conference report

Microfinance Week 2014
Developing better markets
12th - 14th November 2014
Abbaye de Neumünster, Luxembourg

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conference report

Microfinance Week 2014
Developing better markets
12th - 14th November 2014
Abbaye de Neumünster, Luxembourg
conference report

2   – European Microfinance Week 2014
Foreword ________________________________________________________ 5
SessionS ___________________________________________________________ 7

Thursday 13th NOVEMBER 2014                                                    Friday 14th NOVEMBER 2014

Welcome address _____________________________________________________ 7        Plenary: Managing overindebtedness –
                                                                               speaking from experience __________________________________________ 43
Plenary: Balancing financial inclusion, market stability
and client protection _________________________________________________ 8      Lending services for agricultural microfinance _________________ 46

Investing in microfinance as a channel for other impact                        Responsible microfinance from a country point of view:
finance themes – challenges and opportunities ________________ 10              India ____________________________________________________________________ 48

Greening performance assessments: integrating                                  Savings for the bottom of the pyramid: self-reliance
environmental impact into the mfi assessments standard __ 12                   models _________________________________________________________________ 50

Microfinance and poverty __________________________________________ 14         Downscaling with commercial banks in Africa:
                                                                               opportunities and challenges ______________________________________ 52
Microfinance in conflict zones ____________________________________ 16
                                                                               Technology solutions and innovative delivery channels _______ 54
Investing in agricultural microfinance ____________________________ 18
                                                                               Can financial innovations be structured to address
Green microfinance and energy access __________________________ 20             climate risk of smallholder farmers? _____________________________ 56

Microfinance institutions: drivers for formalization                           Client protection and regulation __________________________________ 58
of micro and small enterprises ____________________________________ 22
                                                                               Savings for the bottom of the pyramid: institutional
Increasing youth economic opportunities through                                outreach _______________________________________________________________ 60
access to finance: how favorable regulatory environments
and youth focused services can shape better markets ________ 24                Digital finance: why does it work in Kenya and
                                                                               opportunities for 7 African countries – results from
Social performance: cross-learning from north and south –                      an EIB/UNCDF study _________________________________________________ 62
forging together on the pathway forward ______________________ 26
                                                                               Accelerating rural finance in Africa: initiatives from
Green microfinance and non-energy products _________________ 28                funders and support organizations _______________________________ 64

Developing a standardized approach to risk management:                         Social and financial performance: better together? ___________ 66
challenges and lessons learned from microfinance
risk experts ____________________________________________________________ 30   Local banking and inclusive finance ______________________________ 68

Exiting responsibly: the case of Sathapana ______________________ 32           Building green capacities in financial institutions ______________ 70

Clients at the center: from impact measurement                                 Plenary: From e-waste to e-resource: poverty and
to management, e-mfp University Meets Microfinance                             resourcefulness in Agbogbloshie, Ghana _______________________ 72
Action Group _________________________________________________________ 34
                                                                               Closing of European Microfinance Week 2014___________ 73
Enhancing client financial capability _____________________________ 36

Plenary: 5th European Microfinance Award on
                                                                               List of participants _____________________________________ 75
microfinance and the environment _______________________________ 38
                                                                               Feedback and Statistics _____________________________ 83
5th European Microfinance Award ceremony __________________ 40

                                                                                                                          European Microfinance Week 2014 –    3

                                        © Yann Figuet

4   – European Microfinance Week 2014
financial institutions, practitioners,     various markets, financial institutions
                                           academics, NGOs, analysts, raters and      from international commercial banks
                                           industry commentators to present key       down to small village NGOs and savings
                                           innovations, challenges and also the       groups, and of course the diversifying
                                           work conducted in the previous year by     range of entities involved in providing
                                           e-MFP’s several dedicated Action           inclusive financial services to the poor in
                                           Groups.                                    new – and better – markets. This
                                                                                      diversity, and the range of e-MFP’s
                                           With this year’s attention on Developing   members is reflected in the content of
European Microfinance Week is the          Better Markets, 31 workshops covered       European Microfinance Week – which
annual event of the European Microfi-      subjects including social performance      grows more varied and fascinating with
nance Platform (e-MFP), gathering its      management, agri-finance, conflict         every passing year.
diverse membership and other inter-        zone financial services, digital and
ested professionals from related sectors   technological innovations, green           This report summarises the discussions,
to debate, exchange and share experi-      microfinance, downscaling strategies,      viewpoints and vitality of the event. We
ences on issues impacting microfinance     responsible investment, and client-driv-   wish you an enjoyable read, active
in developing countries. The 2014 event    en product diversification. The title of   exchanges among members in 2015
brought together from 56 countries         the conference, Developing Better          and we hope to welcome you to the
over 400 opinion-leaders, top manage-      Markets, demands buy-in from a whole       next European Microfinance Week,
ment of banks, funds and other             range of stakeholders: regulators from     18th-20th November 2015.

                                                                             Anne Contreras, Chairwoman
                                                                             Christoph Pausch, Executive Secretary

                                                                                                    European Microfinance Week 2014 –   5

6   – European Microfinance Week 2014
Speakers           Christoph PAUSCH, e-MFP
                   Scott BROWN, Microfinance CEO Working Group

                                                                                            client needs. Its three main areas of inter-
                                                                                            vention are advocacy to influential actors
                                                                                            and the press, industry strengthening by
                                                                                            developing industry performance stand-
                                                                                            ards, and institutional strengthening
                                                                                            through the implementation of best
                                                                                            practices, starting within their own or-
                                                                                            ganizations. He also mentioned the group
                                                                                            is supporting the uptake of three industry
                                                                                            initiatives; the Smart Campaign, MF Trans-
Christoph PAUSCH opened the European          He also announced e-MFP’s cooperation         parency and the Social Performance Task
Microfinance Week 2014 with a word of         with the Microfinance CEO Working             Force.
thanks to all participants. This year, more   Group to jointly work on issues that affect
than 400 participants attended the event,     industry stakeholders across the globe. He    He stressed the importance of dialogue
including many new organisations and          explained, for example, their cooperation     beyond their working group, which is
representatives. Pausch highlighted sev-      on analysing microfinance’s information       mostly based in North America. He
eral new elements to the European Micro-      backbone and determining how it could         mentioned an expanding relation with
finance Week (EMW) programme, focus-          be strengthened in the future.                Convergences, with whom they jointly
ing specifically on improving networking                                                    launched the Global Appeal. He also
opportunities among participants: a con-      Scott BROWN, CEO of VisionFund Inter-         underlined their keen interest to strength-
ference app to connect with fellow par-       national continued by introducing the         en cooperation with e-MFP. He sees excel-
ticipants, arrange meetings and follow        Microfinance CEO Working Group to the         lent opportunities to cooperate and learn
the Twitter feed; a new Meeting & Net-        audience as a group of eight international    from each other as both organisations
working lounge; and a new area, the           organisations working in microfinance.        share the same goal towards responsible
Agora for Plaza, coffee breaks and lunch      Started in 2008, the group aims to reorient   finance.
to accommodate EMW’s growing numbers.         the microfinance sector towards meeting

