Open Day at the Grameen Crédit Agricole Foundation

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By Killian Grippon & Chloé Liquard, Grameen Crédit Agricole Foundation

© FGCA

On June 8, the Grameen Crédit Agricole Foundation welcomed partners and entities of the Crédit Agricole group to present the Foundation's activities and discuss its actions for a better shared economy.

The day was rich in discussions and lessons learned, with presentations from the team and talks by Jean-Marie Sander, President of the Foundation, Jean-Michel Severino, Administrator of the Foundation and Sébastien Duquet, Director of OXUS, a network of microfinance institutions supported by the Foundation.

The open day served as an opportunity to reaffirm the Foundation's commitment to excellence, commitment, and sharing in support of inclusive finance. Participating in this day allowed us to fully immerse ourselves in the world of the Foundation from the very first days of our internship.

The world of finance shaken by global challenges

Climate change, security, migration… The world of finance is influenced by a complex collection of interdependent attributes. Climate change will continue to transform politics, security and the socio-economic context. Access to resources is becoming more complicated, exacerbating tensions, inequalities and conflicts. The number of refugees is increasing: the International Organization for Migration (IOM) predicts that there will be 200 million refugees by 2050[1]. The world population is growing: several studies predict around 10 billion people on Earth by 2050[2]. Faced with such demographic growth, many questions arise about the capacity to feed, house and guarantee the economic and social integration of these billions of people.

Faced with this worrying situation, what can be done? There is an urgent need to mobilize resources, act in partnership, and integrate these social and environmental challenges into the economy of today and tomorrow. This integrated approach is at the heart of inclusive finance and the work of the Grameen Crédit Agricole Foundation. By joining the Foundation's team, we discovered its approach of partnership, adaptability, and responsibility to better meet the needs of marginalized populations. For us, this is the finance of the future, one that captures the diversity of present and future challenges and adapts to a changing world.

The Foundation, a key player in inclusive finance

Since its creation in 2008, the Foundation has been working to promote the development of inclusive finance by supporting microfinance institutions (MFIs) and social businesses around the world. Foundation President Jean-Marie Sander opened the day by confirming this strong and shared commitment to a more inclusive economy. Throughout the day, all of the Foundation's teams presented the Foundation's businesses, projects, and initiatives. As newcomers to the world of microfinance and social business, we shared the same observation at the end of the day: the sector is far more complex than one might imagine.

For example, the range of financing tools and services offered and developed is very broad and adapted to the specific needs of microfinance institutions. The African Facility, an initiative set up with the French Development Agency (AFD), is an example of the evolution of the Foundation's offering towards more comprehensive support for MFIs. Also, after a first phase which supported 16 rural MFIs in Sub-Saharan Africa, the second phase of the program will be carried out between 2017 and 2020 and will not only finance but also provide technical assistance to more than twenty institutions.

The Foundation has also strengthened its ties with Crédit Agricole entities. Guarantee schemes with the Group's international entities in Egypt, Morocco, Serbia, and India are also being developed. Long-term financing of €14 million from Crédit Agricole Corporate Investment Bank will enable the Foundation to strengthen its work in the coming years. Crédit Agricole Indosuez Wealth (Asset Management) will manage the investment funds for which the Foundation has an advisory mandate. And to name a final partnership, the "Solidarity Banker" skills volunteer program between Crédit Agricole SA and the Foundation was launched just a week before the Open Day. As part of the program, Group employees will be able to go on assignment to support MFIs and social enterprises supported by the Foundation. This is the first time in the history of Crédit Agricole and the Foundation that such a partnership has been launched.

Promoting inclusive finance also requires raising awareness of the challenges posed by climate change in rural areas. Improving the resilience of rural producers is just as necessary as facilitating access to financing to ensure the sustainability of the agricultural sector. The Foundation adopts this approach, not only through technical assistance, but also through its agricultural microinsurance activities. The Foundation launched a microinsurance pilot project in Mali to support RMCR, one of its partner MFIs, in offering drought risk insurance to its borrowers. The project faces several challenges, but it will continue to evolve to make the product more affordable and appropriate.

