[Covid-19] The Grameen Crédit Agricole Foundation in 2020

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Eric Campos, Grameen Crédit Agricole Foundation

In 2020, the Foundation supported 80 microfinance institutions and social enterprises in 39 countries worldwide. With the COVID-19 pandemic, the Foundation established an ongoing dialogue with all partner organizations and adapted its financial and technical support. The Foundation also collaborated with other key stakeholders in the inclusive finance sector to develop joint solutions and better protect microfinance institutions and their clients. Spotlight on the Eric Campos interview, General Delegate of the Foundation, and some key figures for the activity in 2020.

The Covid-19 crisis has affected the microfinance sector worldwide

Eric Campos : The year 2020 was a very challenging year for the partners of the Grameen Crédit Agricole Foundation, microfinance institutions, and environmental social impact businesses. It was very challenging because the end beneficiaries, who are highly dependent on sectors such as trade, agriculture, and crafts, had to cope with lockdown measures and therefore struggled to develop their income-generating activities.

The Foundation has adapted to better support entrepreneurs in the field

EC : The Foundation's teams focused on all actions that could help these institutions and businesses gain time and adapt to the economic effects of this crisis. At the international level, we coordinated an agreement with international donors to avoid a liquidity crisis in the microfinance sector. At the Foundation level, we granted numerous deadline extensions and supported institutions and businesses by sending technical assistance missions to enable them to improve their risk management and cash flow management. We were present throughout this year, alongside the Foundation's long-standing partner institutions.

What are the prospects for 2021?

EC: In 2021, we are still in a crisis context. We are seeing some weak signs of economic recovery in approximately one-third of the Foundation's countries of intervention. In 2021, the Foundation will strengthen its technical assistance program. We will continue to finance and support our partners, and we are cautious but confident about the economic recovery that we are already beginning to see. Our commitment: to help our partners get through this global crisis.

 

One Year Later: What a Year of Investigations Teaches Us About Covid-19 and Microfinance

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Maxime Borgogno, Grameen Crédit Agricole Foundation

Spotlight on Maxime Borgogno's interview for FinDev. Maxime is an Investment Officer for the Asia and Central Europe region at the Grameen Crédit Agricole Foundation.

Since the beginning of the pandemic, the Grameen Crédit Agricole Foundation has been monitoring how the microfinance sector is responding to the Covid-19 crisis. One year later, what have you learned?

Maxime Borgogno: While the immediate consequences faced by microfinance institutions (MFIs) were an increase in their portfolio at risk and a reduction in their portfolio, the operational crisis did not lead to a total failure of the sector as initially feared. In fact, we saw many MFIs proactively adapt to the new context: they took adequate management measures while maintaining a responsible approach to their clients. Only a small proportion of the institutions surveyed had to lay off staff during the crisis, and those located in the most affected countries successfully transitioned to remote access systems. Most MFIs implemented loan restructuring to provide relief to affected clients. Some, particularly in Southeast Asia, provided clients with emergency kits (food, sanitation equipment, etc.). They even explored new opportunities such as digital loan repayment channels to adapt to the situation.

Overall, MFIs remain optimistic about the future, based on a good understanding of current challenges and the experience gained in 2020. While the crisis is not over and challenges remain, the sector has the capacity to address them.

What are the main challenges ahead? Why do you think the sector has the capacity to overcome them?

MB: The situation remains unpredictable and depends on each country. An MFI can quickly face significant operational constraints, which will limit its activity. The latest data shows that nearly 751,000 MFIs are facing a higher risk portfolio than before the crisis. Consequently, they will have to find a balance between prudently managing this risk and continuing to grant new loans to their clients. It is now clear that the Covid-19 crisis has disrupted certain sectors, business structures, and operating methods. MFIs will need to factor these major changes into their strategy for the coming years.

Over the past year, we have seen MFIs remain fully committed to their social mission. They have proven their resilience and adaptability during an unprecedented crisis. With poverty levels rising as a result of the crisis, the mission of microfinance is more relevant than ever.

How have you been monitoring the situation over the past year?

MB: We launched the first monthly survey in March 2020 among the 75 MFIs we support. The goal was to gather initial impressions of the situation and the potential impact on their operations and clients. In June 2020, we partnered with ADA and Inpulse to expand the survey to more than 100 MFIs, including in Latin America and the Caribbean, where the Foundation does not have a presence. Since September, we have switched to a quarterly format to avoid overloading institutions as they resume operations. The next survey will take place sometime in March.

The survey results, along with other articles related to the Covid-19 crisis, are available at the Covid-19 Observatory, a space created by the Foundation at the start of the pandemic.

Microfinance institutions often lack the capacity to respond to surveys, especially when facing a major crisis. What helped you continue collecting data from them?

