To develop rural economies, the EIB strengthens microfinance in Africa

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© Didier Gentilhomme

On April 1st, from 9 a.m. to 11 a.m., the Grameen Crédit Agricole Foundation and the European Investment Bank (EIB) are organizing a conference in Paris on the theme of developing rural economies and strengthening microfinance in Africa through the EIB.

Jérôme Brunel, Secretary General of Crédit Agricole SA, Director of the Grameen Crédit Agricole Foundation, and Ambroise Fayolle, Vice-President of the EIB, will deliver the opening remarks. Around the table will be Eric Campos, General Delegate of the Foundation and CSR Director of Crédit Agricole SA; Soukeyna Ndiaye Bâ, Managing Director of the INAFI International Foundation and Director of the Foundation; and Mamadou Lamine Gueye, Managing Director of Caurie, a Senegalese microfinance institution supported by the Foundation. Jean-Marie Sander, President of the Grameen Crédit Agricole Foundation, will deliver the closing remarks.

Participants will discuss three themes: Is rural development in Africa an absolute necessity? Rural microfinance in Africa: what opportunities exist? Microfinance, gender, and climate change: are their destinies linked?

To participate, contact: carolina.herrera@credit-agricole-sa.fr

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Created in 2008, under the joint leadership of Crédit Agricole SA's management and Professor Yunus, 2006 Nobel Peace Prize winner and founder of Grameen Bank, the Grameen Crédit Agricole SA Foundation is a multi-sector operator that contributes to the fight against poverty through financial inclusion and social impact entrepreneurship. As an investor, lender, technical assistance coordinator, and fund advisor, the Foundation supports microfinance institutions and social enterprises in nearly 40 countries.

Crédit Agricole launches a fund for rural microfinance

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In partnership with CA Indosuez Wealth (Asset Management) and CACEIS Bank, Luxembourg Branch, the Grameen Crédit Agricole Foundation has launched a social impact investment fund enabling Crédit Agricole Group entities and Regional Banks to invest in financing microfinance institutions in rural areas.

The Foundation is thus strengthening its support for institutions operating in emerging countries to benefit populations traditionally excluded from the banking sector, and more specifically, women, who constitute the bulk of these institutions' clients. The benefit is twofold: a positive profitability objective and an impact in terms of financing income-generating activities. Two loans to microfinance institutions in sub-Saharan Africa were granted thanks to the funds raised. A quarterly monitoring report will be sent to investors. This fund will soon benefit from the Luxflag Label (promoting the financing of sustainable and responsible investments).

This first operation of this type, launched by the Crédit Agricole Group, is a great success!

For the first time, the Regional Banks and Crédit Agricole SA entities have the opportunity to join a system dedicated exclusively to international microfinance investments and structured within the Crédit Agricole group. The first fundraising round, closed on September 28, 2018, confirmed the participation of 13 Regional Banks (Alsace-Vosges, Centre-est, Centre-France, Champagne-Bourgogne, Franche-Comté, Ille-et-Vilaine, Languedoc, Loire-Haute Loire, Martinique-Guyane, Normandie-Seine, Réunion, Savoie and Sud Rhône Alpes) – which already represents 1/3 of the Regional Banks – and Amundi for an amount of nearly €6 million.

The second fundraising round, which closed on December 31, confirmed the participation of two Regional Banks (Charente-Périgord and Provence Côte d'Azur) as well as that of Crédit Agricole Assurances for a total amount close to 8 million euros.

The Grameen Crédit Agricole Foundation – 10 years of supporting microfinance and social entrepreneurship

The Grameen Crédit Agricole Foundation was created in 2008 by Crédit Agricole and the Nobel Peace Prize-winning Professor Yunus Grameen Foundation. Operating in 33 countries, nearly half of which are the world's poorest, the Foundation is committed to combating poverty and promoting financial inclusion. In 10 years, the Foundation has provided more than €215 million in financing. Alongside the Crédit Agricole Group, the Foundation is developing new instruments to increase its financing capacity and strengthen its impact.

The Foundation is proud to work alongside Crédit Agricole SA entities and the Group's Regional Banks to strengthen its action in favor of financial inclusion and the financing of rural economies.

