1 / 15

BUILDING SUSTAINABLE MICROFINANCE INSTITUTIONS

BUILDING SUSTAINABLE MICROFINANCE INSTITUTIONS. Two cases from UNDP Kazakhstan. UNDP Kazakhstan 9 November, 2005. Contents. Background information; Presentation of - Microcredit Support for Women Project in Semipalatinsk - Microcredit Center in Atyrau

zhen
Download Presentation

BUILDING SUSTAINABLE MICROFINANCE INSTITUTIONS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BUILDING SUSTAINABLE MICROFINANCE INSTITUTIONS Two cases from UNDP Kazakhstan UNDP Kazakhstan 9 November, 2005

  2. Contents • Background information; • Presentation of - Microcredit Support for Women Project in Semipalatinsk - Microcredit Center in Atyrau • Focus: Bereke exit strategy and outcome evaluation; • Focus: lesson learned.

  3. Background (1) • There are government and donor microcredit projects, but there is a downward trend in donor commitments; • The Government considers microcredit as a tool for reducing poverty; • The new law “On Microcredit organizations” (March 2003) regulates the sector; • MFIs are not allowed to collect savings; • Microfinance institutions are lobbying to amend the law.

  4. Background (2) DEMAND There are more than 50,000 microfinance clients, about 2% of the poor in Kazakhstan. The potential demand for microfinance services is conservatively estimated between 140,000 and 220,000 clients; SUPPLY There are more than 400 registered organizations providing microcredit but 3-4 Microfinance Institutions (MFIs) have more than 1,000 clients. Only one has more than 10,000 clients.

  5. Two main projects on the field Microcredit Support for Women Project in Semipalatinsk Microcredit Center in Atyrau

  6. UNDP Project Objectives Microcredit Support for Women Project in Semipalatinsk • To alleviate poverty and raise living standard by providing microcredit to entrepreneurs who do not have access to traditional sources of funding; • To provide women entrepreneurs with business related training and support; • To expand and attain operational and financial sustainability of the existing micro-lending scheme in region; Microcredit Center in Atyrau • Support low-income vulnerable population groups through simplified access to micro-credit; • Gradually improve credit culture and discipline, and expose borrowers to the basics of business practices;

  7. Common features • Creation of an independent NGO to conduct micro lending activities; • Self-sustainability; • Institution based in relatively small cities (Oblast Capitals) far from economic centers; • Relatively big outreach in term of clients; • Fast rate of growth.

  8. Bereke:achievements 3rd biggest NGO MFI in Kazakhstan (per number of active clients) % of Women 98 % Average loan Size 400 USD OSS 175 % PAR 1.3 %

  9. Atyrau Micro-credit Center: achievements LOAN DISBOURSED (Cumulative) BORROWERS TRAINED Branch offices in 5 Rayon capitals

  10. UNDP Exit Strategy: KMLO Bereke • Registration of Bereke as a public foundation; • Bereke received its first grant from UNDP to purchase the office • building; • MIS and Accounting System adjusted to the national requirements. 2003 • Bereke signed Capital Grant Agreement with UNDP and started its • own credit activity. It regulates the terms and conditions for transfer • remaining project funds and assets to Bereke after approval from • BOM-HQ; • Bereke became a member of the Association Microfinance • Organizations of Kazakhstan (AMFOK); • Bereke reached operational and financial self-sustainability. 2004 • First external audit of Bereke undertaken; • International Rating – ACCION CAMEL (Mid-November 2005). 2005

  11. Bereke: outcome evaluation

  12. LessonsLearned (1) Provision of microcredit is an effective way to promote the growth of small businesses, expand employment opportunities, and strengthen the ability of vulnerable population groups to provide for their families in Kazakhstan. In 2000 a study by Yasushi Tairo concluded that Bereke clients on average increased their profit by 4,215 Tenge (per credit period). 56 jobs were created in the Atyrau business incubator thanks to microcredit lending. A survey conducted in 2004 found that 87% of Bereke clients reported that the profitability of their business had grown.

  13. LessonsLearned (2): key factors for success • Strong demand for microfinance services; • People: staff professional and interpersonal skills; • Extensive staff training; • Selection of an appropriate market niche; • Development of appropriate products – services; • Low competition; • Well-developed exit strategy.

  14. Lessons learned (3): principals for MFI to be successful • Maximum satisfaction of the borrowers; • Flexibility of credit disbursing; • Efficiency of information processing and loan disbursement; • Provision of complementary technical and information assistance; • Utilization of advanced microcredit technologies.

  15. Lessonslearned (4):challenges The main challenge is to reach REMOTE RURAL AREAS. Both Bereke and the Atyrau Microcredit Center face serious obstacles in expanding services to rural areas. • Lack of qualified specialists / training programmes; • Low population density / remoteness of borrowers; • Underdeveloped transport infrastructure; • Underdeveloped financial infrastructure (rural areas); • Legal status of Microfinance Institutions in Kazakhstan.

More Related