OSHUN, healthy water for all!

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OSHUN, a partner of the Grameen Crédit Agricole Foundation, is a solidarity start-up whose goal is to guarantee access to clean water for all, particularly in developing countries.

OSHUN was born from the alliance of three French companies, each a leader in their respective field, with the idea of adopting a social approach while maintaining the framework and rigor of entrepreneurship.

The Providence technology developed by OSHUN is unique. In addition to addressing the challenges of drinking water purification, Providence technology is energy-independent, easy to transport and maintain, connected in real time, and payable digitally at a fair price.

In Senegal, where the company operates, OSHUN produced and distributed 1,000,000 liters of water during the first year of operation, created 65 rural jobs in one year, 65% of which were held by women, and reduced waterborne diseases by 30% in adults and 80% in children.

Discover OSHUN in video by clicking here.

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Created in 2008, under the joint leadership of Crédit Agricole SA's management and Professor Yunus, 2006 Nobel Peace Prize winner and founder of Grameen Bank, the Grameen Crédit Agricole Foundation is a multi-sector operator that contributes to the fight against poverty through financial inclusion and social impact entrepreneurship. As an investor, lender, technical assistance coordinator, and fund advisor, the Foundation supports microfinance institutions and social enterprises in nearly 40 countries.

Chamroeun, a partner of the Foundation, obtains Smart Certification

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© Smart Campaign

The Smart Campaign, a global initiative to integrate customer protection principles into the financial inclusion sector, has publicly recognized Chamroeun, a partner of the Grameen Crédit Agricole Foundation since 2010, for its customer protection efforts by awarding it Certification. The institution joins more than 115 other financial inclusion organizations in over 40 countries that have been certified since the program's launch in January 2013.

“We extend our sincere congratulations to Chamroeun,” said Isabelle Barrès, Director of the Smart Campaign. “Its willingness to do the necessary work to prepare for and undergo the intensive assessment process is a testament to its deep commitment to its clients. The institution has shown that achieving this goal in the area of client protection is possible. Its example will catalyze a movement toward certification within the broader industry.”

The Smart Campaign's Customer Protection Certification Program publicly recognizes institutions that provide financial services to low-income households and whose treatment standards meet the Smart Campaign's seven Customer Protection Principles. These principles cover important areas such as pricing, transparency, fair and respectful treatment, and the prevention of over-indebtedness. The certification program includes a set of rigorous standards against which institutions are assessed by independent third-party assessors accredited by the Smart Campaign. The assessors are specialized rating agencies with extensive experience and have analyzed hundreds of institutions to date.

Chamroeun has a long-standing commitment to protecting its customers. Before being certified, the Smart Campaign assessed the institution's practices and helped develop the Campaign's tools to advance the industry.

For more information about Chamroeun, click here.

African Facility II: the Foundation and AFD together for microfinance in Africa

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© Philippe Lissac

Launched in 2013 by the Grameen Crédit Agricole Foundation and the French Development Agency (AFD), the Take-Off Facility for Agricultural and Rural Microfinance in Africa (African Facility) aims to support microfinance institutions in sub-Saharan Africa. Following a successful first phase (2013-2016), with 16 partners funded and €6 million in loans disbursed, the second phase of the program will support 25 rural microfinance institutions.

With the Foundation's coordination, AFD's financing for Phase II is structured around three components: a €6 million loan for credit activity; a €2.2 million grant for technical assistance; and an ARIZ portfolio guarantee to cover 50,000,000 of the credits granted.

Phase II results

Phase II of the program already has 22 supported microfinance institutions (including 10 new ones), which at the end of June 2019 represent more than 400,000 active borrowers, including 70% women and 66% living in rural areas.

In terms of technical assistance, beyond missions related to strengthening financial and risk management, new themes have been integrated into the program, such as social performance management, microinsurance, digitalization, and green microfinance. In addition, 79 technical assistance missions have been launched. Furthermore, 29 microfinance institution managers received scholarships to participate in the Boulder training in Turin in 2017 and 2019.

Finally, all institutions have confirmed their participation in the Facility's Partners Forum, which will be held in October 2019 alongside African Microfinance Week in Ouagadougou. This will be an opportunity to take stock of the program's impact and strengthen ties between the supported partners.

Crédit Agricole's FIR Fund invests in Kazakhstan and Kosovo

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©Philippe Lissac/GODONG

In 2018, the Grameen Crédit Agricole Foundation launched a social impact investment fund in partnership with CA Indosuez Wealth (Asset Management) and CACEIS Bank, Luxembourg Branch. This fund offers Regional Banks and Crédit Agricole SA Group entities the opportunity to invest in financing microfinance institutions operating in rural areas in emerging countries.

