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The Challenges and Outcomes of Integrating Financial Services and Social Development Services

The Challenges and Outcomes of Integrating Financial Services and Social Development Services. Carmen Velasco PRO MUJER Bolivia. PRO MUJER´S VISION Women are crucial for national development. PRO MUJER´S MISSION

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The Challenges and Outcomes of Integrating Financial Services and Social Development Services

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  1. The Challenges and Outcomes of Integrating Financial Services and Social Development Services Carmen Velasco PRO MUJER Bolivia

  2. PRO MUJER´S VISION Women are crucial for national development

  3. PRO MUJER´S MISSION To support women who live in conditions of socioeconomic exclusion, through participatory, integrated services so they may attain sustainable improvements in their personal, family and civic lives.

  4. CHALLENGES PRO MUJER FACES

  5. WIN-WIN RELATIONSHIP The biggest challenge: What clients gain What the institution gains Continuous search for balance

  6. CHALLENGE FOR MICROFINANCE INSTITUTIONS COMMITTED TO THE DEVELOPMENT OF THEIR TARGET POPULATION SELF- SUSTAINABILITY OF THE BORROWERS INSTITUTIONAL SELF- SUSTAINABILITY COST RECOVERY • Increase Income • Improve living • conditions • Satisfy needs with new • services PROFITABILITY

  7. Issues to Consider: There is no one size fits all model. If you have a social mission, target the low- end population. Stay focused on the target population and avoid mission drift. Identify the most efficient means of targeting clients. PRO MUJER’s Response: Tailors its intervention model to fit the needs of its clients. Operation sites and services are based on market research. Maintains status as not-for-profit organization. Self selection process (competition). 2nd Challenge: Define the target population.

  8. Issues to Consider: Permanent listening to identify clients needs and demands. Develop and tailor the services to client characteristics. Assure continuous and permanent services. Implement permanent client assessment processes. Implement periodic impact evaluations. PRO MUJER’s Response: Services and institutional structure have been developed with clients. Take into account the results from the assessment and impact evaluation processes. Work toward financial sustainability in all services. Cost effective client assessment process. Outsourcing. 3rd Challenge: Identifying the needs of the clients.

  9. Issues to Consider: Inform the clients. Inform the team. Adjust or create services and processes. PRO MUJER’s Response: Informing the clients is still a major challenge. Feedback to and from the team occurs on a permanent basis. All services are adjusted regularly to respond to results. 4th Challenge: Utilization of client assessment and impact evaluation results.

  10. Issues to Consider: Moving from clients´ unawareness towards awareness of needs generates demand for services. PRO MUJER’s Response: Identify the means to achieve awareness. Identify the cost-benefit of meeting the demand for services. Culturally competent interventions to achieve greater awareness and change behavior. Determine the feasibility of offering services internally or outsourcing. 5th Challenge: Create awareness for demand.

  11. BREAKING THE POVERTY CYCLE Motivate to access available services Identify the means and put them into practice Participate in integrated development programs Increase skills and knowledge Identify new needs WOMEN IN POVERTY Increase income and improve quality of life Change in attitudes Increase participation, increase opportunities Increase self-esteem Increase skills and knowledge

  12. Issues to Consider: Adjust the methodology according to: best practices in the industry – don´t be intimidated evolving skills and preferences of the clients changes within the institution, including personnel Pro-activity, forward thinking to implement best practices and efficiency. Know the competition and how to stand out from it. PRO MUJER’s Response: Major methodology changes. (Communal Associations and Focal Centers) Continuous improvement philosophy – we try to anticipate solutions to problems before problems arise. Created a niche that combines financial and social services. 6th Challenge: Define and adjust the methodology for providing services.

  13. Issues to Consider: Efficient, simple and clear Understandable to internal and external customers Lean and cost effective PRO MUJER’s Response: Staff´s roles, responsibilities and reporting requirements are transparent and flexible. Organizational structure is replicable and has been duplicated in the regions. Organization is not top heavy. Emphasis is on staffing centers to generate more interaction and services for clients. 7th Challenge: Define the organizational structure.

  14. Issues to Consider: Optimizes services focusing on quality. Maintains strict controls over the operating costs. Maximizes the use of resources. Takes advantage of the capacity of the institution. Achieve sustainability by service and by the organization. Establishes goals and projections with the active participation of all levels of the organization. PRO MUJER’s Response: Clients retention and satisfaction Operating expenditures only increase as client base expands. Focal Centers as a means to maximize resources. By combining services in the focal centers, and taking advantage of economies of scale, services are financially sustainable and provided at a lower cost. Annual operation plans. 8th Challenge: Define an operating structure.