MB: From the outset, we chose not to request detailed financial information from MFIs, but rather to gather their impressions and observations on the impact of the crisis. We deliberately limited the number of questions and ensured that they were as clear as possible. We also avoided requesting the same information they send us in their regular monthly reports.

We insist on a high level of communication with our partners, so we share survey results with them as soon as they are available and remain open to their feedback during this process. Our respondents' feedback helped us adapt the wording of the questions and the content of the questionnaire. We believe that their involvement in the process is a key motivation for our partner MFIs to continue participating in the survey.

What are your feelings about how this crisis is shaping the future of microfinance? Are you worried about the future of the sector?

MB: 2020 was a historic year that demonstrated the resilience of the microfinance sector. MFIs innovated and strengthened their services to protect their clients. At the same time, donors and other stakeholders coordinated with each other to adopt the most appropriate measures to support MFIs. The latest survey we conducted on the impact of the Covid-19 crisis reveals that most institutions expect their activity to increase in 2021, in terms of portfolio volume and number of clients.

However, many of the hardest-hit institutions will need support from their shareholders and lenders. With credit risk gradually translating into losses in 2021, investor responsiveness will be critical and will be the next topic of the Foundation's Covid-19 Observatory.

The crisis is not yet behind us, but we are confident about the future of the sector. Digital transformation, coordination between stakeholders, and innovation will be essential to strengthening the resilience and impact of microfinance.

Source : FinDev

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The SSNUP program finances a first agricultural project in Senegal

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©FGCA/Godong

To support smallholder farmers, the Swiss Agency for Development and Cooperation and the Luxembourg Agency for Development Cooperation and Humanitarian Action, coordinated by ADA, have launched the Smallholder Safety Net Upscaling Programme (SSNUP). With a budget of €55 million over 10 years, the programme aims to sustainably strengthen safety nets for smallholder farmers in Africa, Latin America, and Asia by stimulating the development of agricultural value chains.

The program draws on the knowledge and expertise of the technical assistance services of impact investment funds already active in this field. The Grameen Crédit Agricole Foundation is one of the impact investors responsible for implementing the SSNUP. It will provide its technical assistance expertise to the organizations it supports—microfinance institutions and social enterprises—to design and develop financial and non-financial solutions for mitigating and transferring agricultural risks for various actors in value chains.

An impactful agricultural project in Senegal

The first organization supported by the Foundation under the program is SFA (Sénégalaise des Filières Alimentaires), a social enterprise working to develop an inclusive rice value chain in Senegal. Founded in 2013, SFA produces white rice from paddy grown by small producers in the Senegal River Valley. It provides them with technical support through training on best agricultural practices and facilitates their access to markets and financing by connecting them with local donors.

Despite this technical support provided by SFA, small producers' yields remain below their potential. This is due in part to the fact that producers remain reluctant to implement the agricultural practices promoted by SFA without first being able to see their positive effects.

The SSNUP program will strengthen this technical support for producers through a technical assistant mission with a budget of €11,000. This 6-month project aims to create 20 demonstration fields in SFA's operational areas, in which best agricultural practices will be used. These demonstration fields will allow around sixty relay producers to be trained on best practices to optimize their production and to demonstrate to all producers in the area the positive impacts of these practices on agricultural yield and production quality. Exchange sessions and training sessions led by the relay producers will allow them to, in turn, pass on their learning to more than 2,000 small producers.

The expected results of this project are based on three pillars: strengthening the skills of trained farmers; increasing production and quality for trained farmers; and increasing income for trained farmers and their households. This is a high-impact project that will directly contribute to the development of the rice value chain and food security in Senegal.

 

 

Survey on Financial Inclusion of People with Disabilities in Cambodia

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In Cambodia, at least 101,000 people with disabilities suffer from some form of disability and often experience social and economic exclusion and stigma. Strengthening their ability to access financial services can help break the cycle between disability and poverty. In this context, a study was conducted by Chamroeun Microfinance Plc and Good Return to better understand the needs and barriers faced by people with disabilities in accessing financial services.

The study's findings demonstrate the link between disability and exclusion and the untapped opportunities to break this cycle. While only 30% of the 513 respondents have used financial services, more than 50% are considering a loan in the future, primarily for entrepreneurial activities, and 90% see the benefits of financial education training.

This study will contribute to structuring the “Education and Access: Responsible Service for People with Disabilities” project of the Australia-Cambodia Cooperation Program for Equitable Sustainable Services (ACCESS) which aims to improve access to responsible finance for people with disabilities.

Supported by the Grameen Crédit Agricole Foundation since 2010, Chamroeun Microfinance Plc is a Cambodian microfinance institution that provides financial services to the poorest populations, as well as training and support services. It currently serves nearly 43,000 clients, of whom 81% are women and 65% live in rural areas.

