impact is ongoing, but it is already clear that the need is overwhelming, and we gratefully welcome contributions from partners.

Hurricane Matthew Overview

Hurricane Matthew, a Category 4 hurricane, hit Haiti on October 4, 2016. It was one of the most powerful storms to hit Haiti in several decades. According to the latest United Nations Office for the Coordination of Humanitarian Affairs Situation Report, at least 473 people were killed; over 1.4 million Haitians (nearly 13% of the population) are in need of humanitarian assistance; and 2.1 million have been affected by Hurricane Matthew. In coastal areas of the South department, the World Food Program reported a 95% loss of housing and harvest. There are reports of 60 cases of cholera per day, up from 20 cases per week before the hurricane. Media and telecommunications channels in the south were severely damaged, which meant information about devastation was initially slow to emerge.

Fonkoze Action Plan

Sèvis Finansye Fonkoze (Fonkoze Financial Services or SFF) is eager to get operations running smoothly in all of its branches but particularly in the most hard hit areas; this is vital to enable clients and communities to access funds through their accounts and remittances transferred from other parts of Haiti and abroad. We are already seeing a spike in the number of transfers being sent to individual accounts as well as NGOs and churches from partner organizations overseas.

The eight most affected branches (Okoto, Okay, Aken, Ti Rivye d’Nip, Bomon, Lavale, Fondeblan, and Jeremi) serve 17,359 borrowers; we expect it to take some time to reach all of our clients, though Loan Officers have already begun contacting Center Chiefs. The outstanding loan portfolio for these branch regions was $2,472,445 as of September 30. SFF has established the following action plan estimated to take approximately two months:

ACTION

STATUS

PHASE I: Ensure all staff members are alive and well.

Complete. All of Fonkoze’s staff are accounted for, though many lost their homes and all their property. For one staff member, all he has left of his home and possessions are the clothes he was wearing when the hurricane hit. Assessment teams report that some areas are “completely unrecognizable.”

PHASE II: Ensure all affected branches are fully operational.

Partially complete. All Fonkoze branch offices have been open since Monday, October 10, in spite of a very challenging situation. Fonkoze is working with Digicel to repair communications networks in three of the branch offices which are, nonetheless, able to process transactions through remote support from other branches.

PHASE III: Assess and address damage to clients

Establish assessment tool

Complete. Operations has created a post-hurricane client assessment form for field staff to use. A similar form has been created for affected staff, themselves.

Analyze loan portfolio

Near completion. The loan portfolio is being sorted into categories: clients finished loan repayment; clients nearly finished; and those who have just begun.

Conduct client assessment

Ongoing. Field staff will visit and interview all affected clients in their Credit Centers and assess damage to business/livelihoods using assessment tools.

Distribute/adjust loans accordingly

Not started. Upon completion of client assessments, SFF will disburse new loans to clients who can support them and write off loans for those unable to repay them. CARE and Catholic Relief Services have service contracts with SFF to facilitate unconditional cash transfers to hundreds of the most vulnerable families. CRS has already disbursed $160 to each of 154 families through SFF’s Okay branch.

 

Fondasyon Kole Zepòl (the Fonkoze Foundation) has been working through its four departments to assess the impact of Hurricane Matthew on the lives and livelihoods of clients. Here are the latest updates from the Fonkoze Foundation’s teams:

·         Preventing cholera and waterborne disease: Nurses in Fonkoze’s Boutik Sante (Community Health Store) Program have been contacting the community health entrepreneurs. The health team will launch an intensive campaign on October 17 to train Community Health Entrepreneurs in its Boutik Sante Program and other Center Chiefs on hygiene and cholera prevention—a training to be replicated in their credit centers. Participants will also receive a 30-day supply of water purification tablets to distribute to each client in their centers, reaching nearly 25,000 households. They will also learn to train community members how to prepare oral rehydration solution (ORS) and to practice good hygiene, such as handwashing and safe food preparation.

·         Reaching the ultrapoor: Fonkoze’s Chemen Lavi Miyò (CLM) Program for the ultrapoor its assessment of CLM households. Thus far, it is clear that those located at high elevations suffered the most damage. The CLM Program has an emergency fund built into its budget to support its members in crises. In the event that the existing funds are insufficient, the team will welcome support from existing and prospective donors.

·         Supporting recovery of small businesses and associations: Fonkoze Foundation’s Zafèn Program works with five clients in the South and with 36 Village Savings and Lending Associations (VSLAs) in Grandans. At least two associations and one individual have lost their business due to the hurricane. We are working to reach out to the VSLAs; unfortunately, the staff member responsible for working with them lost her home. The Zafèn team will finalize the detailed analysis of their clients over the coming week. Kiva Microfunds, a longstanding partner, has offered to collaborate on a post-hurricane recovery loan product which could include a new loan to the clients to restart their businesses with a prolonged repayment period. 

·         Disaster mitigation and preparedness training: As part of Fonkoze’s long-term response, we will continue to provide community-based education like that offered by our Ti Koze course; one of the key sessions of the course is disaster preparedness.

Fonkoze’s Experience: Disaster Mitigation and Response

As a Haitian institution, Fonkoze is adept at navigating the complexities of working in a failed state with limited infrastructure, insecurity, economic instability, and climactic crisis. Our meticulous stewardship of donor funds meant that in 2010, we reported on every penny received in response to the Haitian Earthquake; 95% of the funds went directly into the hands of those in need and the rest supported Fonkoze’s unfaltering operations.

