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CVCD Microfinance Program
Alex Sobrado
6 February 2015
CURRENT SITUATION
~$256,000 lending portfolio (667
families)
Group and individual loans
SHG and savings
Expansion in KKI & KK2 (60 families)
Situation Analysis
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CURRENT SITUATION
Lack of funding
Staffing issues
No impact evaluation
Limited network
Lack of brand awareness
Situation Analysis
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RECOMMENDATION
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RECOMMENDATION
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WHY TRACK?
CVCD is not a bank!
Learn what is working
Reduce risk
Foster better relationships with community
Attract donors & investors
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BASIC TRACKING
Impact
Income, health, education
Financial
Efficiency, returns, risk
Program Tracking
Beneficiary statistics
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IMPACT TRACKING
Grameen Progress out of Poverty Index
“PPI”
Indirectly track income levels
Basic questions about living conditions
Industry standard (4 Cambodian MFIs)
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PPI
10 questions predict
poverty likelihood
Must administer in
beneficiaries’ homes
No control group
needed
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PPI
“PPI Certification is an important recognition for TPC (and any MFI),
since it greatly helps in evaluating how an MFI assesses whether it is
meeting its social goals and improving its overall performance by
integrating social performance management (SPM) practices into its
core business.” MIX MARKET
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CERTIFICATION PROCESS
1. Review PPI Standards of Use (Here)
2. Gauge certification readiness with PPI
Self-Assessment Tool (Here)
3. Contact ratings agencies (MicroFinanza
or Planet Rating)
4. Submit required documentation
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OTHER BENEFITS
Many investors require the use of PPI
Several MFIs in Cambodia that are PPI
Certified receive funding from Grameen
partner organizations (ex. Citibank)
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LEARNING PPI
FREE introductory online course through +Acumen
& Grameen:
“Market Analysis at the Bottom of the Pyramid”
2.5 hours
Access any time between 17/2/15 and 13/5/15
Click here to Register
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THIRD PARTY RATING
Impact assessments
Official social performance rating
Planet Rating, Microfinanza, MicroRate,
M-Cril
Fees
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PROCESS
6-8 weeks
Required materials
Importance of preparation
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FINANCIAL
Importance of efficiency and sustainability
New loan management system
Key indicators
- Par30, ROE, ROA, profit margin,
operational/financial self-sufficiency, cost of
funds, write-off ratio, etc.
- See CGAP Consensus Guidelines PDF and Excel
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PROGRAM TRACKING
Importance of up-to-date numbers
Key indicators
- # of beneficiaries (women vs. men), total loans
outstanding, new businesses created, new jobs
created
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RECOMMENDATION
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WHY CONNECT?
Leverage competitors existing networks
Create strategic alliances
Capacity building
Create relationships with investors
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SPTF CONFERENCE
The Social Performance Task Force annual
meeting in Siem Reap:
June 8-12th
$175 if registered before March 31st
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SPTF CONFERENCE
Events:
Workshops on Social Performance Management
– including PPI and Social Performance
Indicator audit (“SPI4 Tool”)
Networking events – INVESTORS WILL
ATTEND
Register Here
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CAMBODIAN MICROFINANCE ASSOCIATION
Connecting with the CMA will give CVCD
access to:
MFI workshops
Knowledge on industry standard practices
Potential donors/investors
Top talent
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CMA
Meeting scheduled for 16 Feb 2015 @
3:00PM
Discuss: CMA application process,
incorporating social performance
measurement into the new loan
management system, becoming a “MFI”
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MIX MARKET
Microfinance information hub sponsored
by Gates Foundation
Contains financial and social impact
information on all of the largest MFIs
Publications & research
MIX Market site
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JOINING MIX
Free to join
Must fill out Excel sheet (included in
presentation materials) with data on
microfinance operations
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PRICING TRANSPARENCY
Investor concern
Receive “Seal of Transparency”
Gain visibility from investors/donors
Minimal effort: 2.5 hours
MF Transparency
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RECOMMENDATION
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FUNDING SITUATION
Current donors do not like the for-profit
aspect
MF program to support NGO admin costs
Need to look for alternative sources of
funding
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SOURCES OF FUNDS
1. Microfinance Investment Vehicles
(MIVS)
2. Crowd funding
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MIVS
Invest in MFIs/NGOs through loans
Must pay back with interest
Typically have requirements for MFIs
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REQUIREMENTS Number of beneficiaries
Portfolio size
Audited financial statements
MIX profile
External ratings
- Planet Rating, Microfinanza, MicroRate, M-Cril
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INVESTORS
Have expressed interest in future partnerships:
Babyloan
BlueOrchard
CARE International
Oikocredit
(See appendix for individual requirements)
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CROWD FUNDING
Kiva
- Post photos of recipients and write articles
- Can receive up to $1MM
- Need at least 1,000 beneficiaries
- Prefer to have a Kiva liaison at CVCD
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KIVA
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DONATIONS
Do-it-yourself
- Many sites exist that allow you to post projects
directly without requirements like KIVA
- Ammado, Crowdrise, Global Giving,
Indiegogo
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INTERN POSITION
Large time requirements for funding
Opportunity for Cambodian student
Tasks: create entries/donor stories for crowd
funding sites, manage CVCD social media
Skills: English writing, photography, video
producing, Facebook
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SUMMARY
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Track
PPI, financial ratios, program statistics
+Acumen seminar
Third party rating
Connect
CMA, MIX Market, SPTF Annual Meeting, Seal of Transparency
Fund
MIVs & crowd funding
New internship position
APPENDIX
BLUEORCHARD Requirements: - At least 1 year of operations - Total assets > USD 1,000,000 - Externally audited accounts - PAR30<5%, annual write-offs <2%, Tier 1 Capital >15% Debt Structure: - USD denominated - Fixed rate, semiannual payments - 2-5 year tenor (senior debt), 9 year tenor (subordinated debt) - Amount – up to 75% of MFI’s equity Contact: - Vuthy Chea (Vuthy.Chea@blueorchard.com)
BABYLOAN Requirements: - Loan Portfolio Assets> USD 200,000 - Number of active borrowers > 1,500 - Externally audited accounts Debt Structure: - Euro denominated - Up to 20% of gross loan portfolio - 4.5% annual interest - Fixed rate, semiannual payments - 2-5 year tenor (senior debt), 9 year tenor (subordinated debt) - Amount – up to 75% of MFI’s equity Other - Provide assistance in volunteer procurement Contact: - Main: Justine Maytraud (justine@babyloan.org) - Secondary: Violette Cubier (violette@babyloan.org)
CARE INTERNATIONAL Requirements - 3 years of operations - 500 active clients - PAR30<10% - Audited financial statements for the past three years - Operational self-sufficiency ratio 90% - At least one loan from an external agency on which it has been
making regular repayments* - MIX Market profile* - Rating by a recognized microfinance rating agency in past 3 years* Contact - Ajaz Ahmed Khan (Khan@careinternational.org) Meeting - Will be in Battambang 22-29 April 2015 - Interested in funding rice mill with potential to also fund microloans * Not a strict requirement
OIKOCREDIT Requirements: - No strict criteria; look primarily at impact - Use self-developed Environment and Social Impacts and Governance
Structure (“ESG’’) scorecard - Primary indicator is PPI and Microfinance Transparency Certification
Debt Structure: - Euro or USD denominated - $50,000 - $10,000,000 - 1-6 year tenor Other - Provide funding for skill development in risk management, SPM, market
analysis, product development, agricultural value chain finance Apply: - Oikocredit Application - office.kh@oikocredit.org
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