                                                                                                           European Microfinance Week 2014 –   7
    Moderator           Antonique KONING, CGAP
    Speakers	Kim WILSON, Fletcher School at Tufts University
                        Narda SOTOMAYOR, SBS Peru
                        Armenuhi MKRTCHYAN, Central Bank of Armenia


    Antonique KONING kicked off the Open-
    ing Plenary by explaining the concept of
    balancing “ISIP”: financial Inclusion, mar-
    ket Stability, Integrity and client Protec-
    tion. In her work for CGAP’s Work stream
    Customer Empowerment, an enabling
    environment which takes up issues related
    to ‘ISIP’ is of vital importance. She also
    asked her fellow panellists to explain how
    their work relates to finding this balance.

    Growing up in a rural area, Narda SOTO-
    MAYOR learned at an early age how a
    lack of access to finance makes people
    vulnerable to risks and takes away their
    ability to invest in their livelihoods. She
    described her work at the Superintend-
    ence of Banks of Peru (SBS Peru), improv-     innovative solutions to imbalances in the    Incentives for supply side development
    ing microfinance regulation to achieve        microfinance sector and its institutions.    need to go hand in hand with transpar-
    social impact and market stability, as a                                                   ency rules to ensure clients are well
    balancing act in itself. As head of Con-      Koning asked the audience to consider        informed about financial products and
    sumer Protection and Financial Education      three statements. Half of the audi-          services, their benefits and risks, and the
    at the Central Bank of Armenia, Armen-        ence agreed that “there is no trade-off      terms and conditions agreed upon when
    uhi MKRTCHYAN learned that supply-side        between financial inclusion and financial    contracting. When consumers understand
    development of the financial sector is not    stability”. One contribution was that        their obligations, they are more likely to
    sufficient for deep inclusion. Trust and      when you provide financial services,         honour them; thus supporting the institu-
    understanding are needed to build the         considering customer needs and protec-       tion’s bottom line and the stability of the
    demand side. Empowerment and financial        tion will pay off in financial returns. On   financial system as a whole. According to
    literacy help consumers understand prod-      the statement “by definition financial       Mkrtchyan, it is financial exclusion which
    ucts and take better decisions, benefiting    inclusion implies consumer protection”,      threatens financial stability and integrity
    themselves, their financial service provid-   a key insight from the audience was that     since services remain out of supervisory
    ers and the financial system as a whole.      the definition does not always materialise   regulation and control of the formal
    Kim WILSON, the former head of Micro-         in practice. Finally, the audience agreed    financial system. She stressed the impor-
    finance at Catholic Relief Services and       unanimously on the statement that            tance of bringing microfinance within
    Faculty member at Tufts University closed     “Financial education is an essential         the scope of regulation. Wilson referred
    the introduction round, mentioning that       part of consumer protection”.                to the Banana Skin Report, which marked
    impacts of microfinance are not always                                                     volatility in household income as one of
    positive. Without standards, regulatory       Koning then asked the speakers to con-       the main risks perceived by practitioners.
    systems and impact measurement, practi-       sider the synergies between financial        She mentioned that when the MFI
    tioners had to work by instinct to balance    inclusion, market stability, integrity and   is promoting household stability, it is
    the system. In her current work at the        client protection. Sotomayor explained       also supporting its own stability.
    Fletcher School Leadership programme          how adequate policies to boost finan-
    she trains the next generation of practi-     cial inclusion and to improve consumer       On possible trade-offs and challenges
    tioners to think outside the box and find     protection can reinforce market stability.   Mkrtchyan cautioned policy makers not

8   – European Microfinance Week 2014
to cap interest rates to protect consumers.
Instead, she proposed that the most effec-
tive way to decide on appropriate interest
rates is to leave it to the market. Soto-
mayor partly supported her, by adding that
interest caps introduced in Peru in the mid
80’s were actually hurting the people they
were supposed to help. Similarly, credit tar-
geting quotas led to a sub-optimal alloca-      Discussion                                     a strong consumer protection regulatory
tion of resources and mandated institutions                                                    framework. Regulators from around the
to serve (rural, bottom-of-the-pyramid,         The discussion first turned to how to          world visit Peru to learn from its experi-
remote) populations, they were not ready        balance the ISIP principles in the case        ences engaging with service providers.
to serve. These types of market interven-       of insurance. Mkrtchyan explained how
tions hurt both the financial sustainability    insurance is about perceptions and             The discussion then turned back to the
and ability of MFIs to serve the poor.          stressed the need for financial education.     issue of interest rate caps. The panel
                                                Without pay outs, many clients consider        agreed that credit is diverse: differences
Wilson stressed the need to consider            themselves taxed, instead of lucky that no     exist between products, regions and mar-
interest rate caps in their context. As         insurance event affected their household.      kets, even within countries. Mkrtchyan
credit markets are not fully transparent,       Therefore, the Central Bank introduced         proposed to force financial institutions
caps can be suitable in certain cases, but      compulsory motor vehicle insurance to          to be transparent about the costs of their
need to be carefully considered. Soto-          raise awareness of the merits of insur-        products in order to reduce rates and
mayor cautioned that caps on interest           ance. Against expectations, this did not       fight the inefficiencies in markets. Wilson
rates for loans can also affect deposit tak-    result in consumers buying voluntary           agreed, adding that it is difficult to make
ing as financial institutions need to reduce    insurance in other fields. Sotomayor           MFIs comply with such caps when they
deposit rates to neutralize the reduction       explained how allowing agents to act           are put in place.
of their margins. In response, Mkrtchyan        as a delivery channel for insurance and
proposed the alternative of subsidising         allowing group insurance products show         As a closing statement, Wilson stressed
interest for specific vulnerable populations    promising results in Peru.                     that as regulators are different we need
instead of capping interest rates.                                                             to be aware of who is regulating whom.
                                                The panel then considered the inter-           Sotomayor reiterated the need for inter-
Sotomayor also mentioned false trade-           national dialogue on client protec-            action between industry and regulators.
offs. As Peruvian banks are moving into a       tion between regulators. According             Such interaction allows regulators to
still profitable microfinance market, MFIs      to Mkrtchyan, there are initiatives to         learn from private sector experiences and
are reaching further down the pyramid to        establish best practice, for example World     improves buy-in and compliance. Mkrtch-
more vulnerable and remote populations.         Bank best practices on client protection       yan added that a gap will remain between
On the one hand, this greatly improves          and the Alliance for Financial Inclusion       regulation, enforcement and implementa-
financial inclusion. On the other hand,         guidelines on client protection. However,      tion as the sector continues to develop.
it can also result in deteriorating port-       no single global standard setting body         Koning closed the session by stating that
folio quality if MFIs do not adjust their       exists to address client protection. All       there is always a cost to intervention. We
methodology to appropriately serve their        such global protection efforts are part of     can reduce trade-offs by cooperating,
new client base. Mkrtchyan added that           other standard setting, regulating, fund-      building synergies and by ensuring poli-
increasing competition can drive down           ing and policy-making bodies. Vital in this    cies and practices fit within the national
prices, but also result in over-selling and     dialogue are the voices of financial service   context and take continued development
extending loans to populations without          providers that often are missing from such     of the sector into consideration.
repayment capacities. Wilson underlined         discussions. Sotomayor added that regula-
that by communicating, practitioners and        tors exchange experiences in diverse fora,
regulators can stave-off trade-offs.            assuring that Peru is recognized as having

