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TBLI CONFERENCE™ EUROPE 2012 - Zurich - Switzerland

TBLI CONFERENCE™ EUROPE 2012 - Zurich - Switzerland

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Isabelle Levard Isabelle Levard Presentation Transcript

  • Inclusive Finance:Responsible investment in microfinanceNovember, 2012
  • Microfinance/Inclusive Finance:Balancing Return on Investment and Social Responsibility, while ExpectingPositive ImpactIn the last 15 years, the microcredit sector, matured progressively to microfinance andmore recently to a broader inclusive finance sector ranging from the offer ofmicrocredits to SME development, housing loans, payments including mobile payment,microinsurance, pensions, etc.From a non-profit driven industry, having high expectations on impact, the sectorevolved into a double line industry, where return on investment is key to attract thefunding needed to cover the microfinance industry needs. However, recent failures,particularly in India, are making the investors more cautious about microfinance whileMicrofinance operators struggle reaching or demonstrating their positive impactThe presentation will briefly describe this evolution before focusing on the case studyof Microcred, and how it concretely defines its commitment to inverstors: attractivereturn and social responsabilityMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 2
  • A Current stage of development of microfinanceMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 3
  • A. Current stage of development of microfinance Microfinance has progressively extended from credit only to 5 types of financial servicesDefinition of microfinance? 5 types of financial services▪ Target population is the Players “economically” active poor” which represent more than 75% of the Market Traditional MFIs Commercial players developing world active population – The “poor” with USD 1-2/day ▪ Strong growth in the last They have shown that More commercial (29% of developing world few years it can be profitable players are entering Credit population) ▪ At most 150 mio active the market – The developing world “middle microcredit loans class” with USD 2-13/day (49%) ▪ 4 times more microsavings MFIs struggle to offer Postal banks and▪ Loans tend to be small typically accounts than microloans ranging from USD 15-1,000 Savings savings because of cooperatives provide regulatory hurdles the majority of savings▪ Microfinance started with the accounts to the poor development of microcredit in the 1970s with simultaneous efforts in ▪ Market concentrated in Asia MFIs serve as Commercial insurers Bangladesh and Latin America ▪ Life insurance as the most distribution network are the most common Insurance common product (health providers▪ By extension microfinance now insurance the least common) covers a full suite of financial services ▪ Strongly facilitated by new MFIs have better Commercial players – Pursuit of opportunities (e.g., technologies (mobile phones, Payments distribution channels can now cover rural microenterprises, quality of life correspondent banking) and and peri-urban areas improvements) card-based technologies – Protection in emergencies (e.g., personal crises, catastrophes) ▪ High costs in many countries MFIs serve as Commercial players – Ability to manage life cycle Remittances ▪ High share of informal distribution network are leading because of events (e.g., life events, care for transfers international networks the elderly) Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 4
  • A. Current stage of development of microfinanceThe microfinance sector has developed strongly for 10 years and is nowconsolidating Total 64 68 +42% p.a. 55 ▪ Microfinance sector 47 has experienced a 31 strong development 22 10 14 since 2000 2 3 5 – Total number of assets has increased by an average 42%/year +18% p.a. – Total number of MFIs 1.413 1.434 has increased by 1.287 1.142 1.227 1.082 18%/year only 942 764 501 ▪ Since 2008, there 208 312 appears to be a consolidation of the market towards fewer and bigger MFIs – MFI total number has 67 decreased since +21% p.a. 52 2008 35 39 – Since 2000, MFI 26 average size has 16 20 10 10 11 13 been multiplied by 7 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference SOURCE: Mix Market 2000-2010 5
  • A. Current stage of development of microfinanceReturns are still good, but weakened by competition and saturated markets Returns are decreasing over the past years but is stagnating between 2010 and 2011. But 2011 reflects a still above performance as compared to 6months LIBOR (0,7%) and 6 months EURIBOR (1,6%). The overall downtrend attest lower market interest rates, higher loan loss provision expenses and increasing competition especially in saturated markets. In order to preserve its annual return, investors have no choice but to focus on underserved market and underserved niches (new products), as saturated market, above the potential disastrous effect on micro- entrepreneurs, greatly jeopardize perspectives of return Sources: CGAP and Symbiotics MIV survey reports 2010, Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 2011 and 2012. 6
