Michael HampSenior Rural Finance Adviser – IFAD(International Fund for Agricultural           Development)              It...
Africa Finance & Investment Forum -AFIF2012               Financial Inclusion through SMEs & Cooperatives, Rabobank Headqu...
Overview:Financial access in rural areasRural microfinance -TerminologyRural Finance as part of IFAD’s operationsIFAD’s Ru...
Financial access in rural areas•   2.7 billion people around the world have no access to formal financial services•   Over...
Terminology• Rural finance: Financial  services used in rural  areas by people of all  income levels                      ...
Rural Finance as Part of IFAD’s Operations                         Programme Management Department                     Pol...
IFAD’s Rural Finance Policy- key principles• Support access to a wide variety of financial  services, including savings, c...
Partner Financial Service Providers          FORMAL                                    INFORMAL                           ...
33 Years Experience in Rural Microfinance                                   Facing the challenges of                      ...
33 Years Experience in Rural Microfinancea) focusing on agricultural lending challenges• Taking banking services to the pe...
33 Years Experience in Rural Microfinance b)focusing on IFAD’s competencies                    • Banking beyond branches  ...
Sustainable Outreach and DeepeningEthiopia       • RUFIP targets > 6 m households through RUSACCOs               • RAFIP s...
Emerging Lessons in Rural Microfinance•    Member-based MFIs can facilitate rural outreach and financial deepening:       ...
Discussioncontact: Michael Hamp, +39-06-5459-2807, m.hamp@ifad.org
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AFIF 2012 Session I - Part1 - Michael Hamp - IFAD

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AFIF 2012 Session I - Part1 - Michael Hamp - IFAD

  1. 1. Michael HampSenior Rural Finance Adviser – IFAD(International Fund for Agricultural Development) Italy
  2. 2. Africa Finance & Investment Forum -AFIF2012 Financial Inclusion through SMEs & Cooperatives, Rabobank Headquarters – Utrecht, NL, 17-19 June 2012Michael HampSenior Rural Finance AdvisorSustainable Approaches to Financial Deepening and Rural Outreach
  3. 3. Overview:Financial access in rural areasRural microfinance -TerminologyRural Finance as part of IFAD’s operationsIFAD’s Rural Finance Policy - key principlesPartner financial service providers33 years experience in rural microfinance a) focusing on agricultural lending challenges b) focusing on IFAD’s competenciesSustainable outreach and deepening – country casesEmerging lessons in rural microfinanceDiscussion
  4. 4. Financial access in rural areas• 2.7 billion people around the world have no access to formal financial services• Over 90% of people in rural areas lack access to financial services
  5. 5. Terminology• Rural finance: Financial services used in rural areas by people of all income levels FINANCIAL MARKET• Agricultural finance: RURAL FINANCE Financing agriculture- related activities, from production to the market MICRO FINANCE AGRICULTURAL• Microfinance: Financial FINANCE services for poor and low- income people
  6. 6. Rural Finance as Part of IFAD’s Operations Programme Management Department Policy and Technical Advisory Division Financial Assets, Markets and Enterprises - FAME - Unit Rural Finance Core Business Rural FinanceSpecial Facilities(FFR and WRMF) Rural Economic Economic & Financial Development Analysis (VCD, Private Sector)
  7. 7. IFAD’s Rural Finance Policy- key principles• Support access to a wide variety of financial services, including savings, credit, insurance, leasing, remittances and payment systems• Promote a wide range of financial institutions, models and delivery channels• Support demand-driven, market-based approaches in collaboration with the private sector• Develop and support long-term strategies focusing on sustainability and poverty outreach• Promote an enabling environment for rural finance
  8. 8. Partner Financial Service Providers FORMAL INFORMAL Community Public, Private, Non-Bank NGOs Based Cooperative Financial MFIs Financial Banks Institutions OrganizationsSlide courtesy CGAP
  9. 9. 33 Years Experience in Rural Microfinance Facing the challenges of financing small-scale agriculture • Operating a self-sustaining• Dispersed populations rural MFI• Poor infrastructure • High information &• Seasonality of agricultural transaction costs activities • Private sector approaches• Few collateral assets crowded-out by subsidized• Risks of farming (price, & targeted lending production, …) 30 m borrowers from IFAD assisted MFIs US$ 200 average loan size 15 m voluntary savers US$ 127 average savings women account for 83% (24 m pax)
  10. 10. 33 Years Experience in Rural Microfinancea) focusing on agricultural lending challenges• Taking banking services to the people via ICT applications• building loan analysis & repayment schedules on revenue flows from all farm, labour and business activities, incl. remittances• using specific methodologies for micro-level index insurance applications• securing loans by contractual agribusiness payments (VCF), WRS, etc.• Overcoming poor lending practices and improving repayment culture• Developing technical capacity at the local level
  11. 11. 33 Years Experience in Rural Microfinance b)focusing on IFAD’s competencies • Banking beyond branches • Replicating Targeting Ultra Poor • Managing price risks (commodity exchange, warehouse receipt system) • Enhancing the value chain financing methodology • Promoting & consolidating decentralized community-based financial systems & linkages • Flexible disbursement & repayment schedules (seasonality) • R&D in weather and yield index insurance (WRMF) and productive use of payment services and rural remittances (FFR)
  12. 12. Sustainable Outreach and DeepeningEthiopia • RUFIP targets > 6 m households through RUSACCOs • RAFIP supports formal rural community banks andGhana ARB Apex Bank and credit union association • RFCIP supports community banks and FinancialSierra Leone Services Associations (FSAs) • RFCIP supports some 80 semi formal Village-basedThe Gambia Savings and Credit Associations (VISACAs) of 130,000 members
  13. 13. Emerging Lessons in Rural Microfinance• Member-based MFIs can facilitate rural outreach and financial deepening: Johannesburg Findings Johannesburg 1-3 April, 2009 Agricultural Finance in Africa “Cooperative financial institutions and mutuals are often well positioned and effective in providing financial services for agriculture, and other financial institutions can draw valuable lessons from their experiences.”
  14. 14. Discussioncontact: Michael Hamp, +39-06-5459-2807, m.hamp@ifad.org

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