                                                                                                              European Microfinance Week 2014 –   9
     Moderator           Patrick GOODMAN, Innpact
     Speakers            Sylvia WISNIWSKI, Finance in Motion
                         Frederik Jan VAN DEN BOSCH, FMO
                         Tim RADJY, AlphaMundi
                         Guillaume BONNEL, Lombard Odier
                         Sachin VANKALAS, LuxFLAG

                                                   and low-income households, has a social        Frederik Jan VAN DEN BOSCH supported
                                                   mission and is an expert in high volume        Wisniwski’s view, adding that proper
                                                   – low value transactions. She wonders,         support to MFIs is needed. He explained
                                                   however, whether mainstreaming has             how FMO’s mission and vision towards
                                                   taken off some of the sector’s innova-         impact investment, reducing ecological
                                                   tive edge needed to engage with other          foot prints and green, inclusive growth is
                                                   impact investment themes such as water,        pushing the organisation to re-think its
                                                   health, energy and education. Moreover,        strategy towards MFIs. Out-of-the-box
                                                   addressing such topics often requires dif-     thinking can help to leverage MFIs market
                                                   ferent skills, in terms of new partnerships,   knowledge, networks and outreach to
                                                   different investment formats and different     achieve wider impacts. It can also help
                                                   client profiles. She specifically mentioned    to improve situations outside the normal
                                                   alternative funding streams, with subsi-       sphere of influence of the financial sector,
                                                   dies for impact investment building on a       and he mentioned the example of ship-
                                                   different tradition than debt and equity       recycling in Bangladesh.
                                                   financing for microfinance. Moreover,
                                                   impact investments can be politically          Making such new links between micro-
                                                   sensitive and bring MFIs under public or       finance and other impact themes also
                                                   political scrutiny. Wisniwski concluded        requires new partnerships. Van Den
                                                   that MFIs can do more, but we need be          Bosch gave the example of agricultural
                                                   careful not to overburden MFIs.                investments where agri-traders were
     PRESENTATIONS                                                                                now becoming small farmer financiers
                                                                                                  by default and MFIs can play a role in
     Patrick GOODMAN started the session
     by asking whether microfinance can be
     an appropriate channel for other impact
     investment themes. While some investors
     are exiting these types of investments
     and moving to more direct impact invest-
     ments, he is looking to find ways in which
     the microfinance industry can also offer
     investors a delivery channel.

     Sylvia WISNIWSKI, as CEO of Finance
     in Motion, brought in the perspective
     of an impact assessment manager. Her
     organisation focuses on microfinance,
     SME finance and green finance, looking
     at energy, water and organic agriculture.
     She explained that microfinance seems
     well-suited as a channel for impact invest-
     ment: the sector focuses on the bottom-
     of-the-pyramid, is close to both SMEs

10   – European Microfinance Week 2014
financing their increasing working capital
needs. In conclusion, he believes MFIs can
act as a suitable channel, but require ‘an
additional layer’ of knowledge, networks,
technical skills and regulation.

Tim RADJY expressed a different view.
While agreeing that MFIs have proven
their value; most notably in demonstrat-
ing the poor are bankable, we now need
to move beyond MFIs if we want to
achieve impacts in other fields. In his view,
MFIs can only pay lip service to other
impact themes as going deeper requires
a different skills set. His impact invest-
ment fund takes a more direct investment
strategy focusing on dedicated suppliers
of impact-relevant services. He provided
three examples to support his view. Firstly,
he showed how dedicated student loan
providers in Mexico are better suited to        DISCUSSION                                     ent and can be manipulated. Wisniwski
service students as they can offer lower                                                       added that auditing firms are moving into
interest, longer grace periods and innova-      The discussion first focussed on the issue     impact measurement. As this field is still
tive partnerships with education providers      of interest rates charged to microentre-       emerging, Finance in Motion conducts its
(in this case a first-loss guarantee fund).     preneurs. Radjy mentioned that in some         own checks in the field. Impact measure-
A second example was from the Mexican           cases this is difficult to control by inves-   ment requires a new set of qualitative skills
mortgage market. In this case, dedicated        tors. He proposes investors concerned          which still need to be developed among
providers proved better suited to offer         about high interest rates should focus on      auditors, especially “to look beyond
appropriate products in terms of more           MFIs that meet specific requirements in        the figures”. Based on this discussion,
affordable interest rates, payment sched-       terms of their interest rate policy, or to     Sachin VANKALAS briefly explained about
ules and loan maturity. Lastly, he provided     reduce capital costs to MFIs once certain      LuxFLAG’s microfinance label and how
examples from the solar energy sector           impact or operational requirements are met.    labelling allows investment funds to be
where they helped a solar panel company                                                        transparent and credible to their investors.
to set up a pay-plan and partner with a         The panel then focused on the issue            He stated that with regulation entering
Mobile Network Operator (MNO), reach-           of impact measurement. Wisniwski               the field of impact reporting, labelling and
ing a vastly larger client base than when       explained that their objectives in terms of    auditing firms will be further pushed to
working through typical MFIs. Another           impact are driven by their own investors.      develop appropriate tools. Popular third-
solar investee has already sold more than       Next to quantifiable indicators such as        party impact assessment standards include
1 million solar lanterns in East Africa, a      gender, type of product, urban/rural split     Microrate and Planet Rating ratings for
scale which would be hard to achieve            and penetration of low-income brackets,        MFIs, the Global Impact Investing Rating
with most MFIs.                                 they also look at qualitative aspects of       System (GIIRS) used by AlphaMundi, the
                                                performance through interviews and             Social Return On Investments (SROI), the
Guillaume BONNEL provided the per-              focus groups. Bonnel explained that it         Progress out of Poverty Index (PPI) devel-
spective of a private bank. Lombard             is important to build bridges to make          oped by Grameen, and LuxFLAG.
Odier developed an innovative impact            investors and especially bankers under-
investment fund to meet the demand              stand social impacts. Van Den Bosch            Lastly, the discussion turned to the
for impact investment opportunities. The        supported this statement and added             time frame before impact of projects is
fund is set up in two pockets, a core and       that private funds can learn valuable          measured. Wisniwski explained that this
satellite pocket, where the core focusses       lessons from experienced impact inves-         depends on the characteristics of the
on large-scale funds investing in microfi-      tors such as FMO. It is important to clearly   assets. Direct investments in service sup-
nance and the satellite focuses on impact       define goals of investors, as this needs       pliers and innovative approaches can have
investments requiring more innovative           to translate in targets established in fund-   a time horizon of up to 15 years. Van den
strategies with a higher performance            ing agreements and efforts changed into        Bosch mentioned the possibility of looking
potential. As such, capacities available in     investments.                                   back with clients and measuring retrospec-
the core pocket are leveraged for success                                                      tively. It is important to consider that while
and impact for the satellite pocket.            Van Den Bosch also mentioned the impor-        your impact will increase over time, you
                                                tance of auditing non-financial reporting      also need to consider whether it can still
                                                of MFIs. Reporting is not always transpar-     be fully attributed to your intervention.