  • A. Current stage of development of microfinance6 major trends characterize the microfinance sector 1 Sustained growth of the sector though geographic differences 2 A move from microcredit to financial inclusion, with a wider range of players, but potentially a smaller number of players 3 Increased assessment of institutional performance, both social and financial 4 Increased overall funding with a stronger share of local funding 5 Higher level of government interest with the objective to impact the sector through better regulation 6 An apparently healthier sector though with serious risk of portfolio lossesMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference SOURCE: Mix Market 2010 7
  • A. Current stage of developement of microfinance ▪ Expanding set of products and providers with a move from microcredit to microfinance/full financial inclusion ▪ Increased competition leading to greater consolidation in the sector, either among MFIs or through the acquisition of MFIs by commercial players seeking to enter the market or strengthen their positions ▪ Growing trend to assess MFIs’ performance and impact A move from (economic, social, environmental) microcredit ▪ Increasing overall profitability of the sector expected in the2 to financial inclusion Major long run through the use of low-cost distribution channels with a wider range of (e.g., mobile financial services, correspondent banking) impacts on players, but potentially ▪ Potential decline in profitability due to higher provisions for a smaller number of microfinance expected greater portfolio losses players payers ▪ Considerable efforts to improve corporate governance and Increased assessment professionalize risk management (e.g., initiatives to improve of performance risk systems/ standardize MIS in all regions)3 and increased levels of ▪ Credit risk perceived as a real threat for the sector profitability (overindebtedness of millions of microfinance customers?) which can be further fuelled by increased funding and competition between lenders ▪ Greater interest of government in the industry (especially Latin America, BRICS) ▪ Greater importance of national regulatory environment (e.g., regulations to allow nonbank institutions to take savings or sell insurance; regulations to permit technology- enabled approaches) Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 8
  • A. Current stage of development of microfinance Microfinance, Responsible Investment, a stable financial return, a socially focused fundMIVs are more and morefocused on ESG objectives andstrengthen their requirementsin terms of social impact.Moreover, they are increasingtheir commitment byapproving CCPs.Investors are being more demanding about socialand environmental performance. This isimproving transparency and accountability onsocial performance in microfinance.- Values of responsibility (Smart Campaign on 63% of microfinance investors, doing good and socialclient protection and the Principles for Investors performance are their first investment motivations. Only 11%in Inclusive Finance) percent of the investors surveyed ranked financial return as- Corporate ethics their primary investment motivation.- Social performance management Funders are beginning to analyze their 2,300 endorsers of the Smart “social” added value more deeply Campaign in 2011  About 200 social rating in 2011 Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 9
  • B Balancing return and social responsibility : the case study of MicroCred I.MicroCred overview II.Commitments to investors III.Social ResponsabilityMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 10
  • B Balancing return and social responsibility : the case study of MicroCred I.MicroCred overview II.Commitments to investors III.Social ResponsabilityMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 11
  • B. Balancing return and social responsibility B.I. MicroCred overview – as of September 2012MicroCred builds and manages microfinance institutions in Africa and in ChinaMicroCred is: an investment company that builds and manages microfinance institutions in emergingmarkets (Africa & China).MicroCred’s mission is to provide qualitative financial services that are accessible and adapted to theneeds of the individuals that are underserved and unserved by the financial sector, particularly the micro,small and medium entrepreneurs. Its objective is to improve the living conditions of clients and theirfamilies, and to contribute to the economic development of countries in wich it operates. MicroCred alsocommitted to implementing a fair human resources policy while respecting the environment it operatesin. Shareholding structure MC S.A. Network Africa: 5 institutions 154,583 clients EUR 74.3M loans EUR 36.8EUR savings 1,233 staff China: 2 institutions 10,589 clients EUR 39.4EUR loans 189 staffMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 12
