CGAP 2007 Annual Report - World Bankdocuments.worldbank.org/curated/en/...In 2007, CGAP undertook an extensive process of industry-wide consultations with a broad range of organi-zations

CGAP 2007 Annual ReportBUILDING FINANCIAL SYSTEMS THAT WORK FOR THE POOR

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ACCESSto FINANCE Access to financial services puts power

into the hands of poor people. Evidence

shows that when poor people have financial

services, they use their savings or loans to

improve their families’ lives in a variety of

ways: sending their children to school, buy-

ing better medicines and more nutritious

food, fixing a leaky roof, meeting social and

cultural obligations like paying for weddings

and funerals, and building income-gener-

ating potential by investing in businesses.

Because microfinance can be delivered to

the poor without the need for continuous

subsidy, benefits can be permanent.

There is nothing “micro” about poverty. Thenumbers astound: one in two human beingslives on $2 a day, or less. As many lack publicsanitation. Two billion want for electricity, abillion more for clean water. The challenge isimmense, but the fight against poverty oftenbegins at the smallest level.

OUR VISIONCGAP works toward a world in which

poor people are considered valued clients

of their country’s financial system and every

poor person has access to useful financial

services at their doorstep. We aim to help

build efficient and equitable local financial

markets that serve all poor people with

convenient and affordable financial serv-

ices. A wide array of financial service

providers will harness lessons learned

and innovations of recent years to con-

tinuously improve services and lower

costs to compete for low-income clients.

For more on CGAP’s work, go to www.cgap.org.

These financial service providers will be sound and transparent, andthey will fund growth primarily through local deposits. Ever moreenlightened policy making will support the long-term development ofefficient, competitive, and inclusive local capital markets. Donors andinvestors will contribute to expanding access to finance based on theirrespective comparative advantages. More effective aid mechanisms willefficiently and equitably allocate subsidies, measure performance,complement commercial actors, and be accountable to their end clients.In short, all actors will be focused on responsible finance, with the wellbeing and needs of clients at the center of strategy and operations.

Table of ContentsAccess to FinanceOur Vision

1 About This Report2 Current State of Microfinance5 Evaluating CGAP’s Role7 Activities and Accomplishments26 CGAP Strategy Going Forward28 Governance Structure29 Member Donors 200737 Financial Statements

About This Report

This Annual Report outlines CGAP’s work in fiscal year 2007.This work is described according to the themes set forth by our members for 2003–2008:

Financial MarketInfrastructure—Building localfinancial marketinfrastructure forbetter access tofinance requiresdeveloping efficient,technology-enabledfinancial service,systems for reportingon the performanceof financial serviceproviders.

Governments—Fostering supportivepolicy environmentsfor microfinancemeans advising policymakers and regulators,disseminating researchand guidelines onappropriate micro-finance regulations,and developing diag-nostics on policyissues.

Funders—Helpingfunders use theirresources moreeffectively entailsbuilding consensusaround good practi-ces and reportingon performance,providing technicalsupport to donoragencies and otherfunders, and buildingdonor staff capacity.

Financial ServiceProviders—Promoting diverseinstitutions anddelivery channelsis essential formicrofinance toachieve the kindof scale andsustainability thatwill make a durableimpact on poverty.This requires theengagement of abroad range ofinstitutions andmechanisms todeliver financialservices to the poor.

Pro-Poor FinancialServices—Developing a broadrange of pro-poorfinancial services isnecessary becausedifferent segments ofthe poor needdifferent kinds offinancial services.Emphasis is placedon identifying andlearning frominnovative productsand services thatreach the very poorand unservedpopulation.

Communications and publications are essential for impact and critical for CGAP as a key knowledge center andconvener for the microfinance industry.

Monitoring and evaluation are the means by which CGAP approves, monitors, and measures the performance ofCGAP’s financial commitments to external institutions and CGAP’s internally managed projects.

CGAP ANNUAL REPORT 2007 I 1

2 I CGAP ANNUAL REPORT 2007

• Microfinance has become increasingly inte-grated into the formal financial system, as morecommercial banks and retail institutions take upmicrofinance as a business line. New types of serv-ice providers are entering the market in manycountries, including existing providers liketelecommunications networks, retail outlets, andcredit card companies. Some are reaching verypoor clients. Another dimension of integration isthe work of microfinance institutions (MFIs) thatare collecting deposits and tapping into domesticand international capital markets to raise financingnecessary to fuel their growth. Microfinance isnow widely viewed as an integral part of main-stream financial sectors.

• Traditional MFIs have matured in the last fiveyears. There are five times as many profitableMFIs today as there were four years ago. New in-stitutions are breaking even in two years on aver-age, much faster than their predecessors. Severalhundred have reached a take-off point and aregrowing rapidly. The strongest financial coopera-tives compare favorably to other financial institu-tions on efficiency, product range, and growth.

• The need for commercial practices has becomewidely recognized as a condition for sustainableaccess to an array of demand-driven microfinanceproducts. Whether an NGO or a bank, evidenceshows that commercially focused organizationscan indeed reach the poor profitably, thoughmost profit-maximizing commercial institutions donot reach very deep, to the poorest and most re-mote clients.

• New funders, such as private philanthropists andsocially responsible investors, have entered thefield with large funding programs planned. Nearly80 funds, with more than $2 billion in outstandinginvestments, have been created to invest in micro-finance (including 30 in the last two years). Interna-tional financial institutions (IFIs) have stepped uptheir investments, too, with portfolios doubling an-nually. Grant money from new philanthropists maydwarf money from public donors soon.

• More institutions are offering a wider range offinancial services, such as flexible deposit serv-ices, insurance services, and money transfers, al-though narrow microcredit continues to dominatein many countries.

• The business model for financial service deliveryis “disaggregating” as new partnerships amongMFIs, banks, and, more recently, telecommunica-tions and credit card companies allow each actorto carry out the role in service delivery most suitedto its comparative advantage. For example, suchcontractual arrangements enable theMFI, self-helpgroup, or other agent to focus on client interaction,while a bank provides back-office services and atelecom provides transaction processing.

• Experiments with technology-driven deliverymodels are spreading rapidly, promising to re-duce costs and thus extend outreach to poorerand more remote clients. Although not yetproven, there is evidence that, with the right valueproposition, product design, and marketing, morepoor people will use these services.

Current StateofMicrofinanceThe microfinance industry has undergone dramatic changes inthe last five years. Great strides have been made.


• The widespread use of nonfinancial institutions(such as gas stations and convenience stores) toaccess financial services offers the hope of expo-nential growth and outreach to more remote areas,provided the regulatory environment adapts to allowthis to happen.

• An increasing number of market players are rec-ognizing the importance of professional skills andstandardized accounting in the sector. The industryhas become more professional, with more and morefinancial service providers adhering to performanceand disclosure standards developed by CGAP andothers. Compliance is now driven by investor andmarket expectations.

• The need for measurement of services’ impact onpoor people’s lives, the poverty levels reached, andthe “social” performance of institutions is gainingsupport. New socially responsible investors havejoined traditional donors and a growing number ofpractitioners in calling for better measurement tools.

Consensus is building that consumer protectionmeasures, such as clear and transparent productterms and conditions, are critical.

• Many traditional donors have recognized that thequality of aid is usually more important than thequantity and that their funding can sometimes hin-der rather than help the development of sustainablemicrofinance. Some CGAP members have under-taken significant changes in their processes to im-prove effectiveness.

• Microfinance is high on many governments’ agen-das. This heightened interest can be both good andbad. A wider understanding of what it takes to buildsustainable access, more helpful legal and regulatoryframeworks, and a greater focus on consumer pro-tection and education are welcome. However, the re-introduction of low interest rate caps and the creationof government-sponsored, direct lending institutionsin some countries are troubling developments.


• Despite successes in dozens of countries, fewcountries have high-quality financial services ofany kind. Product diversity remains limited, espe-cially well-designed deposit products and trans-action accounts that could be the gateway forother services.

• Capacity at the management and staff level of mi-crofinance providers remains the principal bottle-neck to expansion. Mechanisms to address themagnitude of human capacity building needs areurgently needed.

• Despite the increasing engagement of commer-cial banks and retail institutions, real competitionamong retail providers is limited. Without thepressure of competition, costs to poor clients re-main high, pricing opaque, and quality serviceslimited in most markets.

• The local financial market infrastructure formicrofinance remains underdeveloped in mostcountries. Rudimentary payments systems andan absence of credit bureaus thwart access tofinance. Shallow local debt and equity marketslimit the ability of financial institutions to raisecapital domestically.

• Service expansion is constrained by large dis-tances between client populations and lack of fi-nancial literacy and credit histories. Expansion andadoption of services are also limited by clients’ ownperceptions of their eligibility.

• Government policies and regulation continue tohinder the development of microfinance in manycountries. In many markets, subsidized govern-ment lending programs and poorly designedwholesale lending institutions, often funded bydonors, continue to undermine the developmentof sustainable financial services. Where more en-abling policies and regulation have been adopted,capacity of supervisory authorities to implementthem effectively is often weak.

• Many donors continue to fund in suboptimal ways(e.g., inappropriate instruments, poor geographicdistribution, disbursement pressure) and can evenundermine markets. The rapid entry of many newinvestors has raised questions about the optimalinteraction between public-purpose and com-mercial actors. Institutional incentives of donorsand investors alike too often lead to competitiverather than complementary work. Most investorsseek to fund already successful institutions, ratherthan funding market infrastructure or the riskierinstitutions.

• Despite important advances, further method-ological refinements and real incentives formeasuring and reporting on social performanceare needed for its widespread adoption. The in-tersection of social and financial goals will raise in-creasingly complex issues about balancing the“double bottom line” in microfinance.

Remaining Challenges, Gaps, and Constraints

For all of the accomplishments—and the fresh exposure the industry received after Mohammed Yunus wasawarded the Nobel Peace Prize—the gains are still fragile, and significant gaps and constraints remain.Stakeholders identified the following as the greatest challenges to achieving widespread access to finance.


Evaluating CGAP’s RoleIn 2007, CGAP undertook an extensive process of industry-wide consultations with a broad range of organi-zations engaged in the access to finance arena, including MFIs, banks, microfinance networks, governments,donors, and investors. The goal was to assess the current and future needs in microfinance and to determinethe role CGAP should play in this rapidly changing environment. Key inputs to this process included a globalsurvey and an independent evaluation of CGAP’s performance in the last three years.

Key Findings from the CGAP SurveyThe survey examined industry views on key issues and challenges in microfinance, as well as CGAP’srole and performance. The 621 respondents to the survey represented a broad mix of MFIs, banks, mi-crofinance networks, funding organizations, governments, private service providers, and independenttechnical specialists.

1. Most critical elements in increasing access to finance:• Building the market infrastructure (63%)• Developing a greater range of products to suit poor people’s needs (54%)• Concentrating on more remote or rural clients (43%)• Working on government policy and regulation (39%)• Experimenting with new technology for delivering services (37%)• Increasing funds for MFIs (32%)• Augmenting consumer protection and financial education (19%)

2. Greatest obstacles to achieving widespread access to microfinance:• Lack of financial market infrastructure for microfinance (64%)• Poor government policies and regulations (51%)• Operational costs of making small transactions (51%)• Lack of capacity at retail financial institutions (44%)• Lack of funds for on-lending (30%)• Lack of understanding of microfinance by the general public (25%)• Lack of industry standards and good practices (22%)

3. What is CGAP?• A knowledge resource center (52%)• A standard setter for microfinance (33%)• A global network for microfinance (29%)• A think tank/research institute (27%)• A funders’ consortium (15%)

4. What best describes CGAP’s role?• Provides services that help the cause of universal access

to financial services (52%)• Is a key player in the microfinance field (41%)• Supports a diverse range of approaches to

microfinance (28%)• Is a partner for developing countries to improve liveli-

hoods through microfinance (20%)

The overwhelming majority

of respondents (85%) agree

that “CGAP’s contributions

to microfinance are very

important to the success of

microfinance globally.”


Effectiveness

The CGAP operational team has made clearprogress in promoting greater institutional diver-sity in microfinance. But CGAP has done little workso far on financial cooperatives and state banks,which deserve more attention.

There is evidence of progress on promoting pro-poor financial services, but work now needs tofocus on communicating findings so they are trans-lated into practice.

Work on transparency has been excellent. “CGAPcan lay claim to having contributed to improvedquality and increased quantity of information avail-able today from different microfinance actors.”

CGAP is well on track to achieving expected policyand legal framework outputs. Attribution for pol-icy changes is difficult to measure, but there are in-creasing examples in which CGAP interventionshave had a decisive effect on policy makers.

“Aid effectiveness is an area where CGAP has aclear mandate, an absolute advantage, and hasmade some very good progress.”

“CGAP’s training and capacity-building initiativehas been a great success.”

The strong and effective communications capabil-ity is highly rated by all stakeholders. “CGAP pub-lications and knowledge products are consideredamong the most important and influential sourcesin…microfinance.”

“The CGAP operational team has produced high-quality outputs during Phase III. With a few excep-tions, the team is on track to produce almost alloutputs.”

Accountability

“CGAP has adequate governance and manage-ment systems that are transparent and thorough inproviding information about the program.” Meas-urement of outputs is well developed, but morework is needed on tracking contribution to longerterm outcomes and objectives.

Value for Money

“[CGAP is a] cost-effective and competitive or-ganization. [The evaluation team is] confident thatCGAP represents value for money and it comparesfavorably with other organizations with similar ac-tivities and mission.”