                                                                                                              European Microfinance Week 2014 –   11
     Moderator	Raluca DUMITRESCU, MicroEnergy International
     Speakers            Geert Jan SCHUITE, Enclude
                         Marion ALLET, PAMIGA
                         Hatem MAHBOULI, FMO

                                                  microfinance and banking sector. It was        Dumitrescu, Innovative Banking and
                                                  developed building on existing tools           Development Finance Consultant at
                                                  created by researchers and practitioners,      MicroEnergy International, continued
                                                  as well as on the result of a survey           with a presentation on integrating envi-
                                                  conducted by the Action group with             ronmental impact into MFI assessment
                                                  36 microfinance practitioners to identify      standards, using the insights gained dur-
                                                  the green microfinance practices most          ing the green performance assessment of
                                                  relevant to assess. Allet continued by         Contactar by MicroEnergy International.
                                                  explaining that the tool reflects all types    This Colombian MFI has 70 thousand bor-
                                                  of environmental strategies that could be      rowers and a gross loan portfolio of USD
                                                  adopted by an MFI. The index covers            $61 million. Its green product is called
                                                  1) formalized environmental strategy,          ConSuPlaneta, offering improved cooking
                                                  2) environmental risk management and           stoves, biodigestors, solar crop dryers for
                                                  3) green opportunities. The tool is meant      coffee, and water tanks and filters.
                                                  to be used in a pedagogical way, leaving
                                                  the user the option to pick some of these      MicroEnergy International´s approach
                                                  strategies over others according to his        consisted of five steps, starting with a sta-
                                                  context of intervention. Answering the         tus quo assessment based on The Green
                                                  survey results in a graphic which shows        Index that resulted in an evaluation. The
                                                  the MFI’s current position in relation to      next steps in developing a new green
                                                  its desired position. Allet closed her pres-   strategy for Contactar included the imple-
     PRESENTATIONS                                entation mentioning that the tool is still     mentation and promotion of a Green
                                                  a work in progress. The tool has already       Strategy, which was based on five pillars.
     Raluca DUMITRESCU welcomed the               been included into the new version of          The first pillar included its environmental
     audience to the first session on green       SPI4, but the Action Group invites the         policy, which resulted in the inclusion
     microfinance and introduced the session’s    audience to give feedback in order to          of Contactar’s green performance in its
     topic of green microfinance tools. Marion    improve it further.                            annual report and green profile for impact
     ALLET, senior microfinance environment
     practitioner for PAMIGA, presented an
     initiative which was started two years
     ago by the e-MFP Microfinance & Environ-
     ment Action Group: The Green Index.
     The Action Group is aiming for a clear
     definition of green performance. The
     tool is designed to help MFIs understand
     where they stand in terms of environ-
     mental management. It is also useful for
     rating agencies and investors, since the
     tool can also be used to identify the dif-
     ferences in environmental sustainability
     between MFIs. Additionally, NGOs can use
     the tool to map the current situation for
     a gap analysis and future strategy.

     The elaboration of the tool was a collabo-
     ration of multiple organizations from the

12   – European Microfinance Week 2014
Together with the African Development
                                                                                             Bank and HIVOS, Schuite trained local
                                                                                             consultants to improve MFIs’ green
                                                                                             performances in East Africa, Indonesia
                                                                                             and Latin America. These programmes
                                                                                             showed parallel streams. Financial institu-
                                                                                             tions are more interested in risk manage-
                                                                                             ment compared to smaller MFIs. Schuite
                                                                                             defended that MFIs frequently struggle
                                                                                             with a lot of things already. They do
                                                                                             not have the capacity to include green
                                                                                             performance on their agenda. However,
                                                                                             MFI should keep in mind that donors and
                                                                                             investors are incentives to consider this
                                                                                             issue. Schuite pointed out that CEOs can
                                                                                             be the drivers behind a green strategy.
                                                                                             Clients can also be drivers since they are,
                                                                                             according to Schuite, often impacted by
                                                                                             environmental issues.

