ADFIP Strategic Plan 2014-2018

1. ADFIPStrategic Plan 2014-2018 Developed by Gilbert & Samuels Company Limited Suva, Fiji Email : gilbert@gilbert.com.fj August – October 2013 Association of Development Financing Institutions in the Pacific

2. Methodology • Environment : • Internal • External • Trends Association of Development Financing Institutions in the Pacific

3. View of ADFIP As Is Key : Very Poor Adequate Excellent 1 2 3 4 5 Association of Development Financing Institutions in the Pacific

4. Expectations • State : • Need to grow (and be more like ADFIAP) or lose relevancy. • Need for raise capacity and increase resources • Function/Purpose : • Increased assistance to members • ADFIP to justify existence and prove its relevance by assisting in the advancement of member DFIs Improve things such as training for staff • Increased knowledge sharing and experience among members • DFIs to improve networking amongst themselves and share more experience to optimize costs • Develop training modules and programs relevant to members’ training needs and requirements • Assist members with securing additional capital and funding Association of Development Financing Institutions in the Pacific

5. Expectations • Function/Purpose (cont.d) : • Harmonise member efforts on common strategic activities: eg financing for renewable energy and energy efficiency programs. • Work more closely as a team to address issues of global warming and renewable energy • Complete and keep ongoing member benchmarking • Regularly update members on office matters/member news • Act as member representatives to regional meets/conferences/ events • Grow partnership organisations and advocate for ADFIP members • Enhance coordination with members and strategic partners/donors • Be a stronger spokesman and player within the financial sector of the Pacific region Association of Development Financing Institutions in the Pacific

6. Expectations (cont.d) • Given borrowing constraints/capacity of individual members and limitations to operate on a regional basis, consider studying development of a regional public/private financial institution, such as a Pacific Investment Bank • Learn from experience of PIPSO Association of Development Financing Institutions in the Pacific

7. Where do you see ADFIP in the next 5 years? • Depends on the strategic plan members will put in place and how effective it will be • An organization with more resources and capacity to be able to deliver on its mission and assist individual members with their unique and respective needs • More important role and spokesman • Stronger links to development partners and regional organisations • Stronger and more frequent governance system • Doing things that ADFIP normally do but not doing now • ADFIP to grow and be more active in partnering with other international organisations to attract assistance of international organizations for ADFIP members • Particularly, members who are too small to deal with the international organisation themselves Association of Development Financing Institutions in the Pacific

8. Where do you see ADFIP in the next 5 years? • ADFIP to remain as a body. • Relevance in the changing landscape of Pacific Islands region is a concern • ADFIP is seen not just as a central body, but also as a trusted advisor to members as outlined in the words of the vision: anticipate; respond; create. • Unless members are serious and committed in bringing about major change in the role of ADFIP, things may not progress too far ahead from they are at present • ADFIP to be developed to a much closer and stronger network of DFIs providing relevant banking solutions for Pacific Island nations • ADFIP can develop a data base of DFIs’ information/data that members can access • ADFIP should stress the role of Development Bank for the financing of renewable energy and energy efficiency projects. • More strategic alliances with commercial banks Association of Development Financing Institutions in the Pacific

9. Suggested Vision Suggested Vision after Phase 1 Survey : “To provide premier services to our members that will bring about increased prosperity for their customers while contributing to the economic development of Pacific Island Countries” Association of Development Financing Institutions in the Pacific

10. Suggested Vision (cont.d) Comments from Survey Phase 2 : • “To be the ultimate resource for development finance services and be the most influential advocate for financial inclusion … effectively collaborating for regional solutions.” • “To be the pre-eminent knowledge and advocacy focal point of financing sustainable development in the Pacific region.” • Revision 1: Successfully serve our members to sustain prosperous economies for all our people in the Pacific. • Revision 2:Serve our members to sustain prosperous economies for all our people in the Pacific. • Revision 3: Serve our members to sustain prosperous economies for our people in all Pacific Island Countries. Association of Development Financing Institutions in the Pacific

11. Suggested Vision (cont.d) Comments from Survey Phase 2 : • Setting high expectations with the formulation of “premier” services especially in consideration of staff and organisational constraints of the ADFIP Secretariat and the governance system • It should not only include economic development but also mention social development and combat of impacts caused by climate change. • Perhaps include the words “effectively” and “efficiently” to stress the aim of enhancing the member’s financial sustainability and capacity. • The “visions” should to be linked to the particular challenges their members face, be they regulatory, funding, sectoral in promoting development finance. Association of Development Financing Institutions in the Pacific

