Technical assistance for strengthening inclusive green finance

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The African Facility is a technical assistance program set up in 2013 by the Grameen Crédit Agricole Foundation, in partnership with theFrench Development Agency (AFD), to support rural microfinance institutions in sub-Saharan Africa.

RENACA is a Tier 2 microfinance institution established in 2005. Located in Benin, its mission is to significantly strengthen the economic base of vulnerable rural, peri-urban, and urban populations engaged in self-employment activities. It offers individual and group loans to a predominantly female clientele in six regions of Benin. As part of the African Facility program, RENACA received technical assistance, with the support of the firm YAPU Solutions, to strengthen its actions in inclusive green finance.

A look back at the system with Thomas DOVONOU, Head of Credit Services, in charge of Promoting New Products at RENACA.

• How important was this mission for your institution?

This mission consisted of an initial intervention with RENACA-Benin (National Network of Self-Managed Village Savings and Credit Banks of Benin) to develop our green agenda and define our organizational objectives. On the one hand, we wanted to benefit from an introductory awareness session on the concept of inclusive green finance. On the other hand, an institutional assessment was necessary to take stock of our actions in the field of inclusive green finance and to identify and exploit market opportunities.

As RENACA operates primarily in rural areas, one of our priorities was to receive advice on how to expand our agricultural credit product offerings, in terms of scope, productivity, and climate change risk management. The firm also specifically trained us on the concept of Climate-Smart Agriculture.

• How the relationship with the consultant throughout the mission?

YAPU conducted an assessment of RENACA's initial implementation of inclusive green finance, based on a review of our documentation and processes, and by interviewing our teams. The firm worked closely with all of the Network's stakeholders (senior management, operational staff, elected officials, and clients) to define our challenges and structure our priorities in an action plan. This provided us with a framework to strengthen our activities toward a more active and environmentally responsible organization.

We particularly appreciated YAPU's participatory approach, as well as the good preparation of the mission and the quality of the documentation provided.

• What actions did you implement following this mission?

We first completed a Green Index and disseminated the results within the Network. This way, the teams were informed of our current situation in terms of the level of implementation of inclusive green finance and became aware of our areas for improvement and possible opportunities.

Then, the results of the mission were used to improve the inclusive green finance system through the implementation of certain recommendations.

For example, we have developed a list of activities excluded from funding because they are harmful to the environment and customer well-being (charcoal production, extraction activities leading to the pollution of water bodies, etc.). This list has also been supplemented with a list of behaviors for sustainable change expected from our customers.

We have also developed our range of agricultural financial products through the implementation of an appropriate system in terms of strategy, actor profile (operational agents and pool agricultural finance specialists), procedures and policies, tools, financial resources, partnerships, etc.

Finally, RENACA developed an environmental and social policy, which was adopted by its Board of Directors. The next step will be to disseminate it to network stakeholders (operational agents, customers, elected officials, etc.).

Ultimately, thanks to YAPU's involvement, we gained a better understanding of the opportunities and challenges associated with inclusive green financing. This mission therefore enabled a real awareness-raising among the Network's teams, from senior management to field agents.