The Grameen Crédit Agricole Foundation has made new investments in its Asian partners with five loans granted in Indonesia, Myanmar, Sri Lanka and Cambodia.
It has thus granted a €2.1 million loan to KOMIDA, a historical partner of the Foundation which is active in Indonesia exclusively among women. KOMIDA is a microfinance NGO which started to provide microloans in 2005 to the population hit hard by the tsunami in Banda Aceh province. The institution was transformed into a savings and loan cooperative in 2008 and now has more than 545,000 clients.
The Foundation has moreover granted a €1.1 million loan to Proximity in Myanmar. Proximity Finance is a microfinance programme developed by Proximity Designs intended to eradicate extreme poverty in the country by treating the poor as clients and by proposing innovative and affordable technologies and services to the families it finances and which earn their living by cultivating small plots of land. The institution has nearly 100,000 clients, 66% of whom are women.
In Sri Lanka, the Foundation granted a new €347,000 loan to Berendina, a microfinance institution dedicated to reducing poverty and improving the living conditions of the poorest groups in the country. Berendina today has 99,000 clients, 87% of whom are women. All its clients are in rural areas.
Finally, in Cambodia, the Foundation has granted two loans to Ankor Mikroheranhvatho (Kampuchea) Co. Ltd (AMK) and to Chamroeun of €2.5 million and €973,000 respectively. AMK provides loans mainly through village banking, giving priority to poor women in rural areas, and to farming activities. Since 2010, the institution has also been authorized to collect savings. It has nearly 325,000 clients at this time, 93% of whom are in rural areas, and 81% women. For its part, Chamroeun, which has 26,300 clients, is a microfinance institution that puts social purpose at the heart of its economic model. It provides financial services to the poorest segments of the population along with a range of training and support services.
At the end of December 2018, the Asia region, where the Foundation has 14 partners, accounted for 25% of all the commitments and 17.6% of new loans provided in the course of the period.
“Social” and “business” are two terms that have often been considered incompatible and for many continue to be so. Nevertheless, there are economic models which set structural objectives to reconcile social impact and economic development in one plan. In the beginning of the 2000s, professor Yunus laid the foundations of a model with these characteristics: social business. Like any conventional business, it aims to turn a financial profit, but must at the same time meet its social utility objective which is integrated into the core of its governance and operations.
Projecting a profitability profile when you are concerned about social impact is no easy matter, because this objective entails additional costs for the company. The break-even point necessarily takes longer to reach, as the capital requirement is often mechanically greater, but the equation is far from impossible.
More specifically, when executives are driven by a determined resolve to create positive externalities by creating value for their company, they find the means to generate social impact and to sustain their action. Increasingly in demand, this model that combines impact and profitability is establishing itself more and more as a model for the future. At the foundation, we see more and more companies that are seeking to serve low-income (Base of Pyramid, BoP) customers by relying on the volume effect but also by pooling the costs on an extensive range of products. In this case, the social objectives turns out to be a wealth creation lever. A case in point is the Laiterie du Berger, a Senegalese social business company in which the Grameen Crédit Agricole holds a shareholding stake.
The Laiterie du Berger: an entrepreneurial adventure
The Laiterie du Berger is the story of a Senegalese family and friends who believed that it was possible to structure a milk production sector in Senegal. At the outset, the project entailed proposing an economic model to Fulani stockbreeders to enable them to increase their income and thus to improve their standard of living, thanks to a model for the production, collection, and marketing of Senegalese milk.
When the project was developed, many thought it was impossible: using Senegalese fresh milk to make dairy products is like building an oasis in the desert: very expensive and not very competitive vis-à-vis competitors who use only milk powder imported directly from major producing nations.
Faced with these difficulties, the project initiators looked for industrial and financial partners for the long run to build a milk value chain together. The Laiterie du Berger thus developed a hybrid model by using milk produced locally together with milk powder to bring down the cost of industrial production. The company moreover developed an umbrella mark, “Dolima,” that covers a range of products at an affordable price intended for populations with varied income level, all of which were nonetheless interested in consuming dairy products. The company recently reinforced its growth with the slogan “Good for me, good for my country” which enabled “Dolima” to become a national reference.
After 12 years of activity, the Laiterie du Berger provides a wide range of well segmented dairy products and has now reached the economic balance point. The factory is fully operational and new investments are planned to keep up with the demand for Dolima products.
Thanks to the tenacity of its founder and joint shareholders, the company has always been mindful of its social mission while having to wait for many years for its economic model to be put in place. It is by mastering the agricultural value chain “from farm to table,” or “from farmer to consumer,” that this project not only managed to see the day but also to break even – a process that took 10 years.