“Overall, CGAP is a powerful and pivotal force inthe field, [and it plays] a critical role in helping oth-ers to build inclusive financial systems. It produceshigh-quality, high-value work that is universally re-spected. CGAP provides good value for moneyand has earned a highly coveted brand. It has longmoved from being a ‘program’ to being an organ-ization of central importance to helping achievethe vision of ‘access for all’ in terms of financialservices.”

Selected Findings from theEvaluation of CGAP Phase III

The evaluation was conducted by a team of three independent consultants consisting of KlausMaurer, Sarah Forster, and Michael Mithika. The evaluation team conferred with a broad rangeof stakeholders and conducted a sweeping literature review.


A sound financial system for the poor must beable to process small transactions at low cost.

Technology, when paired with appropriate regulation,could bring seismic transformation for poor people whohave been left out of the financial system so far, or forwhom the costs of financial services have beenexorbitantly high. Although financial services probablywill never reach everyone, a new financial system, withnew delivery technologies and new business models,holds the promise to reach vastly more people—andmore people in remote areas—than traditional, costly,labor-intensive microfinance business models ever could.Also, because poor people transact in very smallamounts, costs relative to transaction size have been thereal barrier to growth. A system that radically reducesthe costs and risks of doing business for both serviceproviders and customers may actually reach massivenumbers of poor people. Technology can make thishappen—initially by enabling cheaper, more convenientmoney transfers, but also eventually by facilitatingsavings deposits and even loan disbursement andpayment.

Such a system will depend on mechanisms for sharingtransactional and institutional data that are accurate andcomparable, allowing managers of financial institutions,

regulators, auditors, domestic and international lendersand investors, and, indeed, poor clients themselves tomake informed decisions.

CGAP invests in innovative technology-based approachesto both reducing transaction costs and producingstandardized performance data. We also support market-based programs to encourage transparency about financialand social performance of microfinance providers.

DEVELOPING DELIVERY CHANNELSUSING NEW TECHNOLOGIES

In FY 2007, CGAP began a major expansion of itscommitment to using technology to make financialservices accessible to poor people. The $26 millionprogram is co-funded by a four-year, $24 million grantfrom the Bill and Melinda Gates Foundation. Theprogram advises financial institutions, governments,technology companies, and donors; conducts marketresearch on poor people’s adoption of technology; andoffers grant funding for projects that have near-termpotential to rapidly expand access to finance.

Our objectives are to massively increase access tofinance for poor people by (1) demonstrating viabletechnology approaches that overcome constraints to

Activities andAccomplishments

Building Financial Market Infrastructure


accessing payments services and ultimately loan andsavings services to the poor, and (2) advocatingregulatory frameworks that balance opportunities forexpanded access with adequate protection for consumersand the financial system.

Recognizing the dynamic influence of technology infinancial services for the poor, CGAP moved quickly inFY 2007 to create impact, both in specific markets andglobally, by• Launching the development of nine demonstrationprojects selected from more than 200 concept notes.

• Leading groundbreaking research on the use of“nonbank agents”: branchless banking.

• Initiating the first-ever market survey of low-incomemobile phone banking users.

DEMONSTRATION PROJECTS

More than 200 MFIs, banks, payments companies,retailers, and mobile network operators responded toCGAP’s call for proposals to deliver financial services topoor people using technology solutions. The nineprojects chosen for further development focus primarilyon the agent model, using small retail outlets to deliverfinancial services on behalf of a provider. Future calls forproposals will address other dimensions of technology aswell, such as shared information systems and credit cyclemanagement. CGAP is particularly interested in projectswhere the market is challenging, such as countries withpost-conflict environments, and where there is greatpotential to leap-frog development and produce rapidimpact in scale or in reaching clients previously leftbehind.

Credibanco Visa (Colombia)Visa’s acquiring network in Colombia will workwith banks to attract customers and establish anagent network to offer banking transactions over apoint-of-sale (POS) system.

Equity Bank (Kenya)This fast-growing mid-sized bank will develop arural agent network with mobile phones and POS.

FSD Trust Social Protection Payments ChallengeFund (Kenya)This effort will support the use of technology todeliver financial services and distribute social pro-tection payments to vulnerable populations.

GXI, Inc. (Philippines)GXI, part of Globe Telecom, the country’s second-largest mobile telephone provider, will offer “mo-bile wallets” and cash transfers at airtime dealersin remote rural areas.

Maldives Monetary Authority (Maldives)The Government of Maldives aims to achieve uni-versal access to banking and reduce cash usethrough an interoperable m-banking system and anationwide agent network.

Tameer Bank (Pakistan)This microfinance bank will use POS-equippedbanking agents and mobile phone banking to ex-tend financial access to previously excluded popu-lations in rural, urban, and peri-urban locations.

WIZZIT Bank (South Africa)WIZZIT will extend transaction banking to 500,000unbanked farm laborers, rural households, and in-habitants of smaller towns via mobile banking anda Maestro debit card.

XacBank (Mongolia)This microfinance bank will test mobile bankingand an agent channel to reduce cost of service inremote areas.

Projects Approved or Conditionally Approved in Fiscal Year 2007


POLICY AND REGULATION

In many countries, low-income people are conductingfinancial transactions through nonfinancial institutions,such as retail outlets (convenience stores, gas stations,etc.), or other mechanisms, such as mobile phones.CGAP coined the phrase “branchless banking” to refer tothese forms of financial transactions that are taking holdin many countries as a way to reach unserved areas. Thisyear, CGAP accelerated its engagement with policymakers and regulators to understand the key issues intechnology-based banking and to promote soundregulatory frameworks for these new financial servicedelivery mechanisms.

The first task was to understand (1) the risks branchlessbanking models pose compared with traditional bankingmodels and (2) the regulatory responses in countriesalready grappling with these questions. In collaborationwith the UK Department for International Development(DFID) and GSM Association, in FY 2007, CGAPdeveloped a technical tool to assess the regulatoryenvironment for branchless banking and conducteddiagnostic exercises in seven countries: Brazil, India,Kenya, Pakistan, the Philippines, Russia, and SouthAfrica. Already, regulators in the Philippines, Kenya, andPakistan have sought CGAP’s guidance as they developregulation for branchless banking models.

MARKET RESEARCH

Policy and regulation were also at the forefront ofCGAP’s technology research agenda in 2007. In parallelwith the diagnostic exercises, CGAP drew together theexperience of five pioneering countries in branchlessbanking—Brazil, India, South Africa, the Philippines,and Kenya—and explored the main issues involved inregulating branchless banking, particularly regarding theuse of retail agents. The findings were published inCGAP Focus Note No. 38, “Use of Agents in BranchlessBanking for the Poor: Rewards, Risks, and Regulation.”

Understanding how poor people use technology (orwhy they do not use it) to access financial services iscritical to designing effective delivery mechanisms thatcan be scaled up. This learning agenda is an important

component of CGAP’s technology work. In November2006, CGAP, the United Nations Foundation, and theVodafone Group Foundation conducted a survey on howlow-income people view and use banking throughmobile phones (called “m-banking”) in South Africa.

Like the South Africa m-banking study, other researchefforts have been and will continue to be collaborativeefforts. CGAP’s Technology Program has developedrelationships with major industry organizations. Theseinclude GSM Association (mobile operators), ATMIndustry Association (ATM manufacturers), DFID,FinMark, Microsoft Research India, Visa International,Vodafone, and Nokia.

TRANSPARENT REPORTING

Improving financial transparency throughout themicrofinance industry is a cornerstone of CGAP’s work.High-quality financial reporting is an essential part of afunctioning financial system because it allows investorsto make informed decisions, ensures that financialproviders function professionally, and most important,protects microfinance clients by exposing poorpractices.

INFORMATION SYSTEMS FUND

Strong information systems (IS) are essential to buildinga financial system that can serve the poor. However,many institutions lack the professional expertise toanalyze their business and technology needs, selectsoftware packages, and improve their existing systems.The Information Systems Fund is designed to improvethe capacity of MFIs to make good investment decisionsby offering co-financing to hire specialized ISconsultants. In FY 2007, CGAP helped finance 28detailed assessments of different MFIs’ IS needs. Nearly100 such assessments have been completed in the pasttwo years.

RATING FUND

The Rating Fund is a multidonor initiative funded byCGAP, the Inter-American Development Bank, and theEuropean Commission. It offers co-financing for ratings


and assessments of MFIs by prequalified rating andassessment agencies. The fund’s key objective is toincrease the availability and quality of marketinformation on microfinance providers. By FY 2007, theRating Fund had committed grants for more than 400ratings and assessments. All the MFIs that receivefunding consent to publicly disclose their performanceinformation and make their ratings available on theRating Fund Web site (www.ratingfund.org). Nearly allwere first-time disclosures. This increased transparencyhas influenced funding flows to MFIs, making it easierfor them to attract social investors’ interest.

Ratings are now often used by microfinance investors aspart of their preinvestment due diligence and investmentmonitoring. After six years of operation, the Rating Fundis scheduled to conclude in FY 2008.

FINANCIAL TRANSPARENCY AWARDS

The CGAP Financial Transparency Awards are given toMFIs that comply with International Financial ReportingStandards and CGAP Financial Disclosure Guidelines.Qualifying institutions submit audited financial statementsthat are judged by an independent panel. Most important isthe feedback provided to every entrant, with each receiving

a detailed report offering concrete steps for improving itsfinancial reporting. The awards, held for the third time inFY 2007, attracted 231 entrants from 58 countries. Localpress conferences were arranged for the award winnerswith volunteering CGAP Council of Governors membersparticipating in ceremonies in several countries.

MICROFINANCE INFORMATION EXCHANGE

As of July 2007, nearly 1,000 microfinance providers and95 microfinance funders reported to the MicrofinanceInformation eXchange (MIX), the leading provider ofdata on MFIs. MIX provides detailed online informationon the performance of MFIs, funders, investors, networks,and service providers associated with the sector througha variety of publicly available platforms, including MIXMarket (www.mixmarket.org) andMicroBanking Bulletin.MFIs that submit detailed data on their performance toMicroBanking Bulletin receive customized performancereports and compare their institution’s performanceagainst peers. Created by CGAP and spun off in 2002,MIX is now a partnership of CGAP, CitigroupFoundation, Deutsche Bank Americas Foundation, OpenSociety Institute, and Rockdale Foundation. CGAP hastwo board seats, provides active oversight, and supportsMIX activities in many areas throughout the year.


Governments can play a positive role inmicrofinance, by creating policy environmentsthat enable and facilitate financial services forthe poor. CGAP works to change governmentactions that hinder the development ofmicrofinance (such as interest rate ceilings orsubsidized lending to specific target groups).In FY 2007, we expanded our work on advisinggovernments and disseminating standards onregulation and supervision. We responded tonumerous requests for short-term country-levelconsultations, while at the same timebroadening our areas of policy discussion toinclude topics such as the role of state banks inmicrofinance and consumer protection issues.

INTERNATIONAL ANDCOUNTRY-LEVEL POLICY CONSULTATIONS

Upon request, CGAP engages in country-levelconsultations with government agencies that wish toimprove their policy environment for pro-poor financial

services. We place priority on policy work that contributesconcretely to establishing appropriate enablingenvironments and helps to preempt policies or programsthat might undermine access to financial services.

In FY 2007, CGAP continued to provide short-termpolicy advice, including awareness-buildingconsultations, forums, seminars and workshops, andcritical reviews of draft strategies, policies, laws, andregulations affecting microfinance in almost 30 countries.

CGAP conducted full country-level policy diagnosticassessments in the Democratic Republic of Congo,Pakistan, and Syria. Policy diagnostics specific tobranchless banking were conducted in Brazil, India,Kenya, Pakistan, the Philippines, Russia, and SouthAfrica. CGAP provided comments on 17microfinance-related laws in many countries, includingBosnia, Kenya, and Sri Lanka. In Bosnia, CGAPprovided technical assistance to the centralbank/banking agencies on transparency regulationsunder the new microcredit organizations legislation.

Fostering Supportive Policy Environments

Branchless banking—distribution channelsequipped with information and communicationtechnologies that allow financial institutions andother commercial actors to offer financial servicesoutside of traditional bank premises—seems tohold the key to reaching huge numbers of poorcustomers who cannot be profitably served withconventional “bricks and mortar” branch-basedfinancial services. Policy makers and regulatorsfrom Afghanistan to Zambia find themselvesfacing the question of how to approachregulating this new and very fast developingspace at the convergence of telecommunicationsand financial services.

In FY 2007, CGAP continued its groundbreakingwork analyzing proportionate ways to regulatebranchless banking. Working with the U.K.Department for International Development, wedeveloped a tool to assess the regulatory

environment for branchless banking across arange of issues, including prudential regulation ofdeposits, outsourcing, the use of agents,competition policy, taxation, and others. CGAPthen conducted diagnostic assessments in sevencountries at the frontlines: Brazil, India, Kenya,Pakistan, the Philippines, Russia, and South Africa.Policy experts spent an average of two weeksmeeting in-country with business and governmentleaders to assess the current policy environment.

The evidence gathered in these pioneeringcountries will help to inform policy makers andregulators in all countries that want to unleash thepotential of branchless banking models to expandaccess. Following CGAP’s participation in a jointWorld Bank–IMF Financial Sector AssessmentProgram in Malawi, the diagnostic tool willcontinue to be used to examine financial accessas part of overall financial stability and growth.

