NEX- Network Summit Enhancing the Value …...Mr. Allan Sicat, Microﬁnance Council of the Philippines (MCPI) 16:30-17:00 Group exercise on theme 4-member engagement 17:00-17:15 Group

NEX- Network Summit Enhancing the Value Proposition of a Microfinance Association Mexico City June 5, 2017

Agenda 9.00-9.30 Introduc/onandpresenta/onofques/onnaireresults

9.30-10:00 Introduc/ontoTheme1.Presenta/onRepresen/nganIndustryAlfredoAlaniz,ASOMIF,Nicaragua

10:00-10:45 Groupexerciseontheme1-represen/nganindustry

10:45-11:00 GroupShareTheme1-represen/nganindustry

11.00-11.15 Coffeebreak

11:15-11:45 Introduc/ontoTheme2.Presenta/onOfferingCommercialservicesMsKatarzynaPawlak,MicrofinanceCentre,Poland

11:45-12:30 Groupexerciseontheme2-Offeringcommercialservices

12.30-14.00 Lunch

Agenda 14:00-14:15 GroupShareTheme2-offeringcommercialservices

14.15-14.45 Introduc/ontoTheme3.Presenta/onKnowledgeSharingMr.MoazzamIqbal,PakistanMicrofinanceNetwork,Pakistan

14:45-15:15 Groupexerciseontheme3-knowledgesharing

15:15-15:30 GroupShareTheme2-knowledgesharing


16:00-16:30 Introduc/ontoTheme4.Presenta/onMemberEngagementMr.AllanSicat,MicrofinanceCouncilofthePhilippines(MCPI)

16:30-17:00 Groupexerciseontheme4-memberengagement

17:00-17:15 GroupShareTheme4-memberengagement

17:15-18:00Reflec/onsonthelinkagesbetweenmemberengagement,knowledge

management,industryrepresenta/on,commercialservicesandsustainability

Overview of Associations Participating in Survey

•  19 participants, most of whom work on a national scope.

•  Almost 2/3 are from Latin America.

•  Network size varies from 9 to 341 members, and most memberships have been growing for the past 5 years. •  All networks count with a board of directors, though only 10% pay their board members. •  Institutions are overall officially registered, and divide themselves between Associations and Not-for-profit legal structures.

•  Membership nature is diverse and balanced across networks, mostly composed by NGOs, cooperatives and financial institutions.

Representing an Industry vis-à-vis Regulators and Others

… H o w e v e r, w h i l e 5 8 % o f assoc ia t ions o f fer advocacy serv ices , on ly 1 out o f 19 associations offer advocacy services that are income generating.

All associations conduct a diverse array of activities with government agencies or regulators that represent their industry or members…

Vietnam Microfinance Working Group co-organizes events including workshops and trainings with the State Bank of Vietnam.

Red de Instituciones de Microfinanzas de Guatemala (REDIMIF) participates in technical meetings with MINECO (Ministerio de Economía) and SIB (Superintendencia de Bancos).

How are Associations Best Positioned to Offer Commercial Services?

Almost 80% of associations offer commercial services…

12

3 4

Yes, to members and non-members

Yes, only to members No

< 25% of our revenue

29%

21%

50%

Commercial services vary across associations, but the majority focuses on trainings, publications, technical assistance and conferences

0% 20% 40% 60% 80% 100% 120%

Other (shared IT, National and International internships, sell of IT

Social audits

Advocacy

Member client services

Conferences

Advisory services (coaching on product div, social and financial

Data collection

Publications

Trainings

Almost 80% of associations offer commercial services that boost revenue…

> 50% of our revenue

> 25% of our revenue

Commercial Services Offered

How are Associations Best Positioned to Offer Commercial Services?

0% 20% 40% 60% 80% 100% 120%

Advocacy

Data collection

Other (shared IT, National and International internships, sell of IT

Publications

Social audits

Member client services

Advisory services (coaching on product div, social and financial

Conferences

Trainings

Not all commercial services generate revenue. The top revenue earners are...

Optimal Sharing of Knowledge and Industry Expertise

All associations share industry financial information with their members, mostly through web, Board meetings and reports

About 60% of associations also share other types of publications, such as lessons learned and industry analysis.

63% do share other pub.