A future to be shared by and between Franche-Comté and Senegal
A second chapter will now open thanks to the entry of a new shareholder: Crédit Agricole Franche Comté. Following a “Solidarity Banker” mission in June 2018, the regional bank accepted to second an agricultural engineer for two years to KOSAM 2, a project that aspires to set up a milk sector. The territorial problems of the North of Senegal are actually similar to what Franche-Comté went through to create the Appellation d’Origine Contrôlée du Comté (AOC) [designation of origin] and the development of dairy farm milk. The aim is to sustain the income of stockbreeders by building their production capacity and making sure that the Laiterie du Berger has the necessary supplies to develop its specific range.
The story of the Laiterie du Berger shows us that although complex, the marriage between profitability and social impact is possible. At the Grameen Crédit Agricole Foundation, we are convinced and will continue, alongside our partners, to promote this vision of the future of the company and sustainable finance.
In 2018, the Foundation continued its investments in Sub-Saharan Africa in particular with two new investments in the Democratic Republic of Congo.
More specifically it provided financing with a loan equivalent to €716,000 to Baobab RDC, a new microfinance institution created in 2012 by Oxus and acquired by the Baobab Group (formerly Microcred) in 2017. The mission of Baobab RDC is to serve people who are excluded from the conventional financial system and to improve their living conditions by providing a varied range of simple and accessible products. The institution, which provides loans for groups as well as individuals, today has 7,847 clients, 50.7% of whom are women.
The Foundation has also financed VisionFund DRC for the first time, by granting a loan equivalent to €900,000. VisionFund DRC provides a wide selection of loans, savings and microinsurance programmes and other services. These financial products improve considerably the life of many people in rural areas of the country where access to credit is difficult. The institution has more than 16,800 clients at this time, 67% of whom are women, and 63.3% live in rural areas.
Created in 2008, under the joint impetus of the directors of Crédit Agricole S.A. and Professor Yunus, winner of the 2006 Nobel Peace Prize and founder of the Grameen Bank, the Grameen Crédit Agricole SA Foundation is a multi-business operator that contributes to the fight against poverty through financial inclusion and entrepreneurship with a social impact. As an investor, lender, technical assistance coordinator and fund advisor, the Foundation supports microfinance institutions and social enterprises in nearly 40 countries.
Processing milk collected from Fula stockbreeders in the Richard Toll region in the North of Senegal has been part of the business plan of the Laiterie du Berger (LDB) from its very beginning in 2008. The Fula people are nomadic stockbreeders who have always produced milk, mainly for consumption on the farm, considered as a by-product of a suckler herd. The LDB aspires to turn this milk into a full-fledged production to be sold and generate stable income for the household.
This powerful idea of an integrated and sustainable development through the marketing of an agricultural output by a social business company brought together many initiatives around the LDB which are being pursued by stakeholders in research, development or by the LDB itself. Although they at times suffer from a lack of coherence, all these actions have nonetheless made it possible to draw many lessons and thus contribute to the premises of a real territorial dynamism around milk product. The Laiterie du Berger and its shareholders wanted to capitalize and enhance this rich experience at this time to embark on a new stage of development for the milk sector in Senegal.
An ambitious partnership to develop the milk sector in Senegal
Alongside the Grameen Crédit Agricole Foundation, the regional bank of Crédit Agricole Franche-Comté wanted to invest so as to guide and support the LDB in this exciting project. A support mission was consequently carried out against this background under a skills-based volunteering programme: “Solidarity Banker by CA.” The aim is to chart a development plan for the dairy sector aimed at reconciling the needs of the Laiterie du Berger, its social impact, and the expectations of the stockbreeders and the territory.
The action plan proposed after two weeks of work was endorsed by the Board of Directors of the Laiterie du Berger last June. It is the outcome of a collaborative effort with the teams of the LDB and the Foundation, and consultations with the other shareholders, capitalizing on past experience and taking advantage of the analysis of the principal stakeholders.
The mini-farm: point of entry of the strategic plan
The action plan comprises two phases. First, the plan is to deploy 15 mini farms to try and test the model while building the necessary material and immaterial conditions (forage harvesting method, stockbreeding advice, training for farmers, structuring for stakeholders). Then, in a second phase, the plan is to deploy 100 mini farms gradually throughout the territory to reach a larger number of stockbreeders.