Fonkoze is committed to mitigating the impact of shocks by bolstering the economic resiliency of clients as well as their skills to protect themselves and their families. For over 20 years, Fonkoze has overcome one challenge after another to enable our clients to respond and recover when confronted with shocks—political crisis, economic instability, and natural disaster. Fonkoze’s response to some of the most devastating natural disasters included:

·         2004 – Hurricane Jeanne destroyed one of Fonkoze’s largest branches in Gonayiv and the homes and assets of 1,500 clients. Fonkoze offered to cancel the interest on the outstanding balance of these clients’loans and to fold those balances into new interest-free loans with extended repayment periods. Every dollar of those loans was repaid. The program’s success was reported at the World Microfinance Summit in Halifax in the fall of 2006, and has been widely praised.

·         2008 – Hurricanes Fay, Gustav, Hanna, and Ike destroyed the homes and/or businesses of approximately 18,000 clients. Fonkoze again forgave interest on outstanding loan balances and also provided loans specific to recovery: Kredi Siklòn (Hurricane Loans). Fonkoze’s money transfer services also provided a valuable lifeline for clients; more remittances were handled in 2008 than in the six previous years, combined.

·         2010 – Haiti’s 2010 Earthquake killed over 200,000 people. Fonkoze’s head office and three branches were destroyed; five employees were killed; 470 staff were left homeless or in compromised living conditions; and over 19,000 clients’ homes and/or businesses were destroyed by the earthquake. Yet Fonkoze remained open even when commercial banks were not functioning. Fonkoze worked quickly to distribute remittances—some of the very first “aid” to reach the poor and vulnerable—totaling $95,816,784 in 2010. Fonkoze cancelled the pre-earthquake loan balance for 10,445 qualifying earthquake victims and distributed one-time cash grants to 19,811 clients and their families, benefiting 85,150 earthquake victims. And Fonkoze built a new earthquake-resistant headquarters in Potoprens.

Tags:  Haiti  Hurricane Matthew  Microfinance  Women 

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Pulling Together to Beat the Middlemen

Posted By Kathryn Ernst, Center for Advancement of Sustainable Enterprise at Colorado State University, Monday, October 13, 2014
 

10/13/14 - This post is written by Armand Tossou, a Fulbright scholar from Benin who is an MBA Candidate in the Global Social and Sustainable Enterprise MBA program at Colorado State University. Armand and his co-founders Aaron and Leana are starting a social venture that will support rural farmers in Nicaragua through increased access to financing and agricultural technologies.

“United we stand, divided we fall” is an old saying which holds true in most smallholder farmers’ daily experience. From lack of technical skills or affordable financing, to increasingly unpredictable climatic cycles, farmers face many challenges. And yet, what of those who navigate this labyrinth only to find that they cannot market their produce profitably at the end of the harvest season? This is typically where middlemen step in and provide a crucial service by purchasing the produce, but often at extortionate rates. In recent field work with my Growing Capital venture we were exploring an affordable financial solution for low income farmers by providing income producing agricultural assets - such as irrigation systems or greenhouses - on a lease to purchase basis. I had a chance to learn from the smallholder farmers of Nicaragua and observe their adaptations to this market challenge.

The stereotypical smallholder farmer

In the small community of San Ramón - a municipality in the Matagalpa department - Don Isael lives alone on his farm in a tiny mud house. He ekes out a living on a two manzana (roughly 1.2 acres) plot of land by growing various crops throughout the year. He can only sell three quarters of the harvest through middlemen or at San Ramon’s market square. Lacking credit from the formal financial system, Don Isael resorts to usurers for loans each season in order to pay for necessities such as seeds and fertilizers. These loans of 2,000 - 3,000 cordobas (approximately $80 - $120 USD) bear interest rates as high as 15% a month.  Don Isael’s challenges are representative of a large percentage of farmers in this region of Nicaragua. Even simple tools to ease the burden, such as a bicycle, are out of reach. In Don Iseal’s own words, “I cannot afford the repair cost when it breaks down.”

A bright spot just a mile away

A couple of steps away, Don Cidar owns a six manzana (roughly 3.5 acres) farm. The contrast is shocking; not only does he own cattle, but in the luxury of their higher quality home Don Cidar enjoys TV with his family. Unlike Don Isael, Don Cidar grows high value perishables such as tomatoes and sweet peppers in three micro-tunnels equipped with irrigation. He supplies two high-end supermarkets located in the capital of the department of Matagalpa. His success is no mystery, and Don Cidar owes it to his affiliation to the UCA San Ramón: a farmers’ cooperative which provides multiple benefits to its members, including credit for agricultural production, technical assistance and, above all, marketing. Through affiliation with the cooperative, Don Cidar and other farmers have solved the distribution puzzle and hence get a fairer price for their produce. Don Cidar’s immediate goal is to expand his business by acquiring more micro-tunnels.

The most uplifting case of all

Of the various cooperatives which I was fortunate to visit during my time in Nicaragua, the success of COPROEXNIC clearly stands above the rest. Incorporated in 1995, it has grown into a 3,000 member organization, and is Nicaragua’s largest exporter of sesame and sole exporter of organic cotton. By selling on the international market under the Fair Trade label, farmers in this network get more for their crops.  The benefits of pulling together into collectively owned organizations such as COPROEXNIC are obvious for smallholder farmers. By selling as larger groups, they not only achieve the huge volume of crops required to enter major commercial contracts, but also avoid getting stuck in the middleman-supported extortionate loan cycle, and increase their bargaining power.

In summary, it is no wonder that the recent Rockefeller Foundation initiative’s report on Reducing Global Food Waste and Spoilage highlights bulking and group marketing in the top 10 potential solutions to help smallholders escape the middleman trap, and thereby better reap the fruits of their efforts. The implementation of this solution however calls for innovative mechanisms to help farmers like Don Isael, who are too impoverished to afford the entrance fees and periodic membership fees required by cooperatives. While that task might look daunting, Growing Capital is committed to giving it a shot.

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Tags:  access to finance  field work  mba  Microfinance  nicaragua 

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