37% do not

share other

42% 58%

68% 68% 68%

74% 79%

89%

0% 20% 40% 60% 80% 100%

Other Small industry workshops

Large industry conferences Other reports Social media

Industry financial reports Board meetings

Association website

16%

47%

26%

11%

Small industry workshops

Large industry conferences

Board meetings Industry financial reports

Associations ranked large industry conferences as the most effective way to transmit information.

Member Engagement While all associations have implemented measures to increase member engagement, 58% of associations conduct activities to raise funds or awareness for members internationally.

58% do conduct activities

42% do not conduct activities

The type of activities that associations conduct to increase member engagement is diverse.

Discount fees for events

Formation of working groups

CEO round tables

Promotions

Exchange workshops 91% of associations say that this is an important part of their mandate.

Challenges faced by Networks

Evolution of Financial Performance

Evolution of Grants and Donations as % Revenues

2014 2015 2016

0%

2%

4%

6%

8%

10%

12%

14%

16%

1 2 3

Income Sources that have Increased

Membership Dues

Events

Consulting and Technical Assistance

Sources of Revenue that have Increased (% total)


2014 2015 2016

$120,000

$150,000

$180,000

$210,000

$240,000

$270,000

$300,000

1 2 3

Average Revenue

Average Expenses


2014 2015 2016

11% growth

34% growth

Some Solutions Mentioned

“ [we have] a lean set-up, agile operations, we are building partnerships and always looking at what's on the horizon”

“We addressed this challenge by increasing annual dues for two consecutive years in order for core expenses to be covered by membership annual dues.”

“The Network has secured 1-3 year funding agreements with three funders on average per year over the past 5 years, enforced subscription fees for members and generated revenue from services provided (sale of publications, commissions for marketing of trainings etc.)”

“[we are] seeking activities that offer greater visibility for our network”

Conclusions

Member Value

Advocacy and representation

Information and

knowledge management

Member engagement

Commercial services

Conclusions

Member Value

Financial Sustainability

THANKYOU








12.30-14.00 Lunch

Session 1 Representing an Industry

Estrategia de ASOMIF para la Sostenibilidad a Largo Plazo

Agenda

AntecedentesCreacióndeunmarcoregulatorioLacrisisfinancieraLacreacióndelaCONAMISostenibilidaddelaRedEjerciciodeGrupoComparQrenGrupo


En 1990 Nicaragua inicia la transformación de una economía mixta centralizada en una de mercado, mediante:

Ø  La aplicación de planes de ajuste estructural (FMI)

Ø  Con reforma y disminución del aparato estatal

Ø  Apertura y desregulación económica con Tratados de Libre Comercio.

Ø  Reformas fiscales y financieras con cierre de la banca estatal y creación de la banca privada.

Ø  Aprobación de una Ley Anti Usura con techo a la tasa de interés.


�  Afectaron programas sociales elevando el número de pobres y el desempleo, fomentando las migraciones del campo a la ciudad y el exterior y el crecimiento del sector informal de la economía del 52% al 75%.

�  Favorecieron a la gran empresa, con poco interés de la Banca en las MIPYME por la elevada percepción del riesgo y los altos costos operativos.

�  Elevó la demanda de crédito de los micro y pequeños empresarios informales que buscaron apoyo en las ONG que los atendían con programas de desarrollo; estas crearon pequeños fondos revolventes.

En 1992 se aprueba una Ley Anti-Usura con un techo a la tasa de interés, que fue reformada y aplicada a las IMF.

En 1997 se reforma la Ley de Bancos para permitir a las IMF captar depósitos, pero un año después se aprueba una nueva Ley suprimiendo esa disposición a instancias del FMI.

En 1999 se crea ASOMIF con12 IMF sin fines de lucro, que manejaban U$25 millones en cartera y 53 mil clientes.

Se elabora el primer Plan Estratégico con 4 lineamientos:

a) Dotar al sector de un marco legal y regulatorio b) Fortalecer las instituciones agremiadas c) Garantizar la sostenibilidad de ASOMIF en el Largo Plazo

•  En 2003, ASOMIF introduce y se logra aprobar “en lo general” la Ley Especial de Asociaciones de Microfinanzas, que permitía captar ahorro. También fue objetada por OO.FF.II.

