EN
Activity Report 2014
The year we turned 20
02 — ADA Editorial
The year we turned 20 What will remain of the work and activities ADA has carried out this year for society’s most underprivileged citizens, those excluded from the financial system, who are often prisoners of a vicious cycle of “unemployment, therefore without means and thus unable to generate their own business”? Firstly, there will be the families, men and women whose lives have been improved by inclusive finance. Then there are also the microfinance institutions that have been strengthened, better prepared and equipped with the funds needed to carry out their social mission. Finally, there is the training that is being provided by ADA and its partners to hundreds of professionals across the globe. Publishing an activity report brings one to talk about oneself but essentially about others. Our work is dedicated to them, the individual entrepreneurs and often women, who have been able to set up their own businesses, as well as to the MFIs and entities we support. It is therefore stories of encounters that we are going to tell you here today, encounters between ADA and its partners, whose aim is to help in making the world a better place. There is still so much to do and, while poverty is losing ground, inequalities are rising and needs remain flagrant. 2014 was also the year we turned 20, a year to take stock, review our approach and look towards the future. The world has definitely changed over the past two decades. ADA has grown over the past year, and our NGO is adapting and strengthening its structure to face new economic constraints and to maintain its efficiency in an everincreasingly uncertain world. We are taking action today to build our projects of the future with the goal of making them sustainable and noteworthy. When asked, “what have you done in the past 20 years?” I simply reply: we have taken action. It is some of these actions that I invite you to read about in this annual report.
Robert Wagener President of ADA
Under the High Auspices of HRH the Grand Duchess Maria Teresa of Luxembourg.
ADA is a non-governmental organisation approved and co-financed by the Luxembourg Directorate for Development Cooperation and Humanitarian Affairs.
One method, multiple networks In order to maximize the impact of its work, ADA acts in close collaboration with microfinance networks, be they national professional associations or regional networks. These networks enable MFIs to coordinate their action and to pool resources, know-how and any external support they may benefit from. ADA works with the REDCAMIF regional network in Central America, which brings together seven national networks from: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic. In Africa, ADA relies upon four regional networks: AFMIN, MAIN, AMT and AFRACA, as well as on CIF, uniting the major cooperative networks of West Africa. Finally, four national networks in Laos, Vietnam, Cambodia and the Philippines enable ADA to multiply the impact of its projects in South-East Asia.
Leverage effect Working together with networks is a core part of our 2012-2016 strategy. We constantly aim to create a leverage effect, whereby networks act as relays, given that they are the actors and partners interacting with the institutions. All the training, innovation and expertise a network provides is made readily available to benefit numerous microfinance institutions and, ultimately, a great number of individuals. By working together with networks, we are able to reach out to a large number of MFIs, but the latter also benefit from each other by sharing knowhow, experience and good practices. The aim is to transfer skills to key participants who can then, in turn, pass them on. That means that projects are no longer carried out by a single entity, but by a group. We strongly believe that, in this way, networks and MFIs can bolster their autonomy. And that is the core purpose of our work – increasing autonomy.
ADA Table of contents — 03
ADA changes lives
Young artisans, the future is yours! 05
An example of synergy
Green energy for all
Our innovation projects replicated across the globe
07
11
ADA serving MFIs
ADA committed to Soro Yiriwaso
Optimising MFIs’ financial and social performance
11
13
ADA favours financial inclusion
An example of a successful partnership
15
17
An effective microfinance institution in Cap-Verde
Research and 20 years
Our projects across the globe
Our financial data
18
19
22
24
Our institutional data
Contact us
26
27
The figures provided in this publication were accurate as of 31st December 2014.
For more information about our activity: www.ada-microfinance.org
04 — ADA Sensibiliser aux enjeux de la microfinance
ADA
changes lives
« »
Ensuring the economic and social autonomy of low-income populations, especially that of women and young people, is an effective way of fighting poverty and instability. That is why the purpose of microfinance is to contribute, in a sustainable manner, to the economic empowerment of society’s most disadvantaged, in order to improve their quality of life. Alou Sidibe, Managing Director of CIF, Burkina Faso
ADA Young artisans, the future is yours! — 05
Young artisans, the future is yours! The goal of our Créd’art project, with the support it provides to young African artisans, is to work in partnership with MFIs. It works by setting up a range of services, both financial (loans and savings) and non-financial (training, financial education, business management advice, follow-up and support). Services are tailored to the needs of young entrepreneurs seeking to launch or expand their own microbusiness. A young artisan sets up business Along a typical red-earth Ouagadougou road, just after the Patte d’Oie roundabout, one can find Yacouba Sango’s modest workshop. Four mud walls are all that surrounds his two sewing machines and one embroidering machine. But make no mistake! While it may look like a makeshift set-up, his premises are far from being without resources. A quick glance at his order book, as well as several customers patiently waiting to have their measurements taken, confirm how successful this young entrepreneur really is. Yacouba just celebrated his 21st birthday. Just a few years ago, no one would have bet on the young tailor’s success. He had never been to school. Yacouba spent his childhood sewing. He sewed and embroidered all types of watered, cotton and moiré fabric under his uncle and boss’ orders. Some ten years after starting in the sewing shop, however, Yacouba was approached in the marketplace by Isabela, a RCPB credit officer. She told him about the benefits of setting up his own business, how to go about it and, more importantly, where he would find funding to get started, namely some CFA 655,000 or approximately €1,500.