Access the study (in English) here

 

The impact of Crédit Agricole's FIR Fund in 2020

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The FIR (Inclusive Finance in Rural Areas) is a Crédit Agricole impact fund that promotes financial inclusion in developing countries by financing rural microfinance institutions. As of December 31, 2020, the FIR had received subscriptions from 21 regional banks, Amundi, and CA Assurances (*) for a total of €9.75 million, which supported five microfinance institutions serving nearly 80,000 low-income people in Africa, Asia, and Europe.

In 2020, with the Covid-19 crisis, close monitoring was carried out with the organizations funded by the FIR to tailor support to each organization. Among the measures, an international coalition was created, at the initiative of the Grameen Crédit Agricole Foundation - an advisor to the FIR - to protect microfinance institutions and their clients from the consequences of the crisis.

Around thirty investors and key players in the sector, including CA Indosuez Wealth (Asset Management) - Manager of the FIR - have joined this coalition and are coordinating in granting deadline extensions, technical assistance and information sharing to avoid a liquidity crisis in the sector and strengthen the resilience of microfinance institutions in this complex period.

Discover the report complete here

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(*) Crédit Agricole Assurance, Amundi and 21 regional banks (Alpes Provence, Alsace-Vosges, Brie Picardie, Centre-east, Centre-France, Centre Loire, Centre-West, Champagne-Bourgogne, Charente-Périgord, Finistère, Franche-Comté, Ille-et-Vilaine, Languedoc, Loire-Haute Loire, Martinique-Guyana, Normandy-Seine, Provence Côte-d'Azur, Réunion, Savoie, South Rhône Alpes and Touraine Poitou).

 

New Solidarity Banker missions open to Crédit Agricole employees

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Launched in 2018 by the Grameen Crédit Agricole Foundation and Crédit Agricole SA, Solidarity Bankers is a skills-based volunteer program open to Crédit Agricole Group employees working with microfinance institutions or impact businesses supported by the Foundation. Two new online assignments are available for microfinance institutions in Moldova and Palestine.

TYPES OF SOLIDARITY BANKERS MISSIONS

There are two types of assignments: overseas assignments and online assignments. These assignments can take place during the employee's working hours (sponsored by the Solidarity Banker's employer) AND/OR during vacations (volunteering).

Between 2018 and 2020, 20 projects were launched, including 13 completed and 7 ongoing, both in sponsorship and skills-based volunteering. This is a great success that demonstrates the commitment of employees and the Group to supporting projects with social impact.

TWO MISSIONS TO BE FILLED

A first “digital / IT” mission is to be filled for the benefit of Smart Credit, a microfinance institution supported by the Grameen Crédit Agricole Foundation in Moldova. The Solidarity Banker will be tasked with helping to build Smart Crédit's digital strategy. The selected Crédit Agricole expert will work remotely and dedicate the equivalent of one day per week, for 15 weeks, to the mission. Smart Crédit provides financial services to socially disadvantaged people and small entrepreneurs in Moldova. The institution has more than 3,000 active borrowers (54% women and 69% clients in rural areas) and manages a portfolio of €4.4 million.

A second “financial management” mission is to be filled for FATEN, a microfinance institution in Palestine. The Crédit Agricole expert will support FATEN in updating financial procedures, policies, and tools. He/She will work remotely one day per week for 15 weeks. FATEN provides financial services to low-income Palestinian entrepreneurs and individuals. As of December 2020, the institution serves 26,244 active borrowers (34 women and 68 rural borrowers) and manages a portfolio of €108 million.

HOW TO APPLY?

Submit your application on the CA solidaires website here

Contact

Carolina VIGUET
Director of Communications & Partnerships
carolina.viguet@credit-agricole-sa.fr

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Newsletter #38: The resilience of microfinance in the face of the Covid-19 crisis

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The Grameen Crédit Agricole Foundation has published its newsletter #38, highlighting the impact of Covid-19 and the actions of the Foundation and the organizations it supports to address it. 2020 marked the world with an unprecedented crisis, but what will also remain at the end of this historic year is the resilience of the inclusive finance sector.

Signs of this resilience are presented in the results of the 5th survey conducted since the start of the pandemic by the Foundation, ADA, and Inpulse among the microfinance institutions it supports to understand the impact of the crisis on their business and provide them with the most appropriate responses. A vast majority of the supported institutions anticipate growth in their business in 2021, in terms of portfolio volume and number of clients.

The Foundation has also launched an International Coalition to work in concert with other stakeholders in the sector and better support the organizations it supports, both financially and through technical assistance missions, during this time of crisis. In this issue of the Newsletter, you will discover the testimony of OXUS Kyrgyzstan, a microfinance institution that benefited from additional support from the Foundation as part of the Coalition.