•  La falta de poder captar ahorros, motiva a 2 afiliadas convertirse en S.A. bajo la supervisión de SIBOIF; por ello en 2008 ASOMIF reforma sus Estatutos para permitir la afiliación de IMF de carácter mercantil, que en 2017 representan el __% de las afiliadas.

•  En 2009 la crisis financiera internacional afecta negativamente a las IMF con pérdidas del 40% (U$40 millones) del patrimonio; reducción del 40% (U$100 millones) en cartera; y reducción del 38% (128 mil) clientes en los municipios rurales más pobres.

Ø Contracción del PIB y de la demanda agregada que eleva la mora; surge el problema del sobreendeudamiento y crece la percepción del riesgo país que reduce el acceso a fondos.

Ø Surge el Movimiento de No pago, apoyado políticamente.

Ø Deterioro de indicadores de desempeño financiero y social; degradación de las calificaciones de riesgo; y quiebra de un Banco de microfinanzas (BANEX).

Ø Disminuye la cooperación externa hacia el sector de las microfinanzas, por problemas presupuestarios de donantes.

Ø Se aprueba en 2011 la “”, con una amplia gama de operaciones activas y

pasivas, menos captación de ahorro.

Regula 5 ámbitos primordiales, supervisados por la Comisión Nacional de Microfinanzas (CONAMI):

1.  La Administración Integral de Riesgos y obligatoria consulta de todo desembolso al Buró de Créditos

2. Gobernabilidad y Gobierno Corporativo

3.  Transparencia y Protección al Consumidor

4.  La Gestión del Desempeño Social (GDS)

5.  Prevención de Lavado de Activos (PLA/FT)

En total se han emitido 24 normas regulatorias y actualmente se trabaja en una reforma a la Ley que permitiría la captación de ahorros.



“ServiciosdeInformacióndeRiesgosdeCrédito,S.A.”

U$ 50,000

“SociedaddeInversionesparalaMicroempresadeC.A.yelCaribe,S.A.”

U$ 150,000

“SociedadparaelFomentodelaMicroyPequeñaEmpresa,S.A.”

U$ 350,000

“SistemasdeInformaciónGerencialparaMicronegocios,S.A.”

U$ 285,000

“SistemasFinancierosInclusivos,S.A.” U$ 20,000

TOTAL U$ 855,000


Group Exercise: help ASOMIF monetize their value as an advocate Put on your consultants’ hat! 1.  Share among the table what each of your

associations charge in membership fees, the value member receive in return, and fill out the chart below.

Membership Fees What “Value”?

ASOMIF

Association 1 200 Publications, training, networking

Association 2 400 Discounts on annual event, financial education campaign

Group Exercise

3.  Now compare this to the value that ASOMIF offers members, and answer these questions:

–  Are ASOMIF’s fees reasonable, too high or too low?

–  How does ASOMIF compare in terms of the value offered to members and its membership fees?

4.  Prepare a new proposal for members if you deem it necessary. What should you charge? Should all members pay the same?

5.  Make an “elevator pitch” to convince members of your new proposal. How should we sell this change?








12.30-14.00 Lunch

Enhancing the Value Proposition of Professional Associations – Offering commercial services

Katarzyna Pawlak, Deputy Director, Microfinance Centre

MFC: 20 years of service to Microfinance Research

Advocacy

Financial education

Capacity building for MFIs

Regional Networking/Information Exchange

Support to Networks

Other MFIs

Donors

Investors

Policy makers

Member MFIs

104 member MFIs in 27 countries across Europe, Caucasus, Central Asia and Russia with 1M low-income clients

MFC: Evolution of Roles

Member Organization

Member Organization Service Provider

Member Organization Service Provider

Market Facilitator

MFC Services

On-granting

Training/Consulting

Action-research

Financial inclusion

Overindebtness Demand/supply

Thematic analysis

National programs Campaigns Counseling

Courses Games Curricula Competitions

Reminders

Policy Fora Diagnostics Study tours

Brussels presence

Conferences Exchange

visits Working

groups

financial education

MFC Organisational Structure

Board (6)

Training & Consulting (1)

Responsible Finance (2) Research (1) Administration &

Finance (1) Communication &

Events (2)

Management (2)

2 entities: foundation & LL company (100% owned by foundation) 9 full time staff &10 consultants

Project based organization

MFC sustainability model

MFC Conference Income and Expenses

Income structure

Expenses structure

Microfinance Centre ul. Noakowskiego 10/38, 00-666 Warsaw, Poland tel./fax: (+48 22) 622 34 65 e-mail: [email protected]

www.mfc.org.pl

Thank you!