Yacouba benefits from RCPB’s and ADA’s support This type of funding is called Créd’art, resulting from a combination of the French words “crédit” and “artisan”. It is a microloan designed to give young entrepreneurs the helping hand they need to launch their own workshop, restaurant, café or shop. ADA and RCPB have been developing and testing this specific microloan in the branches the MFI has in the country’s capital. ADA finances training, assistance and technical support at the MFI. ADA has also set up a guarantee fund that partially covers outstanding debt with the help of the Luxembourg Rotary clubs. When the credit officer, who is very dedicated to her young clients, learned that Yacouba had already spent over ten years in a dressmaking workshop, she realised that she was dealing with an experienced artisan who had all the right tools for setting up a profitable microbusiness. And she was right! Thanks to Créd’art Yacouba bought a second-hand electric sewing machine and he rented the four walls that still house him today. Slowly but surely, the young tailor built up a clientele, thanks to his work ethic, his attention to detail and his friendly approach.
06 — ADA Young artisans, the future is yours!
Our partners This success-story was made possible thanks to the microfinance institution RCPB, which believes in young adults’ ability to build and manage their own microbusiness. ADA has been working with CIF and RCPB since 2008 in order to set up and develop Créd’art in Burkina Faso.
Créd’art proves that a wellmanaged youth loan can be useful and profitable to microentrepreneurs. Since Créd’art was first launched in 2011:
Success that benefits others…
… is also success for the partner MFI
Yacouba is a tireless worker. He loves his job and is currently looking for a larger workshop, a place where he could take on an apprentice and have the possibility to display more garments. Young microentrepreneurs will often hire staff or apprentices in order to help them expand their businesses. Since 2008, 2,100 jobs have been created by young artisans using Créd’art to lift off.
Distributing the new Créd’art financial product contributes to RCPB’s development as it expands its loan portfolio, increases its clientele and improves its social performance. A strategy for Créd’art continuity was launched in early 2014, enabling RCPB to handle the microloan product’s distribution and management to their full extent. By the end of 2014, in view of reaching more young entrepreneurs, the MFI was ready to roll out Créd’art in its branches in two secondary towns: Bobo Dioulasso and Koudougou. ADA, for its part, is scheduled to exit the project in 2015.
Yacouba is discrete. He won’t boast about his achievements and success with a big smile. Only the sparkle in his eye confirms how, thanks to a helping hand, he has changed his future.
930 young adults
have received loans and support in Burkina Faso
84%
of the microbusinesses financed in 2008-2009 are still thriving today Créd’art has lead to the creation of approximately
2100 jobs: microbusinesses, apprentices and hired staff
2015 goals: develop the Africa Youth project Following the Créd’art example, two new MFIs were selected in 2014 for the implementation of job-creation programmes aimed at young people: ASUSU S.A. in Niger and FUCEC in Togo. The project will consist of rolling out technical support funds, as well as of a guarantee fund, so that the MFI may expand its financial and non-financial services that are tailored to the needs of its target: young entrepreneurs.
The Rotary Clubs of Luxembourg support our Africa Youth project.
Find out more about Créd’art on our website at www.ada-microfinance.org
ADA Green energy for all — 07
Green energy for all Access to cheap power remains a vital part of creating and developing a profitable business. ADA and its partners are working on innovative measures that allow most-disadvantaged households to access energy-efficient equipment, contributing to limiting expenses and pollution. One project, two countries Nearly 18,000 km separate the heights of the Altiplano in Peru and the beaches of the Philippine archipelago. Yet it is in these two far-removed countries that ADA launched its first green microfinance projects. Despite the large distance between them, the challenge of accessing renewable energy remains the same in both countries. In fact, “what we did in Peru is now helping us in the Philippines. In the same manner there will be lessons to learn from the Philippines project that can be applied to Peru…” explains Carla Palomares, manager of ADA’s green energy project.
For three times the benefit ADA launched its “green energy” project in 2011 with the support of MicroEnergy International, EnDev/GIZ (the German agency for international cooperation) and a partnership with two Peruvian MFIs, Caja Huancayo and Fondesurco. Its goal is to provide the most disadvantaged populations with access to energy-efficient equipment (ovens, dryers, lamps, water heaters) and even zero-energy equipment in the case of solar-powered appliances. The benefits were threefold: firstly economical, with reduced energy bills for households and improved profits for entrepreneurs; secondly, social with better health thanks to ovens that produce less toxic smoke; and finally environmental with a reduction in energy consumption and CO2 emissions. By the end of 2014, nearly €550,000 in microloans had been granted to nearly 950 families and microbusinesses in Peru.