The Foundation is thus strengthening its support for institutions operating in emerging countries to benefit populations traditionally excluded from the banking sector, and more specifically women, who constitute the bulk of these institutions' clients. The benefit is twofold: a positive profitability objective and an impact in terms of financing income-generating activities.

Two new microfinance institutions have recently been financed by this Fund. A €1.5 million loan was granted in local currency to the Asian Credit Fund (ACF) in Kazakhstan. ACF offers financial services designed to promote rural household development, small business growth, and home ownership. To date, the institution has 27,000 clients, including 79.51% women and 95.91% rural clients. It manages a loan portfolio totaling €13.2 million.

The fund also provided a €1.5 million loan to the Kosovo-based institution KRK. KRK's mission is to provide access to financial services in rural Kosovo. A long-standing partner of the Grameen Crédit Agricole Foundation, the institution currently has 16,000 clients, including 15.21 million women and 60.51 million rural clients, with a portfolio of €38.4 million.

With these two new investments, the fund has 4 projects supported for a total amount of 5 million euros. As of September 30, 2019, with the confirmation of the participation of Centre Loire, 21 Regional Banks are investing in the Funds. The outstanding amount of the FIR amounts to more than 9.7 million euros thanks to investments from Crédit Agricole Assurance, Amundi and 21 Regional Banks (Alpes Provence, Alsace-Vosges, Brie Picardie, Centre-est, Centre-France, Centre Loire, Centre-Ouest, Champagne-Bourgogne, Charente-Périgord, Finistère, Franche-Comté, Ille-et-Vilaine, Languedoc, Loire-Haute Loire, Martinique-Guyane, Normandie-Seine, Provence Côte-d'Azur, Réunion, Savoie, Sud Rhône Alpes and Touraine Poitou).

Grameen Crédit Agricole Foundation invests again in Central Asia

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© Didier Gentilhomme

During the first six months of the year, the Grameen Crédit Agricole Foundation made new investments in Central Asia. It granted a new USD loan equivalent to €895,000 to the Tajik microfinance institution Humo. Humo is a microcredit and deposit institution whose main activity is to provide quality and affordable financial services to rural populations. To date, this institution has nearly 57,000 clients, including 421,000 women and 80,510,000 clients in rural areas.

The Foundation also granted a new loan to OXUS Kyrgyzstan for an amount equivalent to €708,000 in local currency. OXUS Kyrgyzstan is a microfinance institution that offers individual financing and group loans. OXUS clients primarily work in the agriculture and livestock sectors. The institution currently has 7,600 clients, including 551,000 women and 57,210,000 clients in rural areas.

The Grameen Crédit Agricole Foundation currently supports 20 microfinance institutions in Eastern Europe and Central Asia with a total commitment of €20.1 million, representing €211 million of the Foundation's commitments as of the end of August 2019.

For more information: Supported organizations

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Created in 2008, under the joint leadership of Crédit Agricole SA's management and Professor Yunus, 2006 Nobel Peace Prize winner and founder of Grameen Bank, the Grameen Crédit Agricole SA Foundation is a multi-sector operator that contributes to the fight against poverty through financial inclusion and social impact entrepreneurship. As an investor, lender, technical assistance coordinator, and fund advisor, the Foundation supports microfinance institutions and social enterprises in nearly 40 countries.

The Foundation grants seven new grants in sub-Saharan Africa

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During the first half of the year, the Grameen Crédit Agricole Foundation granted seven new financings in sub-Saharan Africa to long-standing partners. With these new investments, the Foundation brings its commitments in sub-Saharan Africa to nearly €41 million, representing €411 million of the Foundation's total commitments as of the end of August 2019.

In Benin, the microfinance institution RENACA received a loan in local currency equivalent to €762,000. RENACA is a mutual institution whose mission is to significantly strengthen the economic base of rural populations. To date, the institution has 27,000 clients located in 801 rural areas, including 59.51 women.

In Kenya, the Foundation granted a new local currency loan equivalent to €2 million to the Musoni microfinance institution. The institution makes extensive use of information and communication technologies to manage its activities efficiently and adapt quickly. To date, the institution has 44,000 clients, including 66,313 women and 63,313 rural clients.

In Uganda, ENCOT received a new local currency loan equivalent to €296,000. This loan was granted under the African Facility, a program developed by the Grameen Crédit Agricole Foundation in partnership with the French Development Agency to support small microfinance institutions in sub-Saharan Africa. ENCOT is an institution that offers financial and business development services. To date, the institution has 6,200 clients, including 561,000 women and 88,410,000 clients in rural areas.

In the Democratic Republic of Congo, the Foundation granted a €540,000 loan under the African Facility to the microfinance institution Paidek, whose role is to finance the development of small-scale commercial and livestock activities. To date, Paidek has 15,500 clients, including 511,000 women and 31,210,000 clients in rural areas.