Policy Diagnostics on Branchless Banking


In Kenya, we provided a detailed critique of draftprudential regulations and technical assistance on theregulatory approach to nondepository microlenders, bothunder Kenya’s new Microfinance Act. In Sri Lanka, wereviewed and commented on the draft Microfinance Act.

CGAP also engaged with governments in Ethiopia,Yemen, and Pakistan on their national microfinancestrategies. At the invitation of the National Bank ofEthiopia and the German Technical Cooperation(GTZ), CGAP advised on the key principles andpriorities for Ethiopia’s microfinance strategy. Theoverarching goals of the strategy are to help transitionmicrofinance in the country from a fragile, state-controlled niche to a commercial, market-based part ofthe financial sector.

National, regional, and international engagements withhigh-level financial system policy makers in FY 2007included forums co-sponsored with both houses of the

Russian Parliament, a Latin American forum co-sponsored with the Association of Supervisors of Banksof the Americas, and the first-ever seminar on access tofinance co-sponsored with the World Bank and theFinancial Stability Institute, which included leaders ofthe Basel Committee and the Bank for InternationalSettlements and leading policy makers from more than40 countries.

LAW LIBRARY

Two years ago, CGAP and the IRIS Center, a researchinstitute affiliated with the University of Maryland,launched the largest global database of country-levelinformation on microfinance-related regulation andsupervision. In FY 2007, the Law Library covered morethan 50 countries, and its use continues to growdramatically, making it one of the most popular CGAPresources on the Microfinance Gateway, with an averageof more than 41,000 page downloads each month.

REGIONAL INITIATIVESCGAP took several steps in FY 2007 toward contributing more directly to theregional development of microfinance, particularly in the Middle East and NorthAfrica (MENA), South Asia, Eastern Europe and Central Asia (ECA), and Africa.These regional initiatives enhance two-way learning between CGAP and ourinternational partners and the domestic clients we seek to serve. They also helpCGAP serve clients in the field more effectively and quickly.

Middle East and North Africa

The CGAP MENA Initiative significantly expandedactivities during its second year of operations inAmman, Jordan, working closely with partnersincluding IFC, Grameen-Jameel, United NationsDevelopment Fund, the German agency KfW, andothers to achieve a marked effect on efforts toscale up microfinance in the region. Thegovernments of Jordan, Syria, Yemen, Tunisia,Algeria, and Morocco and the PalestinianAuthority have engaged CGAP’s assistance indeveloping policy frameworks conducive to ahealthy microfinance industry. CGAP conductedpolicy diagnostics and supported new laws andpolicy statements in Syria, Yemen, and Algeria.Donor agencies active in the region commendedCGAP for increasing aid effectiveness in FY 2007through CGAP’s role as a service center for field-based donors, providing country-specific advice,organizing regional and country donorcoordination meetings, offering regional donortraining, and publishing CGAP’s MENA newsletter,with partner activity updates to boost capacity andinformation exchange.

Finally, CGAP advised new institutions and projects,including banks downscaling in Jordan and Syriaand postal services in Yemen offering microfinanceservices. A regional workshop on poverty lendingintroduced MFIs and donors to new global ideas onlinking social safety nets to microfinance.

Eastern Europe and Central Asia

Two years ago, CGAP and the Poland-basedMicrofinance Centre launched a regional hub forECA based in Almaty, Kazakhstan. This hub aims tostrengthen microfinance in the region throughinformation exchange and advisory and trainingservices to microfinance practitioners, governmentpolicy makers, and donors. FY 2007 was marked bythe establishment of strong relationships withregulatory authorities and key policy makers in theregion. Training events were conducted for centralbanks, ministries of finance, and other policymakers in Kyrgyzstan, Tajikistan, and Uzbekistan.The National Bank of Kyrgyzstan invited CGAP toserve as a member of the Medium-Term NationalMicrofinance Strategy development working group.

CGAP also completed a performancebenchmarking report on MFIs in Central Asia thatprovides financial and statistical data for financialinstitutions and an overview of country-specificlegal and regulatory environments, macroeconomicfeatures, and banking sectors—leading to a surgeof investor interest in the region. In addition, CGAPconducted the first-ever donor survey for CentralAsia, with information on donor funding,instruments, and types of interventions from 2000to 2007 for all 11 donor agencies operating in theregion. As part of our outreach in the area, keyCGAP publications were translated into Russianand widely disseminated, and a donor trainingcourse was held in Almaty.


Africa

CGAP continued its deep involvement in Africawith special attention to funder coordination,advisory services for governments and centralbanks, and promotion of financial transparency andimproved financial infrastructure. CGAP completedthe second annual regional funder survey to trackfunding programs and promote informationexchange among the funding organizationsoperating in Africa. Throughout FY 2007, CGAPconsiderably scaled up its engagement withgovernments and policy makers by responding torequests for comments on draft microfinance laws,regulations, and national strategies and providing

training to central banks. For example, we providedadvisory services or policy and law reviews inMadagascar, Nigeria, Rwanda, Kenya, theDemocratic Republic of Congo, Mali, Uganda,Benin, Sudan, and BCEAO. In addition, CGAPpromoted financial transparency standards in theregion through seminars on auditing MFIs.

Training continued to be a key activity in theregion. CAPAF, the regional training programworking in 15 francophone countries and co-funded by CGAP, the French Ministry of ForeignAffairs, and USAID, continued its well-knownseries of financial management training programsthrough 20 local and regional training partners.


The microfinance funding landscape hasbecome increasingly diverse and complex, withmyriad new funders vying to become involvedin the sector: 30 microfinance investmentvehicles (MIVs) have been created in just thelast two years, bringing the total to over 80.Private philanthropies, including the Bill andMelinda Gates Foundation, the OmidyarNetwork, and the new MasterCard Foundation,have committed to long-term investment inmicrofinance. Local funders, includinggovernments from countries like Venezuela,Benin, and Kazakhstan and national/regionalpublic apexes, are becoming increasingly activein the sector. IFIs—the private investment armof public development agencies—are alsostepping up their microfinance fundingconsiderably, and traditional public donors,such as bilateral and multilateral agencies,continue to play a significant role.

In many places, developing a local financial market thatcan provide local deposits and other financial resourcesfor microfinance is a long and difficult task. In themedium term, well-targeted external funding from alltypes of funders is needed to help countries build thenecessary infrastructure and capacity. Unfortunately,funding is often misdirected and/or concentrated,leaving some countries and regions with few resourcesand important gaps, such as capacity building,unattended. Some public grants and loans also competewith local or private flows, potentially thwarting long-term local market development.

CGAP is well placed to work with its members andother funders to improve the quality of funding tomicrofinance. The three main dimensions to CGAP’s aideffectiveness work are tracking funding flows, promotinggood practice standards, and providing strategicadvisory services.

TRACKING FUNDING FLOWS

In 2007, CGAP continued research on the increasinglyvaried and complex funding flows to microfinance. Thepreliminary results were published as a draft paper,“Managing the Floodgates? Making the Most ofInternational Flows of Microfinance Funding.” The paperoffers an overview of the landscape of microfinancefunding; highlights the reasons for the incompleteness ofinformation about the levels, composition, andperformance of microfinance funding; outlines severaltrends; and offers thoughts on how the different flows canbe channeled in more complementary and effective ways.

Foreign Capital Investment in Microfinance. Foreigncapital investment in microfinance is surging, driven byIFIs and MIVs. IFI investment in microfinance more thandoubled from $1 billion in 2004 to $2.3 billion in 2006,and the MIV portfolio grew more than threefold duringthe same period from $600 million to $2 billion. Severalstriking trends emerged from surveys conducted in FY2007. On a positive note, more equity is available,investments to Africa are increasing, innovative deals arebroadening the investor base, and more local currencydenominated debt is available. But concentration in afew regions and in a limited number of institutionsremains an issue. There is also little transparency onMIV performance, and concerns about crowding outprivate investors are growing.

Using the results of surveys of IFIs and MIVs, CGAPorganized an online blog on the role of IFI funding andpresented the findings at numerous conferences. Inaddition, with partners such as FMO, IFC, and theNetherlands Development Finance Committee, CGAPco-organized meetings with IFIs and MIVs to discusstheir role and added value in a quickly evolvingmicrofinance sector. CGAP also developed and pilot-testedMicrofinance Investment Vehicle Disclosure Guidelines,designed to increase transparency on the structure,performance, and outreach of the funds currentlyinvesting in microfinance.

Improving the Effectiveness of Microfinance Funding


PROMOTING STANDARDS FOR FUNDERS

SmartAid Index. CGAP’s approach to aid effectiveness isto focus on the one thing funding agencies canchange—their own way of doing business, rather thancountry-level issues. Following peer reviews of donoragencies’ microfinance work, CGAP developed aframework of five essential elements for improving theway funding agencies support microfinance. We alsoprovided overall ratings to the 17 participating agencieson their performance.

The new pilot SmartAid Index goes one step further tocreate standards for measuring and scoring how wellagencies’ internal systems, policies, procedures, andincentives are set up to effectively support microfinance.The Index will help microfinance funders assess andbenchmark performance, provide incentives to makeimprovements, and further stimulate the internationaldebate on the quality of aid.

To develop the Index, CGAP collaborated with expertsfrom the Center for Global Development, CGAPmember focal points, field staff, and ExecutiveCommittee members. In FY 2007, nine agenciesrepresenting a broad range of funders volunteered toparticipate in a pilot round, and CGAP finalized 20indicators. Agencies will report to a four-person reviewboard that will score each agency. First results will beavailable in FY 2008.

Good Practice Guidelines for Funders of Microfinance.After two years of consensus building, field testing, andextensive feedback, CGAP published the second editionof Good Practice Guidelines for Funders of Microfinance. TheGuidelines capture 30 years of lessons learned and provideconcrete operational advice for staff working inmicrofinance. The Guidelines are a tool for all funders,including development agencies, foundations, social andcommercial investors, and international NGOs.

STRATEGIC ADVISORY SERVICES

CGAP provides strategic advisory services on a demand-driven basis, including technical assistance to helpfunders with considerable resources allocated tomicrofinance to improve their operations. Typically,CGAP’s work is focused on helping agencies followgood practices and improve internal systems, includingstrategic planning, transparent reporting, and stafftraining. By working with a range of funders, CGAP alsoseeks to shed light on how different funders can bestdeploy their funds and what kinds of partnerships arepossible. Since FY 2005, CGAP has also extended its aideffectiveness work to where it ultimately matters most—at the regional and country level—by leveraging CGAP’smembers, a wide network of industry contacts, and itsregional hubs. The country-level effectiveness andaccountability reviews (CLEARs) have been a lynchpinof this work. CLEARs are designed to help donorsidentify gaps and opportunities in the financial system ofthe countries where they work and to designinterventions based on their comparative advantage.

Reports for CLEARs conducted in Uganda, Cambodia,Madagascar, Sri Lanka, and Nicaragua were completedin FY 2005 and FY 2006 and are available on CGAP’sWeb site. CLEARs highlight the importance ofcoordination among funders and how governments canplay a conducive role in helping to develop financialsystems. CLEARs have caused numerous agencies torethink programming decisions and improve thedesign of interventions while also reignitingcoordination among funders and facilitating advocacywork with governments. CGAP is now synthesizinglessons learned and developing a CLEAR technicalguide to help others take up the methodology. This isexpected to roll out in FY 2008.


At the request of the State Bank of Pakistan (SBP) andseveral donors, CGAP conducted a CLEAR in Pakistan,with a focus on the policy environment formicrofinance. This is the first time a CLEAR has beenconducted in conjunction with a CGAP policydiagnostic review.

The Pakistan review revealed that, despite a soundregulatory framework for microfinance and significantinjections of donor funding (estimated at nearly US$400 million over the past five years), Pakistan lacksstrong, sustainable MFIs. However, heightened interestby the government of Pakistan and several new projects,if harnessed appropriately, offer hope for a new directionand significant growth. The review suggested sevenpriority recommendations to the government of Pakistanand to funders.

After the review, CGAP individually briefed and advisedseveral funders, including Asian Development Bank,DFID, International Fund for Agricultural Development,KfW, and the World Bank on their microfinancestrategies for Pakistan. CGAP also provides ongoingadvice to SBP and has conducted an analysis of theopportunities and constraints to branchless banking inthe country.

Another example of CGAP’s advisory work following onfrom the CLEARs is in Sri Lanka. In partnership with theOffice of the Special Envoy for Tsunami Recovery(headed by former U.S. President Bill Clinton) and GTZ,CGAP organized a donor meeting in Colombo in August2006 to improve support for microfinance. At themeeting, the Donor Microfinance Network adopted “rulesof the game” for microfinance funding and agreed to pilota common reporting framework for MFIs. Six funders alsoagreed to co-fund a joint review of the impact ofmicrofinance funding in post-tsunami Sri Lanka.

CGAP continues to collaborate closely with theEuropean Union and the African, Caribbean, andPacific (ACP) states on their MicrofinanceFramework Programme. The Programme helpsexpand access to a wide range of quality financialservices to poor people in ACP countries. Theprogram’s goal is to provide a demonstrationmodel for effective funding of microfinance withinthe European Community. In FY 2007, theProgramme established performance-basedcontracts and a standardized reporting system tomonitor the 11 grants awarded in FY 2006—thefirst time that the EC applied systemic

performance monitoring following microfinancegood practices. The grants were made to a rangeof partners to diversify financial products andservices; apply new technologies; expand to ruraland remote areas; enhance transparency; andestablish "greenfield" microfinance banks. Inaddition, the Programme provided scholarships toACP policy makers to attend the BoulderMicrofinance Training and advised aUNDP/UNCDF Financial Services SectorAssessment of five Pacific countries to identifyways to scale up access to finance.