A mini farm is a dairy specialization hub in the dominant suckler herd. It is the place where all the material and immaterial production factors converge to optimize and maximize dairy production: feeding, watering, reproduction monitoring, advice. From a very practical perspective for the stockbreeders, the mini farm consists of stabling the best four dairy cows of the herd every moment of the year, where the point of departure consists of the purchase of four Moor zebus (animals with better milk potential than the local zebus) and a hybrid bull (a cross between a European dairy breed and a zebu). Securing the zootechnical conditions (water, feed supplement, production and reproduction monitoring) coupled with advice and guidance to appropriate the required stockbreeding practices will enable the stockbreeder to product 20 litres of milk per day.
The price of the milk paid by the LDB will secure profitability to pay for the initial investment while ensuring income for the household (see diagram below). This technical trajectory is coupled with a financial trajectory, whereby the value of the capital is vastly improved after a 4-year cycle, the time it takes for the hybrid females (from the crossing of the Moor zebus and the hybrid bull) to go into lactation.
The mini farm thus makes it possible to meet the three key factors of success for the development of a dairy sector around LDB: temporality, giving stockbreeders and the territory the time to appropriate and capitalize on the changes; the trajectory, making material and immaterial means and resources available (animals, feed, etc., and training and support, respectively) so that each breeder can embark on a path of technical progress; and the gradual removal of restrictive factors in the territory (lack of access to water, difficulties in feeding the livestock, etc.) to enable a larger number of stockbreeders to improve and increase the milk production of their herd.
Towards an innovative territorial development method
The implementation of this development plan will be effective and relevant if and only if the project is pursued jointly by the LDB (which buys and uses the milk) and the stockbreeders (who produce the milk). This sectoral or inter-professional type of approach has to materialize on the territory. We therefore propose to create an entity owned by the LDB, the stockbreeders and possibly other stakeholders in the territory. This company will have its own governance and will be tasked with meeting the needs of the stockbreeders (production of forage, trading feeding stuffs, technical advice, training) and the needs of the LDB (selling milk) with an obligation of result. It will be the armed wing of the stockbreeders and the LDB in the service of balanced territorial development based on the production and use of milk, that could expand its scope of action tomorrow to guide and support the transition to a sustainable rural community in Senegal.
In 2018, The Foundation continued to invest in Eastern Europe and Central Asia, granting a total of seven loans to six partners for a total of €7.6 million, wich represents 19% of the new investments made over the year.
The Foundation invested for the first time in Bosnia-Herzegovina, granting a loan of €2 million to Mi-Bospo, a micro-finance institution that provides access to credit and non-financial services to private individuals, in particular to women entrepreneurs. The institution moreover provides responsible financing by applying the consumer protection principles which play a significant role in the development of female entrepreneurship. Mi-Bospo has more than 22,500 clients at this time, 64% of whom are women. The Foundation also provided a first loan of €1 million to Mikra, a microfinance institution founded by Catholic Relief Services (CRS) which provides access to affordable, quality financial and support services to the poorest working populations (mainly women who account for 70.2% of its 13,400 clients).
In Kazakhstan, the Foundation granted a second loan in local currency equivalent to €608,000 to Bereke, a microfinance institution which it has financed since 2017. The mission of Bereke, which has 5,200 clients, 76% of whom are women, is to help improve the standard of living of citizens through economic support provided by means of loans to small and microenterprises as well as by means of agricultural, consumer or housing loans.
The Foundation has also granted a new loan (the third since 2016) to the microfinance institution Oxus Kirghizstan, for an amount of €687,000 over a period of three years. The institution provides individual and group loans to nearly 7,000 clients, most of whom work in agriculture and livestock breeding.
The Foundation has also financed a new partner Agency for Microfinance in Kosovo (AFK) with a loan of €1.4 million over three years. AFK is an institution that aims to improve the living conditions in the country by offering small and microenterprises access to sustainable financial services. It has 17,500 clients, 78% of whom live in rural areas.
Finally, in Tajikistan, the Foundation granted two loans for a total amount of €1.9 million to Humo, an MFI partner since 2017. The Foundation has thus granted a total of three loans to this institution, the main activity of which is to provide affordable, quality financial services to people living in rural areas, as well as to promote the development of small and medium-sized enterprises in the country’s poor regions. Humo has nearly 50,000 clients at this time, 81% of whom live in rural areas, and 44.4% of whom are women.
In the course of the previous year, the Grameen Crédit Agricole Foundation strengthened its presence in West Africa with 8 new loans, 3 of which to new partners.