Group Exercise SWOT ANALYSIS 1.  Discuss as a group the services that your associations offer, and

list below the service that adds the most value to your members and the service the add the least value.

2.  Conduct a SWOT Analysis by filling out the tables below for each of the two services you listed above. In doing so, discuss and identify the internal strengths and weaknesses, as well as the external opportunities and threats.

3.  After conducting the SWOT analysis for each, are you still convinced by your choice of the service that adds the most value?








12.30-14.00 Lunch





















Module 3: Knowledge Management

Knowledge Management: Performance Monitoring and Benchmarking System June 5, 2017 – Pakistan Microfinance Network

Agenda

1.   Whoweare?2.   WhyPromotePerformanceBenchmarking?3.   RoleofAssociaQons4.   Importance&UseofData5.   OurTools6.   OurExperience7.   GroupExercise8.   GroupShare

EnablingEnvironmentPromoteanenablingenvironment

thatbenefitstheworkofallstakeholders

CapacityBuildingBuildthecapacityofstakeholders,

especiallyretailmicrofinanceins/tu/ons

Informa/onHubImprovetransparencyand

accountabilitybypromo/ngthepublica/onanduseofperformancemeasuresandstandardsamongretail

microfinanceins/tu/ons

Management&GovernanceImprovedopera/onalfunc/oningofthePMNbydevelopingpoliciesand

procedures

Supportthesector,speciallyretailMFPstoenhance

scale,quality,diversityandsustainabilityinordertoachieveinclusivefinancial

services

Why Promote Performance Benchmarking?

Demandforinforma/ononmarkets,ins/tu/ons,andclientsisgrowingexponen/allyastheindustrymatures

Growingrecogni/onoftheimportanceoftransparencyandfreeflowofinforma/on

Promotequalitystandardsandincreaseu/liza/on

FacilitatebuildingofstrongIns/tu/ons

Createsresponsiblemarketdevelopment

Role of Associations

MFAsareintegraltoachievingthisvision

ServetobuildthecapacityofMFPs

Promoteconsensusinindustry-definingstandards

Serveaslocalrepositoriesofinforma/onandknowledge

Our Tools

PMROnline

MicroTALK MicroWatchOnline

PricingTransparencyMicroEYE

SilverLight.NETSQLServer

PHPMySQL

GISApplica/on

PHPMySQL

Importance & Use of Data

Policy/Regulators

•  policies/regula/oneffec/velyaspermarketneeds

•  LicenseBranches

Donors/Investors

•  Virginareas•  DeservingMFIs

Prac//oners

•  StrategicPlanning

•  riskManagement

•  IncreaseEfficiency

•  Virginareas•  ImprovePerformance

Gain creditability of being transparent around the world

Contribu/ngtoresponsiblemarketdevelopmentthroughhighqualityindustryrepor/ng

Thesohware’saredemanddrivenproductsinwhichrangeofinforma/onhasbeencon/nuouslybeenincreasingovertheperiodof/me(28to44).

Providingvaluetomembersisthekeyobjec/veinpublishingsuchindicators

100%percentMembersrepor/ng(Membershiprequirement)

DevelopmentofMemberPerformanceMatrix

Non-membersalsorepor/ng(increasecredibility)

Our Learnings

THANKYOU

Group Exercise What is Knowledge Management?

It's a discipline which helps organisations meet their

strategic objectives by designing ways of better managing the knowledge that is useful to its purposes.

Group Exercise How do we learn?

Group Exercise How do we learn? Group 1 - Learning by Reading

Group 2 - Learning Visually Group 3 - Learning by Doing

Follow and complete the relevant instructions for your group until presentation leader announces that the time allotted has run out. The worksheets will then be taken away, and you will be asked to construct the mouse from memory using the provided Play-Doh.