Our discussion with Sébastien Duquet, Director of OXUS, a network of MFIs operating in post-conflict areas, allowed us to better understand the synergies between financial inclusion and humanitarian action. Access to microcredit services remains essential in a context of economic recovery. However, disparities in social performance persist, particularly with regard to gender and rural issues, which represents a major challenge.

Perspectives: multiplying impact and working in partnership

What conclusions did we draw from this day? First and foremost, the Open Day allowed us to better understand the Foundation's role and how it is committed to a more inclusive and responsible economy. Similarly, several strategic areas stand out for the coming years: partnerships, support for the agricultural sector, and a responsible approach.

First, the Foundation's work strongly follows a partnership approach. Fighting poverty is a responsibility that must be shared by various stakeholders. The Foundation will continue to work with private, public, and solidarity-based actors to multiply its impact and expand its geographic presence. The development of the agricultural sector will remain a priority for the Foundation, both through support for microfinance in rural areas and through support for socially beneficial entrepreneurship. Finally, the Foundation will continue to promote a responsible approach in all of its activities.

To conclude the day, Jean-Michel Severino, Foundation Administrator, delivered a powerful speech on Africa's development challenges. Food insecurity, rampant population growth, and shifting markets—the African continent will face several major challenges, and the Foundation and its partners have a major role to play.

This Open Day was the first in a series of events that the Foundation will organize throughout the year. These "Meetings for a Shared Economy" will be a platform for exchange and sharing experiences with the Foundation's partners, and we look forward to being part of them.

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Source

[1] //www.unhcr.org/4df9cc309.pdf
[2] //www.un.org/development/desa/fr/news/population/world-population-prospects-2017.html

Read this week: Peace, security and development in the Sahel

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From demographic challenges to environmental ones, including the fight against poverty, Jean-Marc Chataigner sets out his vision for the development of the Sahel and calls for "the pursuit of increased international solidarity" through "a joint, partnership-based approach, co-constructed with governments, communities, local associations, and populations." A spotlight on his interview.

What are the challenges and prospects for an integrated approach to returning to lasting peace in the Sahel?

The region's major challenges require continued increased international solidarity because the Sahelian countries do not yet have the capacity to address them alone. A joint, partnership-based approach is needed, co-developed with governments, communities, local associations, and populations. An integrated approach is needed, encompassing the various components of the international community's action, as well as national, regional, and international efforts. Through the mission entrusted to me by the Minister for Europe and Foreign Affairs, Jean-Yves Le Drian, France is promoting the idea of a more coordinated approach to the various political and diplomatic actions, particularly for the implementation of the peace agreement in Mali, security efforts, through the establishment of the G5 Sahel joint force, and the relay that will ultimately have to be taken up in renewed approaches to development.

The Sahel Alliance, launched in 2017 by Chancellor Merkel and President Macron, aims to achieve concrete results in a limited number of sectors, on issues essential to the future of the Sahel, which have nevertheless been neglected in recent years by donors, such as agriculture and education. The Sahel Alliance favors an approach in terms of the effectiveness of ODA (Official Development Assistance) and transparency and accountability of the actions implemented, in close collaboration with partner governments and the civil societies concerned. It intends to strengthen the targeting of donor actions on the most fragile and vulnerable areas, peripheral and far from capitals, and to promote better coordination of development programs with humanitarian and security issues.

How can we rebuild a trusting and lasting partnership between France and the African continent?

Relations between France and Africa have always had a special dimension linked to a shared history made up of difficult times, but also of an exemplary community of arms to confront the enemies of freedom. But the world of 2018 is no longer that of 1945 or even that of 1958. International relations have profoundly evolved with the end of the Cold War, the attacks of 2001, the emergence of new powers, and the emergence of global threats that we must face and that can give rise to strong nationalist withdrawal. In this new international concert, France, and through it more broadly Europe, and Africa have common interests to assert.