We also share the testimony of Daniel Hoarau, IT Manager at Crédit Agricole de La Réunion, who went to support a microfinance institution in Bosnia and Herzegovina as part of a Solidarity Bankers mission, a skills volunteer program open to all Crédit Agricole Group employees in support of organizations funded by the Foundation.

Access the Newsletters

Ugafode and the financial inclusion of refugees

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Supported by the Grameen Crédit Agricole Foundation since 2015, UGAFODE Microfinance Limited is a microfinance institution that provides inclusive financial and non-financial services to low-income but economically active populations in Uganda. UGAFODE is one of three organizations supported by a program launched by the Foundation, the Swedish International Development Cooperation Agency (Sida), and the United Nations Refugee Agency to support the financial inclusion of refugees. With this financial and technical support, UGAFODE opened a branch in the Nakivale refugee camp in Uganda. A spotlight on an interview with Shafi Nambobi, Executive Director of UGAFODE.

1. In a few words, what is UGAFODE Microfinance Limited?

UGAFODE Microfinance Limited began in 1994 as an NGO specializing in group lending for women and has since evolved into a deposit-taking microfinance institution regulated by the Bank of Uganda. The institution specifically targets the country's low-income but economically active population through seven urban and 12 rural branches, serving over 110,000 savings clients and 8,000 credit clients. It offers a range of financial services including savings, loans, and money transfer services, with a loan portfolio of €12.1 million and savings volume of €6 million.

2. UGAFODE received innovative financial support from the Grameen Crédit Agricole Foundation, the Swedish International Development Cooperation Agency (Sida), and the United Nations Refugee Agency in 2019, when it was selected as a beneficiary of a program to support financial inclusion for refugees. Can you explain this initiative and the support UGAFODE received?

Most refugees have faced discrimination and have been denied credit facilities by financial institutions because they are considered too risky, despite being engaged in agriculture and retail. In March 2020, UGAFODE became the first financial services institution to establish a branch in a refugee camp in Uganda through this program. Nakivale refugee camp is the 8th largest camp in the world, hosting more than 134,000 refugees from 13 countries. The total project budget is €536,780, of which €396,882 comes from Sida and €139,810 from UGAFODE over three years. In addition, the Foundation also granted a new loan of €540,000 in July 2020, of which €50% will be used for the refugee program to provide loans to refugees and host populations.

3. What are the first results of the project?

The project has already begun to prove its worth. Since the opening of the Nakivale branch, 505 loans totaling €383,596 have been disbursed between March 2, 2020, and December 31, 2020, primarily to support small and medium-sized enterprises and individual agricultural loans. It is important to note that all of this was achieved in the context of the Covid-19 crisis. The portfolio at risk (PAR) is at 1.65% for 1 day and 0% for 30 days, which is both considerable and welcome. In addition, we have raised financial awareness among more than 5,000 refugees, and 2,534 clients have opened savings accounts totaling €65,112. A total of 5,301 refugees received €776,345 through the Nakivale branch's friends and relatives money transfer services in the nine months since the branch opened. We currently employ 21 people, including eight refugees in Nakivale and four at the Kampala call center, to handle customer complaints in the main refugee languages.

4. How has the Covid-19 pandemic affected the project? What measures have been taken to address the crisis?

The project was implemented and opened at the beginning of the Covid-19 crisis. As the government declared financial services essential, the Nakivale branch was able to offer the necessary services to its clients on a very positive note. UGAFODE was able to adjust its policies and procedures to serve refugees in compliance with regulatory guidelines. We recruited refugee staff at the call center to provide advice and information to clients. We also built a branch extension to provide sufficient space to ensure the safety of staff and clients. In addition, we provided loan rescheduling options to clients to support them during this time of crisis. The Grameen Crédit Agricole Foundation and KIVA also supported us in addressing the crisis. The Foundation granted us flexible budgetary allocations within main lines to cope with the uncertainties of the crisis. The branch is operating according to the Covid-19 Standard Operating Procedures (SOPs) established by the Ministry of Health and the Government. We will also be able to purchase three additional motorcycles to enable branch staff to reach more clients more easily and quickly.

5. What are the project priorities now?

There are three priorities:

  1. Intensify financial education training to reach at least 8,800 refugees and 8,000 host communities in the second year and 15,500 refugees and 14,000 host communities in the final year of the project.
  2. Conduct customer surveys to facilitate informed decision-making and develop refugee-friendly products.
  3. Roll out the project model in other settlements. After Nakivale, the project will be replicated as soon as possible in other refugee camps. Initial feasibility studies have been conducted for the Kyaka, Kyangwali, and Rwamwanja refugee camps.

 

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