Ianuarie 2011

Innovative techniques for offering non-

financial services

JASMINEWORKSHOP29.11.2013Bucharest

WS Objectives/Subjects

To discuss over the best ways used by MFIs to provide microfinance services other than financial products.Two main subjects: - how to provide such services in a cost effectiveway - the “sustainability issue” - which services to offer in order to attract new clients - “the product diversification issue”

Context:

78 % of the financial sector practitioners surveyed indicated that, in their assessment:

access to finance in their countries had improved substantially in the last five years.

butPromoting financial capability and finacial

inclusion through standard financial education has proven to be extremely challenging.

In the World Bank’s Global Financial Barometer (ˇCihák 2012; WorldBank 2012a)

MF Services other than finance: Financial literacy and BDSS

Research indicates that standard, classroom-based financial education aimed at the general

population does not have much of an impact on financial inclusion.

It takes more than lectures and memorizing definitions

to develop the capacity needed to benefit from financial services

MF Services other than finance: Financial literacy and BDSS

Financial education is especially beneficial among people with below-average education and limited

financial skills. The impact of financial education is enhanced by:-leveraging social networks (involving both parents and children in the program or, in the case of remittances, both senders

and recipients)-well-designed and targeted interventions (Interventions that use teachable moments, such as starting a job or purchasing a major financial product)

MF Services other than finance: Financial literacy and BDSS

for microenterprises, business training programs have been found to lead to improvements in knowledge, But, have a relatively small impact on business practices and performance and depend on context and gender, with mixed results. The content of training also matters: simple rule-of-thumb training is more effective than standard training in business and accounting.

Effective BDSS : ExamplesPackages of services for potential young

entrepreneurs: ADIE CRÉAJEUNES

Aimed at 18 to 32 years, accompanying the creation company program will allow you to move from idea to the concrete realization of your project, and if necessary to obtain funding from Adie:•4-6 WEEKS OF TRAINING FOR YOUR PROJECT -Collective training modulesTopics addressed: making your market research, build your network of relationships, calculate your estimated turnover, find customers, choose your legal status, etc..•Individual supportIn parallel with group workshops, you will be accompanied by an individual once a week minimum.•NetworkingYou will participate in regular meetings with other young entrepreneurs, to share with them, and you build a network of knowledge among partners Adie.•Facilitated access to appropriate financingYou will be able to apply professional microcredit Adie for creating your business, or be directed to the appropriate financial partners.

Technical assistance for entrepreneurs provided by

VOLUNTEERS• TWO OR THREE APPOINTMENTS TO

COMPLETE the PROJECT with ADIE Volunteers:

• On how to forecast sales consider what legal and tax system to choose, how to find the top suppliers and the top customers, what steps to take to report your business?

• HOTLINES EVERY WEEK TO CREATE YOUR MICRO-BUSINESS QUICKLY:

• Adie’s support teams who, point by point, depending on expectations and needs, will guide and advise during two or three appointments.

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MICROFRANCHISE SOLIDARITY

Aimed to assist in building self-employment•THE MICROFRANCHISE AN INDEPENDENT BUSINESS "TURNKEY"The microfranchise solidarity is for people who want to create their independent activity but have no idea, do not want to run alone or who have not necessarily diploma course. It creates a company with the experience and tools built by microfranchiseur.•THE BENEFITS BEGIN WITH MICROFRANCHISE SOLIDARITY •An activity that has proven • A brand that is known and inspires confidence in customers • Technical and commercial training and coaching to start your business • Ongoing business support to help you develop the activity • Access to shared services such as a call center or appropriate communication tools

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Partnership with BDSS providers

Example of a Romanian MFI bridging the gap between social and commercial

FAERRomania

FAER Foundation

FAER IFN S.A.(NBFI)

1 MFI 2 legal entities

Profi

t

• Provision of non-financial services for the promotion of entrepreneurship

• Provision of financing for business development

Social Performance

Financial Performance

Sustainability of non financial services

How to finance Financial literacy and BDSS interventions:•Profit/ surplus generated by the financial activity of the MFI/CU•National/EU programmes: entrepreneurship development and HR development•Volunteers/ Donations•Fees for services…..

Technological innovations

New technologies can lower the cost and inconvenience of accessing financial and non- financial services leading to greater financial inclusion: – Mobile payments, – Mobile and Internet banking, – Biometric identification technologies– Financial education WEB/Internet portals, e.g. on-

line training, benchmarking, business planning, on line business coaching, on-line application, cost calculation. etc.

Let’s get together!

And contribute to the financial capability of the beneficiaries/clients

For more information

JASMINE Help Deskhttp://www.european-microfinance.org

European Microfinance Networkhttp://www.european-microfinance.org/europe-microfinance_en.php

Thank you!Maria Doiciu

Leader of the Legal and Regulatory Working Group of European Microfinance Network

Eurom Consultancy & Studieswww.eurom-consultancy.ro

E-mail: office@eurom-consultancy.ro