  • B. Balancing return and social responsibility B.I. MicroCred overview – as of September 2012 Operat ional Result s as of Sept ember 30, 2012 Operational Institutions 6 Institutions in Pre-Operational stage 1 Institutions in the pipeline 2 Total Number of Clients 165 172 Total Number of Ac tiv e Borrowers 70 585 Gross Outstanding Portfolio (EUR) 113 824 565 PAR>30 1,51% Outsanding Sav ing Portfolio (EUR) 20 634 748 Total Number of Ac tiv e Sav ers 154 583 Number of Branc hes & Outlets 55 Staff 1 422 As of September 2012, MicroCred served more than 160,000 clients in the world. Oustanding Loan Portfolio & Number of Active Loans Client Savings (Number and Volume)Volume (EUR) Number of active borrowers Volume (EUR) Number of saving accounts120 000 000 80 000 25 000 000 300 000 70 000 Mali Côte dIvoire100 000 000 250 000 60 000 Sichuan 20 000 000 80 000 000 Nigeria 50 000 Côte dIvoire 200 000 15 000 000 60 000 000 40 000 Nigeria 150 000 Sénégal 30 000 Nanchong 10 000 000 40 000 000 100 000 20 000 Madagascar Sénégal 20 000 000 5 000 000 10 000 50 000 Madagascar Total Active 0 0 Saving Accounts Active Loans 0 0 déc.-07 déc.-08 déc.-09 déc.-10 déc.-11 sept.-12 déc.-07 déc.-08 déc.-09 déc.-10 déc.-11 sept.-12 Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 13
  • B Balancing return and social responsibility : the case study of MicroCred I.MicroCred overview II.Commitments to investors III.Social ResponsabilityMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 14
  • B. Balancing return and social responsibility B.II. MicroCred commitment to its investors Market Opportunity: Microfinance has produced growth of ~42% p.a. in recent years. Despite the 2009 financial crisis, a recent J.P. Morgan survey1 concludes that the outlook for equity investment remains positive. Whilst South Asia and Latin America may have become overheated, opportunities await in Africa and China for those with experience of building successful greenfield institutions Risk Diversification: MicroCred is growing a proven model into 14 high performing banks / NBFIs by 2015. The growth will be focused in 14 underserved markets with low risk correlation Uncorrelated Asset Class: In the last 10 years, microfinance has proven to be an uncorrelated asset class in every major emerging market crisis (e.g. LatAm, Asia, and more recently the Global Financial Crisis) Long Term Investment: MicroCred offers an opportunity to invest in a company offering strong and stable performance over the long term. MicroCred is building its microfinance portfolio in the next 5 years and high yield will be offered to long-term investors Opportunity to Leverage at Low Risk: MicroCred has an equity to assets ratio of 30% (compared to emerging markets banks average of 10.9%1), and a positive liquidity gap (borrowings are of longer duration than average loans) – thus equity investors can benefit from increased future leverage at low risk 1 “Microfinance Global Valuation Survey 2010”, J.P. Morgan and CGAP, 02 March 2010 2 “Shedding Light on Microfinance Equity Valuation”, J.P. Morgan and CGAP, February 2009--------------------- Financial Considerations :  MicroCred is raising 30 MEUR from 2012 to start 8 new microfinance banks and NBFIs by 2015;  Targeted IRR above 20% by 2020  By the end of 2017, MicroCred will reach more than 750,000 clients with have more than MEUR 740 active loans, with a PAR below 2,5% Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 15
  • B. Balancing return and social responsibilityA microfinance investment effectively diversifies an investment portfolio – it is a non-correlated asset class An attractive asset in an uncertain climate Uncorrelated to other investments • Research concludes that MFIs “display virtually no correlation with global capital markets” “Do you find microfinance investments more or less • JP Morgan offers a Beta of < 1 for Compartamos, reflecting attractive in light of the global financial crisis?” its ability to diversify an investment portfolio JP Morgan states 3 main reasons for counter cyclicality: 1) Original risk management techniques: small loans, short maturities, personal cashflow evaluation, family and neighbour interviews, monthly collection Source: “Microfinance Insights” Aug’09 2) Client base in safer sectors: provide essential products Top two reasons why GPs find microfinance attractive: (e.g. food or clothing), less integrated into formal economy, not dependent on imports or currency 1. “Low correlation to other asset classes” fluctuations. 2. “Less impact from global financial crisis” 3) Positive liquidity gap: MFIs can access long-term debt funding from international development banks Historical robustness in previous crises: 40 MicroCred positive liquidity gap Average Months 30 borrowing Previous Events Largest MFI Worst Impact 20 duration Asian financial crisis BRI (Indonesia) NPL peaked at 5.7% 10 Average 0 loan to Bangladesh Floods (2001) Grameen NPL peaked at 6.9% client H1 - 07 H2 - 07 H1 - 08 H2 - 08 H1 - 09 H2 - 09 H1 - 10 A majority of general partners find microfinance A microfinance investment offers diversification particularly attractive in today’s climate benefits to the wider portfolio Sources: Can Microfinance Reduce Portfolio Volatility?, Nicolas Krauss and Ingo Walter, NYU Stern, March 2008 Shedding Light on Microfinance Equity Valuation, JP Morgan and CGAP, February 2009 Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 16