In Zambia, the Foundation also granted a new local currency loan equivalent to €300,000 to the microfinance institution Agora Microfinance Zambia (AMZ), also within the framework of the African Facility. AMZ is a microfinance institution that specifically targets low-income individuals with appropriate financial products. It currently has 37,100 clients, including 581,300 women and 851,300 clients in rural areas.

Finally, in Senegal, the Foundation granted a loan to CAURIE Microfinance in local currency equivalent to €1.14 million. CAURIE's mission is to contribute sustainably to the economic and social advancement of microentrepreneurs. The institution currently has 72,200 clients, including 99% women and 55% in rural areas. A second investment was made in Senegal in the form of a stake in Laiterie du Berger for an amount equivalent to €99,700. Laiterie du Berger, in which the Foundation has been a shareholder since 2010, is a social enterprise that recycles milk collected from Fulani herders in the north of the country, transforming it into yogurts and other dairy products sold under the Dolima brand.

The Foundation supports three new partners

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© Didier Gentilhomme

During the first half of 2019, the Grameen Crédit Agricole Foundation funded three new partners in Africa and Central Asia. With these three new partners, the Foundation had 81 supported organizations in 38 countries as of the end of August.

It thus granted an initial loan of an amount in FCFA equivalent to 1.5 million euros to Vital Finance in Benin, a microfinance institution founded in 1998 in Benin. Born from a microfinance project funded by USAID, Vital Finance has acquired solid experience in the field of microfinance and is today one of the largest institutions in the country. Vital Finance is mainly active in peri-urban areas and has 29,000 active clients, including 66% women.

The Foundation also provided a local currency loan equivalent to €1.5 million to the Entrepreneur Financial Centre Zambia (EFC) microfinance institution in Zambia. It is the country's largest regulated deposit-taking microfinance institution. The institution, established by CARE Zambia in 1996 as a microfinance project, aims to provide working capital solutions to micro, small, and medium-sized enterprises (MSMEs), with an emphasis on innovative, client-driven products. It currently has nearly 4,000 clients, including 441,000 women and 61,000 rural clients.

Finally, the Foundation also granted an initial loan of €890,000 to the microfinance institution Salym Finance in Kyrgyzstan. This institution, created in 2007 by four Kyrgyz entrepreneurs, aims to support the creation and development of income-generating activities and to provide access to financial services to populations excluded from the traditional banking system. Currently, the institution has nearly 12,500 active borrowers, including 53% women and 74% clients in rural areas, and manages a portfolio of €16.5 million.

For more informationinformation.

Microfinance and Retail Banking: Cross-examinations

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By Céline Hyon-Naudin, Grameen Crédit Agricole Foundation

© Didier Gentilhomme

Microfinance is the set of financial services and products accessible to people excluded from the traditional banking system. Today, the microfinance sector has 139 million beneficiaries with total outstanding loans estimated at $114 billion (1). Beyond the objective of promoting financial inclusion, microfinance is constantly adapting and innovating to be a lever for economic development through entrepreneurship.

This financing of entrepreneurship is a key commonality between microfinance and retail banking. Like microfinance, retail banking offers financial solutions to promote income-generating activities. In the Foundation's 10-Year Booklet published last year, we compared figures from institutions supported by the Foundation and those of a small, "average" regional bank (2) and identified several similarities. This article is a spotlight on the common issues identified.

Some elements of comparison

Retail banks and microfinance institutions (MFIs) share certain objectives and operating methods. For example, the sales organization of an MFI is similar to that of a traditional banking network, with a relationship manager overseeing a portfolio. Both operate in the heart of local areas, close to their clients. Microfinance has evolved to diversify its financial offerings, becoming closer to those of a retail bank: loans, savings, money transfers, insurance, mobile payments, investments, reflecting the diverse needs of clients and businesses.

Furthermore, MFIs and retail banks carry out their work by seeking to control their costs and risk, while aiming to generate a positive and resilient economic result, capable of ensuring the sustainability of their mission.

However, the revenue and cost structure differs greatly between the two models. Operating costs (for example, travel expenses for loan officers, who have at least 250 to 300 clients) are high for an MFI: they represent 50 to 60% of expenses.

The composition of revenues also presents structural differences. The amounts and average duration of loans are more modest in microfinance: microcredits are generally less than one year and the average loan (from our partners) is €765 compared to €16,000 for an average regional bank. An MFI's revenue is almost exclusively linked to financing activity, unlike a retail bank, which has more extensive products and is less subject to financing activity. As a result, MFI revenues are essentially driven by the net financing margin: interest income on loans represents 88 to 99% of MFI revenues, a far cry from the 51% of the average regional bank.

Interest rates in the microfinance sector are higher than those in retail banking, largely due to operational costs. However, ethics and the need for impact are driving the sector to optimize its operating costs. The table below compares the costs, revenues, and margins per client of a partner MFI and a retail bank. Although there are significant differences between regions, the margin per client is positive for MFIs. Microfinance remains a viable economic sector, even though MFIs face significant challenges, which are common to retail banking.