investors. The second pillar consisted of     facility are in place. High scores for green
non-financial services, emphasizing the       strategy in the index show that manage-        DISCUSSION
environmental and economic benefits           ment is committed to use the green facil-
of green technologies and the use of          ity. Environmental and social risk manage-     The discussion started with the question
preferential credit conditions for clients    ment is nice to have, but not a necessity      on whether MFIs that pursue the Green
mitigating environmental risks. Ecologi-      from an investor’s perspective. It shows       Index are offered additional benefits.
cal footprint, the third pillar, included a   that systems are in place for expansion        Mahbouli responded by mentioning that
methodology for measuring the internal        into riskier clients. Mahbouli concluded       preferably green financial products are
footprint and the reduction of water and      that The Green Index is a good tool to         kept commercial, but technical assistance
electricity use and waste. The fourth pil-    raise awareness amongst MFIs and their         is often offered at a reduced rate. The
lar was formed by an environmental risk       partners, but questioned the need for          discussion then turned to the issue of
assessment of clients’ activities. The last   standardization of the tool. In addition,      weighting questions in the survey of the
pillar of Contactar’s strategy promoted       he also put some remarks forward for The       Green Index. The audience asked the
the improvement of the green credit line      Green Index, raising the question on how       panel whether some issues were more
by standardizing the technologies, inter-     much green portfolio is needed. Mahbouli       important than others. Allet responded
nal capacity building and promotion.          also noted that the closed questions in the    that MFIs should not look at the scor-
                                              survey do not leave much room for MFIs         ing of the survey on its own, and should
Hatem MAHBOULI was asked to share             to express their ambition and potential.       look at qualitative information as equally
the investor’s perspective on the Green                                                      important. Weighting is currently not
Index. As an investment officer at FMO,       Geert Jan SCHUITE from Enclude pro-            feasible due to the closed questions in
the Netherlands Development Finance           vided the case of the Green Performance        the survey of the Green Index but may be
Company, he explained that green finan-       Agenda, which was developed together           considered in an updated version.
cial inclusion fits the bank’s strategy and   with HIVOS. The initiative developed
finance ambitions. This has resulted in       a list of what MFIs can do to become           Another question revolved around the
‘green lines’: credit line for on-lending     more conscious of their impact on the          continuation of funding for the Green
to investments producing environmen-          environment. Schuite stressed that MFIs        Index. Mahbouli answered that continu-
tal benefits. Mahbouli explained FMO’s        cannot do everything, forcing them to          ation of funding is still unclear, as green
approach to green microfinance, using         make choices by developing an agenda.          performance assessments are still in an
a set of criteria to identify the product’s   The tool developed by the initiative has       infancy phase. However, he stressed that
potential. Mahbouli stressed that it has      a 5-step approach: The approach starts         it needs to become a core business. The
to be a win-win for financial institutions,   with identifying the need followed by          final discussion was about the certifica-
suppliers and end clients, consisting of a    ‘speaking the green language’ and the          tion of green finance products. The
clear business case.                          internalisation of the concept of green        panellists agreed that certification is pres-
                                              performance. This is then turned into          ently not a priority because the current
Mahbouli explained that The Green Index       action planning and evaluation to further      tool focuses on creating awareness more
helps investors. A high result for green      improve performance.                           than providing facts and numbers on the
opportunities is appealing for investors,                                                    actual green performance.
as it proves that the systems for a green

                                                                                                            European Microfinance Week 2014 –   13
     Moderator           Scott BROWN, VisionFund International
     Speakers	           JD BERGERON, Truelift
                         Julie PEACHEY, Grameen Foundation
                         Aldo MOAURO, MicroFinanza Rating

                                                                                                  data is collected and analysed. Develop-
                                                                                                  ment organisations should understand
                                                                                                  that there is a business case for collecting
                                                                                                  and using poverty data. Data brings value
                                                                                                  to the organizations and at the end of the
                                                                                                  day positively impacts the bottom line. The
                                                                                                  better you understand your clients, the
                                                                                                  more effectively an organisation can serve
                                                                                                  them, the better it will perform financially.

                                                                                                  Peachey closed her presentation with a
                                                                                                  call for action warning that the sector is
                                                                                                  at risk of losing the PPI. If investors, lend-
                                                                                                  ers, and donors do not demand a data-
                                                                                                  driven approach to decision making and
                                                                                                  business management, and if there is no
                                                                                                  support given to MFIs to collect, analyse
                                                                                                  and use the data, then the momentum
                                                                                                  will be lost. The PPI requires continuous
                                                                                                  updating in order to remain accurate
                                                                                                  and relevant. However, the PPI is a public
     PRESENTATIONS                                 The PPI is most commonly used to report        good and there is a risk that funding will
                                                   on the poverty outreach of an organiza-        not be continued.
     Scott BROWN opened this session by            tion or program. Organizations with a
     thanking the audience for showing inter-      mission to serve the poor can prove they       Aldo MOAURO supported Peachey’s views
     est with their presence and he introduced     are doing so by publishing the poverty         and warned against reputational risk for
     the panellists by briefly explaining their    rate of their client base. In addition, the    those organizations aiming to reach the
     involvement with the sector.                  PPI can be used to: target or screen cli-      poor but who cannot track their evolution.
                                                   ents and areas of operations, track pov-       He pointed out that organizations first
     Julie PEACHEY from Grameen Foundation         erty movement over time, evaluate the          need to understand their capacity if they
     talked about social performance meas-         effectiveness of programs vis-à-vis one        want to put their mission into practice.
     urement, data quality and analysis. She       another, develop products through cus-         According to Moauro, social ratings are
     mentioned that many international devel-      tomer research by poverty levels, and dis-     important as they give an opinion about
     opment organisations are using data as        cover the behaviour and needs of clients       the capacity of an MFI to reach its social
     an accounting function, but not in order      across poverty levels. Peachey emphasized      goals. Moauro presented the findings of a
     to improve their programs, educate them-      that the PPI is relevant to any organization   comprehensive social rating of a sample of
     selves about the lives of the people they     or program that works with the poor.           MFIs which was carried out in the period
     are trying to engage or to deliver custom-                                                   2009-2013. According to these findings,
     ized services. Peachey explained how the      Although there are now hundreds of             only 20% of the total clientele of these
     Progress out of Poverty Index (PPI) tool      organizations using the PPI across differ-     MFIs were below the 2$PPP/day poverty
     addresses the need for MFIs to under-         ent sectors, many of them are not yet          line, showing that outreach in depth is
     stand their customers as well as their        able to use the data meaningfully. This        limited. Moauro mentioned that this offers
     outreach to poor clients. The PPI is a sim-   may be due to insufficient capacity in the     a transparency opportunity, as the pov-
     ple, cost-effective method allowing MFIs      organization, challenges with the manage-      erty outreach message communicated by
     and other organizations to measure the        ment information system (MIS) systems,         the industry may not always be reflected
     poverty level of their clients and provides   and lack of commitment from leadership         in reality. Deeper outreach results are
     estimates of whether a certain household      or follow through on using results when        achieved by poverty oriented MFIs.
     lives below recognized poverty lines.