08 — ADA Green energy for all
In the Philippines, loans are smaller, standing on average at around €60. Some 70% of beneficiaries are new clients to these MFIs, people for whom financial inclusion would not have been possible without this accessible offer. For MFIs, the green microloan is a foot in the door, and it is not surprising that two other MFIs, PMPC and NWTF, will now also be offering this service. Next step: to Peru with the development of a services platform that connects MFIs, beneficiaries, and goods- and equipment suppliers. This will result in providing an offer that covers the entire value chain, from loan to sales, from set-up to repairs, with a view to mid- and long-term profitability. ADA is working on this project with its local partner: COPEME.
The project is taking hold in the Philippines
that local technical teams assigned to the project are able to provide constant and close support to the MFIs.
“Philippine MFIs were immediately very keen to get on board this experience”, adds Benjamin MacKay, Program Manager for the Innovations in Inclusive Finance department. It has to be said that the microfinance market is very different in the Philippines and ADA clearly needed to take on a different approach. That is why ADA is working with MCPI, a network that will replicate the green loan projects together with two MFIs, ASKI and PBC.
ADA and the green energy unit are working together to come up with methods and tools for the development and promotion of green loans by the selected MFIs. The green unit passes on its knowhow to these MFIs. Having a strong social element, this project does require specific promotion and special follow-up, at a difference from other types of microloans. For example, MFIs need to learn new processes including the selection of technology and suppliers, and contractual relation building with the latter (follow-up, customer-service, spare parts, training, etc.). In a context in which qualified staff is in high demand, it is essential for there to be training, preservation and sharing of skills and knowledge. Lessons learnt locally need to be capitalised on at a regional and national level.
In this disaster-prone archipelago (typhoons, earthquakes, etc.) climate change and its consequences are a core issue. The country is spread across hundreds of isolated islands, and access to cheap energy is crucial to a population that makes its living from fishing and agriculture. Power networks are often poorly connected and power cuts are frequent. Microloans are making it possible for households to buy solar lamps (at a price between €50 and €200) thereby, for example, improving children’s education, given that they can study later in the evening. In the Philippines, ADA is working together with MCPI (Microfinance Council of the Philippines Inc.), a national MFI network. MCPI created a green energy unit within its institution, consisting of two local consultants: an Energy Business Advisor and a Technical Energy Advisor. One of the lessons learnt in Peru, that can be passed on to the Philippines, is precisely
Combining two experiences Launched in mid-2014, the green microloan has empowered 300 families to buy energy-efficient equipment. “The markets are different and so are needs”, explains Carla Palomares. But the way the microfinance service is structured and implemented remains the same. That is why the two projects, one in Peru and one in the Philippines, can be cross-referenced to draw out new innovations and best practices.
In Peru
EUR 550,000
of loans granted with an average EUR 500 and EUR 600 per loan
950
Over families or microbusinesses equipped
3 products ovens, dryers, water heaters
In the Philippines
300 families
have benefitted from the “green energy” loan
one product: solar powered lamps
Loans average between
EUR 50 and EUR 200
ADA Our innovative projects are being replicated across the globe — 09
Our innovative projects are being replicated across the globe REPLICATION OF THE AFRICA YOUTH PROJECT
NIGER NIGER since 2014
BURKINA FASO BURKINA FASO since 2008
TOGO TOGO
since 2014
REPLICATION OF THE GREEN ENERGY PROJECT
Luxembourg Luxembourg
PHILIPPINES PERU since 2010
PERU
WEST AFRICA WEST starting 2016
AFRICA
since 2013
PHILIPPINES
10 — ADA Sensibiliser aux enjeux de la microfinance
ADA
serving MFIs
« »
“ADA and Soro Yiriwaso have been married for a long time. I was saying the other day that I was very proud of it. ADA trusted us right from the start when we were setting up the business. ADA has assisted us with funding through the Luxmint fund and then the LMDF fund. They took the time to understand our needs and our ideas, which they share with us, and they give us all the support we need to carry through some of our projects.” Adama Camara, Managing Director of Soro Yiriwaso, Mali
ADA ADA committed to Soro Yiriwaso — 11
ADA committed to Soro Yiriwaso In order to grant microloans, MFIs in southern countries require financing. This is a core concern for developing their business. ADA provides advice and support to institutions as they seek funds from the LMDF (Luxembourg Microfinance and Development Fund). This support does not simply end once funding is granted, it often grows into a strong and long-lasting relationship.