For more information:
pascal.webanck@credit-agricole-sa.fr
carolina.herrera@credit-agricole-sa.fr

In 2018 the Foundation invested €3.7 million in East Africa

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It has thus financed two partners in Kenya: BIMAS, with a loan of 500,000 euros, and VERT Ltd. with a loan of 440,000 euros. BIMAS is a microenterprise development program (MED-P) established in 1992 under the auspices of PLAN Embu. Its objective is to contribute to sustained economic growth and employment in the rural sector, which will result in improved social well-being and increased income for the rural population in Kenya. To date, BIMAS has more than 18,500 clients, including 66.5% women. VERT Ltd., for its part, is a company specializing in the export of fresh fruits and vegetables. The company, created in 2000, has adapted its business model over the years to better meet the specificities of the European market and adapt to current legislation. It has also implemented a more sustainable model by working directly with small local farmers organized into small groups. The Foundation has been a shareholder in VERT Ltd since 2016.

The Foundation also provided its first funding to the MicroLoan Foundation in Malawi, with a €256,000 loan. The MicroLoan Foundation is a UK-based microfinance charity that provides business training, loans, and ongoing support to women living in Malawi, Zambia, and Zimbabwe. The organization's primary goals are poverty reduction and women's empowerment. In Malawi, the institution now has nearly 30,000 clients, all women. In Uganda, the Foundation provided a new €700,000 loan to the microfinance institution UMF. UMF (Uganda Microcredit Foundation) is a microfinance institution that provides loans and other microfinance services to economically active people in Uganda. The institution specializes in commercial and personal, financial, and non-financial products for businesses and individuals to facilitate their development. The institution has more than 4,000 clients, including 54% women and 70% in rural areas.

In Zambia, the Foundation also funded two partners: AMZ with a €600,000 loan over a four-year period and FINCA Zambia with a €1.2 million loan over a three-year period. Agora Microfinance Zambia (AMZ) is a microfinance institution that specifically targets low-income individuals with appropriate financial products. AMZ aims to serve clients who were previously excluded from the formal financial market, primarily due to their poverty or place of residence. It has over 25,000 clients in 391 rural areas. 611 of these clients are women. FINCA Zambia, for its part, is a multi-service microfinance institution that currently serves over 9,000 clients with financial services, including loans, savings, payments, and money transfers. FINCA Zambia's clientele includes 571 women.

For more information about our partners, click here.

The Foundation is carrying out bond financing with OSHUN

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Today, nearly one billion people lack access to improved drinking water sources. Sub-Saharan Africa is one of the most affected regions: between 25 and 50% of its population still lack access to water from an improved drinking water source, and between 75 and 1,000 lack access to a household connection.

Founded in 2014, OSHUN deploys an innovative water service solution in rural areas. Based on an original business model that leverages local entrepreneurship, OSHUN provides high-quality water services through water kiosks at a price that matches the willingness to pay, while providing optimal health guarantees. This business, which is expected to expand to several African countries, began in rural Senegal.

For the first time, the Grameen Crédit Agricole Foundation's project committee has approved €200,000 in bond financing to cover investments and working capital for OSHUN, a new partner headquartered in France. This project is co-financed with the Caisse Régionale Alpes Provence, one of whose clients, the Société du Canal de Provence, is a stakeholder in the project. The Caisse Régionale benefited from the Foundation's expertise in the water sector and its knowledge of the local economy.

For more information on the Foundation's partners, click here.

The Foundation makes new investments in Asia

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© Didier Gentilhomme

The Grameen Crédit Agricole Foundation has made new investments with its Asian partners, granting five loans in Indonesia, Burma, Sri Lanka, and Cambodia. In Asia, the Foundation has 14 partners, representing 251,000 TND of its total outstanding loans as of the end of December 2018.

It thus granted a loan of 2.1 million euros to KOMIDA, a long-standing partner of the Foundation, which works exclusively with women in Indonesia. KOMIDA is a microfinance NGO that began offering microcredit in 2005 to the tsunami-affected population in the province of Banda Aceh. The institution transformed into a savings and credit cooperative in 2008 and now has more than 545,000 clients.

