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  1. 1. 4th “University Meets Microfinance” Workshop Introduction to the “Microfinance Plus” concept Didier Krumm, PlaNet Finance October, 22nd 2010 University of Bergamo Project co-financed by the European Commission
  2. 2. 2 Overview 1. Microfinance plus concept 2. Build microentrepreneurs capacities 1. Microfinance and Education 2. Microfinance and Health 3. Strengthen the economic activities 1. Value Chain 2. Microfinance and Environment
  3. 3. 3 1. The “Microfinance Plus” concept (1/2) MICRO-ENTREPRENEURS MICROFINANCE HEALTH Business Skills Gender issues Illiteracy Market access
  4. 4. 4 1. The “Microfinance Plus” concept (2/2) Build microentrepreneurs capacities Strengthen the economics activities Microfinance Plus strategy Sustainable income-generating activities and financial autonomy Microentrepreneurs Families Communities Income-generating activities Small businesses Targets
  5. 5. 5 2. Build capacities 2.1. Microfinance and education  Inequalities in access to financial services, combined with cultural, social or gender inequalities, provokes phenomena of exclusion.  Development of the skills and qualifications of microentrepreneurs can improve their working conditions and levels of business profitability. Main objectives of Microfinance and education: – Develop the skills of microentrepreneurs through training, particularly in the areas of management and financial control; – Support microentrepreneurs in their projects, and conduct or facilitate programs which build their capacity. Key figures Distribution of out-of-school children by region, 2008 • 46% in Sub-Saharan Africa • 27% in Southern Asia • 4% in developed Regions Proportion of own-account and contributing family workers in total employment, 2009 Projections • Southern Asia 84 % of women 74 of men • Sub-Saharan Africa 84% of women 71% of men Source: MDG Report, 2010
  6. 6. 6 2. Build capacities 2.2. Microfinance and health  Illnesses and pandemics represent both one of the causes and one of the consequences of situations of poverty and precariousness.  Improving the health of populations is therefore an essential condition of sustainable development. Main objectives of Microfinance and health: – Provide access to adapted microfinance products for people with illness or disability; – Prevent diseases by providing critical information to microentrepreneurs and conduct awareness campaigns; – Develop micro-insurance solutions. Key figures Proportion of children under age five who are Underweight 2008 • 46% in Southern Asia • 27% in Sub-Saharan Africa • 26% in developing regions Under-five mortality rate per 1,000 live births, 2008 • 144‰ in Sub-Saharan Africa • 74‰ in Southern Asia • 72‰ in developing regions • 6‰ in developed regions Source: MDG Report, 2010
  7. 7. 7 3. Strengthen economic activities 3.1. Value chain  For many microentrepreneurs, market conditions are very unfavorable: – too many intermediaries, – not enough outlets, – concentration of similar activities in the same area – increased competition.  Value chain = “the full range of activities that are required to transform a product or service from conception to markets and consumers” (Netherlands Development Organization SNV)  Inclusion of small entrepreneurs in local, national and global value chains, in order to increase production, income and employment opportunities for them. Main objectives of Microfinance and Value chain: – Analyze, organize and strengthen the value chain through microfinance; – Structure groups of small- producers and SMEs in order to ensure that they capture maximum value for their resource inputs.
  8. 8. 8 3. Strengthen economic activities 3.2. Microfinance and environment  Nearly 1.6 billion people worldwide without access to basic energy services, with significant consequences on the health.  This situation compromises the development of income generating activities and slows the entrepreneurial capacity of the inhabitants.  Economic activities often engender the deterioration of the environment and dramatically change the ecosystems on which some economic activities rely. Main objectives of Microfinance and environment: – Link poverty alleviation to the protection of the environment; – Leverage the existing infrastructure of an MFI to implement programs which make positive impacts in the areas of renewable energy, waste management and biodiversity. Key figures Proportion of population using an improved water source, 2008 • 50% in Oceania • 60% in Sub-Saharan Africa • 87% in Southern Asia • 84% in developing regions • 100% in developed regions Source: MDG Report, 2010
  9. 9. Let’s share your experience and knowledge ! Project co-financed by the European Commission