  • B. Balancing return and social responsibility The Middle East, Africa and China are great growth opportunities of the future Microfinance investment before 2010 Recent trends 100% 9% South Asia 80% 32% Latin America & 63% Recent Regulatory Caribbean Improvements 60% Eastern Europe & 40% Central Asia 6% 45% 8% Africa + MENA 20% 10% 8% China, E Asia 13% 0% 6% & Pacific Total Equity Total Debt Transactions Investments Equity Transactions: Debt Investments: Focused primarily on India Overwhelmingly invested into Latin and Bangladesh America & Eastern EuropeSources: Adapted from CGAP Deal Book 2009; data from MIX Market; and “International Funding of Microfinance Institutions”, ADA Source: Microcredit summit campaign report “Penetration” = Total MFI loans/# poor families Virtually all historical microfinance investment has gone into Recent regulation improvements are igniting growth in the Middle LatAm, India/Bangladesh or Eastern Europe East, China and Africa – where there is a huge market awaiting Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 17
  • B. Balancing return and social responsibilityB.II. MicroCred commitment to its investorsMissionMicroCred’s mission is to provide financial services to micro entrepreneurs excluded from thetraditional financial sector by building a group of leading microfinance banks and finance companies.MicroCred Holding will cover at least 14 markets with a strong focus in Africa and China by 2015. Objectives Distribution of MFIs in 2009 Proposed distribution of MFIs by 2015 1 Generate Financial Returns while reach large number of unserved clients Be an African 2 Responsible Microfinance Leader (with strong focus on francophone Africa) Be a Chinese Products in 2009 Products in 2015 3 Responsible Credit Savings Channel & Services Credit Savings Channel & Services Microfinance Leader Micro loan Savings Card Micro loan Savings Card SME loan Term Deposits SME loan Term Deposits ATM 4 Broaden product range Group Group Savings Plan Remittances . guarantee loan guarantee loan M-Banking Housing Insurance(Financial projections assume 8 new investments with Rural Financesimilar growth profile to existing MicroCredsubsidiaries) LeasingMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 18
  • B. Balancing return and social responsibility B.II. MicroCred commitment to its investors Growth in Deposits vs. Lending Productivity Portfolio growth vs. PAROutstanding Portfolio Portfolio growth vs. PAR Growth in Deposits vs. Lending Productivity (EUR) PAR (%) Savings Portfolio (EUR) LO productivity (EUR)120 000 000 7,0% 20 000 000 180 000 6,0% 18 000 000 160 000100 000 000 Impact of 2009 financial crisis was minimal 16 000 000 Loan Officer productivity 140 000 5,0% not impaired by deposits growth 80 000 000 14 000 000 120 000 4,0% 12 000 000 100 000 60 000 000 10 000 000 3,0% 80 000 8 000 000 40 000 000 60 000 2,0% 6 000 000 40 000 4 000 000 20 000 000 1,0% 2 000 000 20 000 0 0,0% 0 0 H1 07 H2 07 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H1 07 H2 07 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 Madagascar Sénégal Nanchong Nigeria Côte dIvoire Sichuan PAR Madagascar Sénégal Nigeria Côte dIvoire Lending Productivity Profitability of MicroCred institutions, Cumulative OSS reached within three years, monthly Operational Self Sufficiency 5 years after launch positive retained earnings allowing for dividends from Y5 Bi-annual Operational Self Sufficiency (OSS) Cumulative Operational Self Sufficiency (OSS) 250% 160% Normalized strat year 140% Profit generation 200% 120% Profit generation 150% 100% 80% 100% 60% 50% 40% 0% 20% Half 1 Half 2 Half 3 Half 4 Half 5 Half 6 Half 7 Half 8 Half 9 Half 10 Half 11 0% Half 1 Half 2 Half 3 Half 4 Half 5 Half 6 Half 7 Half 8 Half 9 Half 10 Half 11 Madagascar Sénégal Nanchong Nigeria Sichuan Côte dIvoire Target Madagascar Sénégal Nanchong Nigeria Côte dIvoire Sichuan Target 5 years acti Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 19
  • B Balancing return and social responsibility : the case study of MicroCred I.MicroCred overview II.Commitments to investors III.Social ResponsabilityBusiness Plan MicroCred – June 2012 20