The Foundation also granted a €1.1 million loan to Proximity in Burma. Proximity Finance is a microfinance program developed by Proximity Designs that aims to eradicate extreme poverty in the country by treating the poor as clients and offering innovative and affordable technologies and services to the families it finances, who earn their living by cultivating small plots of land. The institution has nearly 100,000 clients, including 66,133 women.

In Sri Lanka, the microfinance institution Berendina, whose mission is to reduce poverty and provide better living conditions for the country's poorest groups, received a guarantee from the Foundation for an amount of 331,000 euros. To date, Berendina has 99,000 clients, including 87% women. All of its clients are located in rural areas.

Finally, in Cambodia, the Foundation granted two new grants to AMK and Chamroeun, each worth €2.5 million and €973,000. AMK (Angkor Mikroheranhvatho (Kampuchea) Co. Ltd) primarily provides loans through the "village banking" methodology, primarily targeting poor women in rural areas, as well as agricultural activities. Since 2010, the institution has also been authorized to collect savings. To date, it has nearly 325,000 clients in 93% rural areas and 81% women. Chamroeun, for its part, has 26,300 clients and is a microfinance institution that places social vocation at the heart of its business model. It provides financial services to the poorest and also offers them a range of training and support services.

To learn more about the Foundation's partners, click here.

Harmony between social and economic performance is possible

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     By Hélène Sananikone, Grameen Crédit Agricole Foundation

© Philippe Lissac

"Social" and "business" are two terms that have long been considered contradictory and continue to be so for many. However, there are economic models that structurally aim to reconcile social impact and economic development on the same level. In the early 2000s, Professor Yunus laid the foundations of a model with these characteristics: "social business," which can be translated by the generic term "social enterprise." Like any traditional business, it seeks to achieve financial profitability, but it must, at the same time, meet its objective of social utility, which is integrated into the heart of its governance and operations.

Displaying a profitability profile when considering social impact is not a simple equation because this objective entails additional costs for the company. The break-even point necessarily takes longer to reach, and mechanically, the need for equity is often greater, but the equation is far from impossible.

Indeed, when leaders are driven by a deep determination to create positive externalities through their company's value creation, they find ways to generate social impact and sustain their actions. Increasingly sought after, this model combining impact and profitability is increasingly emerging as a model for the future. At the Foundation, we are seeing more and more companies seeking to serve low-income customers (Base of Pyramid, BoP) by leveraging the volume effect but also by sharing costs across a wide range of products. In these cases, the social objective proves to be a lever for wealth creation. A success story that illustrates this point: Laiterie du Berger, a Senegalese social enterprise in which the Grameen Crédit Agricole Foundation is a shareholder.

La Laiterie du Berger, an entrepreneurial adventure

La Laiterie du Berger is a story of Senegalese family and friends who believed in the possibility of structuring a milk production sector in Senegal. The project, initially, was to offer an economic model to Fulani herders to enable them to increase their income and, therefore, their standard of living through a model for producing, collecting, and promoting Senegalese milk.

When this project was first developed, many thought it was impossible: using fresh Senegalese milk in the manufacture of dairy products is a bit like building an oasis in the desert: very expensive and uncompetitive compared to competitors who only use powdered milk imported directly from major producing nations.

Faced with these difficulties, the project leaders sought to partner with long-term industrial and financial partners and then build a milk value chain model together. Laiterie du Berger thus developed a hybrid model by combining the promotion of locally produced milk with the use of powdered milk to reduce industrial production costs. The company also developed an umbrella brand, "Dolima," covering a range of affordable dairy products aimed at populations with varying incomes but all concerned about consuming dairy products. The company recently supported its growth around the slogan "Good for me, good for my country," which has enabled the "Dolima" brand to become a national reference.

After 12 years of operation, Laiterie du Berger offers a wide range of well-segmented dairy products and has now reached economic breakeven. The plant is operating at full capacity, and new investments are being considered to keep pace with demand for Dolima products.