In Mali, the Foundation financed Kafo Jiginew, a cooperative network of savings and loans banks that provides retail financial services (savings, loans, microinsurance, transfer of funds and other services) to the largest number of persons in Mali to improve their living conditions. The institution has 48,000 working clients at this time, 92% of whom live in rural areas. The Foundation granted a loan in local currency equivalent to €3 million over five years to this institution.
In Benin, the Foundation granted a loan in local currency equivalent to €1.4 million to a new partner, PEBCo Bethesda which is geared to improving the living conditions of people by providing quality financial and non-financial services. The institution provides loans to groups and individuals. It has ca. 95,000 active borrowers, 64% of whom are women and 33% live in rural areas.
In Togo, the Foundation also financed a new partner, Assilassimé, with a loan in CFA francs equivalent to €500,000. Assilassimé is a programme created in 2012 by Entrepreneurs du Monde for marginalized people. The institution provides them financial (microcredit) and non-financial (training, individualized support, social media optimization) services. It has nearly 30,000 clients at this time, some 97% of whom are women.
In Burkina Faso, the Foundation moreover made three investments in existing partners in 2018, bringing the total amount of its commitments in that country to more than €4 million, or 13.8% of its commitments in Sub-Saharan Africa at the end of December 2018. More specifically, ACFIME received a loan in CFA francs equivalent to €305,000 over a period of three years. This is a microfinancial institution that helps to bridge the gap not covered by large MFIs which operate across the country, with loans granted by ACFIME having a very strong potential social impact. It has 18,600 clients at this time, 90% of whom are women. For its part, PAMF-BF received a loan in local currency equivalent to €1 million over a period of three years. The core activity of the institution, which has some 28,400 clients, is to grant loans in Burkina Faso so as to help meet better the financial needs of low-income segments of the population with reinforced protection or their members or users. Finally, ACEP Burkina received a loan in local currency equivalent to €1.5 million over a period of three years. Acep is a microfinance institution specialized in the financing of microenterprises and very small existing companies in urban centres and their inner suburbs. The credits granted are intended essentially to finance the working capital and investment needs. The institution has 11,000 active borrowers at this time.
Finally, in Senegal, the Foundation granted a loan in local currency equivalent to €762,000 to Caurie Microfinance, a socially responsible and financially viable MFI geared to making a lasting contribution to the economic and social promotion of poor microentrepreneurs, mainly women. Caurie has 71,000 clients at this time, 98% of whom are women. The Foundation has also granted a €100,000 loan to Sénégalaise des Filières Alimentaires in the form of a shareholders’ current account. SFA is a social business which is developing an inclusive value chain from the production and marketing of rice, in which the Foundation has had a shareholding stake since 2013.
In 2018, the Grameen Crédit Agricole Foundation consolidated its presence in Sub-Saharan Africa by investing in particular in Ghana for the first time, where it financed three partners who account for 8.1% of the new loans put in place in that year.
ID Ghana thus received a loan in local currency equivalent to €300,000. It is a Social Microfinance Institution which, thanks to its microcredit, savings and training services, and its highly innovative social vision, helps thousands of families to work their way out of poverty in a sustainable manner. It has in particular developed a group methodology whereby members are not jointly liable for their loans, and provides a subsidy to beneficiary families to register with the national health insurance system. The institution has more than 10,000 borrowers at this time, 92% of whom are women.
For its part, Advans Ghana was given a loan in local currency equivalent to €2 million. It is a financial institution which gives Ghanaian SMEs, microentrepreneurs and private individuals an opportunity to develop their business and to improve their standard of living thanks to accessible financial services. The institution has nearly 14,000 clients at this time, 62% of whom are women.
Sinapi Aba Savings and Loans is a non-banking financial institution that provides various savings and loans products. Its mission is to be an incubator that provides business development and income generation opportunities to economically disadvantaged people who can thereby improve their living conditions. The institution has thus far received a loan in local currency equivalent to €930,000. It has more than 145,000 active borrowers, some 80% of whom are women and 90% live in rural areas.
Philippe Guichandut, the Head of Inclusive Finance Development at the Grameen Credit Agricole Foundation, has been at all three SAMs. The majority of the foundation’s 76 partners are in sub-Saharan Africa, and Philippe Guichandut has found that “SAM is the best place to meet our existing and potential partners.” He adds, “Around the SAM, we always take the opportunity to gather our partners, [which] is the best way to have exchanges of experience among our partners and give them the opportunity to attend some training sessions either organized by ourselves or the SAM.”
