Microfinance: a tool for a more inclusive economy

Interview with Eric Campos, CEO, Grameen Crédit Agricole Foundation

Probably because it is a very effective lever in the fight against poverty, microfinance is a central topic for rethinking the global economy. The health crisis and its effects on the poorest populations have only reinforced this urgent need for financial inclusion. Spotlight on an interview of Paperjam Luxembourg to Eric Campos, CEO of the Grameen Crédit Agricole Foundation.

Why is microfinance a subject of interest for you?

Today 1.7 billion people, the majority of whom live in rural areas, lack access to funding and the financial sector has a key role to play in addressing this global challenge. The Foundation is one of the Crédit Agricole Group’s levers to promote financial inclusion and the development of rural economies in emerging countries. This was the ambition Crédit Agricole established when it launched the Foundation 12 years ago, along with Professor Yunus, 2006 Nobel Peace Prize laureate: to contribute to the fight against poverty by promoting microfinance and social impact entrepreneurship around the world. The Foundation is a committed player in poor countries in line with the “Raison d’être” of CA Group: “Working every day in the interest of our customers and society”.

Our mission takes on even more significance in the current context. The Covid-19 pandemic particularly hits the most vulnerable populations and microfinance is a lever to strengthen their resilience during the crisis. In this context, we had to adapt our methods of intervention and to innovate. We have set up very regular monitoring with funded institutions to understand the effects of the crisis and their needs. We have also implemented many rollovers to allow these institutions to support their own clients and to accept, themselves, rollovers of microloans. Since March, we have also coordinated an international movement of donors, investors and inclusive finance actors to commit to preventing a liquidity crisis in the sector and providing coordinated responses to cope with the economic effects of the crisis.

Can you present the Grameen Crédit Agricole Foundation and its objectives?

The Foundation is a cross-business player: investor, lender, technical assistance coordinator and fund advisor, the Foundation finances and supports microfinance institutions, enterprises and projects that promote inclusive finance and the development of rural economies around the world.

The Foundation now accompanies and supports 86 partners (74 microfinance institutions and 12 social impact enterprises) in 40 countries with nearly 100 million outstanding loans. The Foundation seeks to promote women empowerment through the economy, 88% of final beneficiaries are women, and primarily targets rural populations: among the 7.3 million clients supported by the institutions the Foundation finances, 84% live in rural areas.

How does the Foundation work with the CA Group today?

The Foundation has set up several partnerships with the Regional Banks and Crédit Agricole entities. We have established cooperation plans with the International Retail Banking in Romania, Egypt, India and Morocco, which allows Group entities to finance microfinance institutions in local currency with the guarantee of the Foundation. We have launched with CA Indosuez Wealth (Asset Management) and CACEIS Bank Luxembourg Branch, the Fund for Inclusive Finance in Rural Areas (FIR), the first microfinance fund of Crédit Agricole to which 21 Regional banks, Crédit Agricole Assurances and Amundi have already subscribed. Finally, since June 2018, along with Crédit Agricole SA we set up “Solidarity Bankers”, a skills-based volunteering programme through which we propose technical assistance missions to CA Group employees on behalf of organisations financed by the Foundation.

Furthermore, in response to the Covid-19 crisis, the Foundation has worked with Crédit Agricole SA, Crédit Agricole CIB, Crédit Agricole Wealth (Asset Management) and other key players in inclusive finance on a Common pledge to protect microfinance institutions and their clients. The commitment, which gathers 30 signatories, is based on a set of principles intended to protect the microfinance sector and their clients from the economic effects of the health crisis. Thanks to this coordinated action, liquidity defaults have been avoided and we have supported partner organisations through technical assistance missions.

What subjects will be addressed in the years to come within the Foundation?

Climate change, demographic growth, food security, digital transformation … there are many challenges at the centre of our concerns. It is urgent to act, to innovate with new means of action, to strengthen cooperation. This belief is at the heart of the Foundation’s actions and of its 2019-2022 Strategic plan. Its objectives are: consolidate the sustainability of organisations that provide essential services with appropriate funding and technical assistance; strengthen the resilience of rural economies by supporting social impact enterprise; and promote inclusive finance within the banking sector, in particular through the partnerships set up with the Crédit Agricole Group.