Thanks to the tenacity of its founder and co-shareholders, the company has always been vigilant about its social mission while facing many years of implementing its own economic model. It is thanks to the mastery of the agricultural value chain, from "farm to fork" or "from breeder to consumer," that this project was not only able to see the light of day but, above all, to reach its break-even point. This took 10 years.

A future to share between Franche-Comté and Senegal

A second chapter will now open thanks to the arrival of a new shareholder: Crédit Agricole Franche Comté. Following a "Solidarity Banker" mission in June 2018, the regional bank agreed to second an agricultural engineer for two years to join KOSAM 2, a project whose ambition is to structure a dairy sector. The territorial issues of northern Senegal are in fact close to the history experienced in Franche-Comté during the creation of the Comté Appellation d'Origine Contrôlée (AOC) and the promotion of livestock milk production. The objective is to sustain the income of livestock farmers by strengthening their production capacity and thus ensuring that Laiterie du Berger has the necessary supply to develop its specific range.

The story of Laiterie du Berger shows us that, although complex, the marriage of profitability and social impact is possible. At the Grameen Crédit Agricole Foundation, we are convinced of this and will continue, alongside our partners, to promote this vision of the future of business and sustainable finance.

Laiterie du Berger: a promising experiment

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By Jonathan Michaud, CA Franche Comté

© Philippe Lissac

The Fulani, nomadic herders, have always produced milk primarily for self-consumption and considered a by-product of a suckler herd. The LDB's ambition is to turn this milk into a fully-fledged production, intended for sale, generating a stable income for the household.

The reason for being of the Laiterie du Berger

Processing milk collected from Fulani herders in the Richard Toll area of northern Senegal has been part of the business plan of Laiterie du Berger (LDB) since its inception in 2008. The Fulani, nomadic herders, have always produced milk primarily for self-consumption and considered a by-product of a suckler herd. LDB's ambition is to turn this milk into a fully-fledged production, intended for sale, generating a stable income for the household.

This strong idea of integrated and sustainable development through the promotion of agricultural production by a social business enterprise has brought together numerous initiatives around the LDB, whether led by research and development stakeholders or by the Dairy itself. Although sometimes suffering from a lack of coherence between them, all the actions carried out have nevertheless made it possible to learn many lessons, develop monitoring tools and thus contribute to the beginnings of a true territorial dynamic around dairy production. The Laiterie du Berger and its shareholders now wish to capitalize on and promote all this rich experience to embark on a new stage in the development of the dairy sector in Senegal.

An ambitious partnership to develop the dairy sector in Senegal

Alongside the Grameen Crédit Agricole Foundation, the Caisse Régionale de Crédit Agricole Franche-Comté wanted to get involved in supporting Laiterie du Berger in this exciting project. It is in this context that a support mission was carried out as part of the "Solidarity Banker by CA" skills volunteer program. The objective: to develop a development plan for the dairy sector aimed at reconciling Laiterie du Berger's needs, its social impact, and the expectations of farmers and the region.

The action plan proposed at the end of the two-week work was approved by the Laiterie du Berger Board of Directors last June. It is the result of collaborative work with the Laiterie and Foundation teams, and discussions with other shareholders, capitalizing on past experiences and benefiting from the analysis of key stakeholders.

The mini-farm: entry point of the strategic plan

The action plan is structured in two phases. The first phase involves deploying 15 mini-farms to test and ensure the reliability of the model while building the necessary tangible and intangible conditions (fodder harvesting site, livestock advisory services, farmer training, and stakeholder structuring). The second phase, and a gradual rollout, aims to deploy 100 mini-farms across the country to impact as many farmers as possible.

A mini-farm is a center of dairy specialization within the dominant suckler herd. It is the place where all the tangible and intangible production factors are brought together to optimize and maximize milk production: feeding, watering, monitoring of reproduction, advice. From a very practical point of view for breeders, the mini-farm consists of stabling the four best dairy cows of the herd at each moment of the year, the starting point being the purchase of four Moorish zebus (animals with better milk potential than local zebus) and a crossbred bull (a cross between a European dairy breed and a zebu). By meeting the zootechnical conditions (water, supplementation, monitoring of production and reproduction) and by supporting the farmer in the appropriation of the required breeding practices, the farmer will be able to produce 20 liters of milk daily.