EU/ACP Microfinance Framework Programme

“The Pakistan CLEAR &Policy Diagnostic Reportpresents an excellent analysisof the microfinance marketin Pakistan, draws coherentconclusions and providespractical recommendationsfor policy makers and donors.”

—Lioba Solbach, KfW Entwicklungsbank


In October 2006, CGAP hosted the 2nd HighLevel Meeting of CGAP members, Better Aid forAccess to Finance, in Paris. Co-chaired by JeanMichel Severino (AFD, French Agency forInternational Development) and Kemal Derviş(UNDP), the meeting highlighted the commitmentof the leaders of the world’s largest aid agenciesto improving aid effectiveness in microfinance. Theleaders—representing bilateral and multilateral aidagencies, international financial institutions, andprivate foundations—spoke candidly about howtheir agencies work, the impact—negative and

positive—of their actions, how subsidies can bebest put to work with private actors to helpunleash domestic financial markets, and thechanges they are committed to making. In theCompact for Better Aid for Access to Finance, thedevelopment leaders pledged to improve howthey spend funds for microfinance.

CGAP has had follow-up visits with seniormanagement of numerous agencies to jointlyencourage operational staff to work toward thegoals of the pledge. The Compact’s fouractionable commitments are as follows:

• Measuring the quality of aid management(reporting to a new SmartAid Index)

• Implementing the Good Practice Guidelinesfor Funders of Microfinance

• Improving field-level coordination

• Exploring how best to partner with theprivate sector

Better Aid for Access to Finance, 2nd High-Level Meeting of Agency Heads

“When put into action, thispledge will mean that morepoor people in developingcountries will have betteraccess to a diverse range offinancial services.”


CGAP is focused on overcoming the lack ofsufficient retail capacity as the single mostimportant bottleneck in scaling up microfinanceservices for poor people worldwide. To thisend, CGAP continued to work with a variety ofinstitutions and delivery channels in FY 2007.

RETAIL ADVISORY SERVICE

Through the Retail Advisory Service, CGAP helpsinterested commercial banks develop the services andproducts that will allow them to serve poor clients. TheRetail Advisory Service offers banks and othercommercial retail providers a package of technicalassistance, co-financed by CGAP and the banksthemselves. Services include the following:• Management information systems (MIS) designed tocustomize each bank’s existing information technologycapacity to fit microfinance specifications

• Product and procedure design and integration ofmicrofinance products into the bank’s existing services

• New product launches• Marketing for target-group-oriented campaigns• Training in good practice microfinance and lendingtechnologies

• Strategic planning and human resource management

As of June 2007, 10 commercial banks with retailactivities in Jordan, Kenya, Brazil, South Africa,Pakistan, Egypt, Russia, and Morocco have developednew microfinance services or made substantialimprovements to existing products and increased theiroutreach with technical assistance from CGAP. Examplesof the work we have done in FY 2007 includedeveloping housing loans for slum dwellers in Moroccoand providing microfinance products through thenetwork of post offices in Jordan. After three years ofpilots, the Retail Advisory Service will wind downoperations by the end of 2007, and a synthesis oncommercial bank downscaling will be prepared.

SOCIAL PERFORMANCE

Many financial service providers and the organizationsthat fund them are seeking rigorous and transparentways to determine whether microfinance is trulyachieving social goals, such as improved nutrition,health, housing, and education. The Social PerformanceTask Force, formed in 2005 by the Ford Foundation,Argidius Foundation, and CGAP, is a group of expertsthat has taken on the challenge of establishingstandardized measures of social performance inmicrofinance. In FY 2007, CGAP worked with keystakeholders in the Task Force to develop a globalreporting format on social performance for MFIs.

Promoting Diverse Institutions and Delivery Channels


In June, CGAP co-hosted the fifth meeting of the TaskForce, at which members agreed on a common set ofindicators to track three dimensions of socialperformance:• Intent indicators describe whether institutions have aclearly defined social mission and social goals.

• Process indicators consider whether institutions havethe operational set-up to track achievement of theirsocial objectives.

• Results indicators demonstrate whether institutionsare reaching poorer, more marginalized, and morevulnerable populations and whether clients areexperiencing positive social and economic changes.

The reporting format will be included on MIX Market.Institutions can choose to report on some or all of theindicators.

To complement this framework, CGAP has also beenworking with microfinance researcher Mark Schreiner,the Ford Foundation, and Grameen Foundation todevelop and promote the Progress Out of Poverty Index(PPI). PPI is a simple, country-specific scorecard thatallows MFIs to reliably document and track the povertylevels of their clientele. It is a practical tool forinstitutions that want to report on results indicators.

PRO-POOR INNOVATION CHALLENGE

One of the critical challenges facing the microfinanceindustry is the development of financial products andmethodologies for very poor or difficult-to-reachpopulations. The CGAP Pro-Poor Innovation Challenge(PPIC) seeks to demonstrate that microfinance can reachpoorer people and services can be designed to reducetheir vulnerability. The program provides awards of upto $50,000 to small and large institutions that developinnovative financial products and methodologies toserve very poor or marginalized clients. To date, CGAPhas granted PPIC awards to 54 MFIs in Asia, Africa,Latin America, and Eastern Europe.

The ninth round of PPIC, which ran in FY 2007, centered oninnovative partnerships between financial and nonfinancialservices. The winners, selected from an applicant pool ofmore than 200 institutions from around the world, wereHabitat for Humanity (Armenia), BRAC (Southern Sudan),FarmConcern International (Kenya), FINCA (Afghanistan),and Tamweelcom (Jordan). The learning generated from thisround will contribute to CGAP’s growing body of researchon creating appropriate linkages among governments,nongovernmental organizations, and financial serviceproviders to ensure that poor people have access to a varietyof financial and nonfinancial services.


CGAP promotes the development of strongand dynamic domestic financial markets thatprovide quality services to a wide range of poorclients. We place special emphasis on clientswho are poorer than those currently reachedby microfinance. Depending on theircircumstances, the poor need differentfinancial services at different points in time,whether it is a small loan, a safe place to savemoney, or the ability to transfer or receive cashconveniently and safely. In FY 2007, CGAPscaled up its savings initiative and continued todevelop work on international remittances anddomestic money transfers. We also continuedwork on programs for the extremely poor thatsequence grant support, livelihood training,and savings training to ultimately “graduate”clients into mainstream microfinance programs.

SAVINGS

A safe means of saving money is a critical financial toolfor poor and vulnerable households. Many poor peoplewant to save as insurance against future emergencies orfor future investment or consumption, but they areconstrained by the multiple demands on their limitedearnings and the lack of appropriate deposit services.Poor people want secure, convenient deposit servicesthat allow for small balances and offer easy access totheir funds.

CGAP’s savings initiative seeks to improve theknowledge and practice of small savings mobilizationamong financial institutions, policy makers, and funders.We also work to promote the importance of depositmobilization as a critical source of funding formicrofinance. Over the past two years, CGAPconducted diagnostics in five countries to identifyobstacles to providing quality deposit services for poorclients and opportunities for improving their supply. InFY 2007, CGAP published “Safe and Accessible:Bringing Poor Savers into the Formal Financial System,”which synthesized the diagnostics’ insight into thecomplex factors affecting supply and demand for small

deposit services. The assessments also served to test amethodology that will be published as a technical guidefor donors and other funders in 2007.

In addition, research has been conducted on the cost ofoffering small-balance deposit services for MFIs, the roleof savings in an institution’s capital structure, and themarket demand for deposit services. This work isavailable on the Savings Information Resource Center(www.cgap.org/savings), which offers a user-friendly wayto obtain the newest information about small-balancedeposit mobilization.

MONEY TRANSFERS

In recent years, competitive pressures have lowered theprice of money transfers and increased the menu ofservices available between Latin America and the UnitedStates and Europe. But progress on internationalremittances has been uneven in other regions of theworld, and clients in many countries still lack access to

Developing Diverse Pro-Poor Financial Services


affordable, reliable domestic and intraregional moneytransfer services. CGAP is pursuing an array of activitiesintended to help financial institutions enter this market.

In FY 2007, CGAP completed a draft technical guide onmoney transfers that will serve as a tool for MFIsinterested in providing money transfer services to theirclients. The guide is currently being field tested and willbe finalized in December 2007. In March 2007, CGAPand the International Fund for AgriculturalDevelopment, the European Union, Spain, UNCDF,Luxembourg, and the Inter-American Development Banklaunched a technical assistance fund aimed at increasingthe capacity of institutions to offer money transferservices in rural areas.

GRADUATION PROGRAMS

Because microfinance is an inadequate tool to addresssevere or chronic poverty, CGAP is working with theFord Foundation to develop a methodology in whichsafety net programs that provide grants partner withMFIs to “graduate” people out of food insecurity intoappropriate financial services. These pilot projectscoordinate a broad package of services (food aid,livelihood training, asset/grant transfer, financial services)to create a pathway for the poorest to escape chronic foodinsecurity and dependence on subsidies. Over two years, aseries of services will be carefully sequenced to first createstability and food security in the household, developskills, build assets, and finally access financial services. InFY 2007, pilot projects involving approximately 300participants each were developed in Haiti, India (twopilots), Pakistan, and Yemen. To maximize learning fromthis program, rigorous impact assessments have beendesigned to accompany the pilots to determine the effectsthis approach has on the lives of the poor.


CGAP’s objective for all communications,across all technical areas, is maximizing impact.

In FY 2007, CGAP’s communications significantlyexpanded outreach through a series of partnerships—working, for example, with the Microfinance Center inPoland for the Eastern European and Central Asianregion—and through the launch of the nationalnetworks program in which 12 national and regionalgroups were selected to distribute CGAP publications indeveloping countries (particularly in Africa and LatinAmerica). This expansion was marked by a continuingpush to translate a steady stream of relevant CGAPpublications into six languages and significantlyincreasing dissemination of print copies of CGAPpublications in English and introducing dissemination ofCGAP publications in French and Spanish.

KNOWLEDGE MANAGEMENT

Knowledge management has become a key piece of ourcommunications strategy, underpinning all of CGAP’swork. In FY 2007 we pulled together all of CGAP’s Webassets onto one platform to improve internalmanagement processes, allow for greater engagementwith our partners, and improve our electroniccommunications.

We ran several successful virtual conferences throughthe year on the new platform, including one on thefuture of microfinance that involved 100 participantsacross five days and fed into the CGAP IV strategy.Portfolio, the CGAP newsletter, went electronic, with anaverage of 22,000 monthly page views.

The second phase of this project involves redesigningthe CGAP Web site and further tailoring our electronicand print distribution to ensure consistent, relevant,continuous, and on-time communications. Work onphase two will continue in FY 2008. In FY 2007,cgap.org received visitors from over 200 countries, withan average of 13,000 unique visitors a month.

PUBLICATIONS

In FY 2007, CGAP published more than 20 newpublications that were then distributed at an average rateof about 5,000 documents a month in hard copy alone.During the year, 100 of our publications were translatedinto French, Spanish, Portuguese, Arabic, Russian,Chinese, and Bahasa. These translations are availablefreely on cgap.org, and printed versions in French andSpanish are made available in relevant regions.

THE MICROFINANCE GATEWAY

The Microfinance Gateway facilitates innovation andengagement in microfinance by making the industry’scollective knowledge available and accessible online.Services include access to the latest research andpublications, regular highlights of current industrydebates and developments, specialized resource centers,organization and consultant profiles, job postings, andcurrent news and events in the field. More than 40,000individual users from over 150 countries visit the siteeach month, representing an average month-on-monthgrowth of 4.7 percent in FY 2007.

FY 2007 highlights included the launch of the SocialPerformance Resource Center, the first MicrofinanceGateway discussion blog on IFIs, and a doubling ofe-newsletter subscribers and profiled consultants. (For moreinformation, visit http://www.microfinancegateway.org.)In addition to the English-language site, which isconsistently a top site on Google for “microfinance,”the affiliate language sites, in French(www.french.microfinancegateway.org) and Arabic(www.arabic.microfinancegateway.org), continued toexpand global outreach in cooperation with partnerorganizations GRET and ADA in France and Sanabel inEgypt. CGAP has also begun a partnership with INCAEBusiness School in Costa Rica to develop a Spanishlanguage site, el Portal de Microfinanzas, with plans tolaunch in late 2007.

Communications and Publications


FOCUS NOTESNo. 42 CGAP Reflections on the Compartamos Initial Public Offering:

A Case Study on Microfinance Interest Rates and ProfitsNo. 41 Beyond Good Intentions: Measuring the Social Performance of Microfinance InstitutionsNo. 40 Guaranteed Loans to Microfinance Institutions: How Do They Add Value?No. 39 Financial Inclusion 2015: Four Scenarios for the Future of MicrofinanceNo. 38 Use of Agents in Branchless Banking for the Poor: Rewards, Risks, and RegulationNo. 37 Safe and Accessible: Bringing Poor Savers into the Formal Financial System

BRIEFSMicrofinance Investment Vehicles

PORTFOLIONo. 5 One Continent, Many SolutionsNo. 4 Better Aid?

