Grameen Crédit Agricole Foundation and Crédit Agricole CIB provide a sustainability-linked loan to Annapurna Finance, a leading Indian MFI

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The Grameen Crédit Agricole Foundation and Crédit Agricole CIB are providing a 350 million rupees (4.5 million euros) Sustainability-Linked Loan to Annapurna Finance, an Indian non-bank financial institution specializing in providing microcredit to low-income populations. Annapurna Finance is the first microfinance institution in India to sign a Sustainability-Linked Loan.

Through this facility, Annapurna Finance is committed to strengthening its environmental and societal contribution, beyond the social impact inherent in microfinance activity, by promoting new solutions to finance the energy transition and the resilience of populations in the face of climate change, and strengthening women's entrepreneurship through training.

In line with the recommendations of the Sustainability-Linked Loan Principles, the conditions of the transaction include a mechanism for indexing the margin to the achievement of the annual objectives of the following indicators: the photovoltaic capacity installed by micro, small and medium-sized enterprise customers; the construction and modernization of resilient housing in cyclone zones by microfinance customers; the participation of microfinance customers in a program to strengthen entrepreneurial skills for an exclusively female audience.

The Grameen Crédit Agricole Foundation and Crédit Agricole CIB have been working since 2019 to promote financial inclusion through financing of non-banking institutions in India. For this transaction, the Grameen Crédit Agricole Foundation acted as arranger and guarantee provider to Crédit Agricole CIB in India, which granted this financing to Annapurna Finance. In addition, as ESG Coordinator, Crédit Agricole CIB's Sustainable Banking team advised Annapurna Finance on " Solidarity Bankers ", a skills volunteer program launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA for microfinance institutions and impact businesses supported by the Foundation.

Eric Campos, General Delegate of the Grameen Crédit Agricole Foundation, declared: “ We are pleased to direct bank financing towards the microfinance sector and to foster innovation, supporting our partner Annapurna in its desire to strengthen financial inclusion and social and environmental impact. »

Nathalie Sarel, responsible for Sustainable Banking for SMEs and mid-caps at Crédit Agricole CIB, added: “ This landmark loan, linking financial and non-financial aspects, the first of its kind granted to a microfinance institution, sends a powerful message that once again demonstrates our ability to support and encourage all types of institutions in their efforts to combat climate change and promote a more just and inclusive society. Alongside the Grameen Crédit Agricole Foundation, we are very proud to have supported Annapurna in this innovative and high-impact transaction. »

Gobinda Chandra Pattanaik, Managing Director of Annapurna Finance, said: “ The future of responsible lending lies in leveraging sustainability practices, which requires strategic decision-making and the use of more environmentally and socially appropriate products. We are confident that this collaboration between Crédit Agricole and Annapurna will help both organizations achieve positive sustainability outcomes. »

Dibyajyoti Pattanaik, director of Annapurna Finance, said: “ We are pleased that Crédit Agricole supports our efforts to integrate a better environmental and social management system. For two decades, Annapurna has placed sustainable development at the heart of its strategy, in line with our vision of contributing to self-sufficient and economically strong rural and peri-urban communities. Our We-LEAD program, which aims to develop the entrepreneurial spirit among women in rural areas, pursues the same ambition of a positive societal contribution from our business. Entering into such a unique partnership with Crédit Agricole should help us achieve our future objectives. »

Download the press release.

For more information about our partners, click here.

Paidek beneficiary of a technical assistance mission within the framework of the SSNUP program

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PAIDEK, a partner of the Grameen Crédit Agricole Foundation since 2014, is a microfinance institution (MFI) created in 1993 by SOS Faim whose mission is to contribute to strengthening the economic fabric and revitalizing the popular economy in the Democratic Republic of Congo, and in particular in the Kivu region (North Kivu, South Kivu and Maniema). To do this, the institution, which had nearly 21,000 active borrowers at the end of June 2022, including 51% women, facilitates access to financial and non-financial services for disadvantaged populations excluded from the traditional banking system by setting up a professional and sustainable financial instrument with individual and group loans.

Today, PAIDEK operates mainly in urban areas (2/3 of its clients). Despite its desire to target more small agricultural producers in rural areas, and despite the decline in the number of active borrowers in urban areas for several years, the MFI is having difficulty achieving this strategic objective due to the distance between the targeted areas and its branches, making it difficult to reach its target and posing security issues related to cash transfers. To this end, the institution wishes to adapt its service offering, in particular to provide remote access to its rural clientele, composed mainly of women, young people and small producers.