The price of milk paid by the LDB will generate a return to cover the initial investment while ensuring a household income (see diagram opposite). This technical trajectory is coupled with a financial trajectory, the value of the capital being significantly improved after a 4-year cycle, the time taken for the entry into lactation of crossbred females resulting from the crossing of Moorish zebus and crossbred bulls.

The mini-farm thus makes it possible to bring together the three key factors for the success of developing a dairy sector around the LDB: temporality, by giving time to breeders and the territory to take ownership of and value the changes; trajectory, by providing material resources (animals, fodder, etc.) and immaterial resources (training, support) so that each breeder is part of a trajectory of technical progress; and the gradual removal of limiting factors in the territory (lack of access to water, difficulties in feeding livestock, etc.) to allow as many breeders as possible to improve and increase the milk production of their herd.

Towards an innovative mode of territorial development

The implementation of this development plan will only be effective and relevant if and only if the project is jointly supported by the LDB (which buys and adds value to the milk) and by the farmers (who produce the milk). This sector-based or interprofessional approach must materialize in the territory. We therefore propose the creation of an entity owned by the LDB, the farmers, and possibly other stakeholders in the territory. This company will have its own governance and will be tasked with meeting the needs of the farmers (fodder production, livestock feed trading, technical advice, training) and the needs of the LDB (sales of milk) with an obligation of results. It will be the armed wing of the farmers and the LDB in the service of balanced territorial development based on the production and promotion of milk and which could in the future broaden its scope of action to support the transition to sustainable rurality in Senegal.

The Foundation makes two new investments in the DRC

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© Philippe Lissac

In 2018, the Foundation continued its investments in sub-Saharan Africa, notably with two new investments in the Democratic Republic of Congo.

It thus financed with a loan equivalent to 698,000 euros Baobab RDC, a microfinance institution created in 2012 by OXUS and acquired by the Baobab group (formerly Microcred) in 2017. Baobab RDC's mission is to serve people excluded from the traditional financial system and to improve their living conditions by offering them a varied, simple and accessible range of products. The institution offers both group and individual loans. To date, the institution has 7,847 clients, including 50.7% women.

The Foundation also provided its first-ever grant to VisionFund DRC, granting it a loan equivalent to €900,000. VisionFund DRC offers a wide range of loans, savings programs, microinsurance, and other services. In rural areas of the country, where access to credit is difficult, these financial products significantly improve the lives of many people. To date, the institution has more than 16,800 clients, including 67,000 women. 63.3 million of VisionFund DRC's clients are in rural areas.

For more information about our partners, click here.

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Created in 2008, under the joint leadership of Crédit Agricole SA's management and Professor Yunus, 2006 Nobel Peace Prize winner and founder of Grameen Bank, the Grameen Crédit Agricole SA Foundation is a multi-sector operator that contributes to the fight against poverty through financial inclusion and social impact entrepreneurship. As an investor, lender, technical assistance coordinator, and fund advisor, the Foundation supports microfinance institutions and social enterprises in nearly 40 countries.

The Foundation continues its investments in Eastern Europe and Central Asia

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© Didier Gentilhomme

In 2018, the Foundation continued its investments in the Eastern European and Central Asian regions with the granting of a total of seven loans from six partners for a cumulative amount of 7.6 million euros, representing 19% of the new investments made during the past year.

The Foundation thus invested for the first time in Bosnia and Herzegovina with the granting of a loan of 2 million euros to the microfinance institution Mi-Bospo, which offers access to credit and non-financial services to individuals, and in particular to women entrepreneurs. The institution also provides responsible financing by applying the principles of consumer protection, which play an important role in the development of women's entrepreneurship. To date, Mi-Bospo has more than 22,500 clients, including 64% women. The Foundation also granted an initial loan of 1 million euros to Mikra, a microfinance institution founded by CRS (Catholic Relief Services) and which offers the poorest working populations (and mainly women, representing 70.2% of its 13,400 clients) access to affordable and quality financial and support services.