14   – European Microfinance Week 2014
Moauro concluded his presentation by
suggesting actions based on these find-
ings. There is a need to improve the
capacity of MFIs on measuring and track-
ing poverty level. In order to minimize
and manage reputational risk, the sector
needs to introduce effective incentives to
collect and analyse and use the data. This
can be done for example through regula-
tions, investment covenants, or self-reg-      He concluded his presentation by stating      Another discussion point revolved around
ulation by networks. Finally consolidation     that through the use of data and conclu-      economic activities of the MFI clients
on specific industry norms and standards,      sions drawn from it, the MFI is able to       and whether the MFIs should focus on
like the PPI and Truelift is important.        monitor the progress of poor clients, and     measuring it. Brown explained that peo-
                                               think strategically about further adding      ple below the 2$PPP/day poverty line
JD BERGERON opened his presentation            value. Findings should be used to: assist     earn income from trade that could not
by stating that social businesses need to      board and senior management make              be done before becoming an MFI client.
be accountable for their actions. To date      specific decisions; plan and respond to       If we are not measuring job creation for
we have tracked financial accountability       any weaknesses found; improve specific        the poor then perhaps MFIs are missing
in great detail but the social side is often   products; add skills and services.            out on reporting some of the impact
measured by a few stories and some                                                           of microfinance. Patricia Richter stated
photos. This is relevant for marketing                                                       that according to research by ILO, self-
purposes but not for stakeholders.             DISCUSSION	                                   employed clients of MFIs create on
He explained Truelift’s framework which                                                      average two jobs in their businesses.
is based on three Pro-Poor Principles:         The first question from the audience chal-
1) Purposeful outreach to people living in     lenged the capability of PPI to measure       Brown concluded by summarizing its
poverty, 2) Design of products and ser-        poverty. Poverty is dynamic, i.e. people      main outcomes. PPI is proven to be suc-
vices that meet the needs of poor clients,     move in and out of poverty, while PPI is      cessful in helping target and track poverty
3) Tracking progress of poor clients. He       a static tool. Peachey talked about how       impact. Analysis and decision making
emphasized that being robust and con-          some organizations, such as Vision Fund,      should be based on the findings. Having
sistent on how you measure and collect         are tracking changes in poverty likelihoods   a strategy of social performance is not
data is a good start but it is not enough.     of the same clients over period of time.      enough; organizations should be able
This needs to be coupled with useful           Peachey also emphasized that the PPI          to measure its evolution. Management
analysis that leads to lessons learned and     could be used together with other tools       should be informed of the outcomes of
change. Social data should be considered       to measure various aspects of poverty.        social data and ready to make decisions.
as critical as monetary data. Client satis-
faction and feedback reports are equally
important to capture information on the
results achieved.

                                                                                                           European Microfinance Week 2014 –   15
     Moderator           Willemien LIBOIS, Frankfurt School of Finance & Management
     Speakers	           Michaël KNAUTE, OXUS Development Network / e-MFP
                         Major David BESKOW, US Military Academy – Commander’s Emergency Response Program
                         Adeeb SHARAF, First Microfinance Institution Syria

                                                                                                  Microfinance Institution since 2010. He
                                                                                                  explained that, despite the conflicts affect-
                                                                                                  ing the country, First Microfinance has
                                                                                                  been able to successfully overcome and
                                                                                                  mitigate risks. Sharaf also reaffirmed First
                                                                                                  Microfinance Institution’s long-term com-
                                                                                                  mitment to reach its social mission and
                                                                                                  contribute to sustainable development.

                                                                                                  Libois then addressed the panellists with
                                                                                                  some key questions. Her first question
                                                                                                  was directed to Knaute, concerning the
                                                                                                  ethical dilemma of using a commercial
                                                                                                  approach to microfinance in conflict
                                                                                                  zones, where populations are most vul-
                                                                                                  nerable. In response to this question,
                                                                                                  Knaute clarified that the implementation
                                                                                                  of such activities is not unethical, and
                                                                                                  that microfinance can be done anywhere.
                                                                                                  He further explained that conflicts zones
     PRESENTATIONS                                  as Afghanistan and DRC, and that he           also have markets and economic activity,
                                                    expects to be challenged on this point        but that it is highly important to carefully
     Willemien LIBOIS introduced the topic          during the session.                           select the populations which are served.
     - lessons learned and good practices in                                                      As such, a diagnostic phase is essential in
     the implementation of microfinance in          Major David BESKOW explained that his         order to identify areas which are acces-
     conflict zones. She called attention to the    experience in conflict zones essentially      sible and safe for the staff, as well as to
     fact that conflicts occur on a permanent       comes from a thirteen-year career in the      identify the existence of market demand
     basis all over the world. Libois reminded      USA Military, during which he served in       and infrastructure.
     the audience that individual conflicts         countries such as Afghanistan and Iraq.
     have different characteristics and stages,     Most recently, Beskow was involved in         Libois’ next question was directed to
     thus requiring diverse approaches from         a Commander’s Emergency Response              Beskow, revolving around the mecha-
     a microfinance perspective. Following          Program in East Baghdad, designed to          nisms to guarantee that micro grants are
     Libois’ lead, each panellist briefly shared    implement a number of projects, one of        put to good use. Beskow clarified that
     their experiences with microfinance in         them covering economic development.           there is indeed an existing concern that
     conflict zones, which was followed by an       Within this project, micro grants rang-       the micro grants may not be well spent,
     extensive discussion and interaction with      ing from USD $500 to USD $5,000 were          which is why potential beneficiaries go
     the audience.                                  provided for beneficiaries in sectors such    through an application process to estab-
                                                    as retail, industry and agriculture, funded   lish the type of grant. In order to avoid
     Michaël KNAUTE briefly introduced the          by both the USA and the Iraqi govern-         this risk, the existing database of the Coa-
     work of OXUS, a French network of MFIs.        ments. This project also keeps a dataset      lition Forces is consulted before giving out
     He explained that OXUS is currently active     on the investment of local funds which        micro grants. In addition, district councils
     in countries such as Tajikistan, Kyrgyzstan,   can be accessed globally by commanders,       are directly involved in the selection pro-
     Afghanistan and the Democratic Republic        and which can contribute to a long-term       cess, which also guarantees the safety
     of Congo (DRC), which have experienced         economic development.                         of beneficiaries. The grants also have a
     or are currently experiencing conflict.                                                      follow-up component, where an audit on
     Knaute acknowledged that OXUS takes            Adeeb SHARAF shared his experience in         the use of the funds is conducted toge­
     a commercial approach in countries such        Syria, where he has been working for First    ther with Iraqi police forces.