In order to achieve its objectives, PAIDEK will be able to benefit from the SSNUP (Smallholder Safety Net Upscaling) program coordinated by ADA and for which the Foundation was selected as one of the impact investors responsible for its implementation. This program aims to increase the productivity and resilience of smallholder farmers, particularly in Asia and Africa, through better risk management and the promotion of sustainable and climate-smart agricultural practices.

This project focuses on the development of digital channels for the distribution of financial products, adapted to the needs and constraints of small producers in rural areas. The technical assistance provided under the program will allow PAIDEK to define the digital solutions to be implemented to improve the distribution of financial products and strengthen its reach in rural areas, particularly among small producers operating in the coffee, rice, onion, tomato, potato, cassava, corn, and bean sectors. This project will also allow the institution to increase its reach in rural areas, reduce its operational costs, and limit the risks associated with handling cash.

For the Grameen Crédit Agricole Foundation, this project is central to one of its strategic priorities: strengthening rural economies. This technical assistance mission thus contributes to strengthening the impact of the funding already provided by the Foundation to PAIDEK.

For more information about the SSNUP program, Click here.

Improving the resilience of small businesses and smallholders: the Foundation organizes training for its partners as part of its AT offer

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Small businesses and small farms 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. However, now is the time to rebalance attention to the protective role of financial services.

The transition from productive to protective financial services is particularly relevant for financial service providers (FSPs), which can mobilize savings because they can offer a range of services. The distribution of inclusive insurance products by FSPs is possible because they are well-established in communities and have established trusting relationships with their clients. Moreover, the introduction of insurance into their product portfolio also reduces their own risk exposure: insured clients are less vulnerable and therefore more likely to repay their loans even in the event of an adverse event.

However, the challenges are numerous. Offering insurance to clients requires new skills, such as understanding client risks, negotiating and managing partnerships with insurers, and implementing new business strategies. Furthermore, PSFs are often underinsured themselves, lacking sufficient protection for their own assets and staff.

In 2017, the Grameen Crédit Agricole Foundation and the International Labor Organization (ILO) conducted a survey of the Foundation's partners on their involvement in inclusive insurance. Of the 36 FSPs that responded to this survey, 69 already offered some form of insurance. However, at that time, most of them only offered basic and mandatory products, such as outstanding balance insurance, which offered limited benefits to clients. Yet, 75 of the respondents were interested in introducing inclusive insurance or expanding their current offerings. To do so, however, the FSPs highlighted some of their needs, such as access to financing, technical assistance, and training.

It is within this framework that the Grameen Crédit Agricole Foundation organized a first training session for its partners in September 2022, in Benin. With 9 participants from 5 countries, this first training, which took place over two days, focused on the value of insurance, strengthening the product portfolio, strengthening the organizational structure of MFIs, improving operational processes and ways to improve impact in the organization of institutions. The main objective of the training was to enable partner institutions to acquire the tools to design a comprehensive strategy to make changes to the existing microinsurance offering 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 deemed it relevant and adapted to their needs. This training will also be followed by support actions including monitoring the West African market in terms of agricultural insurance offerings, sharing best practices through occasional field visits, and reviewing protocols or agreements concerning borrower death products.

More information on the Foundation's technical assistance offer by clicking here.

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Source of program presentation: ILO

Foundation grants new loans in Central and South Asia

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

A new dollar loan equivalent to 2 million euros has been granted to the microfinance institution Asian Credit Fund (ACF) in Kazakhstan. A long-time partner of the Foundation, ACF is an institution established in 1997 by the American NGO Mercy Corps, 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 homeownership. The institution adheres to a specialized community lending model that offers tailored financial solutions, business advice, and technical assistance to its clients. As of the end of June 2022, ACF had 33,856 active borrowers, including 66% women and 92% clients living in rural areas.

Similarly, the Foundation granted a loan in local currency equivalent to 1.3 million euros to the Indonesian microfinance institution Coop TLM, an institution established in 2010 by the TLM Foundation. Coop TLM's mission is to provide poor Indonesian micro and small businesses with the means to improve their standard of living. The institution provides loans using the group methodology. As of the end of March 2022, Coop TLM had 145,997 active borrowers, including 99,971 women and 931 rural borrowers, 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 Barometer of Impact Finance

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

This publication presents key figures and trends in impact investing and financial inclusion worldwide. Since its emergence in the early 2000s, the sector has enjoyed strong and sustained momentum. According to data from the Global Impact Investing Network (GIIN) for 2020, the size of the impact investing market is estimated at approximately $1.4 trillion. At a time when we are barely emerging from the COVID-19 crisis, this momentum appears far from slowing.