Soro Yiriwaso: a bond stronger than war When war broke out in Mali and Operation Serval was launched, pushing back the salafi-jihadists, the future of Soro Yiriwaso, a Malian microfinance institution, could legitimately fear the worst. The MFI was hit hard by the exceptional crisis. Though located in the south and theoretically sheltered from the conflict, there was a sharp drop in the number of loans granted by the institution. Business was blocked and the MFI’s loan operations plummeted. In one year, the outstanding portfolio had dropped by a third. The number of borrowers fell from 72,000 to 45,000 between 2011 and 2014. Before the war, Soro Yiriwaso had taken on a large staff of credit officers. Costs exploded while inflows collapsed.
Mali
When, in March 2013, ADA maintained its co-funding in the institution and, in early 2014, it offered to renew its funding to the order of €760,000, it gave out a strong signal. Despite the challenges, ADA displayed its full trust in Soro Yiriwaso and in all the families of the Malian farmers who depended on the institution’s loans. “I have to mention that we have been working with Soro for eight years”, stated Luc Vandeweerd, currently ADA’s Director of Institutional Relations, who led the first due diligence in 2006. “In fact, more than microfinance we should be talking about financial inclusion”, specifies Sarah Canetti, Senior Investment Manager at ADA. Above and beyond providing a loan, ADA seeks to offer other services to back up MFIs, either in the form of technical support, structural assistance or even as a guarantee. Using this approach, “our support can only become stronger”, adds Sarah Canetti.
12 — ADA ADA committed to Soro Yiriwaso
Long-term partnership Behind this long-term relationship lies a mutual commitment that is built on strong values. The MFI is a notfor-profit organisation. Its social and community-based commitment is clearly set out in its statutes. It focuses first and foremost on women in rural areas. Its governance relies on women as the Board of Director’s includes a majority of women.
More than just financing The €760,000 loan disbursed by the LMDF fund was both a breath of fresh air for Soro Yiriwaso (whose balance sheet stands at €6.5 million) and a display of trust to the institution’s other financial backers. ADA’s support did not stop at injecting funds granted under advantageous conditions, and this meant that Soro Yiriwaso was able to continue its social missions.
In 2008, ADA had issued a guarantee with Ecobank, an African bank. Not only did the guarantee strengthen the ties between ADA and Soro Yiriwaso, whose name fittingly translates as “a bond” in English, but it also enabled the MFI to integrate the banking system, helping it to take a further step towards financial inclusion. In 2014, ADA also covered half of the costs of the MFI’s assessment by Planet Rating, a rating agency specialised in microfinance. This represented a key step in regaining the financial markets’ trust. Finally, ADA provided currency hedging, thus enabling the reduction of risks and therefore costs.
Today, although still fragile, the situation in Mali is quieter. ADA’s support of Soro Yiriwaso in 2013 and 2014 was a choice. A choice made from the heart firstly, because relations with Adama Camara, the Managing Director who has been there since the beginning, have always been strong. It is also an informed choice because the institution’s foundations remained solid while the challenges came from the outside and they were temporary. It was a choice made out of conviction, in order to send out a strong message: autonomy is still a goal for all our partners, and they can always rely on ADA’s support.
Soro Yiriwaso in figures
45,000
borrowers 93% of which are women
MFI financing: a precise procedure The granting of funds takes between six months to a year and it includes several steps: First contract and verification of criteria
Due diligence
Analysis of data by ADA
Contract drawn up and disbursement of funds
Case assessment and validation by an investment committee based in Luxembourg
Once the loan is granted ADA and the MFI maintain their relations. The situation and requirements are regularly monitored.
95%
of clients in female communitybased groups Backed by ADA since
2006
ADA Optimising MFIs’ financial and social performance — 13
Optimising MFIs’ financial and social performance In a few simple clicks, MFI managers and microinsurance professionals can download the free Microfact analytical tool. It is a compilation of Excel spreadsheets that can be used to calculate key financial and social performance indicators. This powerful management tool has been tried and tested in the four corners of the globe and it is now being used by nearly 600 MFIs. A tool designed for MFIs The easy-to-access Microfact tool can be used for financial reporting purposes, as well as to assist in management. Upon inputting financial figures and social indicators, Microfact calculates, analyses and presents financial and social performance results over several years, which it also expresses by means of numerous graphs. Financial indicators are grouped into five areas: growth, loan portfolio quality, financial structure, productivity and viability. Based upon these, Microfact produces a series of financial ratios, which it presents in easy-to-read graphs. The compilation of social performance indicators this programme offers is the result of our collaboration with Cerise (Comité d’Echange, de Réflexion et d’Information sur les Systèmes d’Epargnecrédit). The set of social indicators used by Microfact was, in large part, inspired by the SP14 social performance assessment tool. The Microfact analytical approach is based upon 18 social indicators, as defined by the Universal Social Performance Standards, which were developed by the SPTF (Social Performance Task Force). Microfact’s development has been driven by the desire to contribute to establishing a consensus concerning social and financial reporting standards for MFIs. The indicators Microfact uses are the
same as those used by the famous MIX Market database, as well as by most rating agencies. Microfact is also recognised by investors as being a guarantee of the credibility of the MFIs using it. ADA’s investment team advising the LMDF fund uses Microfact to carry out due diligence. Microfact will continue to develop alongside recognised initiatives throughout the microfinance sector. With this in mind, and in view of optimising its use in West Africa, we developed a version of the tool that is tailored to the WAEMU (West African Economic and Monetary Union) accounting standards. While this version is based on Microfact’s traditional indicators, it incorporates BCEAO (Banque Centrale des Etats d’Afrique de l’Ouest) prudential indicators and allows MFIs in the sub-region to generate financial reporting approved by the relevant authorities.