16   – European Microfinance Week 2014
DISCUSSION                                      The discussion also showed that micro-
                                                                                                finance in conflict zones does not offer
                                                The first discussion point revolved around      room for insurance products. Knaute
                                                the perception that conflict zones face         clarified that there is no clear demand
                                                dramatic population moves and how               for such products, and prices would be
                                                that would present an essential shortcom-       too high. Sharaf agreed, and elaborated
                                                ing for microfinance activities. Beskow         that clients need more physical products
                                                reacted to this comment by mentioning           to support them, something which insur-
                                                that, at the time of the project, the popu-     ances do not offer. In fact, he mentioned
                                                lation of East Baghdad was not in transit.      that insurance would only be functional
                                                He also explained that beneficiaries need       to cover loans.
                                                to be present for at least twelve months
                                                to go through a compulsory audit. Knaute        The audience also questioned whether
                                                then mentioned that microfinance is             there is any room for investors in micro-
                                                highly sensitive to major population            finance in conflict zones. In his response,
                                                moves, and further explained that this          Knaute clarified that investor inter-
                                                occurs in very specific contexts, such as       est varies from country to country. In
                                                natural disasters. In addition, he men-         Afghanistan, for instance, most funds are
                                                tioned that, during a conflict, populations     from public institutions such as the World
                                                in rural areas move more often than those       Bank. As for the DRC, which is a post-
                                                in urban areas. Sharaf reinforced this          conflict area, there are more opportunities
Libois asked Sharaf on the extent to            point by mentioning that the security situ-     for private investors who are looking into
which his institution’s social aspect is        ation is better in large Syrian cities, where   diversifying their portfolios.
incorporated into its operational model.        there are currently no military operations.
Sharaf reacted by reiterating First Micro-                                                      Libois concluded by emphasizing that
finance Institution’s commitment to carry       Another member of the audience                  the implementation of microfinance in
out its social goals, and that its services     addressed Knaute with the theme of sav-         conflict zones presents a number of risks
and activities are complementing efforts        ings, namely on how to convince clients         which are essentially operational rather
to support sustainable development              that their deposits are secured with the        than credit-related. She also mentioned
in Syria. In addition, he explained that        given MFI. Knaute explained that OXUS           that operating successfully in conflicts
operating in Syria always brings an unex-       is usually seen as a foreign bank, which        zones creates a strong need to under-
pected risk, which is why the MFI adopts        tends to create client trust more easily.       stand the market and offer appropriate
certain steps such as proper assessment         This is especially true in countries such       conditions to the right beneficiaries. As
of clients, branch control on any lend-         as the DRC, whereas it is more difficult        a closing remark, Libois commented that
ing activities and a comprehensive bonus        among populations which have had bad            private investors are exceptional in such
system for the staff. He also mentioned         experiences with banks, such as in Tajik-       initiatives, and usually have a social char-
the institution’s risk management model         istan and Kyrgyzstan.                           acter and long-term vision.
which, in coordination with the local
team, guarantees the security and acces-
sibility of clients.

Knaute also reacted to Libois’ question on
how to manage access to grants vs. loans,
so as to avoid confusion for clients in
conflict zones. He explained that people
who need grants are different from peo-
ple who need loans, which is why Oxus
specifically identifies beneficiaries with
capacity, skills and potential to re-pay and
be a client. Beneficiaries of grants or loans
are two separate target groups which
should not be confused.

                                                                                                               European Microfinance Week 2014 –   17
     Moderator           Jürgen HAMMER, Grameen Crédit Agricole Microfinance Foundation
     Speakers	           Zacchaeus I. SYENGO, Rafiki Kenya
                         Irina EICHENAUER, KfW Development Bank
                         Caterina GIORDANO, Alterfin


     Jürgen HAMMER introduced the session
     by explaining how agricultural microfi-
     nance became mainstream as financial
     institutions and MFIs were searching for
     new markets during the crisis of 2008.
     Agricultural microfinance has proved to
     be fundamental for impact, as 80% of the
     people in developing markets live in rural
     areas. Nevertheless, only 30% of MFIs are
     dedicated to agricultural microfinance.

     Hammer continued by asking the panel-
     lists to answer the questions on why a
     specific session on agricultural microfi-
     nance is necessary and what makes it dif-
     ferent. Caterina GIORDANO replied that
     agricultural microfinance requires more
     adaptation by MFIs, while systemic risks
     are evidently linked to the product. Irina    she mentioned, related to human                  Hammer asked the panellists about their
     EICHENAUER added that rural areas have        resources and higher training costs: it is       role in supporting agricultural finance.
     the challenge of low population density       challenging to recruit well qualified staff in   Eichenauer stated that KfW’s approach
     and poor infrastructure (roads, communi-      rural areas and loan officers need financial     to agriculture finance can be presented
     cation, etc.), resulting in higher transac-   and agricultural skills. Zaccheus SYENGO         along three pillars. The first pillar is a tra-
     tion costs for MFIs. Another challenge,       also pointed out that the agricultural sec-      ditional financial intermediary approach:
                                                   tor is not well-structured, which is shown       KfW provides credit lines and training
                                                   by gaps in the value chain. Another issue        measures to local MFIs for refinancing
                                                   according to Syengo is related to seasonal       lending to agriculture. The second pillar
                                                   weather externalities.                           consists of the value chain approach:
                                                                                                    KfW invests in funds that provide financ-
                                                   Hammer asked the opinion of the panel-           ing and technical assistance to agricultural
                                                   lists on the role of technology. Syengo          producer organisations, SMEs and other
                                                   stressed the importance of mobile bank-          chain actors. The third pillar is agro-insur-
                                                   ing. Mobile banking attracts new people          ance, which has the goal of expanding
                                                   to agriculture. Syengo related mobile            agricultural microfinance by reducing the
                                                   banking to the current problem that many         credit risks through e.g. weather-index-
                                                   studies on smallholder farmers show:             based insurance.
                                                   although smallholders are responsible for
                                                   most of the food production in develop-          Giordano answered the question by men-
                                                   ing markets, challenges are found in the         tioning that Alterfin is an investor which
                                                   traditional patterns in smallholder farm-        attracts funds from the North to invest
                                                   ing. They do not appreciate new technol-         in the South. The total portfolio is EUR
                                                   ogies and associated agricultural improve-       60 million, of which 60% is invested in
                                                   ments. However, mobile banking products          agricultural finance. Alterfin’s approach
                                                   opened up opportunities for young farm-          to agricultural finance consists of two
                                                   ers, helping them to mitigate risks.             pillars. Firstly, Alterfin directly finances

18   – European Microfinance Week 2014
ture portfolio consists of coffee. Systemic
                                                                                              risks, such as price fluctuations and cli-
                                                                                              mate shocks can be solved through geo-
                                                                                              graphical and product diversification. This
                                                                                              new strategy led to a continued growth in
                                                                                              the loan portfolio, while at the same time
                                                                                              operational self-sufficiency was reduced.