TECHNICAL GUIDESAppraisal Guide for Microfinance InstitutionsFormat for Appraisal of Network Support OrganizationsMaking Money Transfers Work for Microfinance InstitutionsForeign Exchange Risk Mitigation TechniquesCommercial Loan Agreements

CONSENSUS GUIDELINESGood Practice Guidelines for Funders of Microfinance

REPORTS2006 Annual ReportPakistan Country-Level Effectiveness and Accountability Review (CLEAR)

with a Policy DiagnosticCGAP Client Survey 2006Mobile Phone Banking and Low-Income Customers: Evidence from South AfricaDiagnostic Reports on the Legal & Regulatory Environment for Microfinance, Algeria

New Publications


During FY 2007, CGAP’s InvestmentCommittee approved eight new projects, for atotal of $5.3 million, with co-financing of $1.6million from CGAP partners. Projects launchedthis fiscal year included Phase II of our researchefforts on small deposit mobilization, theMicrofinance Management Institute, acomprehensive Aid Effectiveness Initiative, andincreased budget support for CGAP’s globalpolicy efforts. CGAP has 33 open projects. Tomonitor and evaluate these projects, CGAPuses a combination of activities, includingreview by the Investment Committee, internalmonitoring reports, annual work plan reports,work plan updates to the Council of Governorsand Executive Committee, and monthly activityhighlights that are circulated among theCouncil of Governors and other stakeholders.

INTERNAL MONITORING

Performance threshold targets and monitoring indicatorsare established at the outset of all CGAP projects as partof the proposal process. These proposals are reviewedand approved by an Investment Committee consisting ofsenior World Bank technical staff and an ExecutiveCommittee representative. Monitoring reports arecompleted for all projects either semi-annually (forexternal grants) or annually (for internally managedinitiatives). At the end of each project, a final report isprepared highlighting key accomplishments, failures,and lessons learned. These reports are available toCGAP members and other interested partners.

EXTERNAL EVALUATIONS

CGAP commissions independent external evaluations ofmajor initiatives to measure outcomes against theobjectives of specific projects. In recent years, severalexternal evaluations have been conducted for the RatingFund, the Microfinance Gateway, and the MicrofinanceInformation Exchange as well as CGAP as a whole in itsPhase III. CGAP expects to continue this practice.Like many development organizations, CGAP iscontinuously reassessing its monitoring and evaluationsystem with a view toward strengthening the way itmonitors its activities. In FY 2007, CGAP initiated aprocess to review and improve its monitoring andevaluation system. The evaluation resulted in three keyrecommendations: (1) to identify output indicators thatcross thematic areas of work (e.g., technical assistance,research, publications, dissemination), (2) to collectcitations and other evidence of CGAP’s impact, and (3)to choose a small sample of projects for external impactassessments. These suggestions will be incorporated asCGAP reforms its system going forward.

Client-level impact assessments will be conducted onvarious pilot initiatives going forward. The CGAP/GatesTechnology Program and the graduation pilots havebuilt-in impact assessment components, where baselinesurveys and, in some instances, control groups have beencreated at the outset of the activity.

Monitoring and Evaluation


CGAP Strategy Going ForwardAs microfinance continues its rapid transformation, CGAP must also evolve to meet thechanging needs and challenges of the industry. In June 2007, CGAP’s Council of Governorsendorsed a new strategy that will guide CGAP for the next five years (2008–2013). Thisstrategy was shaped by extensive industry-wide consultations, including a scenario-buildingexercise that analyzed key global forces impacting the future of microfinance, a global clientsurvey, an independent external mid-term evaluation of CGAP, a virtual conference on thefuture of microfinance and the role CGAP should play, and focus groups with microfinancepractitioners, donors, investors, and policy makers in different regions of the world.


Over the next five years, CGAP’s overarching objectiveremains helping to build financial systems that work forthe poor, with a particular emphasis on building local,deposit-driven markets. CGAP’s focus, for at least thenext five years, is to ensure that those local financialmarkets are equitable and efficient and that finance forthe poor is fully integrated into mainstream markets.

By equitable we mean ensuring that the increasingcommercial focus of microfinance, or access to finance,does not leave some poor people, regions, or countriesbehind; that subsidies are equitably allocated; that loanand other service costs are competitive, ethical, andtransparent; and that sound business practices arerespected. We aim to ensure that financial service accesscontributes to reducing poverty.

By efficient we mean improving the way local financialsystems operate. At the institutional level, this meanslowering transaction costs for clients throughtechnology, streamlined operations, and enhancedcompetition. It also means effective aid delivery andinvestment mechanisms on the part of international anddomestic funders. Sound and deep market infrastructure,good information, and policies that stimulate accesswhile protecting clients are critical to efficient andequitable domestic financial markets.

The next phase of CGAP’s work will focus on three rolesthat emerge from our distinct comparative advantage:• Developing standards and providing advocacy andadvisory services around those standards

• Providing objective, high-quality market intelligencecomplemented by sector data and analytics

• Supporting experimental new approaches, deliverychannels, and product designs

An important value that cuts across each of these roles isour aim to be an informed, credible, and objectiveindustry organization that is able to raise controversialissues and advocate for difficult change and reform. Weseek to be open to all views and to be free to take well-considered, even if unpopular, positions. We seek tostimulate and facilitate industry debate. CGAP aims toleverage the first- and second-generation comparativeadvantage it has earned as an asset to further its mission.

With the rapid growth, commercialization, and highprofile microfinance has gained, we will commit toasking the tough questions and helping to bring deepissues to light. We will invite discussion around theintersection of social and commercial aims and thetrade-offs involved in microfinance. We will explore,provide data, and engage with industry critics on theextent to which microfinance can benefit very poor anddisadvantaged people. We will examine the risks andadvantages of burgeoning cross-border funds. In short,we will use the objectivity our structure permits toconfront even the most controversial issues in thebusiness of providing financial services to poor people.


CGAP has an autonomous governance structure thatconsists of the Council of Governors (CG) of memberdonors, the Executive Committee (Excom), and theInvestment Committee (IC). Housed at the World Bank,the operational team implements CGAP’s activities.

The CG is CGAP’s highest governing body and operatesas a general assembly. It is responsible for settingCGAP’s broad policies and strategic direction, providinginputs to the annual work plan and budget, adopting andimplementing CGAP consensus documents andguidelines, and determining the extension ordisbandment of CGAP. The CG has 33 members—bilateral and multilateral agencies, regional developmentbanks, private foundations, and IFIs—that are committedto building inclusive financial systems.

The Excom functions as CGAP’s board and executivegoverning body. It has oversight of CGAP’s activitiesand is responsible for providing strategic guidance to theoperational team and approving the work plan andbudget on behalf of the CG. The Excom is composed ofrepresentatives of the CG and leading microfinanceindustry experts.

The IC provides fiduciary oversight. The IC makesdecisions on key CGAP investment allocations andallocations for projects with budgets of more than$100,000. The IC meets several times a year and consistsof senior-level World Bank Group managers.

The operational team, overseen by the CGAPmanagement team, implements CGAP’s activities andprograms. A representative office in Paris providesoutreach and advisory services to funders.

Governance Structure


MULTILATERALMEMBER DONORS

African Development Bank (AfDB)Temporary Relocation AgencyRepresentatives: Mr. Mohamed Alinand Mr. Philibert Afrika1002 Tunis BelvédèreBP 323 TunisTunisiawww.afdb.org

Asian Development Bank (AsDB)Rural Finance DepartmentRepresentative: Mr. Nimal Fernando6 ADB AvenueP.O. Box 7890980 ManilaPhilippineswww.adb.org

European Commission (EC)EuropeAidRepresentatives: Mr. David Domesand Mr. Amadou TraoreRue de la Loi 41B-1040 BrusselsBelgiumwww.europa.eu.int

European Bank for Reconstructionand Development (EBRD)Representatives: Ms. Chikako Kunoand Ms. Maria Teresa ZappiaOne Exchange SquareLondon, EC2A 2JNUnited Kingdomwww.ebrd.org

European Investment Bank (EIB)Representatives: Mr. Cyrille Arnouldand Mr. Edvardas Bumsteinas100 Boulevard Konrad AdenauerL-2950 Luxembourgwww.eib.org

Netherlands DevelopmentFinance Company (FMO)Representatives: Mr. Els Boerhofand Mr. Arthur ArnoldP.O. Box 930602509 AB The HagueThe Netherlandswww.fmo.nl

Inter-American Development Bank (IDB)Micro, Small and Medium EnterpriseDivisionRepresentatives: Mr. Alvaro Ramirez andMr. Dieter Wittkowski1300 New York Ave., N.W.Washington, DC 20577USAwww.iadb.org

International Finance Corporation (IFC)Representatives: Mr. Michael Klein, Mr.Matthew Gamser, and Ms. Mamta Shah2121 Pennsylvania Ave., N.W.Washington, DC 20433USAwww.ifc.org

International Fund forAgricultural Development (IFAD)Technical Advisory DivisionRepresentatives: Mr. Francesco Rispoliand Ms. Jamie AndersonVia del Serafico, 10700142 RomeItalywww.ifad.org

International Labour Office (ILO)Social Finance ProgramRepresentatives: Mr. Bernd Balkenholand Mr. Craig Churchill4, route des MorillonsCH 1211 Geneva 22Switzerlandwww.ilo.org

Multilateral Investment Fund (MIF)Representatives: Ms. Sandra H. Darvilleand Mr. Donald Terry1300 New York Ave., N.W.Washington, DC 20577USAwww.iadb.org

United Nations Capital DevelopmentFund (UNCDF)/UNDPRepresentatives: Mr. Richard Weingarten,Mr. Henri Dommel, and Mr. John TuckerTwo United Nations Plaza, 26th FloorNew York, NY 10017USAwww.undp.org

The World Bank GroupRepresentative: Mr. Carlos Cuevas1818 H St., N.W.Room J 10-077Washington, DC 20433USAwww.worldbank.org

BILATERALMEMBER DONORS

AUSTRALIA

Australian Agency for InternationalDevelopment (AusAID)Representatives: Ms. Nadira Mailewaand Mr. Terry HillsGPO Box 887Canberra ACT 2601Australiawww.ausaid.gov.au

CANADA

Canadian InternationalDevelopment AgencyRepresentative: Mr. Jonathan Rothschild200 Promenade du PortageGatineau (Quebec)K1A 0G4Canadawww.acdi-cida.gc.ca

DENMARK

Royal Danish Ministry of Foreign AffairsRepresentatives: Ms. Birthe E. Larsenand Mr. Morten ElkjaerAsiatisk Plads 2DK-1441 Copenhagen KDenmarkwww.um.dk

FINLAND

Ministry for Foreign Affairs of FinlandRepresentative: Mr. Marko KatilaPL/P.O. Box 176 (Katajanokanlaituri 3)FIN-00161 HelsinkiFinlandhttp://formin.finland.fi/english

Member Donors 2007


FRANCE

Agence Française de Développement(AFD)Representatives: Ms. Aude Flogny-Catrisse and Ms. Martha Stein-Sochas5, rue Roland Barthes75598 Paris Cedex 12Francewww.afd.fr

GERMANY

Kreditanstalt fur Wiederaufbau (KFW)Financial Sector Competency CenterRepresentative: Ms. Ulrike Haupt andMr. Martin HagenPalmengartenstr. 5-960325 Frankfurt am MainGermanywww.kfw.de

Federal Ministry for EconomicCooperation and Development (BMZ)Representative: Mr. Hendrik DenkerFriedrich-Ebert-Allee 4053113 BonnGermanywww.bmz.de

Die Deutsche Gesellschaft fürTechnische Zusammenarbeit (Societyfor Technical Cooperation) (GTZ)Financial Systems DevelopmentRepresentative: Ms. Gabriela BraunPostfach 5180Dag Hammersjolk Weg 1-565726 EschbornGermanywww.gtz.de

ITALY

Ministry of Foreign AffairsRepresentative: Mr. Filippo Scammaccadel MurgoPizzale della Farnesina 100194 RomeItalywww.esteri.it

JAPAN

Japan Bank for International Coopera-tion (JBIC)Social Development DepartmentRepresentatives: Mr. Yuho Hayakawa andMs. Sonoko Takahashi4-1 Ohtemachi 1-ChomeChiyoda-KuTokyo 100-8144Japanwww.jbic.go.jp

Ministry of Foreign AffairsEconomic Cooperation BureauRepresentative: Mr. Tomoyuki Nishiura2-2-1 KasumigasekiChiyoda-kuTokyo 100-8919Japanwww.mofa.fo.jp

Ministry of FinanceInternational BureauRepresentatives: Mr. Satoshi Tuchimotoand Mr. Toyohiro Makino3-1-1 KasumigasekiChiyoda-kuTokyo 100-8940Japanwww.mof.go.jp

Japan International Cooperation AgencyInstitute for International CooperationRepresentative: Mr. Koji Yamada10-5, Ichigaya Honmura-cho, Shinjuku-kuTokyo 162-8433Japanwww.jica.go.jp

The World BankOffice of the Executive Director forJapanRepresentative: Ms. Rie Kishino1818 H Street, N.W.MC 12-315Washington, DC 20433www.worldbank.org

LUXEMBOURG

Ministry of FinanceMultilateral Development FinancingRepresentative: Ms. Anouk Agnès3, rue de la CongrégationL- 2931 LuxembourgLuxembourgwww.etat.lu/FI

Ministry of Foreign AffairsDirection de la Coopération auDéveloppementRepresentative: Mr. Thierry Lippert6, rue de la CongrégationL-2931 LuxembourgLuxembourgwww.mae.lu

THE NETHERLANDS

Ministry of Foreign AffairsRepresentatives: Mr. Johan de Waardand Mr. Hans van der VeenBezuidenboutseweg 67P.O. Box 20061The Hague 2500 EBNetherlandswww.minbuza.nl

