Presentation Transcript

1. DID’s specialized solutions Mobilization Agricultural Technological Training Surveillance of savings Finance Solutions Financing Microinsurance Housing Loans for Investments for entrepreneurs Finance Schooling
2. Offer leverage for economic development and autonomy DID assists its partners (MFI, central banks, etc.) in the design, delivery and marketing of savings products and services DID provides MFI the adequate coaching : management of financial risks, technology, training, internal controls and infrastructure DID offers education about savings to the population in general MOBILIZATION OF SAVINGS
3. Sustain economic development, profitability of agricultural activities and food security A diagnostic tool to determine the offer for agricultural credit A methodology for analyzing the potential of a supply chain Specific training programs for agricultural financing Financial services adapted to the various needs of the rural clientele: Operating , warehouse, investment credits Loan life insurance plan Indexed crop insurance AGRICULTURAL FINANCE
4. Improving performance for financial institutions but also, increasing security and accessibility of financial services SYSDE-SAF transactional program Mobile application for information on operations (AMIO) Stratego decision-making support system Computerized data processing centre (CTI) Smart cards Intercoop transaction system MFI Outlets in town/village market(s) Credit+ tool for risk analysis TECHNOLOGICAL SOLUTIONS
5. Develop quality services for members and clients Toolkits for setting up a training service within an MFI International and institutional seminars (strategic financial management, governance, challenges or training for MFI operators, etc.) Specialized international seminars on operational and critical management issues Task-based training programs for managers, loan officers and tellers Training program for managing and operating savings and credit cooperatives TRAINING
6. Increase the confidence of depositors in microfinance institutions Our expertise: Prevention Legal and regulatory framework Supervisory activities Internal control systems Inspection External audit Protection Security fund SURVEILLANCE
7. Supporting the business projects of small and medium entrepreneurs Two specific business models for SMEs are offered in these two financial institutions models: EFC Alliance EFC operator-investor : build, operate and transfer Entrepreneurs benefit from sustainable access to financial services adapted to their specific needs. Financial institutions gain access to specialized expertise in financing for entrepreneurs FINANCING FOR ENTREPRENEURS
8. Reduce the vulnerability of families in the event of unexpected situations Our adapted tools: Loan insurance Health insurance Indexed agricultural insurance Funeral insurance MICROINSURANCE Desjardins: number one insurer in Québec
9. Facilitate access for families to healthy and secure housing Our expertise Start up of specialized units dedicated to housing finance within MFIs Implementation of decision support systems Market analysis and definition of housing finance products and services Market positioning, business models and commercialization Evaluation of government policies and programs Definition of a sector-based approach HOUSING FINANCE
10. Facilitating access to education and improving conditions for success DID helped Haitian financial cooperatives to design, deploy and manage this financial product: schooling loans. The role of DID consists of: Establishment of coordination among schools, school officials, parents and the financial cooperatives Product design and methodologies to deliver and oversee credit for school fees Production of the toolkit related to product design and follow-up Training of the staff in the financial cooperatives offering the product Monitoring of results LOANS FOR SCHOOLING
11. Support the growth and development of microfinance Our experts analyze applications received, proceed with necessary due diligence, propose terms and conditions for loans or investments and establish partnerships that make it possible to conclude these operations. The institutions financed receive the support of our experts during investment follow up. DID manages two funds that promote access to financial resources and thereby provide leverage for development and growth in the microfinance sector. Partnership Fund (capitalization: CAN$22 million) Desjardins Fund for Inclusive Finance (capitalization: CAN$10 million) INVESTMENTS
12. DID’s Entrepreneurs Financial Centres (EFC)
13. How DID contributes to MSME finance and its challenges? Our answer: Implement business centres specifically for entrepreneurs/MSME, called “EFC”. Two business models are offered: Affiliated EFC EFC operator-investor : build, operate and transfer Entrepreneurs benefit from sustainable access to financial services adapted to their specific needs. Financial institutions gain access to specialized expertise in financing for entrepreneurs.
14. What is a EFC? Entrepreneurs Financial Centres Based on Desjardins Group’s initiative A specialized department within a network of savings and credit cooperatives a local microfinance institution offering financial services for the SME market Local and collective ownership In addition to financial experts (credit, savings) Experts in housing finance Experts in insurance Etc.
