Enhancing the resilience of small enterprises and smallholders: the Foundation organizes training for its partners as part of its TA offer

Small enterprises and smallholder farmers are particularly vulnerable to risks, including climate change and the COVID pandemic, as well as exposure to theft, fire and other threats. Financial institutions serving this market segment have historically focused on financing the operations and growth of these businesses. Now is the time, however, to rebalance the focus so that they give equal attention to the protective role of financial services.

The transition from productive to protective financial services is particularly relevant for financial service providers (FSPs) that mobilise savings as they can offer a bundle of services, including savings, emergency loans, and insurance. The distribution of inclusive insurance products by FSPs makes is possible because they are well embedded within communities and have established trustful relationships with their clients. Plus, introducing insurance into their product portfolio mix also reduces the FSP’s exposure to risks: insured clients are less vulnerable and therefore more likely to repay their loans even in the case of an adverse event.

The challenges, however, are numerous. Offering insurance to their clients requires new skills, such as understanding the clients’ risks, negotiating and managing partnerships with insurers, and putting in place new commercial strategies. Besides, FSPs are often underinsured, not having sufficient protection for their own assets and staff.

In 2017, the Grameen Crédit Agricole Foundation and the International Labour Organisation (ILO) conducted a survey with Foundation’s partners regarding their involvement in inclusive insurance. Out of the 36 FSPs that answered to this survey, 69% were already offering some kind of insurance. However, at that time, most of them provided only basic and compulsory products, like credit-life insurance, which offer limited benefits for the clients. Still, 75% of the respondents were interested to introduce inclusive insurance or expand their current offering. For this to happen, however, FSPs pointed out some of their needs, such as access to funding, technical assistance and training.

It is within this context that the Grameen Crédit Agricole Foundation organised a first training session with its partners in September 2022 in Benin. With 9 participants from 5 countries, this first two-day training focused on the value of insurance, strengthening the product portfolio, strengthening the organisational structure of MFIs, improving operational processes and ways to improve the impact in the organisation of the institutions. The main objective of the training was to enable partner institutions to acquire the tools to design a global strategy to bring changes to the existing microinsurance offer and to be able to identify ways to increase its efficiency while improving its value and contribution to the MFI’s business strategy.

Overall, the beneficiary institutions appreciated the training and its content and considered it relevant and suited to their needs. This training will also be followed by support actions, including monitoring the West African market in terms of the agricultural insurance offer, sharing good practices with occasional field visits or the revision of protocols or agreements concerning borrower death products.

More information on our technical assistance offer by clicking here.

______________________________________________

Source of presentaion of the project: ILO

The Foundation grants new loans in Central and South Asia

During the first half of 2022, the Foundation granted two new loans in Central and South Asia, bringing to 11 the number of financings carried out at the end of July.

A new loan in dollars equivalent to €2 million has been granted to the microfinance institution Asian Credit Fund (ACF) in Kazakhstan. A long-time partner of the Foundation, ACF is an institution created in 1997 by the American NGO Mercy Corps and whose mission is to help improve the quality of life of households through financial and development products and services. ACF’s financial services are designed to promote rural household development, small business growth and home ownership. The institution adheres to a specialist community lending model that offers tailored financial solutions, business advice and technical assistance to its clients. At the end of June 2022, ACF had 33,856 active borrowers, 66% of whom are women and 92% of of whom are clients living in rural areas.

Similarly, the Foundation granted a loan in local currency equivalent to €1.3 million  to the Indonesian microfinance institution Coop TLM, an institution created in 2010 by the TLM Foundation. Coop TLM’s mission is to provide the poor, micro and small businesses in Indonesia with the means to improve their standard of living. The institution grants loans according to the group methodology. At the end of March 2022, Coop TLM had 145,997 active borrowers, 99.97% of whom were women and 93% of whom were living in rural areas, and managed a portfolio of €18.7 million. It operates in East Nusa Tenggara (NTT), West Nusa Tenggara (NTB), Central and West Sulawesi and Bali through a network of 41 branches and 612 employees.

Discover the partners supported by the Foundation by clicking here.

Publication of the 2022 Impact Finance Barometer

The second edition of the Impact Finance Barometer, to which the Grameen Crédit Agricole Foundation contributed once again,  was launched at the 3Zero World Forum on 5 September 2022, in the presence of Philippe Guichandut, Head of the Impact Finance Development unit at the Foundation.

This publication presents key figures and trends in impact investing and financial inclusion around the world. Since its emergence in the early 2000s, the sector has enjoyed a strong and sustained momentum. According to the Global Impact Investing Network (GIIN) data for the year 2020, the size of the impact investment market is estimated to be around $715 billion1. At a time when we seem to be just emerging from the COVID-19 crisis, this dynamic seems far from being halted.

So what are the motivations driving this sector? How can we contribute to its proper definition and the measurement of its objectives? How can we ensure effective coordination of the various impact initiatives on a global scale?

This year, as part of its special report, the Impact Finance Barometer examines the resilience of the impact finance sector to exogenous shocks. By this term, one means all the political, economic, climatic and social risks which, if they materialise, contribute to the destabilisation of the sector, with knock-on consequences for all beneficiaries.

By inviting the structures of the ecosystem to share their expertise on the subject of impact, this publication aims to make a contribution. The Barometer thus offers a panoramic view of the different forms that impact finance can take, highlights its real operating capacities on a global scale through concrete examples, and highlights responses to the issues of inclusion and financing of social and environmental transitions.

To download the Barometer, please click here.

________________________________________

Source: Convergences