In response to the Covid-19 crisis, the Foundation will continue to support, alongside its institutional, private and solidarity partners, microfinance institutions and social enterprises with targeted funding and technical assistance to strengthen their resilience in this unprecedented crisis. We will continue to monitor the effects of the health crisis and take action to strengthen the resilience of microfinance and impact entrepreneurship, in concert with other stakeholders.

Source : Paparjan.lu 

Taking the floor: Advocacy for a more inclusive and sustainable economy

For 12 years, the Grameen Crédit Agricole Foundation has positioned itself as a player committed to the fight against poverty by promoting financial inclusion and social impact entrepreneurship. With more than 200 million euros in funding and over 100 organisations supported in some forty countries since inception, the Foundation has been able to build a solid history in the field of inclusive finance, particularly microfinance, financial engineering, financing of family agriculture and support for social entrepreneurship.

To promote good practices and contribute to the advocacy of the sector, the Foundation shares its experience through various publications, organises events and exchanges with other key players in the field of inclusive finance. This is why the Foundation has decided to share its main leading articles published since 2018 in this new publication “Taking the floor: Advocacy for a more inclusive and sustainable economy”.

For this first edition, this document is organised around four chapters with topics that marked our sector:

  • The first chapter contains general reflections on the need to shape a more inclusive economy.
  • The second one shares our various experiences on the development of rural areas, in particular, by supporting impact entrepreneurship.
  • The third chapter presents more specifically the work of the Foundation on the programme for the financial inclusion of refugees launched with the UN Refugee Agency and the Swedish Cooperation.
  • The last chapter focuses on the impact of the global economic crisis generated by the Covid-19 pandemic on microfinance institutions and their clients and the action of the Foundation to coordinate a concerted approach by donors, investors and others microfinance players to support the sector.

The “Raison d’Être” of Crédit Agricole is Working every day in the interest of our customers and society. With this publication, the Foundation fully plays its advocacy role to support microfinance, impact entrepreneurship and to shed light, alongside other key stakeholders, on good practices for a more inclusive, responsible and sustainable economy.

Download the publication here

AFD Group reiterates its support for microfinance by renewing a €10M guarantee to the Foundation

A guarantee of € 10 million has just been granted by the Agence Française de Développement (AFD) Group, represented by its subsidiary Proparco, to the Grameen Crédit Agricole Foundation. This funding will allow the Foundation to pursue its support to microfinance institutions in Sub-Saharan Africa. Proparco has also granted a new € 5 million loan to the Grameen Crédit Agricole Foundation, which will allow it to consolidate its support to its microfinance institutions partners in the exceptional context of the crisis linked to Covid-19.

A historic partnership to support microfinance

The partnership between AFD Group and the Grameen Crédit Agricole Foundation is long standing. One of the emblematic joint projects is the African Facility programme (1) launched in 2013. It allows the Foundation to offer funding and technical assistance suited to small and medium-sized rural microfinance institutions in Sub-Saharan Africa.

AFD also supports the Foundation in the loans it grants to its partner microfinance institutions, through a portfolio guarantee mechanism, the ARIZ guarantee, which covers up to 50% of the loans granted. This mechanism has just been renewed for the sixth time, providing coverage for loans that the Foundation will grant to microfinance institutions in Sub-Saharan Africa over the next two years. Together, AFD and the Foundation have adapted the eligibility criteria, in particular to be able to include less mature microfinance institutions with a very social vocation.

A special Covid-19 funding envelope of € 5M

The health and economic crisis generated by Covid-19 particularly affects the poorest populations. According to the World Bank, the crisis could push 150 million people into extreme poverty by 2021 (2). This issue is at the heart of the action of the Grameen Crédit Agricole Foundation, which, for 12 years now, has contributed to the fight against poverty through financial inclusion and entrepreneurship. The Foundation finances and supports microfinance institutions that serve populations excluded from the traditional banking system, mainly women (88%) and rural populations (84%), in around 40 countries.

