slide1 l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
What Is Microfinance? PowerPoint Presentation
Download Presentation
What Is Microfinance?

Loading in 2 Seconds...

play fullscreen
1 / 15

What Is Microfinance? - PowerPoint PPT Presentation


  • 494 Views
  • Uploaded on

Banking for Smallholders and Options for Financial Transfers Presented During the first Green Water Credit Stakeholders workshop, Kari 11 th -12 th October , 2006 What Is Microfinance?

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'What Is Microfinance?' - HarrisCezar


Download Now 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.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Banking for Smallholders and Options for Financial TransfersPresented During the first Green Water Credit Stakeholders workshop, Kari 11th -12th October , 2006

By Moses Banda

what is microfinance
What Is Microfinance?
  • Microfinance is the supply of loans, savings, and other basic financial services to the poor. People living in poverty, like everyone else, need a diverse range of financial instruments to run their businesses, build assets, stabilize consumption, and shield themselves against risks. Financial services needed by the poor include working capital loans, consumer credit, savings, pensions, insurance, and money transfer services. E g. Payments For Environmental services.( PES)

By Moses Banda & Benson Kimithi

what is microfinance cont
What Is Microfinance-Cont?
  • The poor rarely access services through the formal financial sector. They address their need for financial services through a variety of financial relationships, mostly informal. Credit is available from informal commercial and non-commercial money-lenders but usually at a very high cost to borrowers. Savings services are available through a variety of informal relationships like savings clubs, rotating savings and credit associations, and mutual insurance societies that have a tendency to be erratic and insecure.

By Moses Banda

what is microfinance cont4
What Is Microfinance-cont?
  • Financial services for the poor have proved to be a powerful instrument for poverty reduction that enables the poor to build assets, increase incomes, and reduce their vulnerability to economic stress.? However, with nearly one billion people still lacking access to basic financial services, especially the very poor, the challenge of providing financial services to them remains. Convenient, safe, and secure deposit services are a particularly crucial need.

By Moses Banda

what is k rep bank
What is K-rep Bank?
  • K-Rep Bank is a licensed commercial bank that specializes in microfinance. It is the first micro-finance commercial bank in Kenya. Microfinance is a development intervention that has evolved overtime to operate on a commercial viable basis and aims at providing banking and financial services to low-income and poor people.
  • The bank is distinguished from other commercial banks or financial institutions, by its social mission of addressing poverty by supporting employment, income generation and savings mobilization activities of low-income & poor people, as a means of building an asset base for poor house-holds.

By Moses Banda

share holding
Share holding
  • K-rep bank major share holders
  • International Finance Corporation (IFC)
  • The African Development Bank (ADB)
  • The Netherlands Development Finance Corporation
  • Treodos
  • Shore Bank
  • Shore cap international
  • K-rep group

By Moses Banda

products
Products
  • Main Investment Products:
  • Microfinance Loans.
  • Retail Loans.
  • Wholesale (SACCO) loans.
  • Special Projects.
  • Deposit Products i.e. Savings Accounts, Current Accounts, Term Deposit Accounts, Foreign Currency Accounts, Investment clubs savings accounts, Mshahara Account etc

By Moses Banda

experience of outline principle of microfinance
Experience of outline principle of microfinance
  • Our experience and the outline principle of microfinance can be applied as a financial intermediation in other sectors of the economy. Some of the ideas that we have are the following:-
  • The approach should be a market based mechanism because they ensure sustainable provision of services.
  • What is more important here is that the development of market-based solution requires donors to build up the infrastructure, institutions & systems for such solutions.

By Moses Banda

experience of outline principle of microfinance cont
Experience of outline principle of microfinance-cont
  • It is equally important to identify what aspect of these solutions are “public goods” and seek appropriate donor intervention to put them into place because market-based approaches cannot effectively subsidize/finance aspects that are of public good nature. e.g.. – Roads infrastructure.
  • Donors/Governments are also important for changing culture and public perceptions that certain services can only be provided by Government and public institutions. The government can only create the conducive environment for private investments to thrive.

By Moses Banda

does donor crowd out market based approaches
Does Donor crowd out market based approaches
  • In essence, donor is cheap money – provided through grants or concessionary loans. There is some evidence that this cheap money can “crowd out” efforts by communities towards more market based approached. For example, in Kenya, there are cases of peri -urban communities organizing themselves to self-finance water projects, and saving upwards of 20% of capital costs.

By Moses Banda

does donor crowd out market based approaches cont
Does Donor crowd out market based approaches.. Cont
  • With arrival of “free” money or in kind donations, mobilization of community savings plummeted. Likewise, some organizations that seek to facilitate market-based and “bottom up” approached have noted difficulties entering markets in countries where grant-based (whether through bilateral agencies or NGOs) approaches are dominant.

By Moses Banda

how can donors effectively lever market based mechanism
How can Donors effectively lever market based mechanism?
  • In recent years, calls for guarantees and the creation of revolving funds to stimulate investment in the water sector have increased, resulting in the creation of such funds in many middle income countries. For small towns, which pose considerable governance and capacity risks, these mechanisms could be very useful to increase the attractiveness of water and sanitation investments, particularly to support local utilities, small scale private entrepreneurs, and financial intermediaries (whether domestic Banks, Micro-credit funds, or if regulation allows NGOs)..

By Moses Banda

how can donors effectively lever market based mechanism cont
How can Donors effectively lever market based mechanism? ..cont
  • The practical application of these mechanisms can be challenging. Given the poor levels of capacity in governance, issues of inflation, debt ceilings, Currency risk , High cost of guarantees , Revolving funds require servicing in order to revolve hence may be an issue for many utilities. The more reason why we need partnering and synergy between the Government, the private sector and the Donor community.

By Moses Banda

should donors be used as a market based mechanism
Should Donors be used as a market-based mechanism?
  • In conclusion therefore the experience of K-rep bank in financial intermediation can be applied in other sectors of the economy, and Green Water Credits programme is not an exception. K-rep Bank will be willing to be part of this initiative.

By Moses Banda

slide15
END OF PRESENTATION

Thank you

Q& A

By Moses Banda