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 enable effective coordination of the various impact initiatives on a global scale?

This year, as part of its special report, the Impact Finance Barometer questions the resilience of the impact finance sector in the face of exogenous shocks. This term refers to all political, economic, climatic and social risks which, if realized, contribute to the destabilization of the sector, leading to knock-on consequences for all beneficiaries.

By inviting organizations within the impact finance ecosystem to share their expertise on sector-specific issues, this publication aims to contribute. The Barometer offers a panoramic view of the various forms impact finance can take, highlights its real operational capabilities on a global scale through concrete examples, and highlights solutions to the issues of inclusion and financing social and environmental transitions.

Download the Barometer by clicking here.

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Source: Convergences

 

The Foundation supports RENACA with technical assistance within the framework of the SSNUP program

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The objective of the program SSNUP (Smallholder Safety Net Upscaling) is to increase the productivity and resilience of smallholder farmers in Asia, Africa, and Latin America through improved risk management and the promotion of sustainable and climate-smart agricultural practices. In addition to improving food security and the standard of living of some tens of million smallholder farm households, this program will also contribute to the development of sustainable agricultural value chains.

Spread over ten years, the program draws on the knowledge and expertise of multiple technical assistance mechanisms of impact investment funds to reach the greatest number of smallholder farmers.

It is within the framework of this program, coordinated by ADA (Luxembourg) and financed by the Swiss, Luxembourg and Liechtenstein cooperation, and for which the Foundation was selected as one of the impact investors in charge of its implementation, that the Beninese microfinance institution RENACA will benefit from a technical assistance mission.

Founded in 2005, the National Network of Self-Managed Village Savings and Credit Banks of Benin (RENACA-Benin), which has more than 45,000 borrowers, including 59% women, is a microfinance institution particularly committed to agricultural financing and inclusive green finance. The institution has already conducted a diagnosis of its actions in terms of agricultural and green financing, raised awareness among its staff and its governance on green finance and climate-smart agriculture, and developed a list of activities excluded from financing as well as an environmental strategy.

Building on the lessons learned from its previous experiences, RENACA now wishes to change scale and strengthen its autonomy in the field of non-financial services. As such, the overall objective of the project, which will be carried out within the framework of the SSNUP program, will be to strengthen RENACA's capacities and create teams of internal trainers to empower the institution in the creation and delivery of training modules on various themes such as financial education for small producers, sustainable, profitable and environmentally friendly agricultural practices for small producers, or risk analysis and the preparation of agricultural credit applications.

This project will therefore strengthen the MFI's non-financial offering through dedicated training for small producers, as well as its financial offering, through better analysis of agricultural credit applications, which will thus respond in a targeted manner to the financial needs of small producers. This project will also improve the management of risks related to agricultural credit by strengthening the capacities of its staff, but also limit the risks linked to poor farm management by producers.

For the Grameen Crédit Agricole Foundation, which has been working with RENACA since 2013, this project is central to one of its strategic priorities: strengthening rural economies. This technical assistance mission will thus strengthen the impact of the funding provided by the Foundation to the institution since the beginning of their partnership.

For more information on the SSNUP program, click here.

Foundation invests in sustainable cocoa sector in the Philippines with first loan to Kennemer Foods International

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In July, the Grameen Crédit Agricole Foundation granted an initial loan to Kennemer Foods International in the Philippines, for an amount equivalent to 1.1 million euros in USD.

Kennemer Foods International is an agricultural company with a strong social and environmental impact, active in the collection and processing of cocoa, bananas, and other agricultural products, and the largest Philippine supplier of cocoa beans to the international market. The company sources from approximately 20,000 smallholder farmers, offering various services throughout the value chain: supply of high-quality inputs, pre-financing solutions, guarantee of the total purchase of the harvest at prices linked to the world price, access to agricultural microinsurance solutions and training in sustainable cocoa farming practices. This support results in an improvement in the quality of life of farmers and an increase in their resilience to growing climate risks, while maintaining good soil health over the long term.

Kennemer created a subsidiary financial institution, Agronomika, to facilitate access to financing for small producers, and more recently another entity, Kennemer Eco-Solutions, to launch a carbon credit activity through the protection and restoration of forests in Mindanao, in the south of the archipelago.

According to Vincent Brousseau, Director of the Impact Business Financing division at the Grameen Crédit Agricole Foundation, this partnership with Kennemer foreshadows the 2025 ambitions of the Foundation's new medium-term plan. The Foundation will seek to partner with local stakeholders positioned at the crossroads of social and financial inclusion of rural communities, and climate issues and the fight against biodiversity loss.