In his speech in Ouagadougou last November, the President of the Republic clearly laid the foundations for this new relationship to be built, notably through the call for better listening to African youth, a real change in method in the management of public development aid, "no longer building cathedrals to our glory" he even specified, the priority given to education, particularly that of young girls, the common fight against religious extremism and obscurantism, the launch of a reflection on the restitution of African heritage, the conditions of movement of African students and the reception of African talents, investment in the African infrastructure of tomorrow. All these subjects, I will not list them all because the list is impressive, are crucial for the establishment of a relationship of respect, partnership and balance, the only one capable of establishing lasting mutual trust over the long term between our two continents.

What are the challenges of growth, peace and security for Europe and Africa?

Africa is the location of essential economic and security issues for Europe in a geographical area undergoing rapid change and experiencing strong demographic growth.

The takeoff of many African countries is now underway and represents trade and investment opportunities for Europe in rapidly emerging markets. Conversely, the persistence of fragile and failed states poses a threat to both our collective security and the sustainability of African development. Strengthening regional peacekeeping capacities and deploying African military forces, along the lines of the G5 Sahel, capable of addressing the various threats to peace and security on the continent is therefore a fundamental priority.

Find his column here.

The Crédit Agricole group sponsors the Plastic Odyssey expedition

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Crédit Agricole SA, five regional banks, and CAMCA Mutuelle are supporting the Plastic Odyssey project, which aims to recover plastic waste from the coasts before it pollutes the oceans and transform it into fuel. What does this project involve?

The Plastic Odyssey project is based on the following objective: to recover plastic waste from the coasts before it pollutes the oceans and transform it into fuel, thanks to an innovative process that consists of adapting pyrolysis technology to navigation. Once this challenge is successful, the Plastic Odyssey team will be able to bring this technology to local populations in emerging countries, with an impact on the environment but also on job creation.

Who is involved?

Crédit Agricole SA, five regional banks* and CAMCA Mutuelle are sponsors for a total amount of €115,000, with the support of the Grameen Crédit Agricole Foundation.

What are the stages of the project?

The first stage includes the construction, the launch on June 15 in Concarneau and the exhibition of a prototype named "Ulysse" for 6 months, a miniature replica of the boat that will set sail in 2020. The second stage of the project will include the construction of the boat, as well as a 3-year voyage, made up of 30 stopovers in South America, Africa and Asia.

* Aquitaine, Finistère, Normandy, Normandy-Seine, Provence Côte d'Azur

>>> Learn more

A partnership to strengthen “climate smart finance”

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Family farming in Africa constitutes the bulk of the continent's agricultural production. It is particularly impacted by climate change. Microfinance institutions (MFIs) in rural areas must adapt their practices to better manage their own risks as well as those of their clients.

Faced with this challenge, the Grameen Crédit Agricole Foundation and YAPU, a German social fintech company, aim to support partner MFIs in digitizing their operations and updating their information systems to incorporate climate risk. In November 2017, the Grameen Crédit Agricole Foundation and YAPU signed a cooperation agreement to develop services in the field of climate-smart finance. This approach aims to include climate change risks in the product and service offerings of financial institutions so that they can further develop economically viable activities that are resilient to climate change and contribute to the preservation and restoration of ecosystems. Two projects will be launched in 2018 as part of this partnership.

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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.

A new partnership between the Foundation and Crédit Agricole Egypt

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By Violette Cubier, Grameen Crédit Agricole Foundation

The Grameen Crédit Agricole Foundation and Crédit Agricole Egypt have signed a partnership agreement to structure a loan facility for DBACD, one of the largest MFIs in Egypt. Read the interview with Walie Lotfy, Head of Retail Banking at Crédit Agricole Egypt.

Interview with Walie Lotfy, Head of Retail Banking at Crédit Agricole Egypt

Could you introduce the partnership between Crédit Agricole Egypt and the Grameen Crédit Agricole Foundation?