Rabobank Foundation(representing the NetherlandsMicrofinance Platform)Representative: Mr. Frank BakxP.O. Box 171003500 HG UtrechtThe Netherlandswww.rabobankfoundation.nl

NORWAY

Norwegian Ministry of Foreign Affairsof NorwayRepresentatives: Ms. Bente Weisser andMr. Berit FladbyP.O. Box 8114 DEPNO-0032 OsloNorwaywww.odin.dep.no/ud/engelsk

Norwegian Agency for DevelopmentCooperation (NORAD)Representative: Mr. Parvez KapoorRuselokkveien 26P.B. 8034 Dep.0030 OsloNorwaywww.odin.dep.no/ud/engelsk

SPAIN

Agencia Espanola de CooperaciónInternacional (AECI)Representatives: Mr. Manuel CadarsoGalárraga and Ms. Elena MadrazoHegewischAvenida Reyes Catolicos, 428040 MadridSpainwww.aeci.es

SWEDEN

Swedish International DevelopmentCooperation Agency (SIDA)Financial Sector DevelopmentRepresentatives: Mr. Ola Sahlén andMs. Anna SpringforsSveavagen 20S-105 25 StockholmSwedenwww.sida.se

SWITZERLAND

SwitzerlandSwiss Agency for Developmentand CooperationFinancial Sector OperationsRepresentative: Mr. Hansruedi PfeifferFreiburgstrasse 130CH-3003 BerneSwitzerlandwww.sdc.admin.ch


UNITED KINGDOM

Department for InternationalDevelopment (DFID)Financial Sector Team,Policy & Research DivisionRepresentative: Mr. Chris Bold1 Palace St.London SW1E 5HEUnited Kingdomwww.dfid.gov.uk/

UNITED STATES

United States Agency for InternationalDevelopment (USAID)Representative: Mr. Thomas Kennedy1300 Pennsylvania Ave., N.W.Washington, DC 20523USAwww.usaid.gov

FOUNDATIONMEMBER DONORS

The Ford FoundationRepresentative: Mr. Frank DeGiovanni320 East 43rd St.New York, NY 10017USAwww.fordfound.org

Michael and Susan Dell FoundationRepresentative: Ms. Caitlin BaronP.O. Box 163867Austin, TX 78716USAwww.msdf.org

Bill and Melinda Gates FoundationRepresentatives: Ms. Amolo Ng’weno,Ms. Priya Jaisinghani, Mr. LawrenceYanovitch, and Mr. Robert Christen1555 Eastlake Ave., EastSeattle, WA 98102USAwww.gatesfoundation.org

EXECUTIVECOMMITTEE MEMBERS

Mr. Carlos Cuevas (The World Bank)The World BankIFC

Ms. Martha Stein-Sochas (AFD)BelgiumEuropean CommissionEuropean Investment BankFranceLuxembourgThe NetherlandsSpainUnited Kingdom

Mr. Frank DeGiovanni, ChairIFADILOUNDP/UNCDFArgidius FoundationFord FoundationDell FoundationBill and Melinda Gates Foundation

Mr. Jonathan Rothschild (CIDA)AfDBAsDBAustraliaCanadaIDBJapanUnited StatesMIF

Ms. Gabriela Braun (GTZ)DenmarkEBRDFinlandGermanyItalyNorwaySwedenSwitzerland

Mr. Brian Branch (WOCCU)Global

Mr. Carlos Labarthe (Compartamos)Global

Ms. Marilou van Golstein Brouwers(Triodos Bank)Global

Mr. Vijay Mahajan (BASIX)Global

Ms. Elizabeth Littlefield (CEO CGAP)Ex officio

INVESTMENTCOMMITTEE

Michael Klein, Chair, Vice President,Finance and Private Sector Development,The World Bank

Elizabeth Adu, Vice-Chair, DeputyGeneral Counsel, Legal Department ofOperations, The World Bank

Junaid Kamal Ahmad, Sector Manager,Social Development Unit, The World Bank

Simon Bell, Sector Manager, Finance &Private Sector Development Unit, TheWorld Bank

Deepak Bhattasali, Lead Economist,Poverty Reduction & EconomicManagement Sector Department,The World Bank

Gerard Byam, Director, OperationalQuality & Knowledge Services, TheWorld Bank

Laurence Carter, Director, Small andMedium Enterprise Department,International Finance Corporation

Carlos Cuevas, Lead Financial Economist,Financial Sector Operations & Policy, TheWorld Bank

Sandra Darville, observer and alternate,Coordinator of Investment Unit,Multilateral Investment Fund,Inter-American Development Bank

Frank DeGiovanni, observer, Directorof Economic Development, The FordFoundation

Thomas Duvall, Chief Counsel,Cofinancing & Project Finance,The World Bank

Mamta Shah, Associate Director, GlobalFinancial Markets Operations, Interna-tional Finance Corporation

Lynne Sherburne-Benz, Country ProgramCoordinator, SE Asia Headquarters Unit,The World Bank

Donald Terry, observer and alternate,Manager, Multilateral Investment Fund,Inter-American Development Bank

Antony Thompson, Sector Manager,Africa Financial Sector, The World Bank

Gilles Veuillot, alternate, Counsel, LegalDepartment Africa, The World Bank


Elizabeth Littlefield, Director and CEO. Elizabeth Littlefieldis a director of the World Bank and the chief executiveofficer of CGAP. Previously she was the managing directorof JP Morgan’s Emerging Markets Capital Markets inLondon. As such, she was responsible for all bond offerings,structured financing, and credit ratings for emergingEurope, Middle East, Africa, and Central Asia. She and herteam won and executed more than 80 percent of all bondissues in these regions in the 1990s. Earlier, Littlefield spenta year-and-a-half living in West and Central Africa startingup and advising microfinance institutions. She has servedon many corporate and nonprofit boards and foundedseveral not-for-profit organizations. A U.S. and U.K.citizen, Littlefield is a graduate of Brown University inRhode Island and also studied at the École Nationale deSciences Politiques in Paris.

Julia Abakaeva, Microfinance Specialist. Julia Abakaeva joinedCGAP’s Retail Advisory Service program in 2005. Beforejoining CGAP she was a consultant at InternationaleProject Consult for nine years. She has a master’s degree inFinance and Management from Clark University. Shespeaks English and Russian.

Malika Anand, Associate Microfinance Analyst. Malika Anandjoined CGAP in 2006. Before joining CGAP she spent ayear in the Dominican Republic on a Fulbright Fellowship.She has a bachelor’s degree from the University of Chicagoin Public Policy Studies with a minor in South AsianLanguages and Civilizations. She speaks English, Spanish,and rudimentary Hindi.

Abigail Augusta, Associate Microfinance Analyst. AbigailAugusta works on the Microfinance Gateway. Beforejoining CGAP in 2007, she worked at a communitydevelopment credit union as a financial literacy trainer withDominican immigrants in New York. She holds a master’sdegree in International Development from the New Schooland a bachelor’s degree in Ethnomusicology fromDartmouth College. She speaks English, Spanish, and somePortuguese.

Carmencita B. Clay, Budget Officer. Carmencita Clay joinedCGAP in 1995. She handles all budget issues, administersCGAP’s trust funds, and works with member donors oncommitments to CGAP. Before joining CGAP, Clay workedat the U.S. Agency for International Development/Philippines, the Asian Development Bank, and variousdepartments in the World Bank. Clay has a bachelor’sdegree in Commerce and Accounting from the PhilippinesCollege of Commerce.

Ann Courtmanche, Senior Program Assistant. AnnCourtmanche works on CGAP’s policy advisory initiative.Before joining CGAP in 2006, Courtmanche was aninternational market analyst for U.S. Wheat Associates. Shehas a master’s degree in Agricultural Economics fromRutgers University and a bachelor’s degree in Economicsand French Literature from Hobart & William SmithColleges.

Tiphaine Crenn, Microfinance Analyst. Tiphaine Crenn joinedCGAP in 1998. She is currently a member of the AfricaTeam and concentrates on policy and communications inSub-Saharan Africa. Before joining CGAP, Crenn worked asa translator and bilingual lexicographer. She has a master’sdegree in Translation from the University of Ottawa,Canada. She speaks English and French and is proficient inSpanish.

Rula Dababneh, Senior Microfinance Specialist and MENA HubDirector. Rula Dababneh joined CGAP in 2005 to manageCGAP MENA Initiative activities to scale up microfinance inthe Arab World. Before joining CGAP, she was a managingdirector at ShoreBank International. Dababneh has over 20years’ experience in the finance, banking, private, andbusiness development sectors. She has a master’s degree inInternational Financial Management from the University ofGlasgow. She speaks Arabic and English.

Aude de Montesquiou, Associate Microfinance Analyst. Audede Montesquiou has worked on aid effectiveness inmicrofinance at CGAP since August 2005. Before joiningCGAP, she worked on microfinance impact assessments atPlaNet Finance in Paris. She has a master’s degree inDevelopment Studies from the School of Political Sciencein Paris and studied Literature, Law and History atUniversity of la Sorbonne.

Staff Biographies


Eric Duflos, Microfinance Specialist. Eric Duflos joined CGAPin 2003. He is based in CGAP’s Paris office where hemanages the Country-Level Effectiveness andAccountability Reviews. Before joining CGAP, Duflos spent7 years in Laos, where he worked with the United Nationsand the World Bank to help set up microfinance institutionsand policy frameworks. He has a master’s degree inManagement from the Lyon EM and a master’s degree inEconomics and International Relations from Johns Hopkins.He speaks English and French and knows German and Lao.

Evelyne Fraigneau, Director’s Assistant. Evelyne Fraigneaujoined CGAP in 1999. She provides assistance to thedirector and CEO. Before joining CGAP, Fraigneau workedin the World Bank’s Africa Region and at the French missionto the United Nations office in Geneva, Switzerland. Shestudied translation at St. Bénigne Institute in Dijon, France,and Georgetown University.

Zoë Gardner, Program Assistant. Zoë Gardner joined CGAPin 2003. She supports CGAP staff in its Paris office,including support on the effectiveness of funding, savings,and the Middle East/North Africa initiative. Before joiningCGAP, Gardner worked as an office manager in the filmproduction and publishing industries in Australia and hasalso worked in the media sector in the United Kingdomand for Texaco, Inc., in Bermuda.

Jasmina Glisovic-Mezieres, Microfinance Analyst. JasminaGlisovic-Mezieres joined CGAP in 2004. She works withthe savings team and the aid effectiveness team in CGAP’sParis office. Before joining CGAP, she worked as a creditmanager for the Danish Refugee Council (Serbia) and forthe Micro Development Fund. She has a master’s degree inMarketing and Business Administration. She speaks Englishand Serbo-Croatian and is proficient in French.

Idawati Harsongko, Team Assistant. Idawati Harsongkojoined CGAP in 2003 as a member of the budget andadministration team. Previously, Harsongko worked as ateam assistant for the World Bank Indonesia Country OfficeHuman Development Unit. She received a diploma inAccounting from the Institute of Economics (STIEPerbanas) in Jakarta.

Syed Hashemi, Senior Microfinance Specialist. Syed Hashemijoined CGAP in 1999. He concentrates on identifying pro-poor innovations and disseminating best practice lessonsrelated to poverty outreach and impact, including thedevelopment of social performance indicators for trackingchanges in the social and economic levels of microfinanceinstitution clients. Before joining CGAP, Hashemi directed theProgram for Research on Poverty Alleviation at Grameen Trustand taught Development Studies at Jahangirnagar Universityin Bangladesh. Hashemi has a Ph.D. in Economics from theUniversity of California at Riverside. He speaks English,Bangla, and conversational Hindi.

Martin Holtmann, Lead Financial Specialist. Martin Holtmannjoined CGAP in 2003 to co-manage its cooperation withcommercial banks and large retail organizations. Beforejoining CGAP, he was managing director of InternationaleProjekt Consult, where he provided advisory assistance tobanks and credit-granting nongovernmental organizationsin Eastern Europe and the newly independent states, Africa,and Latin America. Holtmann has a master’s degree inEconomics from Trier University and a master’s degree inPublic Administration from Harvard University. He iscurrently completing his doctorate in Finance at theGoethe Universität in Germany. Holtmann speaks English,German, Spanish, and Russian and is proficient in French.

Claudia Huber, Associate Microfinance Analyst. Claudia Huberjoined CGAP’s aid effectiveness team in Paris in May 2006.Previously, she worked with Banco los Andes ProCredit inBolivia, where she was trained as a credit officer. She has amaster’s degree in Business Administration/Economics and aCEMS Master in International Management from theUniversity of St. Gallen. Huber is fluent in German,English, French, and Spanish.

Jennifer Isern, Lead Microfinance Specialist. Jennifer Isernjoined CGAP in 1996. She has 18 years of experience indevelopment, including more than five years living in WestAfrica managing institutions. She leads CGAP’s Africa teamand coordinates CGAP’s money transfers initiative. Beforejoining CGAP, Isern was the regional technical adviser foreconomic development in West and Central Africa withCare International. She has a master’s degree fromPrinceton University and is a Chartered Financial Analyst.She speaks English and French and is proficient in Spanish.


Gautam Ivatury, Microfinance Specialist. Gautam Ivaturyjoined CGAP in 2003. He manages the MicrofinanceTechnology Program and works on several CGAPinitiatives in India. Before joining CGAP, Ivatury was vicepresident of Finance and Administration at SKSMicrofinance in India, an investment analyst atInternational Finance Corporation, and co-founded astartup education technology venture. He has a master’sdegree in International Affairs from Johns HopkinsUniversity. He is proficient in French and Hindi.