12. Suggested Vision (cont.d) • “To be the premier knowledge and advocacy focal point in the financing of sustainable economic and social development within the Pacific Islands region.” Revised Vision Suggested : Association of Development Financing Institutions in the Pacific

13. Suggested Mission Suggested Mission after Phase 1 Survey : “We contribute to development finance initiatives in Pacific Island Countries by enhancing the capacity of our members through : • advocating development finance and its benefits • training and capacity development • building and coordinating relationships with other providers of similar services and donor agencies, and • providing other advisory services that our members need.” Association of Development Financing Institutions in the Pacific

14. Suggested Mission (cont.d) Comments from Survey Phase 2 : • Sounds OK except that you need to also mention something about ‘sustaining membership’ • Revision: ADFIP will contribute in an efficient, responsive and collaborative manner to development finance initiatives that enhance the capacity of our members through: • advocating development finance issues and their benefits • (suggest a verb to start the sentence as with the other points) training and capacity development • building and coordinating relationships between members, other providers of similar services and donor agencies, and • providing other advisory services that our members need.” Association of Development Financing Institutions in the Pacific

15. Suggested Mission (cont.d) Comments from Survey Phase 2 : • “To contribute to the sustainable development of the Pacific by advancing development finance programs and practices through knowledge-sharing, training and capacity enhancement, advisory support, building partnerships and advocacy work.” • Suggest rewording to: “advocating development finance benefits and possible issues in the policy dialogue with Governments and the dialogue with other stakeholders” • It should also include something on “sustaining membership” or membership care and support in order to maintain level of members • Proposal of a three-fold mission; (i) promoting training and development amongst its members, (ii) influencing development of national and regional policies and legal frameworks and (iii) facilitating access and integration with regional and international financial institutions such as the EIB. Association of Development Financing Institutions in the Pacific

16. Suggested Mission (cont.d) “We contribute in an efficient, responsive and collaborative manner that sustains our membership, to the sustainable development of Pacific Island Countries by : • advocating development finance benefits and practices • facilitating training and capacity development of our members • building partnerships between members, with Governments, providers of similar services, donor agencies and other stakeholders • providing other advisory services that our members need.” Revised Mission Suggested : Association of Development Financing Institutions in the Pacific

17. External Trends – Current • Political/financial relationship with the (US) government • Long-term funding sources • Mobilising and leveraging affordable funds • Declining level of funding under the Compact with (US) government • Competition in the financial sector • Rapid technological changes, especially those connecting the islands (telecommunication and transportation) • Roles, responsibilities, and priorities of donor countries • Limited market prospects for products developed that hinder prospect of new developments within a country • Climate changes affecting small island countries Association of Development Financing Institutions in the Pacific

18. External Trends – Current • Ongoing threat of commercial banks stealing good clients after development banks helped establish and set up clients • Note : A client’s move to a commercial bank is usually a commercial decision e.g. lower interest rates. This is a good indicator that Development Banks are successfully fulfilling their role i.e. assisting business clients establish themselves to a level that they are sufficiently strong to venture into a more competitive financial market. • Present trends towards financial literacy and inclusion to reduce poverty • ADB’s move away from advocating the Development Bank model • Members strategic alignment with National Development plans • Regional recognition / alignment / perception of ADFIP and member development banks (financial institutions) and bank model in terms of financial performance and governance Association of Development Financing Institutions in the Pacific

19. External Trends – Current (cont.d) • Members own recognition in-country by Government, business community, general community • ADFIP lacks the level of recognition it deserves from the respective Governments of each member country • Although majority of member countries have small economies and are geographically scattered, they face similar challenges and have common needs • Members individual efforts to resolve economic issues may not be as effective as that of a consolidated regional approach through ADFIP • Current economic conditions likely to continue for the duration of the planned period • Continuing low interest on deposits leading to reduced cost of funding for DFIs • Pressure to reduce lending rates so that benefits of reducing cost of funds can be shared with the customers Association of Development Financing Institutions in the Pacific

20. External Trends – Current (cont.d) • DFIs need to know how to align their operations and services in order to address the impact these external factors (e.g. regional/global issues including Climate Change, Renewable Energy, Environment and Social Impact Assessments, Carbon Credits, etc) may have in the respective economies in which they serve • ADFIP should access appropriate resources and expertise on behalf of member DFIs to assist them facilitate necessary adjustments in response to these external factors. • DFIs have evolved to meet the challenges in the financial markets • Greed of players in the financial systems (banks, investment banks, mortgage brokers, financial planners etc) blamed for current global economic and financial difficulties • Strategies developed not to lose sight of global trends and identify means to mitigate the trends for island economies Association of Development Financing Institutions in the Pacific