The project of a partnership between Crédit Agricole Egypt (CA Egypt) and the Grameen Crédit Agricole Foundation (GCA Foundation) was born more than three years ago. However, regulatory constraints prevented us, at the time, from realizing our cooperation. Because CA Egypt, like the GCA Foundation, was convinced of the importance of this partnership and the market potential, we relaunched our project in 2017 around a completely renewed and better structured cooperation scheme, which meets the Group's requirements and regulatory requirements, particularly with regard to compliance issues.

We have partnered to structure a loan facility for microfinance institutions (MFIs). The first transaction, worth EGP 58 million (approximately EUR 2.8 million), was successfully completed for the benefit of a leading MFI in Egypt, the Dakahlya Businessmen Association for Community Development (DBACD).

With this first successful transaction, CA Egypt joins the ranks of banks contributing to the development of microfinance in the country. CA Egypt is thus expanding its range of services by reaching new sectors, in line with the Bank's sustainable growth strategy.

How can the banking sector contribute to the development of microfinance in Egypt?

Historically, the banking sector in Egypt has avoided entering the microfinance sector due to its complexity. As a result, public banks have long dominated this market. However, the Central Bank of Egypt has recently implemented mechanisms to incentivize banks to support the development of microfinance in the country. Moreover, all banks have recognized the vast potential of the microfinance market, not only due to the quality of assets but also the high levels of profitability. Most banks are now competing to lend to microfinance institutions.

In your opinion, what is the added value of the Grameen Crédit Agricole Foundation and what are the prospects for the partnership?

This partnership aligns with the Group's strategy to strengthen synergies between its various entities. It brings mutual benefits to both the GCA Foundation and CA Egypt. For the GCA Foundation, this partnership opens new markets for its expansion. For CA Egypt, being able to rely on the Foundation's knowledge and expertise is a significant support in diversifying its range of services and entering the microfinance market in Egypt while limiting the associated risks. This partnership will allow CA Egypt to gain an edge over competitors lacking this type of expertise.

The partnership also allows the Bank to gain visibility and acquire a better positioning in the microfinance sector, thanks to the reputation of the GCA Foundation which is recognized as one of the benchmark players in the sector.

I believe this collaboration has strong potential. We have learned several lessons from this pilot transaction, and we will continue to optimize the system to develop a more competitive offering and thus increase our impact, while keeping risks under control.

CA-Assurances and the Grameen Crédit Agricole Foundation on a mission to Burkina Faso

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Crédit Agricole Assurances is assisting the Grameen Crédit Agricole Foundation in conducting due diligence on CIF-VIE, one of the leading insurance companies in Burkina Faso, which is of particular interest to the Foundation. This transaction is part of the Foundation's dual ambition: to strengthen its presence in the microinsurance sector and consolidate its ties with Crédit Agricole Group entities.

CIF-VIE: a company with strong potential

CIF-VIE began its operations in Burkina Faso in 2013, with the support of RCPB, the leading Burkinabe microfinance cooperative network, and ADA (a Luxembourg NGO). It aims to improve the protection of policyholders and beneficiaries through a comprehensive range of life, death, and capitalization insurance products in Burkina Faso.

Today, the African company accounts for 61.3 billion euros of the market. With a positive net profit since its creation, CIF-VIE is taking a new step in its growth with a strategic, operational, and financial transformation. Its action plan: open its capital to new shareholders to comply with the new requirements of the Inter-African Conference on Insurance Markets (CIMA); restructure its organization towards greater efficiency and better risk management; and develop its products and expand its distribution network. Its goal by 2020 is to be among the top five insurance companies in Burkina Faso.

The Foundation and CA-Assurances join forces to support microinsurance

The Grameen Crédit Agricole Foundation supports 70 microfinance and social business institutions in more than 30 countries. As an investor, financier, and supporter, it strengthens its contribution to the financial transition by supporting the development of microinsurance in Africa.