Session 4 Member Engagement

Enhancing the Value Proposition of Professional Associations - Member Engagement

June 5, 2017 | Allan Robert Sicat, MCPI

Agenda

1.  Brief Description of MCPI 2.  Definition of Member Engagement 3.  Segmentation of Members 4.  Tools 5.  Conclusion 6.   GroupExercise7.   GroupShare

Brief Description of MCPI

MCPI is the national network of MFIs and support organizations working towards sustainable, innovative, and client-responsive solutions to poverty in the Philippines.

MCPI is composed of 60 institutions including 47 MFIs (30 NGOs, 11 banks, 6 cooperatives), 2 regional networks and 11 support organizations.

Definition of Member Engagement

•  Attendance in conferences •  Participation in annual meeting •  Attendance in trainings •  Payment of annual dues •  Submission of reports

1st Level

•  Joining technical working groups to represent the sector (legislation, advocacy)

•  Members are linking the association with their own partners

2nd Level

Segmentation of Members SegmentaQon(basedonGrossLoanPor_olio)

NGOs(30) CooperaQves(6) Banks(11)(basedonMFpor_olioonly)

RegionalNetworks(2)andAssociateMembers(11)

Small–belowPHP200M(belowUSD4M)

1.  BayanEDGE2.  CCFAPI3.  FCBFounda/on4.  JMHonradoFdn5.  JVOFI6.  KazamaGrameen7.  KCCDFI8.  KDCI9.  Mentors10.  Pag-AsaFounda/on11.  PALFSI12.  SaklawFounda/on13.  SECDEP14.  Serviamus15.  BINHI

1.PMPC 1.BangkoKabayan2.Can/lanBank3.FICOBank4.RBTBank5.MalligPlainsRB6.RBGuinobatan

RegionalCouncilsBMCIMMCAssociateMembersNetworks1.APPEND2.MASS-SPECC3.NATCCOWholesalers4.BPIGlobeBanKO5.FPSDC6.PostalBankTraining/TA7.PunlasaTaoFounda/onOthers8.SmartCommunica/ons9.ChildFundPhilippines10.LingapPangkabataan11.PlanInterna/onal

Medium1–PHP200Mto600M(USD4Mto12M)

1.  ASHI2.  CEVI3.  ECLOF4.  RSPI5.  SEDP-Simbag6.  MILAMDEC7.  RAFIMF

2.GataDakuMPC3.MarandingCoopera/ve

7.Ka/punanBank8.PBC9.OKBank10.FAIRBank

Medium2–PHP600Mto1B(USD12Mto20M)

1.  ARDCI2.  KMBI

4.St.Mar/nofToursCDC5.CCTCreditCoopera/ve6.USPDCoopera/ve

11.GMBankofLuzon

Large–abovePHP1B(aboveUSD20M)

1.  ASAPhilippines2.  ASKI3.  CARD4.  NWTF5.  TSKI6.  TSPI

Segmentation of Members

Type of Member (based on Portfolio

Main Services Provided Amount of Annual Dues

Small Training, Assessments PHP20,000 (USD400)

Medium 1 Training, Assessments PHP50,000 (USD1,000)

Medium 2 Training, Assessments PHP70,000 (USD1,400)

Large

Advocacy – Lobbied for a law to provide tax incentives to accredited Microfinance NGOs

PHP100,000 (USD2,000)

Tools

Feedback tools

•  Annual membership survey

Communications

•  E-mail blasts on specific regulation or advisory from regulators and global initiatives

•  SMS message – to Board members and heads of member-MFIs

Events and small group activities

•  One “event of the year” – MCPI Annual Conference •  Working/peer groups on thematic areas (SPM, Green Energy)

Conclusion

Know your members!

Define products and services according to different member segments

Member engagement will depend on how the association responds to the needs of members

Group Exercise: MCPI You are a consultant again! This time in the Philippines! 1.  Segment MCPI’s members:

•  NGOs & Foundations •  Rural Banks •  Banks •  Cooperatives •  Other support agencies

2.  Now match the services to each segment. Which services meet which segment’s needs?

3.  Now, identify which segment is well served? 4.  Which segment is underserved? 5.  Spend 10 minutes brainstorming about how you can serve

these less served groups better. What additional services should MCPI offer? Who would this help and why?