21. External Trends – Future • Environmentally friendly projects • Change in potential membership organisations i.e. Housing Finance, Micro Finance, etc • Source of funds for members’ portfolio growth • Technology and how member organisations interact with their clients • Changing and evolving client expectations • Member countries regulatory environments : Anti Money Laundering etc • DFIs to consolidate efforts towards promoting the use of renewal energy i.e. move towards use of wind and solar power and away from fossil fuels • Ongoing improvement in the use of technology to provide banking services • ADFIP Secretariat to build relationships with appropriate bodies and be abreast with developing trends to be able to advise members Association of Development Financing Institutions in the Pacific

22. External Trends – Future (cont.d) • Impact of global warming in the Pacific Islands nations to continue to be a reality and will become a major threat to DFIs way of doing business, especially in small land low lying islands • Government support & relationship • Expiring political/financial relationship with US government • Enabling policies and incentives • “Arms length” relationship • Performance & impact measurement • To include options to support ADFIP members seek more commercial activities • Role in the financial system • Capital market catalyst • Complementarity and additionality Association of Development Financing Institutions in the Pacific

23. Internal Trends • Governance & Management Dimensions • Strategic visioning and direction: balancing between mission & sustainability • Board-Management structure & processes • Financial discipline & risk management • Corporate culture & human capital strengthening • Reputation & brand building Association of Development Financing Institutions in the Pacific

24. Operational Challenges of DFIs – World Bank/World Federation of DFIs Survey Based on the World Bank & World Federation of DFIs survey, with the assistance of ADFIAP as WFDFI Secretariat, the following are key operational challenges of DFIs: Association of Development Financing Institutions in the Pacific

25. Strategic Goals for the next 5 years Comments from Phase 2 Survey : • The acronym is SPARK which stands for the following: • Sustaining Membership • Promoting Advocacy • Advancing Human Capital development • Revving up resources • Keeping alliance • Strategic Goal 1: Advocate development finance issues and their benefits • Strategic Goal 2: training and capacity development • Strategic Goal 3: building and coordinating relationships with other providers of similar services and donor agencies • Strategic Goal 4: providing other advisory services that our members need Association of Development Financing Institutions in the Pacific

26. Strategic Goals for the next 5 years Comments from Phase 2 Survey (cont.d) : • 1. To establish a formal relationship with the Forum Secretariat as the agency that Forum members acknowledge as the conduit for financial assistance from the international financial institutions and other donor agencies of the world • 2. To establish formal relations with all donor agencies to be the conduit for assistance to the various members of ADFIP. • 3. To raise funding by organizing relevant trainings programs in Fiji. • 4. To solicit donor contribution to the activities of ADFIP. • 5. To make ADFIP relevant to the changes conditions of the world, in terms of technology, climate change, financial literacy, improvement of women’s participation in economic development and food security. Association of Development Financing Institutions in the Pacific

27. Strategic Goals for the next 5 years Comments from Phase 2 Survey (cont.d) : L – iven up membership: this means increasing both members’ base and benefits, engaging more with its members, partners and donors as well as enhancing business model growth and brand equity I – mprove people and institutional capacities: this connotes enhancing knowledge access through training and capacity-building as well as consulting and advisory services through pooling of expertise and partnerships N – urture advocacy work and partnerships: this appertains to leveraging the avowed mission of DFIs as development catalysts and trailblazers and promoting the same to its constituencies and to the public-at-large through alliances and cooperation with like-minded organizations, partners and donors. K – eep enhancing financial capacity: this relates to increasing and sustaining financial resources needed to operate the association effectively and efficiency Association of Development Financing Institutions in the Pacific

28. Strategic Goals for the next 5 years Comments from Phase 2 Survey (cont.d) : • Increase members and strategic alliances with external parties and organisations • Enhance reputation and brand image • Increase financial resources and sources of funding • Improve marketing and develop/implement a communication plan Association of Development Financing Institutions in the Pacific

29. Strategic Goals for the next 5 years [This covers all suggestions provided by other respondents to Phase 2 Survey.] Association of Development Financing Institutions in the Pacific

30. Strategic Goals for the next 5 years Association of Development Financing Institutions in the Pacific

31. Actions to achieve Strategic Goals Comments from Phase 2 Survey : • Present a proposal to Forum Secretariat seek endorsement from the Forum member countries to recognize ADFIP and its roles. • Establish formal relations with ADFIAP, ADFIM and other similar regional organization to learn from them. • Establish relations with the multilateral development organizations, like ADB, World Bank, European Investment Bank, Japan Development Bank and related organizations that could provide both financial and technical assistance to the small Pacific Island DFIs. • More frequent membership consultations and improve membership benefits • Knowledge sharing and hub (e.g. via website) Association of Development Financing Institutions in the Pacific