Numerous advantages Microfact is free to download and only requires a basic set-up: all you need is Excel, installed with MS Office on most computers. MFIs can learn to use Microfact in workshops that are organised upon request and, since 2014, via free video tutorials and online support. Designed to serve as great a number as possible, Microfact is available in nine languages: English, French, Spanish, Portuguese, Russian, Vietnamese, Lao, Khmer and Arabic. Finally, any data input by an MFI into Microfact can be regrouped using the
Compiler tool. This also makes it possible for professional organisations and MFI networks to automatically generate financial and social reports covering all of their members or, for example, a given sector in their country. Microfact was created in 2010 in partnership with BRS. It benefitted from specialised advice from KBC, Belgium’s number-one bank-insurance. Its social performance dimension was developed thanks to the contributions made by Cerise and the SPTF.
Microfact in figures
38 Microfact trainers over 4 continents Used by around
600 MFIs
as a reporting and/or management tool
14 — ADA Optimising MFIs’ financial and social performance
Developments in 2015 • Creation of a tutorial explaining use of the Compiler tool. The tool is used to import, archive and organise Microfact factsheets in order to generate financial reports in a practical way. • Development of a training course for MFI social performance auditors, together with Cerise and the SPTF. • Improvement of follow-up on trainers and training data given to MFIs to map Microfact use. • Partnerships with universities to develop a simplified Microfact workshop for students aiming to become MFI managers.
Download Microfact free at : www.microfact.org
Synergies of expertise
Microbusiness at the heart of ADA’s strategy
M
INVES TM ICROFIN
MICROENTREPRENEUR
-
IN
T
M FI -
N O V TIO N A
KN OW LE D G
EARCH RES
NG RI A SH E-
A
N C E I NS
G IN AR SH E-
ARCH RESE
T EN
G IN AR SH E-
EARCH RES
EARCH RES
KN OW LE D G
On a large scale, these developments will only truly be of benefit to all if ADA shares its experience with other NGOs (KNOWLEDGESHARING). In the same way, ADA must draw on other NGOs know-how.
KN OW LE D G
G NIN AI R
Investment, innovation and training all benefit from ADA’s research, particularly in the field of social performance (RESEARCH). The aim is to measure the impact of the programmes and actions taken better so as to optimise their activity.
G IN AR H -S E
T UT I O N TI
ADA provides support to MFIs in their search for funding, so that they may offer their microbusiness clients more services (INVESTMENT). Designed according to their needs, ADA develops financial products in partnership with the MFIs (INNOVATION). Finally, ADA organises workshops for MFI professionals (TRAINING). In a long-term setting, with well-trained managers, the MFIs can better tailor their services to their clients’ needs.
KN OW LE D G
ADA places microbusiness at the heart of its strategy and, through its various programmes, it aims to develop synergies of expertise.
ADA An example of ADA’s synergies — 15
An example of ADA’s synergies At the beginning...
MFI
MFI MFI MFI
MFI
Then...
MFI MFI MFI INVESTMENT SERVICES INVESTMENT INVESTMENT SERVICES INVESTMENT SERVICES SERVICES
The investment service advises and supports a MFI in obtaining funding. The MFI has resources at its disposal. It can act and offer products.
MFI
Moving to...
MANAGEMENT TOOLS
CAPACITY BUILDING
MANAGEMENT MANAGEMENT TOOLS MANAGEMENT TOOLS TOOLS
CAPACITY CAPACITY BUILDING CAPACITY BUILDING BUILDING
ADA can strengthen the MFI’s capacities by providing training and management tools. The MFI strengthens and grows.
Finally...
MFI MFI MFI NEW PRODUCT
NEW PRODUCT NEW PRODUCT NEW PRODUCT INNOVATION
MFI MFI MFI MFI
RESEARCH
RESEARCH RESEARCH CH RESEAR EVALUATION
EVALUATION EVALUATION EVALUATION
INNOVATION INNOVATION INNOVATION
KNOWLEDGEMANAGEMENT
With ADA’s support the MFI can then test more innovative products, which will meet other needs of excluded populations and contribute to financial inclusion. The MFI develops and expands its offer.
KNOWLEDGEKNOWLEDGEMANAGEMENT KNOWLEDGEThe methodology applied to integrating a new product MANAGEMENT MANAGEMENT into the MFI’s offer, as well as its results, are compiled
and analysed by research teams. The results are sent out to various professionals in the sector.
