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1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt
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1101755892409_Mapping_RF_Models__Linkages_and_Products.ppt

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  • 1. Mapping of Rural Finance Products, Delivery Models and Linkages SEEP Rural Finance Pre-Event Workshop Washington D.C. – October 26, 2004 Maria Pagura, FAO Rural Finance Group
  • 2. Presentation Overview
    • Rural Finance Demand and Supply
    • Innovative Products and Services
    • Mapping of Delivery Models and Linkages
    • Moving towards Design and Choosing the Right Mix
  • 3. Demand and Supply of Rural Financial Services
  • 4. Demand for Rural Finance
    • Agriculture production – medium and long-term loans, leasing arrangements, lines of credit, crop insurance
    • Agriculture based industry – investment and working capital loans, lines of credit
    • Non-farm enterprise and trade – investment loans, short-term working capital loans,
    • Household consumer finance - emergency loans, health insurance, savings, remittances, housing
  • 5. Supply of Rural Finance
    • Informal: Moneylenders and Traders
    • Semiformal: Village Banks, NGOs, MFIs Cooperatives, Credit Unions, Input Suppliers, Agribusiness Companies, Marketing Companies
    • Formal: Agricultural State Banks, Commercial Banks, Community and Rural Banks, Postal Banks
  • 6. Innovative Rural Financial Delivery Models, Linkages and Products
  • 7. Innovative because they......
    • expand access to new segments of the rural population not traditionally served
    • create quality increases in terms and condition of current products already being offered
    • broaden the variety to offering new products and services
  • 8. Innovative Rural Finance Products
  • 9. Loan Products
    • Working capital loans
    • Lines of credit
    • Emergency loans
    • Term finance loans
    • Warehouse receipts
    • Leasing arrangements
  • 10. Savings Products
    • Mobile Banking – flexible savings products
    • Improved ROSCA open access savings
    • Certificate of Deposits
  • 11. Insurance
    • Agriculture – indexed weather based instruments
    • Health
    • Life
  • 12. Other Services
    • Payment services
    • Remittances
  • 13. Mapping of Delivery Models
  • 14. Traditional Delivery Channels MONEYLENDERS/TRADERS CLIENTS COMMERCIAL BANKS CLIENTS (Private and State Development) MFOs and NGOs CLIENTS MEMBERSHIP-BASED ORGANIZATIONS CLIENTS (Self Help Groups, Village Banks, Co-ops, Credit Unions)
  • 15. Multi-Partner Delivery Channels Private Banks State Banks Postal Banks Insurance Cos. MFOs NGOs Credit Unions Village Banks Agro-processors Input Suppliers Marketing Companies Leasing Companies Warehouse Operators Supermarket Chains Clients Non-bank Financial Institutions (APEX, Investment Funds)
  • 16. Using Agribusiness as a Delivery Channel Clients Trader Bank or FI Marketing Co. Farmer Assoc. Private Investors
  • 17. Innovative Linkages and Delivery Channels Producer Business Models New Delivery Channels Other Business Service Models Bank - MFI Wholesale Models
  • 18. Producer Business Models
  • 19. Banks and Ag Processing Firms
    • Land Bank of South Africa and Cotton Processing Firms - providing credit to farmers
    • Commercial Banks and Ag Processing Firms in Kenya, Zambia, Mozambique – providing credit to farmers
    • Role of mills in facilitating finance to small and medium scale farmers.
  • 20. Banks and Supermarkets
    • Farmers access to loans due to purchasing arrangements with supermarkets – HortiFruiti in Costa Rica
    • Banks use supermarkets as delivery channels for range of services, including deposit mobilization - Nedbank and PicknPay Chains in S. Africa
  • 21. Banks and Inputs Suppliers
    • Teba Bank (S. Africa) using point of sales terminals to provide banking services through rural trader shops and MFIs
    • Drumnet-Pride Africa linking farmers to financial service, primarily lines of credit through the use of smart cards with input suppliers coupled with access to market information
  • 22. Bank – MFI Models
  • 23. New Wholesale Models
    • Portfolio buyouts
      • One time purchase of MFI portfolio
    • Partnerships
      • Bank holds loans, MFIs monitor and collect payments
    • On tap Securitization
      • Continuous buyout of MFI portfolio
    • Systems based on incentives and risk sharing arrangements – default limits and guarantees
  • 24. New Wholesale Models
    • Investment funds - debt and equity instruments for MFIs
  • 25. Bank – MFI Linked Services
    • Banks – MFI Linkage for deposit mobilization services
    • Post Office Bank in S. Africa acts as payment backbone for a range of MFIs and credit unions
  • 26. Other Business Service Models
  • 27. Linkages and Delivery Channels
    • Life insurance firms using post office banks as payment facility for rural clients – S. Africa and Kenya
    • Social pensions paid out in rural areas through commercial bank mobile units – S. Africa
  • 28. Moving towards Design and Choosing the Right Mix
  • 29. The A.C.T. Principle
    • A nalyze and understand the key constraints and challenges of provisioning rural finance
    • C omprehend the different products and delivery models available
    • T ake the best mix of products and delivery models to effectively deal with the constraints in your area of intervention
  • 30. “ Creativity is thinking up new things. Innovation is doing new things.” Theodore Levitt Professor Emeritus, Harvard Business School

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