32. Actions to achieve Strategic Goals Comments from Phase 2 Survey (cont.d): • Issue awareness programme by sharing problems and experiences amongst members, e.g. semi- or annual consultations also by email • Quarterly newsletter also for external audience to promote the brand “ADFIP” as well as its members through coverage of major events and achievements • Increase in financial resources but also sources (grant financing or support for SME financing) and identification should also be carried out by members of the Management Committee • Enhance ADFIP’s financial sustainability to ensure objectives and programmes to be carried out • Communication Plan with ADFIP website • Realistic and fundable training plan for ADFIP members that could also include e-learning programmes Association of Development Financing Institutions in the Pacific

33. Actions to achieve Strategic Goals Comments from Phase 2 Survey (cont.d): Association of Development Financing Institutions in the Pacific

34. Actions to achieve Key Strategies Strategies : C R E A M • Actions suggested for C – develop Capacity and human resources Association of Development Financing Institutions in the Pacific

35. Actions to achieve Key Strategies Strategies : C R E A M • Actions suggested for R – rev utilisation of Resources Association of Development Financing Institutions in the Pacific

36. Actions to achieve Key Strategies Strategies : C R E A M • Actions suggested for E – Establish alliances Association of Development Financing Institutions in the Pacific

37. Actions to achieve Key Strategies Strategies : C R E A M • Actions suggested for A – Advocate development finance issues and benefits : Association of Development Financing Institutions in the Pacific

38. Actions to achieve Strategic Goals Strategies : C R E A M • Actions suggested for M – strengthen Membership : Association of Development Financing Institutions in the Pacific

39. Prioritising actions to achieve Key Strategies Actions for “develop Capacity and human resources” Association of Development Financing Institutions in the Pacific

40. Prioritising actions to achieve Key Strategies Actions for “rev utilisation of Resources” Association of Development Financing Institutions in the Pacific

41. Prioritising actions to achieve Key Strategies Actions for “Establish alliances” Association of Development Financing Institutions in the Pacific

42. Prioritising actions to achieve Key Strategies Actions for “Advocate development finance issues and benefits” Association of Development Financing Institutions in the Pacific

43. Prioritising actions to achieve Key Strategies Actions for strengthening Membership Association of Development Financing Institutions in the Pacific

44. Review of the Strategic Plan Third quarter of calendar year Association of Development Financing Institutions in the Pacific

45. Proposed Organisation Structure Justifications for changes to organisation structure : • Staff numbers and capacity identified as areas needing improvement • Structure to be in place should suit mission/goals/ strategies/work set out in the Strategic Plan • Need to combine trustee and ADFIP Secretariat – avoid confusion and bureaucracy through additional organisation/layers to deal with • Having a good structure in place with appropriate oversight by a “Board” a step in the right direction to a stronger institution Association of Development Financing Institutions in the Pacific

46. Proposed Organisation Structure (cont.d) Justifications for changes to organisation structure : (cont.d) • Strong organisation (supported by a good/robust structure) better able to advocate issues and collaborate with stakeholders and donors • Strong and “independent” organisation (i.e. able to make its own decisions through its Board and implement strategies identified) will enable the organisation to push through its work and serve members • At the moment most decisions and actions are only discussed/passed at annual meetings • [Structure proposed to be implemented over a 3 year period to enable organisation to deliver strategies identified in the Strategic Plan and justify changes] Association of Development Financing Institutions in the Pacific

47. Proposed Organisation Structure (cont.d) Organisation Structure in Year 1 of Strategic Plan Notes : 1) Minimum qualifications for a Accounts Officer is a degree in a relevant discipline with 2 years relevant work experience Association of Development Financing Institutions in the Pacific

48. Proposed Organisation Structure (cont.d) Organisation Structure towards end of Year 2 of Strategic Plan Notes : 1) Minimum qualifications for a Project Officer is a degree in a relevant discipline with 2 years relevant work experience Association of Development Financing Institutions in the Pacific

49. Proposed Organisation Structure (cont.d) Organisation Structure for Year 3 of Strategic Plan Notes : 1) Minimum qualifications for a Project Officer is a degree in a relevant discipline with 2 years relevant work experience Association of Development Financing Institutions in the Pacific

50. Proposed Organisation Structure (cont.d) Organisation Structure in Year 4 of Strategic Plan Notes : Minimum qualifications for a Project Officer is a degree in a relevant discipline with 2 years relevant work experience Association of Development Financing Institutions in the Pacific