16
ADA
favours financial inclusion
« »
“ADA and REDCAMIF have been partners for 12 years. I helped ADA evolve. It is one of the leaders in its sector. I really like its innovative work model, its transparency in our relationship, its flexibility and ability to constantly adapt to the environment. We don’t see ADA as a regular financial backer but as a true partner working in innovation to help the poorest populations.” Ivan Gutierrez, Managing Director of REDCAMIF, Nicaragua
ADA REDCAMIF — 17
An example of a winning partnership Working with REDCAMIF and its seven member networks has enabled ADA to position itself as a key player in the development of financial inclusion in the region. A large-scale project ADA and its long-standing partner REDCAMIF designed and implemented a five-year programme to expand financial inclusion across Central America and the Dominican Republic. The project is set around three pillars: the development of inclusive financial services (IFS), strengthening of the sector’s capacity, and knowledge-management. This programme enables MFIs and professional organisations to build on their expertise. REDCAMIF and ADA define the strategy and guidelines such that, at a nationallevel, there is a shared vision among the MFIs. If a project of this scale has been made possible, then it is thanks to REDCAMIF, whose structure includes seven national microfinance networks comprising 130 MFIs (as of December 2014). These national networks play a key role in our being able to act nationwide.
Direct impact on microbusinesses In seven countries, working with 28 MFIs, ADA and REDCAMIF are contributing to innovating the range of housing and green rural finance IFS products on offer. An ISF co-ordinator has been appointed within each of the networks, to ensure that MFIs receive high-quality and proximity support. The co-ordinators are responsible for monitoring pilot ISF projects, providing technical assistance and liaising between the MFIs, ADA and REDCAMIF. In view of better meeting clients’ needs, ADA and REDCAMIF’s partnership enables widening the range of financial products offered by the 28 selected MFIs. By 2016, the pilot phase should enable 4,500 persons with low incomes to access funding suited to their needs. This partnership is a means of optimising the use of our resources, as well as being an example of the leverage effect (see page 2), which multiplies the scope of our action in improving the living conditions of low-income populations.
National microfinance networks members of REDCAMIF Dominican Republic Guatemala
REDOMIF
REDIMIF Honduras REDMICROH Nicaragua ASOMIF Panama
El Salvador ASOMI
Costa Rica REDCOM
REDPAMIF
18 — ADA Cape Verde
Developing successful microfinance in Cape Verde Our work in Cape Verde is done in close collaboration with the Cape Verdean and Luxemburgish governments, with the aim of developing and consolidating the microfinance sector across the archipelago. This project is carried out by governmental authorities and sectoral representatives but also by MFIs and Cape Verdean migrants. These different actors work together in order to promote microfinance in a coherent and concerted manner. Thanks to a vision shared by all sector professionals and, in particular, to adapted regulations, the aim of the Cape Verde project is to create an environment that is favourable to professional and sustainable microfinance. In order to cater better for the different participants, ADA opened an office in Praia, which is managed by a technical advisor and a coordinator.
Defining a national strategy Microfinance could not have developed in Cape Verde without the government’s participation and its strong involvement in helping to implement legislation favourable the sector. Today, that has been achieved as, after several months’ work involving ADA experts, a number of Cap Verdean ministries, the FAM-F professional organisation (Federation of Microfinance Associations in Cape Verde) and microfinance institutions active throughout the territory, the national strategy for the development of microfinance was adopted by the Council of Ministers. The improved policy will now be rolled out by the government.
Formally regulating the sector The law governing the microfinance sector was reviewed and made more favourable to microfinance growth. Approved in a parliamentary session in late November 2014, the law clearly defines the roles held by different authorities and, in particular, that of the Central Bank. The latter will be responsible for supervising the law’s application, as well as for developing tools that facilitate and unify financial reporting by MFIs, which are now classified according to the business sector they work in. The most mature MFIs will now be authorised to collect savings, enabling them to diversify their sources of funding and to reduce costs.
III Semana Nacional de Microfinanças Praia, 10-15 novembro 2014
Juntos pela inclusão financeira
The government’s commitment, together with that of other participants, was also underlined during the third National Microfinance Week, held in Praia in November 2014. The event helped the microfinance sector to gain recognition throughout the archipelago.
Partners Find out more about the Cape Verde project - On the ADA website: www.ada-microfinance.org - In the Luxembourg Development Cooperation 2013 Annual Report: www.cooperation.lu/2013
This project is part of the third Indicative Cooperation Programme (ICP) set up by the Luxembourg Development Cooperation body. Cape Verde is a priority country to the Luxembourg Directorate for Development Cooperation and Humanitarian Affairs. The project is also supported by the UNDP (United Nations Development Programme), the National Programme for the Fight Against Poverty and UniCV (Universidade de Cabo Verde).