Noting CIF-VIE's strong potential, the Foundation, alongside CA-Assurances, carried out a due diligence mission to better understand this structure and assess the possibility of investing in it. Pierre Casal Ribeiro, Microinsurance Expert at the Foundation, led the due diligence mission accompanied by Eduardo Cardoso de Miranda, Creditor Insurance Expert at CA-Assurances, with the support of El-Hadj Diop, Investment Advisor, and Céline Hyon-Naudin, Social Business Investment Officer at the Foundation.

Crédit Agricole Assurances, the leading insurance group in France and the leading bancassurer in Europe, has committed itself alongside the Foundation to a dynamic of social responsibility to promote the skills and convictions of its employees in favor of the common good.

Investing in a more shared economy is the driving force behind this collaboration.

The Foundation publishes its 2017 Integrated Report

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The Foundation is publishing its 2017 Integrated Report, which is a call to design financing, investments, and economic support mechanisms that are more accessible, more transparent, and more inclusive. Alongside other committed stakeholders, the Grameen Crédit Agricole Foundation is taking part in the financial transition toward a fairer, more equitable economy with more widely shared benefits. Its 2017 Integrated Report is a call to design financing, investments, and economic support mechanisms that are more accessible, more transparent, and more inclusive.

With €49.3 million in funding granted in 2017, the Foundation expanded its scope of intervention to 32 countries by supporting 69 microfinance institutions and social business enterprises that assist 3.2 million clients worldwide, of whom 77% are women and 75% live in rural areas. By promoting access to entrepreneurship and seeking to strengthen the resilience of the most vulnerable, the Grameen Crédit Agricole Foundation is committed to the common good.

Download the Integrated Report 2017

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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.

Social Business, towards socially useful entrepreneurship

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© CreditAgricole SA/CAPA Pictures/Nicolas Axelrod.

For more equitable access to wealth creation, the Grameen Crédit Agricole Foundation calls for a more responsible capitalism that embodies a new “social contract.”

A pragmatic observation

With its experience as a pioneer investor in Social Business companies, and supported by a detailed assessment, the Grameen Crédit Agricole Foundation notes that social entrepreneurship is, most often, rapidly beneficial for society, but that it takes much longer to reach its financial equilibrium threshold.

Social Business

A social business aims to provide a solution to a societal problem while also seeking to achieve financial profitability. This business model is therefore classic in its financial aspect, but very different because social utility is its primary goal. Profitability is only one means to achieve it sustainably. Its way of creating value does not lie in its ability to meet a market need, preferably with a competitive advantage, but in the pursuit of its social mission, the project of collective utility at the origin of its creation.

A White Paper, seven proposals

In its White Paper, the Grameen Crédit Agricole Foundation sets out seven concrete proposals to improve the effectiveness of social business. From identifying success factors to structuring the social performance of projects, the Foundation presents a unique economic approach.

1. Create the status of a “social utility contract” company

For the Grameen Crédit Agricole Foundation, a social enterprise cannot exist without a contractual act that commits to the societal objectives of the projects.

2. Value social utility to integrate it into the social enterprise's income statement

Valuation would consist of identifying and estimating the social and environmental impacts of the company in order to be able to transcribe them in the form of units of account.

3. Tax-support the development of associations into companies with social utility contracts

Social businesses need to resort to hybrid financing (donation/debt combinations) because the particularly low margins of their economic models generally cannot cover investment costs.

4. Create public-private partnerships in rural areas for access to essential goods

A social enterprise established in a rural environment can perfectly act as a relay for public action and make itself eligible for a suitable PPP format.

5. Disseminate low-tech patents in open source

Open source (royalty-free) low-tech patents are one of the keys to the development of modest and local economies in emerging countries.

6. Use of deconsolidating financial arrangements in agricultural value chains

Developing a relationship of trust through contractualization strengthens and structures the agricultural value chain.