Group Exercise: MCPI 1) Advocacy: A.  MCPI works with the Central Bank on matters relating to the

regulation of microfinance institutions, particularly banks and NGOs

B.  MCPI spearheaded the formulation of a Code of Practice for MFIs C.  Initiated the drafting of the Standard Chart of Accounts for NGOs D.  Promoted the MF Performance Standards for all types of

institutions 2) Capacity Building: A.  Transforming MFI formal insurance schemes to formal B.  deepen understanding of agriculture-microfinance models and

practices 3) Social Performance Management: A.  Efforts to scale up the practice of social performance management

and mainstreaming it into the overall performance management of MFIs by improving the understanding and appreciation of SPM

Group Exercise: MCPI 4) Performance Monitoring & Benchmarking: A.  Financial and outreach performance of MCPI members and

other microfinance industry players such as NGOs, rural banks, thrift banks, and credit cooperatives

B.  Partnered with the Microfinance Information Exchange (MIX) for its benchmarking tool.

C.  Promotes the use of Customized Performance Reports (CPRs) to help MFIs assess their strengths and weaknesses in terms of financial and operational performance.

5) Knowledge & Resource Center A.  Increasing the availability of industry information,

microfinance best practices, and innovations in microfinance. B.  Circulates benchmark data and reports, publishes

microfinance industry reports and puts forward a microfinance research agenda.

C.  Forums and conferences to facilitate knowledge sharing











Conclusions 1) Membership fees •  What do we do about free riders? Need to consider that the association is

representing a whole sector. •  Scaled vs fixed fees: smaller institutions require more work- but they have less

money. Overall, there is a consensus for a scaled fee to be more inclusive •  Should they even be fees at all or should we consider them institutional

“cuotas”? •  We need to promote the financial benefits from being in an association- these

have a financial value •  Legal advisory and incidence •  Publicity and public relations •  Negotiation with providers for group discounts/access to services •  Funding access •  Learning and market intelligence

•  Do we need to learn how to sell and make an “elevator pitch”?

Conclusions 2) Commercial Services •  Evolution of an industry requires an evolution of commercial services

•  Early on- experience sharing •  Need to develop service provision as the market becomes more

sophisticated •  But over time, the role is that of a market facilitator

•  Business thinking is not natural in an association, but its necessary to get the most profit out of commercial services

•  Outsourcing can be positive if it allows you to concentrate your energy on being a thought leader

•  Thought leadership is critical to being taken seriously as a commercial service provider

•  While industry representation isn’t “comercial” it is a critical foundation to the sustainability of the association

Conclusions 3) Knowledge Management and Information •  The importance of benchmarking – allows a network to be up to date on changes

in the market •  Technology can increase the utilization of the network- in PMN “anyone can

play with the data” •  Information can help reduce over indebtedness by identifying where clustering

of services may be •  Information can be used by different stakeholder in different ways to support the

market differently- it is useful to provide access to all to create a healthy balance between MFI- led growth, regulation and support.

•  We questioned what is the best way to learn and how we can use the learning pyramid to think about the way we are sharing knowledge in our associations

•  Incorporating “learning by doing” more actively in our network activities can offer greater value to our members

•  Member exchanges •  Group work •  Action research and sharing

Conclusions 4) Member engagement •  Member engagement requires a strategy to involve members in a regular way- in

the Philippines, “Peer pressure” to publish who is participating in what activities •  Using technical working groups to deepen member engagement •  How do we segment members?

•  Size •  Geography •  Institutional type

•  Important to segment our members but we need to consider their needs. Without understanding their needs, we may miss opportunities to serve them better

•  We need to be careful as institutions from not to try to serve everyone with limited capacity, sometime, segmentation means splitting up.

Conclusions Final thoughts •  A network’s strength comes from the value that it is offering its members •  Sustainability and value are closely tied •  Value comes from the effective representation and service to the membership •  Financial value comes from starting to develop strategies with a more

commercial apporach

Conclusions

Member Value

Financial Sustainability

Thank You

Documents

NEX- Network Summit Enhancing the Value …...Mr. Allan Sicat, Microﬁnance Council of the Philippines (MCPI) 16:30-17:00 Group exercise on theme 4-member engagement 17:00-17:15 Group