                                                                                              The last case study presented by Syengo
                                                                                              was the successful pilot of Kilimo
                                                                                              Advance, a strategic partnership between
                                                                                              farmers, milk processors, technology
                                                                                              partners and the Rafiki Bank. The main
                                                                                              challenges included slow information
                                                                                              flow, errors leading to double payments
                                                                                              and late payments due to market cir-
                                                                                              cumstances. Success factors include the
                                                                                              ability to access USD $15 million worth
                                                                                              of credit served beyond the 19 branches.
                                                                                              Furthermore, the pilot worked with more
international value chains, such as coffee      The session then continued with the           than 60 cooperatives and 87 thousand
and cocoa. Secondly, the organisation           presentation of three case studies by         farmers.
finances local value chains by providing        the panellists. Eichenauer introduced the
working capital investment, asset finance       KfW Development Bank and the Fairtrade
and rural finance. Alterfin uses tripartite     Access Fund, which is a social investment     DISCUSSION
agreements between local partners, farm-        fund, designed to support smallholder
ers and buyers to mitigate risks in the         farmer cooperatives and associations in       The discussion started with a question on
value chain.                                    Latin America, Africa and Asia. The fund      the plot size of the farmers. The panellists
                                                is a joint investment with Fairtrade Label-   agreed with the audience that it is tricky
The Rafiki Bank has a more practical            ling Organisation International, Grameen      to access subsistence farmers through
approach, working directly with farmers.        Foundation and Incofin cvso. KfW cur-         agricultural finance. They are often more
The services consist of four components:        rently has an equity investment of EUR        dependent on traditional microfinance
savings facilities, credit facilities, insur-   2 million for refinancing smallholder         tailored to flexible needs of those farmers.
ance and value addition through technical       cooperatives and a new proposal               The discussion then moved to the inter-
assistance and creating market linkages.        for expansion to Africa is underway.          est of young people in farming. Syengo
Syengo stressed that Rafiki’s loan book         Eichenauer stressed that the challenges       noted that the Kenyan government,
consists of: 20% of smallholder farm-           and risks faced by smallholder farmers        banks and private sector are promoting
ers and 17% of agribusinesses. Rafiki           require a                                     farming amongst the youth, and provided
expressed that he is proud to support           holistic approach. This approach includes     the example of a performance artist,
the people that feed the nation.                a combination of financing (e.g. long-        who grew up in a rural part of Kenya, as
                                                term loans for business development,          ambassador for farming. Syengo closed
Hammer carried on by asking the panel-          working capital loans and trade finance)      the discussion agreeing on a question
lists about their experience with micro-        and technical assistance (e.g. organiza-      about the competitive environment in
insurance. Syengo highlighted the main          tional capacity building or mobile infor-     agricultural microfinance. He provided the
difficulties for Rafiki Bank. Affordability     mation services).                             example of his own bank which did not
is still a challenge due to the 6% inter-                                                     exist three years ago.
est rate. Distribution is another challenge     Giordano presented her case study on an
which Rafiki Bank was able to overcome          MFI in Northern Peru which mostly serves
by opening 19 branches. The final chal-         the agricultural sector. The MFI was cre-
lenge posed by Syengo was trust. This           ated by coffee and cocoa cooperatives to
issue was dealt with by incorporating           provide adapted loans both for working
a third party which was trusted by the          capital and asset financing. She expressed
farmers.                                        the risk of concentration: 70% of agricul-

                                                                                                             European Microfinance Week 2014 –   19
     Moderator           Marion ALLET, Pamiga
     Speakers            Hadley TAYLOR, MicroEnergy International
                         Carla PALOMARES, ADA
                         Patrick REICHERT, CERMi
                         Bold MAGVAN, XacBank Mongolia

     PRESENTATIONS                                  clients spent up to 50% of their incomes      far. In this case, a national apex body was
                                                    on energy during Mongolia’s harsh win-        set up to manage the Solar Home Sys-
     Marion ALLET underlined the importance         ters, jeopardizing their livelihoods and      tems programme. The apex body works
     of energy access by providing some             the financial stability of the institution.   with partner organisations (POs), both
     stunning figures: 1.3 billion people lack      In addition, older heating stoves were        MFIs and accredited technical providers
     access to electricity and 2.6 billion people   jeopardizing family health and added to       to implement the programme. Certifica-
     lack access to clean cooking facilities,       the massive pollution plaguing the capital.   tion of technical providers, either separate
     especially in rural areas. This severely       To amend this situation, XacBank started      enterprises (two-hand model) or technical
     curtails local development and negatively      a project through which it offered energy     subsidiaries of the bigger MFIs (one-hand
     impacts livelihoods and the environment.       efficient and low-emission stoves to the      model) is done according to quality stand-
     Although technical solutions are avail-        urban population. In a multi-stakeholder      ards established in the programme. The
     able, outreach to populations in need          effort, the bank developed financial          programme has proven particularly suc-
     and overcoming financial barriers of high      products to finance the stoves, while the     cessful due to the competition between
     initial costs requires appropriate delivery    government helped register households         MFIs which greatly reduced costs to end
     channels and financing mechanisms. This        who might be in need of stoves. XacBank       users. Moreover, non-performing POs are
     session looked at the possibilities microfi-   also worked with donors and NGOs for          not refinanced in consecutive rounds,
     nance offers, with their frequent access to    funding and accessing carbon credit mar-      ensuring partners keep up quality stand-
     low-income clients. It uncovered lessons       kets to reduce costs. Finally, the institu-   ards. After such success in Bangladesh,
     learned and identified opportunities to        tion worked with technical providers to       the challenge at hand is now replicating
     scale up initiatives.                          develop suitable stoves.                      this model, which Allet added requires a
                                                                                                  strong government buy-in.
     Bold MAGVAN of XacBank explained how           Hadley TAYLOR added to our understand-
     there is a clear link between his institu-     ing of possible impacts and partnership       Carla PALOMARES provided insights from
     tion’s social mission and clean energy.        models by providing us with best prac-        ADA’s experiences with green energy in
     Engaging with energy was a necessity           tices from Bangladesh where 3.2 million       Africa. ADA strives to develop win-win
     from different perspectives. XacBank           solar home systems have been installed so     scenarios between financial services

20   – European Microfinance Week 2014
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