7. Rely on local relays

The Foundation recommends relying on a local investor member on the board of directors. Their presence will facilitate operations and governance.

“Social and Business: two words that, on the surface, are complete opposites. In the old economic paradigm where individualism was triumphant and its consequence, precariousness, widespread, they resonated as a contradiction, a paradox. An idealist's whim. And yet, their meeting, however singular it may be, is a way forward to rethink and redefine a more responsible capitalism and a deliberately inclusive economy.” Eric Campos, General Delegate of the Grameen Crédit Agricole Foundation.

To download the Social Business White Paper: White paper - Social business - BD

The Grameen Crédit Agricole Foundation posted a good performance in 2017

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Since its creation in 2008, the Foundation has committed nearly €200 million in financing. It works with 70 microfinance institutions and social businesses in 28 countries. Women and rural populations represent 76% and 81% of the more than 3 million clients of the institutions that the Foundation supports both in financing and technical assistance. In this support component, the Foundation's teams have led 50 technical assistance missions for 16 partner institutions.

2017 was a year of growth, with positive operating income and a net profit that was also positive, while maintaining a risk profile with no adverse trends. The Foundation thus demonstrated its ability to combine social performance and economic balance. During this year, we refocused on our core business while increasing our capacity to act. In 2017, 44 financing applications were presented to the Investment Committee, for an additional amount of nearly €50 million.

The Foundation has expanded its scope of operations with new partnerships in Montenegro, Kazakhstan, and Burma. 86% of our countries of operation are among the poorest in the world. 48% of funding applications are concentrated in sub-Saharan Africa and 23% in South and Southeast Asia; these two geographic areas each represent 35% of the Foundation's commitments at the end of the year.

Meeting on March 6 and 7 in Luxembourg, the Foundation's directors expressed their satisfaction and congratulated the Foundation's teams for these results, which honor the Institution. The Board of Directors meeting was also an opportunity to outline the avenues for the next medium-term plan for 2019-2023 and to launch a project to create an Investment Fund designed to improve the operational excellence and resilience of our partners.

Committing alongside microfinance institutions, participating in the growth of rural economies, seeing further, acting together for a better shared economy, the Grameen Crédit Agricole Foundation remains focused, humble but active and bold in the service of its founding mission of fighting poverty.

AFD and the Foundation strengthen their support for microfinance in Africa

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The Foundation is strengthening its ties with its institutional partners through a new agreement signed in March 2017 between the Grameen Crédit Agricole Foundation and the French Development Agency (AFD) for a period of 3 years.

A program to strengthen microfinance institutions

The "Take-off Facility for Agricultural and Rural Microfinance in Africa," established in partnership with the French Development Agency (AFD), was renewed in March 2017 for a period of three years. The first phase of the program, carried out between 2013 and 2016, helped strengthen microfinance institutions (MFIs) in Africa and support them towards operational self-sufficiency and financial sustainability.

At the end of December 2017, the program had 18 partners, 15 of which were located in six AFD priority countries[1]. In 2017, seven new partners joined the program, three of which were in two new countries of intervention under the Facility: the DRC and Rwanda. Loan contracts totaling €6,033,000 were approved and €3,707,363 were disbursed.

A second phase to multiply the impact of the project

The second phase of the program will run from 2017 to 2020 and will finance and provide technical assistance to more than twenty MFIs. The new AFD financing is structured around three components: a €6 million loan to develop the Facility's credit activity; a €2.2 million grant to contribute to technical assistance lines; and an ARIZ portfolio guarantee to cover 50,000 million of the loan production granted to MFIs in sub-Saharan Africa.

Since the signing of the second phase in March 2017, five technical assistance protocols have already been signed and 28 technical assistance missions have been completed or are underway. The missions aim to strengthen the risk profile of partner institutions through various themes such as developing a business plan, risk management, and improving the information system. The missions will also focus on measuring and managing social performance, agricultural financing, and green microfinance.

[1] Benin, Burkina Faso, Mali, DRC, Senegal, Togo

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