For Simon Bakker, CEO of Kennemer Foods, this partnership with the Grameen Crédit Agricole Foundation represents a strategic initiative with an organization with similar goals. Grameen Crédit Agricole's mission to combat poverty through financial inclusion and rural development aligns perfectly with Kennemer's own mission.

With this new investment, the Foundation is relaunching its impact business financing activities. It currently has eight impact business partners, particularly in the agricultural sector, which represents 641,000 TND of its funding.

Travel diary of a Solidarity Banker in Senegal

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Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA in 2018, Solidarity Bankers is a skills-based volunteer program open to all Crédit Agricole Group employees, supporting microfinance institutions and impact businesses supported by the Foundation. Discover the opinion piece by Stéphane Frénéat, UNEXO's Solidarity Banker, who went to Senegal to support La Laiterie du Berger, a social enterprise in which the Foundation is a shareholder.

Solidarity Banker…an incredible professional and personal adventure of riches!

The Grameen Crédit Agricole Foundation has been a partner since 2010 of Laiterie du Berger (LDB), a social enterprise based in Senegal (Dakar and Richard Toll), created in 2006 by Bagoré Bathily. LDB fights poverty by building a local dairy sector (from production to distribution) in harmony with the environment, and thus promoting healthy eating for as many people as possible. It deploys a specific training program based on the "school farm" concept, located in Richard Toll (Mauritanian border), close to the production plant. This training allows many young Fulani village women to access the profession of livestock breeder and thus earn an income from the milk they produce and sell to the dairy. They thus acquire, among other things, financial independence.

The proposed mission consisted of supporting Laiterie du Berger and its manager in (i) structuring financing (mix of equity, private and public debt, hybrid financing) and (ii) considering the governance to be put in place in order to ensure the development of the company and its sustainability.

The profile sought and the content of the mission could correspond in every way to my professional skills, my experience, my passion for travel and the discovery of other cultures. It allowed me to combine my profession with my values and a certain quest for meaning... "Finance" in the service of solidarity and sharing.

It was therefore only natural that I submitted my application to the Foundation, with the support of my management and UNEXO. Once approved, we immediately prepared the mission with the Foundation and Bagoré teams. Together, we "reformulated" the mission's objectives and its schedule. Bagoré and the Foundation sent me all the necessary information so that I could familiarize myself with the Dairy's strategic plan and its economic and financial challenges.

Before the trip, the preparation phase is essential. It allows us to clearly validate everyone's expectations, clarify the objectives, the approach, and the expected deliverables. Thus, on Bagoré's suggestion, in collaboration with the Foundation's teams, we developed my work schedule for my entire stay: the people to meet, the sites to visit, the work and feedback sessions. 10 days is very (too) short...

Flight to Dakar and Richard Toll

The big day is here! I'm flying off, happy and excited to spend 12 days in the field in Senegal! I was leaving for a mission that aligned with my skills and knowledge in corporate finance, but without any specific knowledge of the microfinance and impact business sector, in a structure and cultural context different from my daily life.

Welcomed by Bagoré upon my arrival, the adventure begins! Located not far from the Dakar headquarters of Laiterie, I prepare for this busy week of meetings and working sessions with the LDB teams based in the capital.

After a weekend spent meeting the family shareholders of the Dairy to immerse myself in the company's shareholder context, Ortence, Executive Assistant, Jean, who will be leading me throughout the mission, and Bagoré welcome me to LDB's headquarters to begin our week of meetings with the various managers. The objective is to immerse myself in the company in order to fully understand the challenges and development strategy:

  • Ouakam will show me in situ the two distribution channels for “Dolima” products (trademark of LDB products), namely the GMS and some of the 22,000 shops in the “informal” sector!
  • Bakary will introduce me to Tiès, one of the company's logistics hubs, the real organizational and financial challenge for La Laiterie (respecting the cold chain in a tropical country, managing collections, etc.);
  • Momar will present to me the plans for the new factory to be built, the technical, organizational and financial challenges of such a project in Senegal;
  • Emma will share with me the multiple financial challenges that the company must face to finance its daily operations and find adequate financing for the various projects underway in a country where the banking and financial sector does not operate in the same way as the one we know here in Europe;
  • Arona will show me around the factory based in Richard Toll. We will meet young Fulani villagers, students of the livestock training program initiated by the Dairy and future "entrepreneurs" supplying fresh milk to the Dairy. Moments of sharing and unforgettable emotions at the time of breaking the fast (we were during Ramadan) with these young girls of incredible courage and energy! Laughter, smiles... a clash of cultures!