Common challenges for microfinance and banking

With 1.7 billion unbanked adults (3), microfinance and banking must continue to innovate to reach them. Two avenues are open to them: digital finance and resilience in the face of climate change.

Digital finance is transforming the world of finance, making it more agile: New technologies offer digital financial services that both improve the operational efficiency of financial institutions and increase the reach of their services. Improving operational processes should help reduce operating costs, develop new distribution channels, and reach new markets. The diffusion of financial services through these new technologies is a pillar of the current financial acceleration. The potential is significant: of the 1.7 billion unbanked adults, one billion own a mobile phone and 480 million have access to the internet (4).

Financing the ecological transition is another shared challenge. Through direct contact with small producers, MFIs strengthen the development of rural economies. Small farmers are already weakened by the small size of their farms (80% have a farm of less than 2 ha) and their limited integration into agricultural sectors (only 7% are formally integrated into commercial value chains). Climate change poses an additional risk, and both MFIs and retail banks must innovate to provide financing better adapted to agricultural cycles and risks and promote new farming practices that encourage resilience and adaptation to climate change. Microfinance and retail banks are also positioning themselves around financial solutions such as those promoting access to green energy intended to promote the ecological transition.

These shared challenges bring together these two branches of the financial system, which play a powerfully inclusive role in economic development and social and environmental progress. There are many synergies to be exploited between microfinance and traditional banking. At its own level, and alongside the Crédit Agricole Group and its partner MFIs, the Foundation will continue to contribute to advancing responsible and inclusive finance.

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(1) The 2018 Microfinance Barometer: //www.convergences.org/barometre-de-la-microfinance/
(2) The average regional bank is the result of calculations based on figures provided by French regional establishments which made it possible to establish an average profile.
(3) Global Findex 2017
(4) Ibid

Grameen Crédit Agricole Foundation invests in three new countries

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© Philippe Lissac

During the first half of 2019, the Grameen Crédit Agricole Foundation made new investments, including three in new countries. It financed the LAPO microfinance institution in Sierra Leone for the first time, with an equivalent amount of €385,000. LAPO's mission is to offer financial services that meet the needs of economically active people in a profitable and innovative manner. It is an MFI committed to developing the microfinance sector in Sierra Leone based on best practices in microfinance and strengthening the sector with a view to developing a credit culture. To date, the institution has nearly 22,000 clients, including 97.3% women. This clientele is located in rural areas.

The Foundation also secured an initial financing amounting to €500,000 from the Nigerien microfinance institution ACEP Niger. ACEP Niger is an MFI specializing in financing very small businesses in urban areas. It manages loans and savings products for small and micro-enterprises in urban and peri-urban areas that have been rejected by the traditional banking system. In keeping with its corporate social responsibility priority, ACEP Niger has adopted the SMART Campaign's client protection principles. It thus ensures that its borrowers are protected from over-indebtedness. To date, the institution has nearly 4,000 clients, including approximately 251,000 women. All of ACEP Niger's clientele is located in urban areas.

Finally, the Foundation also granted an initial loan equivalent to €493,000 to VisionFund Rwanda, a microfinance institution and subsidiary of VisionFund International whose mission is to provide financial and non-financial services to disadvantaged rural communities. VisionFund Rwanda primarily serves vulnerable women with children and young people in rural areas and offers them opportunities for economic empowerment. The products offered and the strategy are focused on strengthening and providing financial services to village savings and loan associations and groups. To date, the MFI has nearly 12,000 clients, including 62% women and 85% clients in rural areas.

In the first quarter, the Foundation made three new investments in Asia

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© Didier Gentilhomme

During the first half of 2019, the Grameen Crédit Agricole Foundation made three new investments in Asia, including a guarantee in India in partnership with CA-CIB India.

In Cambodia, Phare Performing Social Enterprise (PPSE) was granted a loan equivalent to €332,000. This partner, in which the Foundation has held a 15.51% stake since 2013, is a social enterprise that creates, produces, and distributes live performances and employs young artists from disadvantaged backgrounds.

In Myanmar, the Foundation also provided a new €1.8 million loan to Vision Fund Myanmar, a microfinance institution that lends small amounts of money to individuals who lack a measurable credit history, assets to secure loans, or access to traditional sources of financing. The institution currently has 183,000 active clients, including over 851,000 women and nearly 521,000 rural clients.

Finally, in India, the Foundation, in partnership with Crédit Agricole CIB India, has established a guarantee in local currency equivalent to €5.5 million on behalf of Fusion Microfinance Private Ltd. Founded in 1994 in northern India, the institution offers financial products and services to low-income individuals. To date, it has 1.4 million clients, exclusively women, located in rural areas.

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