ADA Research and 20 years — 19
Building bridges between research and fieldwork With the MFIs concrete requirements in mind, ADA endeavours both to provide innovative solutions and to contribute to the sector’s professionalism. It acts as a bridge between the academic sphere and those active in the field. “Research-action” for microfinance In particular, our work in building bridges between research and fieldwork involves working together with universities. ADA provides its support to university curricula by contributing to the development of courses, by lecturing on inclusive finance and taking part in workshops, and by tutoring end-of-study projects.
1
With that goal in mind, the research work we coordinate adopts a “research-action” approach. In other terms, researchers are asked to take both a critical and constructive view of existing projects while also providing possible solutions and putting forward new paths for development.
2
Identifying lines of research
Thanks to monitoring in the field, we observe requirements for the strengthening of core themes pertaining to the development of inclusive finance. This observational process involves MFIs, ADA staff, networks, universities, local and international research centres alike, along with students, who are sent on internships in the field as part research for their theses.
Implementing research projects
Research projects are established in close coordination with the entirety of ADA’s other programmes and with the strong involvement of academic and field partners.
The action can be represented in a threestep cycle.
3
Disseminating results
The results of these research projects are communicated through various channels: in lessons and workshops, via conferences, through publication of the Passerelles review, etc. In keeping with the goal of communicating acquired knowledge, we organised a symposium in October 2014 based on the question “What autonomy to expect for microfinance?” This brainstorming event fitted in with our 20th birthday celebrations and was attended by 130 professionals and academics active in the microfinance sector.
A publication combining analysis with experience By highlighting the answers put forward by the academic world to questions on major topics of development and attempting to express these in layman’s terms, while also reporting on views from the field, the bi-annual «Passerelles» publication endeavours to act as a catalyst for reflection. Its aim is to provide a platform for sharing knowledge and skills. The first issue of “Passerelles” focussed on the theme of institutional autonomy in microfinance.
20 — ADA 20 years
Our birthday celebrations: a conference-debate, opening of an exhibition and cocktail evening To celebrate our 20th birthday, Marc Bichler, the Luxembourg Ambassador for climate change issues and Alpha Ouedraogo, former CEO of the Confederation of Financial Institutions of West Africa, discussed the theme of autonomy. The evening’s events continued with a cocktail dinner and the opening of a photography exhibition titled “Prises d’autonomie” (Capturing Autonomy) by photographer Andrés Lejona. We would like to thank the 300 people who attended the event!
Robert Wagener, President of ADA ; Nicolas Schmit, Luxembourg’s Minister of Labour, Employment and Immigration; Jacques Prost, Director of ADA’s Board; Philippe-Fitzpatrick Onimus, Vice-President of ADA, and Bram Schim van der Loeff, Director of ADA’s Board.
Photo credits: Michel Zavagno Blitz Agency
Daouda Sawadogo (Caisses populaires du Burkina Faso) and Mia Adams, founder and Honorary President of ADA.
Daouda Sawadogo (Caisses populaires du Burkina Faso), Kimanthi Mutua (African Microfinance Transparency), Yombo Odanou (Coopérative d’Epargne et de Crédit des Artisans, Togo) and Alou Sidibe (Confédération des institutions financières de l’Afrique de l’Ouest, Burkina Faso). Romain Schneider, Luxembourg’s Minister for Cooperation and Humanitarian Action; Olivier Massart, Director, Support to MFIs at ADA and Robert Wagener, President of ADA.
ADA 20 years — 21
Luc Vandeweerd, Director, Institutional Relations at ADA, and two speakers at the conference-debate: Marc Bichler and Alpha Ouedraogo. Wendy Medrano (ADA), José Luís González Renderos (REDCAMIF, Nicaragua), Iván Gutiérrez (REDCAMIF, Nicaragua) and Paul Surreaux (ADA).
Mia Adams, founder and Honorary President of ADA.
Photographs were taken by Andrés Lejona in Burkina Faso and Bolivia.
Khadija El Hantali and Youssef Errami (Centre Mohammed VI, Morocco) and Katia Mehanneche (consultant for ADA).
The exhibition was organised in Neumünster Abbey, Luxembourg.