Farai Jena, Associate Microfinance Analyst. Farai Jena joinedCGAP in 2006. She provides research support across teamsand to the director and CEO. She also works on projectactivities in the Africa team and on pro-poor innovation.Before joining CGAP, she interned as a corporate financeanalyst with Deutsche Bank in London. Jena has abachelor’s degree in Mathematics and Economics fromMount Holyoke College.

Nora Kim, Communications Assistant. Nora Kim joined CGAPin 2006. She assists in the development of CGAP’stechnology platform and oversees special projects, includingthe CGAP Microfinance Photography Contest. Kim has abachelor’s degree in International Affairs and History fromGeorge Washington University. She is fluent in English andKorean and is proficient in French and Spanish.

Kabir Kumar, Microfinance Analyst. Kabir Kumar is currentlyworking on CGAP’s Technology Program. He designsexperiments and builds partnerships to use cell phones andother technologies to expand access to finance. He was anIT and telecom marketing and strategy consultant and hasworked at the World Bank on gender equality andeconomic growth. Kumar has a dual masters in PublicAdministration and International Relations from theMaxwell School of Syracuse University.

Antonique Koning, Program Coordinator. Antonique Koningcoordinates the European Union/African, Caribbean,Pacific States Microfinance Framework Program—acapacity-building program for microfinance actors in sub-Saharan Africa, the Caribbean, and the Pacific. Koning isseconded to the European Commission and is based inBrussels. Before joining CGAP, she worked with the WorldSavings Banks Institute. Koning has a master’s degree inInternational Trade Management and Policy from theUniversity of Birmingham. She speaks English, Spanish,French, and Dutch.

Estelle Lahaye, Associate Microfinance Analyst. Estelle Lahayejoined CGAP in 2007. She works with the Africa team on avariety of funders initiatives and policy-related projects.Before joining CGAP, Lahaye worked as an account officerat Banco Itaú Europa in Luxembourg. Lahaye holds amaster’s degree in Business Administration from SanFrancisco State University and a bachelor’s degree inBanking, Finance and Insurance from the University ofNancy 2 in France. She speaks French, English, andPortuguese and rudimentary Spanish and German.

Alexia Latortue, Senior Microfinance Specialist. Alexia Latortuejoined CGAP in 2002 and is based in CGAP’s Paris office.She leads CGAP’s work on improving the effectiveness offunding for microfinance and provides strategic andtechnical services to development agencies. Latortue haswritten extensively on aid effectiveness in microfinance.Before joining CGAP, Latortue was a development specialistwith Development Alternatives, Inc. She has a master’sdegree in Development Economics from the FletcherSchool of Law and Diplomacy at Tufts University. Shespeaks English, French, Creole, and German, and hasrudimentary Spanish.

Timothy Lyman, Senior Policy Adviser. Timothy Lyman joinedCGAP full-time in 2005 following many years advisingCGAP and various CGAP members on legal and regulatorypolicy issues in a consulting capacity. He is a co-author ofCGAP’s Guiding Principles on Regulation and Supervision ofMicrofinance. He has worked in community development forover 20 years in the United States and internationally,during much of this time as a partner of the law firm ofDay, Berry & Howard and president of its affiliatedphilanthropic foundation, the Day, Berry & HowardFoundation. He holds a bachelor’s degree from HarvardUniversity and a law degree from New York UniversitySchool of Law. He speaks English, French, Spanish, andBosnian/Croatian/Serbian, as well as conversational Germanand Russian.

Sarah Manapol-Brown, Budget Assistant. Sarah Manapol-Brown joined CGAP in 2000. She works on theadministration of CGAP’s trust funds, donor and grantagreements, consultant contracts, and general office needs.Before joining CGAP, Manapol-Brown worked for theWorld Bank’s Private Sector Department and Aon RiskServices/HTB Insurance Agency.


Kate McKee, Senior Adviser. Kate McKee joined CGAP inSeptember 2006 as senior adviser for Policy, Outreach, andAid Effectiveness. She is acting director of the savings teamand is carrying out several special projects. From 1998McKee served as director of the MicroenterpriseDevelopment office at the United States Agency forInternational Development. McKee is a developmenteconomist, with a master’s degree in Public andInternational Affairs from the Woodrow Wilson School ofPrinceton University.

Patricia Mwangi, Microfinance Specialist. Patricia Mwangijoined CGAP in 1999. She works on deepening CGAP’soutreach in Africa and manages the Financial TransparencyAward. Before joining CGAP, Mwangi worked as anexternal auditor and management consultant withPricewaterhouseCoopers, Kenya. She has a master’s degreein Administration from the Australian Catholic Universityand is a Certified Public Accountant.

Anna Nunan, Publications Manager. Anna Nunan joinedCGAP’s Communications Team in 2005. She has more than21 years of experience in all aspects of nonprofitpublishing. Nunan has a bachelor’s degree in Journalismfrom the University of Maryland and a master’s degree inBusiness Administration from Johns Hopkins University.

Mark Pickens, Microfinance Analyst. Mark Pickens workswith the Technology Program. He contributes to CGAP’sinitiative on regulation of branchless banking and workswith the Technology Program’s MFI, bank, and mobileoperators partners. Before joining CGAP, Pickens consultedto MFIs and banks with microfinance programs in Bosnia,Cambodia, and Madagascar. Pickens has a master’s degreein International Affairs from Columbia University.

Klaus Prochaska, Associate Microfinance Analyst. KlausProchaska has been part of CGAP’s Policy Team sinceSeptember 2006. He holds a law degree from theUniversity of Vienna in Austria and gained some years oflegal work experience at the Austrian courts as well as inthe private sector before pursuing a masters degree inInternational Development at the Johns Hopkins School ofAdvanced International Studies. He is fluent in English,German, Spanish, and Italian.

Lauren Reese, Associate Microfinance Analyst. Lauren Reeseworks with CGAP’s Technology Program, includingcoordination of the Technology Fund, research, andprogram activities. Reese holds a master’s degree inInternational Development and Economics from JohnsHopkins University, School of Advanced InternationalStudies, and a bachelor’s degree in Political Economy fromthe University of California, Berkeley.

Xavier Reille, Lead Microfinance Specialist. Xavier Reille joinedCGAP in 1999. He leads the CGAP Transparency Teamand chairs the board of directors of the MicrofinanceInformation eXchange. He is also director of CGAP’sMENA initiative. Before joining CGAP, he was the regionalmicrofinance adviser for Southeast Asia with CatholicRelief Services. Reille has a master’s degree in InternationalFinance from the University of Paris. He speaks French,Spanish, English, and Bahasa Indonesian.

Jim Rosenberg, Communications Officer. Jim Rosenberg joinedCGAP in March 2007 to manage all aspects of strategiccommunications for the Microfinance TechnologyProgram. Before joining CGAP, he was a producer for XMSatellite Radio’s public affairs channel. Rosenberg has amaster’s degree in Journalism from Columbia Universityand attended the Universidad de Sevilla (Spain) for oneyear as a Rotary Foundation Ambassadorial Scholar. Hespeaks English and Spanish.

Richard Rosenberg, Senior Adviser. Richard Rosenberg joinedCGAP in 1995. He has written or contributed to a dozenCGAP publications. He is a core faculty member of theMicrofinance Training Program at the Boulder Institute.Before joining CGAP, Rosenberg was deputy director of theU.S. Agency for International Development’s Center forEconomic Growth and spent nine years in Latin Americamanaging investment promotion, privatization, pensionreform, and development finance. He has a doctor of lawdegree from Harvard University. Rosenberg speaks Englishand Spanish.


Ousa Sananikone, Senior Private Sector Development Specialist.Ousa Sananikone joined CGAP in 2000. She is responsiblefor a broad range of activities, including external reporting,member services, reviewing publications, and preparing keycorporate outputs. Before joining CGAP, Sananikoneworked in the Small and Medium Enterprise Unit of thePrivate Sector Department of the World Bank, where sheprovided research and technical support to the regions onSME and microfinance projects. Sananikone holds a master’sdegree in International Affairs from the School of ForeignService at Georgetown University and a bachelor’s degree inPolitical Science from Trinity College in Washington, D.C.She is fluent in Lao, Thai, French, and English.

Hannah Siedek, Microfinance Analyst. Hannah Siedek joinedCGAP in 2003 as part of the aid effectiveness team in Parishelping private and public microfinance fundingorganizations use their resources more effectively. Sinceearly 2006, Siedek has been based in Washington, D.C.,where she also provides support to CGAP’s TechnologyProgram. She has a master’s degree from ESCP-EAP, Paris,and has studied in England, Spain, and France. Siedekspeaks German, English, French, and Spanish.

Sherry Sposeep, Microfinance Gateway Manager. SherrySposeep joined CGAP in 2007. She manages theMicrofinance Gateway, as well as its French, Arabic, andupcoming Spanish affiliate sites. Before joining CGAP, shemanaged a microfinance research project at ChemonicsInternational. Sposeep has a master’s degree inDevelopment Management from American University. Shespeaks English and intermediate Russian.

Jeanette Thomas, Communications Manager. Jeanette Thomasjoined CGAP in 2004 as the manager of theCommunications Team. Before joining CGAP, Thomas wasnews editor and senior producer in the BBC’s WashingtonBureau. She started her 11-year tenure at BBC in London,producing radio documentaries and Start the Week withMelvyn Bragg, BBC Radio 4’s longest running discussionprogram. In 2003–2004, she produced a series of films forthe World Bank on development projects in the MiddleEast. She has a master’s degree and doctorate in EnglishLiterature from Oxford University. She speaks English,French, and rudimentary Spanish.

Olga Tomilova, Consultant for Europe and Central Asia. OlgaTomilova joined CGAP in 2007. She represents CGAP inECA and is based in Moscow, Russia. Before joining CGAP,she managed the Central Asia Microfinance Center, a jointproject of the Microfinance Centre for CEE and the NIS(MFC) and CGAP in Kazakhstan. She worked at MFC asmanager of the training and consulting department. She hasa degree in History, Social Sciences, and Applied Sociologyfrom Nizhny Novgorod State University in Russia. Shespeaks English and Russian.

Louise Westerlind, Associate Microfinance Analyst. LouiseWesterlind joined the Financial Transparency Team atCGAP in March 2007. Her responsibilities include theMicrofinance Capital Markets Update newsletter, theRating Fund, and the Financial Transparency Award/Certificate. Before coming to CGAP, Westerlind worked asan analyst at the Securities & Investments practice at Celent.She has a degree from Copenhagen Business School andHong Kong University of Science and Technology.Westerlind is fluent in Swedish and English, proficient inDanish and German, and beginner in Mandarin.

Tonia Wright, Operations Manager. Tonia Wright managesCGAP’s day-to-day business and administrative functions,including budget and finance, human resource management,and administrative services. She coordinates CGAP’sAssociate Microfinance Analyst Program and internshipinitiatives. Before joining CGAP, Wright worked in localgovernment training, technical assistance, and capacity-building, both domestically and internationally. Wright hasa master’s degree in Public Administration from theUniversity of Delaware and a bachelor’s degree in PoliticalScience from North Carolina A&T State University.


YEAR ENDING JUNE 30, 2007

CGAP is a trust-funded joint venture consortium of 33 memberswith a mandate of improving access to financial services by theworld’s poor. It is housed in the World Bank which, on behalf ofother member donors, has legal, financial, and administrativeoversight of CGAP. CGAP’s grants, projects, and most of itsinitiatives span more than one fiscal year. CGAP follows theWorld Bank’s fiscal year, which ends on June 30.

These financial statements include a Statement of Revenues andExpenses, a Balance Sheet, a Statement of Cash Flows, andaccompanying notes. They are unaudited. Internal audits areperformed by the World Bank.

KEY HIGHLIGHTS

Donor Contributions. Donor contributions and pledges for 2007($19.3 million) increased compared to 2006 ($14.1 million). This ismainly because of the sizeable contribution from the Bill andMelinda Gates Foundation toward the CGAP/Gates TechnologyInitiative.

Grant Commitments. In 2007, CGAP committed $10.7 million innew grants and initiatives. This included $6 million in improvingaccess to technology by financial institutions, a $1.4 millionincrease to the Policy Initiative, a $0.6 million increase to theMicrofinance MBA project, and $0.39 million for the secondphase of the Savings Initiative. CGAP continued to generatedonor co-financing for its initiatives. On the technology initiativealone, CGAP’s investment of $2 million was matched by GatesFoundations’ $24.2 million. CGAP’s commitment of $740,000toward building sustainable information systems for MFIs wasmatched by a contribution of $800,000 from the EuropeanCommission.

Operating Expenses. Operating expenses went down slightly to$8.2 million ($8.6 million in 2006). This was because of lower staffcosts from attrition and lower office and occupancy costs. Themid-term evaluation that began in late 2006 was fullyimplemented in 2007. CG and ExCom meetings expenses werehigher than last year because there were two CG meetings infiscal year 2007, one in November and one in June as a result ofa request from the CG to change the date.

Financial Position. CGAP’s financial position is sound. At theend of FY 2007, operating reserves stood at $9.9 million, up by$3 million from fiscal year 2006 ($6.9 million). These reserves aremeant to smooth the planning and execution of ongoing CGAPactivities and cushion the effect of delays in donor contributions.