In Kazakhstan, the Foundation granted a second loan in local currency equivalent to €608,000 to the microfinance institution Bereke, which it has been financing since 2017. Bereke, which has 5,200 clients, including 76% women, aims to contribute to improving citizens' living standards through economic support provided through loans to small and microenterprises as well as agricultural, consumer, and housing loans.

The Foundation also granted a new loan, its third since 2016, to the microfinance institution OXUS Kyrgyzstan, amounting to €687,000 over a three-year period. The institution offers individual financing and group loans, with OXUS's nearly 7,000 clients working primarily in the agriculture and livestock sectors.

In Kosovo, the Foundation also funded a new partner, AFK (Agency for Microfinance in Kosovo), with a €1.4 million loan over a three-year period. AFK is a microfinance institution that aims to improve living conditions in the country by providing micro and small businesses with access to sustainable financial services. The institution has 17,500 clients, 781 of whom are located in rural areas.

Finally, in Tajikistan, the Foundation granted two loans totaling €1.9 million to the microfinance institution Humo, a partner since 2017. The Foundation thus granted a total of three loans to this institution, whose main activity is to offer quality and affordable financial services to rural populations, as well as to promote the development of small and medium-sized enterprises in poor regions of the country. To date, Humo has nearly 50,000 clients, 81.5% in rural areas and 44.4% women.

In 2018, the Foundation consolidated its presence in West Africa with 8 new loans

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© Didier Gentilhomme

Over the past year, the Grameen Crédit Agricole Foundation has strengthened its presence in West Africa with 8 new financings, including 3 from new partners.

In Mali, the Foundation has funded Kafo Jiginew, a mutual network of savings and credit unions that offers local financial services (savings, credit, microinsurance, fund transfers, and other services) to as many people as possible in Mali to improve their living conditions. The institution currently has 48,000 active clients, including 92% clients in rural areas. The Foundation has granted it a loan in local currency equivalent to €3 million over a five-year period.

In Benin, the Foundation granted a local currency loan equivalent to €1.4 million to a new partner, PEBCo Bethesda, whose mission is to improve people's living conditions by providing quality financial and non-financial services. The institution offers group and individual loans and has approximately 95,000 active borrowers, including 641 women and 331 in rural areas.

In Togo, the Foundation also funded a new partner, Assilassimé, with a loan in CFA francs equivalent to €500,000. Assilassimé is a program created in 2012 by Entrepreneurs du Monde for marginalized people. The institution provides them with financial (microcredit) and non-financial services (training, individualized support, social referrals). It currently has nearly 30,000 clients, including approximately 95,000 women.

In Burkina Faso, the Foundation also made three new investments in 2018 with existing partners, bringing its total commitments in the country to more than €4 million, or €13.81 billion of its commitments in sub-Saharan Africa as of the end of December 2018. ACFIME received a loan in FCFA equivalent to €305,000 over a three-year period. It is a microfinance institution that helps bridge the gap not covered by large MFIs operating throughout the country, as ACFIME's loans have very strong potential for social impact. It currently has 18,600 clients, including €901 billion women. PAMF-BF, for its part, received a loan in local currency equivalent to €1 million over a three-year period. The institution, which has approximately 28,400 clients, is primarily engaged in collecting savings and granting loans in Burkina Faso, in order to help better meet the financial needs of low-income populations within a strengthened framework of protection for its members and users. Finally, ACEP Burkina received a local currency loan equivalent to €1.5 million over a three-year period. Acep is a microfinance institution specializing in financing microenterprises and very small businesses in urban centers and their inner suburbs. The loans granted are primarily intended to finance working capital and investment needs. To date, the institution has 11,000 active borrowers.

Finally, in Senegal, the Foundation granted a local currency loan equivalent to €762,000 to CAURIE Microfinance, a socially responsible and financially viable microfinance institution whose mission is to contribute sustainably to the economic and social advancement of poor microentrepreneurs, primarily women. CAURIE currently has 71,000 clients, including 98% women. The Foundation also granted €100,000 in financing to SFA (Sénégalaise des Filières Alimentaires) in the form of a shareholder current account. SFA is a social enterprise that develops an inclusive value chain based on the production and marketing of rice, and in which the Foundation has been a shareholder since 2013.

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