“AFD Group is a major partner of the Grameen Crédit Agricole Foundation. It has been with us for many years and allows us to increase our impact, mainly in rural areas of emerging countries. In the context of Covid-19, the Foundation’s mission takes on a very particular significance. We work to enable vulnerable populations to lift themselves out of poverty by providing them access to financial services through socially performing microfinance institutions. The health crisis has strained local economies. Alongside AFD Group, we innovate, adapt and provide reinforced support to these institutions to strengthen their resilience and their capacity to face the economic effects of this global crisis”, says Eric Campos, Managing Director of the Grameen Crédit Agricole Foundation and Head of CSR at Crédit Agricole SA.

“After 10 years of cooperation at the service of financial inclusion, Proparco and the AFD Group are delighted to once again support the Grameen Crédit Agricole Foundation at the heart of this year 2020, which has seen the microfinance institutions supported by the Foundation strongly affected by crisis. A leading player in access to funding particularly for vulnerable populations in rural areas, the Foundation plays a major role in supporting its partner institutions and their clients during this difficult period. The renewal of the portfolio guarantee envelope granted by AFD Group to the Foundation, as well as the financing lines granted in 2020, aim to strengthen the Foundation in its social mission in favour of financial inclusion”, affirms Guillaume Barberousse, Head of Banking and Financial Markets Division at Proparco.

These new mechanisms will strengthen the collective action of AFD Group and the Foundation to promote the resilience of microfinance institutions and their clients in the face of this unprecedented crisis.


(1) //www.gca-foundation.org/en/technical-assistance/african-facility/
(2) Acces World Bank’s presse release here

ZEP-RE and ACRE Africa: a partnership to reinforce agricultural insurance in Africa

ZEP-RE, an African leading reinsurance company will acquire a 56% controlling stake in ACRE Africa (Agriculture and Climate Risk Enterprise Ltd.), a social impact company supported by the Grameen Crédit Agricole Foundation since 2014. CA Indosuez Wealth (Asset Management), the Management company of the Grameen Crédit Agricole Fund that holds an equity stake in ACRE Africa, validated the equity operation.

ACRE Africa provides crop insurance services to smallholders, and consulting services to development organisations and insurance regulators associations in Kenya, Tanzania and Rwanda. This agreement paves the way to expand agricultural insurance in favour of smallholder farmers in Africa as it will reinforce ACRE Africa’s wide range of products and technology platforms for agriculture and microinsurance. “Our goal is to expand insurance coverage and improve financial inclusion throughout Sub-Saharan Africa. The safety nets we are building will make a large number of disadvantaged smallholders more confident in farming», declared George Kuria, CEO of ACRE Africa, at the signing ceremony.

ZEP-RE (PTA Reinsurance Company) is a regional organisation that promotes development and integration within the Common Market for Eastern and Southern Africa (COMESA) through insurance and reinsurance business trade. It is based in Kenya, with regional and country offices in Zimbabwe, Ivory Coast, Uganda, Zambia, Ethiopia, Sudan and the Democratic Republic of Congo.

As shareholder of ACRE Africa, the Grameen Crédit Agricole Foundation is excited about the cooperation between ZEP-RE and ACRE Africa. “The COVID-19 pandemic emphasizes the importance of microinsurance in helping low-income rural people build resilience. ZEP-RE’s expertise and its alignment with ACRE Africa’s mission of advocating smallholder farmers will open a new chapter for ACRE Africa to enter new markets, to increase its social influence and to help strengthen the rural microinsurance industry”, affirmed Eric Campos, CEO of the Foundation.

Another important partnership was announced in parallel. With the financial support of Chainlink Community, ACRE Africa and Etherisc (designer of online insurance platforms) will develop a platform for 250,000 smallholder farmers to insure them against climate change risks in Kenya. The outlook for ACRE Africa and the smallholder agricultural insurance in Africa is encouraging.

More information on ACRE Africa