15. EFC in operation, with DID’s collaboration Affiliated EFCEFC operator-investor Burkina Faso Panama Mali Tanzania Senegal Uganda Zambia
16. DID’s Affiliated EFC
17. What is an Affiliated EFC ? It’s an extension of an already existing financial institution It increases the range of services offered to the members and clients It maximizes staff performance It optimizes the quality of service delivered to entrepreneurs
18. Sample Organization Chart of an Affiliated EFC Federation Regional Union Supervision and support for the financial institutions (FI) FI FI FI FI FI FI Coordinating Committee Monitoring of budget, financial results and business plan Hiring and oversight EFC Technical Director Credit Committee Personnel
19. Characteristics of an Affiliated EFC The EFC works for and on behalf of its participating financial institutions : The member can do business with its financial institution and the EFC at the same time: One financial institution can then respond to its personal and professional needs. The EFC’s powers and responsibilities are defined legally and are validated by Board of Directors of the financial institution Managers, Union and Federation are all responsible for global management follow-up of the financial institution
20. Affiliated EFC: Conditions of success Continuous commitment of the managers Trust relationship between the managers and the supervision structures Commitment to action and openness to change Common vision and shared business objectives Customer-loyalty approach, business development and adequate consulting expertise and techniques EFC visibility and its positioning in the market
21. In the end, the Affiliated EFC is a solution that: Reaches the market needs Increases financial institutions profitability Increases the cooperative character of the network Allows the women and the young people to have access to credit
22. DID’s EFC « operator-investor » (O/I)
23. Deployment of CFE-O/I : Prerequisites
24. EFC-O/I: DID’s Strategy Establish local financial institution with the mission to supply suitable financial products and services to local MSMEs Offer financial products adapted to the needs of the local MSMEs Encourage the development of the private sector Community-owned and managed EFCs Transfer of expertise (build, operate, transfer) Set-up mechanisms to allow “clients users” of the EFCs to become owners
25. EFC O/I vs local ownership: two ways to consolidate Employee share ownership programs (ESOP) Client share ownership programs (CSOP)
26. The impacts on both EFCs business models
27. The EFCs have a considerable impact in their milieu, because they contribute to: Growth for MSMEs and the feeling of pride that results Job creation Economic development in communities Improved credit management practices in financial institutions Increased management capacity Growth and profitability for financial institutions linked to the EFC
28. Lessons learned: Affiliated EFC and EFC-O/I To be implemented successfully, the EFCs require: A good start-up An organizational governance An operational governance Operations (marketing, credit, administration, management) Adequate technological solutions A good marketing approach Continuous training for officers and managers
29. Lessons learned: Affiliated EFC and EFC-O/I Deploying EFCs take… Time Identify, analyze and conclude in the potential, install the institutional capacity. Identify and mobilize resources Adapt the tools and methodology to the country Resources Human, financial and technological ones
30. Other challenges:DID’s service offer in Agricultural Finance
31. What we do… Diagnosis the agricultural credit offer Analysis of the potential of a supply chain Human resource planning Specific training programs for agricultural financing Financial services adapted to the various needs of the rural clientele: Operating credit Warehouse credit Investment credit Loan life insurance plan Indexed crop insurance
32. The equilibrium principle The pillar of financial services Agricultural development will be more sustainable if all pillars are strengthened, but also if there are reinforcements of the links between each pillars AGRICULTURAL DEVELOPMENT EQUILIBRIUM Risk mitigation Technical expertise Financial services Marketing
33. The equilibrium principle DID considers that access to adapted financial services must be increased in order to support the development of the agricultural and agri-food sector, but also recognizes that strengthening the financial institutions, albeit essential, cannot support the development of the sectoron its own . The “pillars of equilibrium” Risk mitigation Financial services Technical expertise Marketing APPROPRIATE LEGISLATION to SECURE ACCESS to LAND and WATER
34. CFIs that serve or wish to serve the agricultural sector Base CFIs EFC / CFA Apex organization Government authorities Clientele CFIs are more familiar with opportunities and constraints in the sector CFIs can develop a financial service offer that is better adapted to the sector •CFIs have specialized staff who can design and offer agricultural credit products •Specialized staff understand inherent risks in the agricultural sector •CFIs have a range of credit products adapted to the agricultural sector •CFIs contribute to establishing an integrated approach to development of the agricultural sector •Prudent financing norms and appropriate strategies limit the impact of risks on agricultural loan portfolios •Agricultural credit risks are shared with external structures Outcome Mitigate risks Know the needs Specialize the staff Offer agricultural finance services with DIDFulfill your mission to rural and disadvantaged communities in every way Develop and offer financial services adapted to the agricultural sector Develop and apply risk management mechanisms Organize the agricultural credit department Know the sector’s needs, capacity and risks Goal Develop and introduce agricultural credit products: •Supplier's credit •Seasonal credit •Investment credit •Marketing credit 3 5 Define and introduce internal risk management strategies for agricultural loan portfolios 1 2 Understand how agricultural production chains function and assess the financing needs of stakeholders Specialize the staff and organize the agricultural credit department 4 6 Satisfying needs and making the offer sustainable Establish partnerships with organizations that offer technical support to producers or to those involved in marketing agricultural products Develop and introduce external mechanisms for managing and sharing agricultural credit risks Partnerships Specialize the products V3
35. www.did.qc.ca