Back in Dakar and armed with a clear vision of the company and its challenges, particularly financial ones, I spent the last two days discussing with Bagoré and Emma the two themes of my mission (structuring financing and governance) and writing the first drafts of deliverables (capitalization tables, governance model, financing plan, etc.) which will be adjusted upon my return to France and then shared with the Foundation team and Bagoré...

I returned to Nantes, happy to have had this experience. This mission brought me a lot, especially on a human level; I was able to discover another culture, have enriching exchanges and meet inspiring people. It is, certainly, a significant investment in terms of time and workload, but the mission is truly worth it. I will forever keep deep inside me the laughter and smiles of the students of the Richard Toll farm school, their sense of hospitality, and the immense hope they embody for future generations of this beautiful country that is Senegal.

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My thanks to Eric Campos, Vincent Brousseau, Céline Hyon-Naudin, Aurélie Béchara and Maria-Teresa Calvo of the Grameen Crédit Agricole Foundation for their support throughout the mission and the trust they placed in me. A huge thank you to Bagoré, Jean, Ortence, Emma and the entire team at the Laiterie for their warm welcome, to Arona for introducing me to St Louis, Djoudj, Richard Toll and the farm school, to Florence Pelletier, Aurélie Cacciotti and Christian Bodenes of Crédit Agricole SA and to Jean-Luc Creach, Managing Director of UNEXO without whom I would not have been able to have this experience.

The Foundation continues to develop its activity in sub-Saharan Africa

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The Grameen Crédit Agricole Foundation continues to consolidate its position in sub-Saharan Africa with the granting of three new loans, including two in the Democratic Republic of Congo, to two new partners.

In Benin, the Foundation granted a new loan to the microfinance institution COMUBA, for an amount in local currency equivalent to 915,000 euros. COMUBA, A partner of the Foundation since 2015, it is an institution created in 2000 by a group of market gardeners who were unable to finance their activities through the traditional financial sector. The institution offers financial and non-financial services, particularly through group loans, and contributes to improving the well-being of low-income women. To date, the institution has more than 45,000 clients, including 91% women.

In the Democratic Republic of Congo, the Foundation granted a first loan to the GUILGAL Microfinance Company (SM Guilgal), for an amount in dollars equivalent to 950,000 euros. SM Guilgal's mission is to provide financial and non-financial services to low-income legal and natural persons, especially small traders, young people with bankable projects and farmers (grouped or non-cooperative) in order to contribute significantly and sustainably to the improvement of their living conditions, while preserving the environment. The institution serves nearly 8,000 borrowers, of which 54% are women.

Still in the Democratic Republic of Congo, the Foundation also granted a first loan to the microfinance institution minimum wage for an amount in dollars equivalent to 970,000 euros. SMICO is an institution created in 2010 with the mission of becoming a leading microfinance institution that offers rapid solutions adapted to the needs of local populations to enable them to develop income-generating activities. The institution grants loans according to individual and group methodologies to more than 7,000 borrowers, including 52 % women, and operates in the urban areas of eastern DRC through a network of 7 branches and 94 employees.

With these two new partners, the Foundation now works with four microfinance institutions in the DRC. As of the end of July, the Foundation had 77 partners, including 521 in sub-Saharan Africa, representing 321 of its portfolio under management.

For more information about our partners, Click here.

ECLOF Kenya launches film on its innovative agricultural value chain financing model

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Small farms produce most of Africa's food. But they need to become more productive to accommodate a growing population.

ECLOF Kenya, a partner of the Grameen Crédit Agricole Foundation since 2015, is a microfinance institution that offers financial and related non-financial services to micro, small and medium entrepreneurs, as part of their income-generating activities.

As part of its efforts to improve the quality of life of its clients, ECLOF operates an innovative agricultural value chain financing model to build the capacity of smallholder farmers and their cooperatives and factories. Through financial and technical training, loans, and connections with local dairy factories as trusted buyers, farmers earn a stable income and invest in high-yielding cows and better maintenance. On average, participating farmers triple their annual income from dairy production.

At the same time, this innovative structure reduces the costs and risks associated with working with ECLOF farmers: the repayment rate is well above 90 %. As of December 2021, ECLOF Kenya had disbursed dairy loans worth more than USD 3 million to over 2,200 farmers.

Kenya's new dairy film lets farmers themselves speak out to tell their stories.

Click here to watch the movie.

 

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