COPIE 2 - Learning Network Berlin, 21st May 2010 Author: Brigitte Maas Presenter: Dr. Bernd Curtius
Microfinance in Germany
2000: first four microfinance pilot projects for young unemployed people started – financed by the federal job agency
Microfinance in Germany is relatively young compared with other EU countries (e.g. France, UK)
2002 – 2007: with the support of EQUAL – substantial progress was made in the development of structures, approaches, products and tools
„ DMI – Deutsches Mikrofinanz Institut“ was founded as a meso level actor to support the establishment of local MFIs: training, development of lending methodologies, a loan product framework, an online-tool for loan procurement and quality and riskmanagement (f.e. monthly benchmarking / portfolio at risk for the „Mikrokreditfonds Deutschland“)
Microfinance in Germany
„ Mikrofinanzfonds Deutschland“ (2 Mio €)
was founded by two federal ministries, a federal public bank and a private ethical bank as a risk fund for microloans respectively MFIs.
Microfinance in Germany 2009: after 3 ½ years of experiences still a small level of outreach ( each year duplication of figures ): 12 DMI accredited MFIs / 521microloans 2010: significant rising of local MFIs and microloan disbursements since mid of February: 15 DMI accredited MFIs / 270 microloans (only 2010) What is the reason?
End of January 2010: Start of „Mikrokreditfonds Deutschland“ The new fondsvolume is 100.000.000,- €! The fonds grants 800 Euro for each new microloan (will probably decrease in the future). MFIs can use this benefit to cover institution building costs.
Loans 2010 Loans: 270 Payout: 4.261.451 Loans with small problems: 13 % Loans with bigger problems: 17 % Loan defaults (last 12 months): 3,17 %
DMI Loan – the product framework loan sum: up to 20.000 € steplending: first loan max. 5.000 € interest: 7.5% p.a. credit period: up to 35 months - no grace period or maturity loan up to 6 months collateral: different - most MFI‘s ask for guarantors (50% of loan sum), MFI‘s bear a default risk of 20% for which they have to set up a desposit account at GLS Bank
Strukture of microfinance-system Example: ostpol° credit German Mikrofinance Institute Microfinance-Fonds Germany Microfinance Instition Micro- finance- Fonds Offenbach multipliers Credit institute GLS Bank Client loan-application, support presentation loan 20 % liability (first loss) 100 % guarantee Preparation Know How / Systems / Tools Benchmarking / Quality-Audits „ go“ „ go“
COPIE Project (I) Our top questions are:
How can we give more loans?
What conditions do we need?
Who can tell us what to do?
COPIE Project (II) MFIs have a need of improve in this topics
public relation / branding
So, sucessful microfinance strategies and cases in other EU countries have been identified to learn from.
personal / qualification
The Strategies and Cases to learn (I)
strategy 3: self-help micro-finance incl. group lending microlending programmes, which build up on dezentralized forms of micro-lending f.e. AgroInvest (Montenegro), Fudusz Mikro (Poland)
strategy 2: pure micro-lending experience with very small loans and huge quantities f.e. MFI's from Romania, Bosnia or Montenegro
strategy 1: improvement of micro-enterprise lending systems f.e. UnSolMon (Catalunya), ADIE (France)
The Strategies and Cases to learn (II)
strategy 5: multiple-service programmes micro-finance as one component of a service package for business starter's and SME f.e. business cooperatives (Belgium), business associations (UK), Smart (Belgium)
strategy 4: saving based micro-finance (or similar) forms of micro-finance to reduce fear of potential clients to apply for a loan f.e. through pre-saving f.e. credit unions (UK), cooperatives (Poland)
The Methodology (I)
contact international experts (with regard to strategy 1-5) that German MFI‘s get first taste of strategy
Recognise what is working in our MFIs and what isn´t
Preparated study visits with German "Microfinance Scouts“ to draw up expert's reports for MF practitioner‘s in Germany
National knowledge transfer workshops
The Methodology (II)
Organizing group study visits for interested microlending practioner's (selected strategies)
Documentation of „lessons learned“ in practitioners manual
Organizing mainstreaming conferences
microfinance institutions (national / transnational) as operational partners
ESF stakeholders as funders and promoters
local, regional, national and European institutions as mainstreaming partners
National and European networks as prospective strategic and operational partners (f.e. MFC, EMN)
Thank you very much for your attention! www.mikrofinanz.net www.mikrokreditfonds.de