  15. 9th Challenge: Offering multiple services, both financial and social. There are two main delivery methods for providing multiple services: • Non-Integrated model: In order to respond to their needs, clients must search for and work with multiple institutions or services providers. • Integrated model: Clients find answers to their needs and provision of services via one stop shopping.

  16. PROS: Easier administration. Greater specialization. Less burdensome for staff and organization. Easier to know your competition. NON-INTEGRATEDMODEL INTEGRATED MODEL PROS: • One stop shopping is easier for clients and less time intensive. • Institution gets to know its clients better. • Greater client loyalty. • Administrative costs on a per client basis are lower. • Fixed costs are spread over multiple services. • Adds value and increases competitive advantages.

  17. INTEGRATED MODEL NON-INTEGRATEDMODEL CONS: • More burdensome for clients to establish relationships with multiple institutions. • Institutions only understand one aspect of the client. • Administration is more expensive on a cost per client basis compared to the centralized model. CONS: • Difficult to administer and monitor. • Must retain various specialists in each field. • More burdensome for staff and organization.

  18. PROMUJER´S INTEGRATED MODEL TRAINING COMPONENTS SERVICE COMPONENTS

  19. Training in social development: Leadership and self esteem Maternal and child health Reproductive health Legal rights Health leadership Training in financial services Pre-credit Credit and savings Administration of their internal account Management of communal associations´ financial operations and meetings Types of training that PRO MUJER offers INTEGRATED SERVICES IN PRO MUJER • Training in business development: • Ongoing development of business skills • Training in sales, purchasing, accounting, evaluation and competition • Business leadership

  20. Services in social development Basic health services and preventative health Reproductive health services Health consultations and services for families of PRO MUJER members Legal assistance services Individual and couples counseling Childhood development programs Financial services Group and individual loans from PRO MUJER Internal loans from Communal Associations Internal savings account with dividends for clients Types of services that PRO MUJER offers INTEGRATED SERVICES IN PRO MUJER • Services in business development: • Visits to the businesses are available upon request. • Technical assistance in business management and development

  21. PRO MUJER has succeeded in creating a sustainable win-win program of services and training. How it has been accomplished How clients win How the institution wins

  22. A. How it has been accomplished PRO MUJER´s structure • Each country has a National Office that oversees the Regional Offices. • Each Regional Office oversees the operation of the Focal Centers. • PRO MUJER participants meet at the Focal Centers to receive training and services. • In each Focal Center, women create their own Communal Associations, which are composed of 4 – 6 solidarity groups. • Solidarity groups are composed of 4 – 8 clients. Each member of the solidarity group guarantees the loans made to the other members in the group.

  23. A. How it has been accomplished (Cont…) Communal Association structure • Most communal associations meet every two weeks to receive training, services and make payments on their loans. • Each communal association has a Pres., Vice Pres, Secretary, Treasurer and Vice Treasurer responsible for administering internal and external funds of the Communal Association. • Each communal association has a credit committee responsible for analyzing and approving new loans. • Each communal association has a health and business representative.

  24. B. How clients win • Self confidence • Social network • Empowerment • Training to build and grow successful business • Greater business skills • Improved outcomes in areas of health and social development

  25. INTEGRATED SERVICES Health MICRO FINANCE SERVICES Educ. Power Credit Partici- pation Client gains MICROFINANCE AS SINGLE SERVICE Credit Clients gain little or lose MICRO FINANCE SERVICES

  26. Clients´& Institution´s Achievements

  27. C. How the Institution Wins • Number of clients: 49,750 • Number of borrowers: 38,380 • Sustainability: Operating self-sufficiency of 117%. • Number of branches: 33 focal centers • Number of personnel: 263 • PRO MUJER operates in four countries and will be expanding to Argentina in 2004

  28. BOLIVIA 33focal centers 38,380loans COCHABAMBA 6 focal centers 7,330loans EL ALTO 13 focal centers 16,896loans SANTA CRUZ 3 focal centers 1,968loans POTOSÍ 3 focal centers 2,204loans SUCRE 5 focal centers 7,202loans TARIJA 3 focal centers 2,778loans PRO MUJER´S COVERAGE

  29. Growth of Pro Mujer´s Total Portfolio and Clients´ Savings Balances ($US)

  30. Growth in Borrowers, Clients and Communal Associations

  31. Profitability

  32. Self-Sufficiency

  33. Productivity

  34. Productivity

  35. After 13 years of work in the field…

  36. PRO MUJER´s best practices include: • The most successful way to add education and social development services is through the microcredit program and not as a separate programs. • Microcredit is not an end in itself but a vehicle to attain development for women. • Providing door to door services is neither efficient nor effective. We have found the focal center model to maximize effectiveness for clients and the institution. • Provision of additional services can be facilitated through strategic alliances such as Pro Mujer´s relationship with FIE

  37. Thank you!!!

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