22 — ADA Our main areas of action
Our main areas of action
• Support sector development – ADA representation bureau for the MicroMed project funded by the European Investment Bank and the Luxembourg Ministry of Foreign Affairs through the trust fund of the Faculty for Euro-Mediterranean Investment and Partnership (FEMIP)
• Support sector development page 17
Tunisia
Senegal Cape-Verde
• African Microfinance Week 2015
Mali
Burkina-Faso Togo
Niger
West Africa
Semaine Africaine de la Microfinance
• Support to African networks AFMIN, CIF, MAIN and AMT
Dakar, SÉNÉGAL 29 juin - 3 juillet 2015
• Replication of the Youth project page 09
• Agricultural leasing • Youth Project: Helping young artisans in their efforts to create their own businesses page 05
• Migrant savings transfers: Optimising migrants’ money transfers and favouring savings
ADA Our main areas of action — 23
• Support to REDCAMIF network page 17
Dominican Rep. Guatemala
Honduras
Salvador
Nicaragua
Costa Rica Panama
Peru • Green energy: Facilitating access to green energies in rural areas page 07
South East Asia Vietnam Philippines
Laos
• Replicating the green energy project page
Cambodia
page 07
• Support to national networks page 02
Latin America
24 — ADA Our financial figures
Balance
(EUR)
Assets as at 31/12/2014 31/12/2014
31/12/2013
Fixed assets Tangible fixed assets
775 582
667 092
Financial fixed assets
1 430 049
1 491 350
2 205 631
2 158 442
292 974
275 954
62 164
10 124
1 054 392
4 439 014
1 409 530
4 725 091
112 710
374 136
3 727 871
7 257 669
31/12/2014
31/12/2013
Total fixed assets Current assets Receivables associated with management of programmes Other receivables Cash and current account balances, petty cash Total current assets Prepaid expenses Total Assets
Liabilities as at 31/12/2014
Equity Association funds
473 712
473 712
Carryforwards
188 652
188 652
Reserve for outstanding projects
384 623
287 202
-288 846
66 405
Initial endowment
1 182 195
1 156 390
Total funds and reserves
1 940 336
2 172 361
455 405
-
Surplus (deficit) for the year
Payables – credit institutions Provisions for contingencies, charges and litigation
49 855
30 687
Dedicated funds
586 675
4 171 706
Payables - suppliers
549 615
759 441
Tax owed and payables – Social Security
72 868
54 210
Prepaid income
73 117
69 263
3 727 871
7 257 669
Total liabilities
ADA’s accounts are audited by PricewaterhouseCoopers. The report of ADA’s 2014 audited accounts is available at www.ada-microfinance.org.
ADA Our financial figures — 25
Operating account
(EUR)
Operating account as at 31/12/2014 2014
2013
Dedicated funds / Funds carried over from previous year
3 605 582
277 785
Co-financing
3 926 938
9 450 419
299 951
350 813
52 517
64 536
130 496
52 378
Income associated with development activities Contributions and donations Other operating income Reversals of value adjustments, of provisions
54 233
267 215
8 069 717
10 463 146
68 345
69 615
Operating expenses associated with development activities
2 527 468
2 832 691
Support for development and other grants paid out
2 632 876
2 300 111
545 372
587 184
-
739
2 346 933
1 800 492
142 523
329 798
51 567
2 569 135
8 315 084
10 489 765
-245 367
-26 619
4 035
30 954
Financial expenses
12 358
3 724
Financial profit/(loss)
-8 323
27 231
-253 690
612
813
68 286
35 969
2 493
-35 156
65 793
-288 846
66 405
Operating income Stationery and consumables
Other operating expenses Taxes and similar levies Staff expenses Staff on programmes: Administrative staff: Depreciation and amortisation, value adjustments and provisions Outstanding commitments of funds received Operating expenses Operating balance Financial income
Operating profit/(loss) Extraordinary income Extraordinary expenses Extraordinary profit/(loss) Profit/(loss) for the year
1 887 308 459 625
26 — ADA Our institutional data
Our partners Key partners
Government of the Republic of Tunisia
Other project partners
ADA is a member of the Board of Directors of
ADA is a member of
Government of Cape Verde
ADA Our institutional data — 27
2014 Board of Directors Chairman: Robert Wagener Vice-Chairmen: Philippe-Fitzpatrick Onimus, Max Meyer Directors: Karin Faber, Elmar Follmann, Rémy Jacob, Corinne Molitor, Michel Maquil, Henri Marx, Jacques Prost, Bram Schim van der Loeff. New Directors : Nicole Dochen, Gilles Franck, Patrick Losch
La Maison de la Microfinance ADA is located at the Maison de la Microfinance in Luxembourg. The Maison houses several entities active in financial inclusion: Boulder Institute www.bouldermicrofinance.org European Microfinance Platform www.e-mfp.eu InFiNe www.infine.lu LMDF www.lmdf.lu Microinsurance Network www.microinsurancenetwork.org
Photo credits: Andrés Lejona / ADA : cover page, pages 4, 5, 6, 10, 11, 16, 17 Fondescuro : page 7 Felix Sorger / ADA : pages 8, 18 Guy Wolff / ADA : page 12
Publisher ADA asbl 39 rue Glesener 1631 Luxembourg Tel.: +352 45 68 68 1 Fax: +352 45 68 68 68 Web: www.ada-microfinance.org RCS Luxembourg F 199 CCPL IBAN LU64 1111 1189 2705 0000 Copyright: ADA, May 2015 This publication as produced by Cropmark and printed by WePrint.
Follow ADA on
ADA Appui au DĂŠveloppement Autonome 39, rue Glesener L-1631 Luxembourg +352 45 68 68 1 www.ada-microfinance.org