Notes

1. Basis of Accounting

CGAP changed its financial reporting to accrual based in 2003.This gives the reader a fuller understanding of CGAP’s financialposition by showing funds approved for commitments separatelyfrom funds available for ongoing operations and future commit-ments. Resources are expensed when committed to projects.

Revenue from donor pledges is recognized when writtennotification of a donor’s intent to process the grant is received.In most cases, pledges are fulfilled during the fiscal year theywere made but often they are received in the following year(s).

These unaudited financial statements are prepared on a historicalcost convention and are denominated in U.S. dollars.

2. Contributions from Donors—Core and Designated

Donor contributions (including pledges that have not yet beenreceived but are being processed by the donor), interestincome, and foreign exchange gains comprise CGAP’s revenues.Donor contributions can be unrestricted (core) or, in exceptionalcases, limited to a specific purpose (designated). Amounts ofdonor contributions to CGAP’s core funds can also be found inthe table on page 42 CGAP Member Donor Commitments,Fiscal Years 2006–2008.

The Statement of Revenues and Expenses shows donorcontributions allocated for fiscal years 2006 and 2007. TheStatement of Cash Flows/Inflows shows all donor contributionsreceived during the fiscal year regardless of the fiscal year towhich they relate.

3. Interest Income and Foreign Exchange Gains

Interest Income is the interest received during the fiscal year oncash balances held. Foreign exchange gains are the differencebetween the estimated U.S. dollar equivalent of donorcontributions appearing in previous years’ financial statementsand the actual U.S. dollar value of the contribution when it wasfinally converted to U.S. dollars. Interest income in 2007 was $2.1million. Although there was foreign exchange loss in 2006, therewas a gain in 2007.

4. Grants and Initiatives

This expense category relates to CGAP’s work program viagrants to MFIs, networks, and initiatives focused on policy

Financial Statements


issues, financial and social transparency, accountability,technology development, transfers/remittances, and othermulticomponent projects managed by CGAP staff. Project-related commitments for consultants and travel come out of thiscategory. Approved commitments that are not fully disbursedwhen they are closed are returned to the original trust fundwhere the commitments were derived. Commitment amountsare therefore reported net of returns.

5. Operating Expenses

Operating expenses are comprised of the following:

• Staff Salaries and Benefits include salaries and benefits ofdirect-hire CGAP staff.

• Office and Occupancy Costs include space, equipment,communications, supplies, and other overhead expenses.

• CGAP Phase III Evaluation includes costs of consultants,travel, and meetings related to the external evaluation ofCGAP. The evaluation is a requirement to determine whetherCGAP should go into phase IV.

• CGAP Internships include the costs of associate microfinanceanalysts and the summer fellows program.

• CGAP Staff Travel/Representation and Service Providersinclude costs that are not related to grants and initiatives(airfare, subsistence, and hotel costs to attend publicpresentations, conferences, external training travel,recruitment travel, liaison with external actors, meetingfacilitators, presentors, trainers of CGAP staff, CGAPcocktails, etc.).

• Communications Activities include commitments forpublishing, printing, translating, editing, Web sitedevelopment and maintenance, publications and Web sitemanagers, Microfinance Gateway costs, etc.

• CG and Excom Meetings include travel, facilities, foodservices, and other expenses connected with the CG andExCom meetings.

• Foreign exchange loss is the difference between theestimated U.S. dollar equivalent of donor contributionsappearing in previous years’ financial statements and theactual U.S. dollar value of the contribution when it was finallyconverted to U.S. dollars.

• Cancelled pledge is donor contributions included in theprevious year’s financial statements that were subsequentlycancelled.

• Administration fees are levied by the World Bank for costsrelated to trust fund administration (currently at 5% ofcontribution).

6. Operating Reserves

Reserves are funds available for ongoing operations and futurecommitments. Given that CGAP is not a self-standing, permanententity, an operating reserve is maintained to cushion the effects ofdelays in donor contributions and to allow an orderly wind-downof CGAP activities if and when member donors decide todiscontinue CGAP’s operations in its present form.

7. Bank Balances

Bank balances on hand represent CGAP’s available cashbalances. In FY 2007, this amount was $9.5 million, a decrease of$0.7 million compared to 2006 ($10.2 million).

Bank balances representing approved commitments that are inthe process of being disbursed and hence not available for newcommitments were $23.4 million in FY 2007.

8. Donor Contributions Receivable

FY07 FY06Dell Foundation 100,000 100,000European Commission 1,227,600 1,227,600Ford Foundation 200,000Gates Foundation 157,500 157,500Germany 317,250 331,250IFAD 600,000 600,000Japan 300,000Norway 456,236 471,143Spain 384,630 361,830Sweden 417,944 391,430TOTAL 3,961,160 3,840,753

9. Liabilities

The undisbursed portion of Grants, Initiatives, andCommunications Activities represents funding commitmentsapproved but where disbursements are in progress and are tobe made or continued beyond the current fiscal year.

10. Contributions Received in Advance

FY07 FY06World Bank 2,150,000 6,375,000Australia 559,130 359,250France 388,112United Kingdom 482,750 444,625TOTAL 3,579,992 7,178,875

In April 2005, the World Bank’s legal department determinedthat interest income that had accumulated on the CGAP trustfund over the last 10 years belonged to CGAP and transferredthese funds to CGAP. As a result of this unexpected inflow, theWorld Bank reduced its future allocation to CGAP to $500,000per annum, recognizing that the interest income can fund thebalance of its pledge. In 2006, CGAP allocated $4.6 million ofthis interest income toward on-going operations. In 2007, CGAPallocated $4.2 million leaving a balance of $2.2 million, whichwill be allocated in 2008.


CGAPFINANCIAL STATEMENTSFiscal Years Ending June 30, 2007, and June 30, 2006

Actual ActualNotes July 2006– June 2007 July 2005–June 2006

STATEMENT OF REVENUES AND EXPENSESRevenuesContributions from Donors—Core & Designated 2 19,285,897 14,129,420Interest Income 2,110,579 1,151,567Foreign Exchange Gains 3 153,806Total Revenues (A) 21,550,282 15,280,987

ExpensesGrants/Initiatives Committed 4 4,534,478 8,335,341CGAP/Gates Technology Initiative 6,003,317Staff Salaries and Benefits 5 2,728,885 3,381,740Office and Occupancy Costs 5 1,310,610 1,698,207CGAP Phase III Evaluation 239,993 164,040Project Preparation and Rapid Response 454,835CGAP Internships 410,000CGAP Travel/Representation and Serv. Providers 5 475,779 290,892Communications Activities 5 1,346,900 1,507,904CG and ExCom meetings 5 275,497 177,409Foreign Exchange Losses 5 31,644Cancelled Pledges 200,000 600,000Administration Fee 5 530,990 409,733Total Expenses (B) 18,511,283 16,596,909

Excess of Revenues over Expenses for the year (A)-(B) 3,038,999 (1,315,922)

Operating Reserves at beginning of the fiscal year 6,900,779 8,216,701

Operating Reserves at the end of the fiscal year 6 9,939,778 6,900,779

BALANCE SHEETAssetsBank Balances on hand 7 9,558,610 10,238,901Bank Balances relating to Undisbursed Grants/Initiatives and Communications Activities 7 23,374,656 23,631,509Donor Contributions Receivable 8 3,961,160 3,840,753

Total Assets 36,894,426 37,711,163

LiabilitiesBank Balances relating to Undisbursed Grants/Initiatives and Communications Activities 9 23,374,656 23,631,509Contributions Received in Advance 10 3,579,992 7,178,875Total Liabilities 26,954,648 30,810,384

Operating Reserves/(Net Assets) 6 9,939,778 6,900,779

Total Liabilities and Net Assets 36,894,426 37,711,163


STATEMENT OF CASH FLOWSInflowsDonor Contributions received 10 15,007,884 8,638,116Interest Income 2,110,579 1,151,567Foreign Exchange Gains 153,806 -Total Inflows 17,272,269 9,789,683

OutflowsCash spent against previous commitments 8,592,836 8,058,109Grant Disbursements 4,471,439 5,114,862Disbursements related to initiatives 4,121,397 2,943,247

Cash spent against current year commitments 917,381 1,469,440Grant Disbursements 11,560 661,053Disbursements related to initiatives 450,986 808,387Project Preparation and Rapid Response 454,835

CGAP/Gates Technology Initiative 483,874 —Grant DisbursementsDisbursements related to initiatives 483,874

Operating expenses 8,215,322 8,574,639Staff Salaries and Benefits 2,728,885 3,381,740Office and Occupancy Costs 1,310,610 1,698,207CGAP Phase III Evaluation 239,993 164,040CGAP Internships 337,877CGAP Staff Travel/Representation and Service Providers 475,779 290,892Communications Activities 2,115,691 1,820,975CG and ExCom meetings 275,497 177,409Foreign exchange loss 31,644Cancelled pledge 200,000 600,000Administration Fee 530,990 409,733Net increase/(decrease) in undisbursed grants/initiatives,and communications activities (256,853) (2,029,269)

Total Outflows 17,952,560 16,072,919

NET INCREASE (DECREASE) IN CASH (680,290) (6,283,236)

Bank balances on hand at beginning of the fiscal year 10,238,901 16,522,137

Bank balances on hand at end of the fiscal year 9,558,610 10,238,901


CGAP ONGOING GRANTS AND INITIATIVESAs of June 30, 2007

CommitmentsCGAP/Gates Technology Program 8,160,817Policy Initiative 3,732,000Microfinance MBA 3,287,000Retail Advisory Services 3,250,000CAPAF Phase II 2,431,898MENA Initiative 1,890,000BCEAO Regional Regulation & Supervision 1,523,502MIX Phase II 1,500,000Microsave Africa III 1,500,000Microfinance Technology Program 1,250,000Rating Fund III 1,050,000Pro-Poor Innovation Challenge Phase II 1,000,000CIDR East Africa Initiative 974,000MISFA II 958,791Financial Transparency Awards II & III 745,000WOCCU Supervisory Toolkits & TA 742,000IS Project, Phase II 740,000Money Transfers Phase II 622,800Central Asia Microfinance Center 594,400Graduating Poorest into Microfinance 570,000CLEARS 568,000China Capacity Building 440,000Savings Initiative II 385,000Regulation & Supervision Resource Center, Phase III 372,900Microcredit Interest Rate Sensitivity Study 244,930Social Indicators 240,000Microsave Latin America 180,000Regulation for Alternative Distribution 90,000Staff Incentives Scheme Action Plan 84,000Course Updates and Global TOTs 80,850Microinsurance 65,000

39,272,888

CGAP ONGOING COMMUNICATIONS ACTIVITIESCommitments

Microfinance Gateway II 1,735,655International Translation Project 922,500Communications Activities 859,780CGAP Web sites 340,844National and Regional Networks Program 335,904International Associates Program 98,000

4,292,683


CGAP MEMBER DONOR CONTRIBUTIONS AND PLEDGES, FISCAL YEARS 2006–2008 (IN US $)*1

Core FY2006 FY2007 FY2008

World Bank 5,125,000 4,725,000 2,650,000*2

Argidius Foundation 100,000 99,985Australia 697,550 359,250 279,565Canada 428,119 466,157 466,157Dell Foundation 100,000 100,000Denmark 476,984 522,362European Commission 665,200 600,000 600,000European Investment Bank 242,040 256,220Finland 334,256Ford FoundationFrance 183,750 190,245 168,975Gates Foundation 157,500 157,500 157,500Germany 317,250 317,250IFADIFC 300,000 300,000 300,000ItalyJapan 300,000 300,000Luxembourg 421,395 464,635 464,635Netherlands 400,000 400,000 400,000Norway 456,236 456,236 456,236Spain 384,630 384,630 384,630Sweden 417,944 417,944 417,944Switzerland 399,975 399,980 400,000United Kingdom 474,938 444,625 482,750United States 300,000

Core 12,382,767 11,362,019 7,928,392Designated 1,700,460*3 7,923,878*4 7,288,895*5

TOTAL 14,083,227 19,285,897 15,217,287

*1 Contributions not yet received are italicized.

*2 Of the originally budgeted World Bank contribution for FY 2008, $500,000 is the new annual contribution

and $2,150,000 comes from the remaining balance of the $11 million interest income transferred to CGAP in 2005.

*3 European Commission, IFAD, and Sweden.

*4 European Commission, France, Gates Foundation, IFAD, Sweden

*5 European Commission, France, Gates Foundation, Sweden

® CGAP/World Bank. All rights reserved.

PHOTO CREDITS, CGAP 2007 ANNUAL REPORT

Cover: Rolando Villanueva, KixiCredito, Angolaii: Fernando Decillis, USAiii: Mohammad Rakibul Hasan, Dhaka Film School, Bangladeshiv: Jean-Bastien Lagrange, France3: Michael Foley, World Bank, USA10: Tapas Banerjee, India12: Syed Tahir Jamal, Tahir Photografics Studio, Pakistan14: Corjan Rink, Woord en Daad Holland, The Netherlands19: Fernando Decillis, USA20: Aizada Subanbekova, Bai Tushum and Partners, Kyrgyzstan21: Michael Foley, World Bank, USA22: Boaz Rottem, Boazimages, China26: Vikram Joy, India28: Pauline Häbel, GTZ (German Technical Cooperation), Germany

1818 H Street NWWashington, DC 20433 USATelephone: 1.202.473.9594Fax: 1.202.522.3744www.cgap.org

Documents

CGAP 2007 Annual Report - World Bankdocuments.worldbank.org/curated/en/...In 2007, CGAP undertook an extensive process of industry-wide consultations with a broad range of organi-zations