Leading and attending workshops at SAM has been key for Mr Guichandut’s team “to share our own experience and promote themes that are relevant for us, especially in the fields of agri-microinsurance and and agri-financing.” For example at SAM in Ethiopia in 2017, the foundation organized a field visit for 11 MFIs to learn about the R4 Rural Resilience Initiative, an agri-microinsurance project of the World Food Program and Oxfam America. Attendees visited Africa Insurance, Nyala Insurance, the microbank DECIS, and two local NGOs, ORDA and REST.
Philippe Guichandut added that SAM’s “Investor’s Fair is also an excellent venue to meet potential new partners and have a better understanding of the different types of MFIs that would be interested in working with us.” For example, his team met representatives of ID Ghana for the first time at the fair. That relationship has flourished, and the Grameen Credit Agricole Foundation is now funding ID Ghana through the African Facility, a collaboration between the foundation and Agence Francaise de Developpment.
ADA, an NGO based in Luxembourg, co-organizes SAM every two years with the support of Luxembourg’s Ministry for Development Cooperation and Humanitarian Affairs. The SAM steering committee members are: ADA, Luxembourg’s Ministry of Foreign and European Affairs, the Microfinance African Institutions Network, the African Rural and Agricultural Credit Association and the Fédération des APSFD de l’Union Economique et Monétaire Ouest Africaine. We invite you to read more about SAM at //www.microfinance-africa.org/.
This SAM 2019 is part of a sponsored series demonstrating the value of SAM (the French acronym for African Microfinance Week), a major conference dedicated to financial inclusion in Africa. The first three SAMs were held in Arusha, Tanzania, in 2013; Dakar, Senegal, in 2015; and Addis Ababa, Ethiopia, in 2017. The next SAM will take place in late October 2019 in Ouagadougou, Burkina Faso!
The goal of SAM is to provide a unified platform for addressing issues facing microfinance in Africa by bringing together investors, MFIs, researchers, banks, networks, innovators, governments and other stakeholders.
The 2017 SAM hosted 700 participants from 58 (mostly African) countries, including representatives of 200 MFIs; 25 exhibitors at the Innovation Fair; and 26 investors, who made 170 MFI contacts at the Investor’s Fair. The proceedings also included conference sessions presented by 60 speakers plus a menu of 20 training programs.
The year 2018 marked the 10th anniversary of the Grameen Crédit Agricole Foundation. Created by the Crédit Agricole and Professor Yunus, Nobel Peace Prize, the Foundation aims at contributing to the fight against poverty through the promotion of social entrepreneurship and financial inclusion. Since its inception, it has granted more than €200 million in financings and has supported more than 100 partners (microfinance institutions who grant microcredits to populations excluded from the traditional banking system and social enterprises serving low-income populations) in 38 countries.
As of December 2018, the Foundation recorded €81 million in commitments, including €75.7 million in funding to microfinance institutions and €4.5 million invested in social business companies. Sub-Saharan Africa concentrates 37% of the commitments. At the heart of its objectives, the Foundation promotes female entrepreneurship and rural development: 75% of the microcredit beneficiaries are women and 79% live in rural areas.
Strong partnerships with the Crédit Agricole Group
Several projects were launched in 2018 in partnership with Crédit Agricole entities and Regional Banks. In partnership with CA Indosuez Wealth (Asset Management) and CACEIS Bank, Luxembourg Branch, the Grameen Crédit Agricole Foundation has created the Inclusive Finance in Rural areas Fund (FIR), a social impact investment vehicle allowing the entities and Regional Banks of Crédit Agricole to invest in the microfinance sector. The FIR, for which the Foundation acts as exclusive advisor, grants loans to microfinance institutions in rural areas. The two first fund-raising drives in September and December 2018, confirmed the participation of 15 regional banks, Amundi and Crédit Agricole Insurances for an amount close to €8 million.
In partnership with Crédit Agricole S.A. and the Group entities, the Foundation launched the ‘’Solidarity Banker’’ programme, a new type of volunteering missions proposed to the employees of the Crédit Agricole Group on behalf of microfinance institutions and social business companies that are partners of the Foundation. In 2018, three missions took place in Burkina Faso, Senegal and Cambodia. Three other missions are to be filled in Kazakhstan, Haiti and Morocco during the first semester of 2019.
2018 was also the preparation year for the 2019-2023 Strategic plan. Reinforcing the offer to microfinance institutions, enhancing the development of rural economies and developing partnerships with the Crédit Agricole Group will be at the heart of the Foundation’s actions in the coming years.