  • B. Balancing return and social responsibilityB.III. Social ResponsabilityMicroCred’s Social Performance Management PhilosophyBeyond ethical considerations, the will to develop MicroCred’s Social Performance Management is driven by the strongbelief that working towards social performance enforces and secures institutional soundness and long runfinancial performance.What is MicroCred’s Social Performance management Policy?MicroCred’s Social Performance Management Policy was designed from 2010 and formalized in 2011. It was introducedto the managers of all affiliates in December 2011 and its implementation started in January 2012.The Policy is consistent with the Smart Campaign’s Client Protection Principles, with the United Nations’ Principles forResponsible Investment and with the current developments of Universal Standards for Social Performance Managementby the Social Performance Task Force.It is the baseline tool that shall guide the management of social performance in all affiliates. It defines:1 Objectives in terms of social performance;2 Processes to set up, to translate them into practice;3 Indicators to gather and analyze to check on the efficiency of processes.Part of the Policy will be implemented uniformly; some will be adapted to the particularities of each subsidiary.MicroCred’s strategy of the Social Performance Management is based on sharing and replication of best practices.Business Plan MicroCred – June 2012 21
  • B. How MicroCred is being responsible?B.III. As an operating microfinance institution: Social Performance Management Objectives & implementation of the PolicyBusiness Plan MicroCred – June 2012 22
  • B. How MicroCred is being responsible?B.III. As an operating microfinance institution: Social Performance Management MicroCred intends to “Do no harm”, “Do its best” and follow up on its success in “Doing good”, concerning the following stakeholders:Business Plan MicroCred – June 2012 23
  • MicroCred Social Performance StakeholdersImplementationIn each affiliate, the implementation of MicroCred’s Social Performance Managment Policy will involve the followingsteps:1. Define its own mission and quantitative objectives related to it. The quantitative objectives build consistencybetween local needs, by-laws and products characteristics.2. Develop precise social processes;3. Assessing practices and results by benchmarking quantitative indicators to objectives;4. Using the information obtained to improve systems and further refine social objectives. MicroCred intends to “DO NO HARM”, “DO ITS BEST” and follow up on its success in “DOing GOOD”, concerning the following stakeholders: 1)Clients : Quality, Affordability and Accessibility of services. Wide range of Financial services offer set in adequacy with clients needs. Ensure Client Protection, through standard guidelines and processes. 2)Staff: Offer equal opportunity, favor staff diversity, maintain employability of staff, propose fair remuneration, support social dialogue, develop conditions for self accomplishment at work. 3)Environment: Limit and measure Environmental impact of financed activities, Promote positive impact products 4)Community: Build Local Capacity and raise interest of young professionals, support local entrepreneurship. 5)Shareholders: Maintain regular and transparent transmission of information, efficient administration, maximize use of resources .Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 24
  • DO DO OURB. SPM towards CLIENTS BEST GOODB.I. Definition of Mission, Performance Targets & Impact Objectives IntentionEach MicroCred affiliates shall define its own mission and the corresponding objectives in terms of outcome. The chosen objectives shall build consistency between local needs, by-laws and products characteristics. ProcessesAffiliates shall define their specific mission and outcome objectives in coordination with the CSR unit at MCH level. The steps to follow are 1. Affiliates: Brainstorm to determine the mission taking into account target clients, outreach and outcome objectives; 2. Affiliates : Define relevant indicators & performance targets related to these indicators addressing each objective, in coordination with MicroCred Holding; 3. Affiliates: Present social mission and indicators to the Board; 4. Board: Validates social mission, social indicators and performance targets (see exhaustive list in Appendix 1); 5. Affiliates: Ensure that local Board, management and staff are aware of the mission and committed to it (in particular through incentive) and ensure that indicators are all collected, entered in the MIS, analysed & trigger decisions; 6. Board: Follows up on progress using indicators & monitors results through external audit on an annual basisIndicatorsHere are examples of indicators that could be considered relevant to measure outreach and outcome. The indicators chosen can bepicked among this list or proposed by affiliates.  Impact indicators Targeting & Outreach indicators Variations of clients’ income# of Active clients x% of borrowers whose revenue has increased by more than 25% p.a. REVNUSHOLD ING207(EUR) Budget Budget%var. aprouvé(1) revisé(2)al3/1 Nombredanqus6 54 REVNUS3067 1043275% RevnusdAT3067 10436275%9 Revnusfiacr 1849NADistribution by Loan Amount at disbursement Autresvn 576120NA9% x% of borrowers whose revenue has increased by 5 to 25% p.a.Average Loan Size/ % GNI x% of borrowers whose revenue has varied by less than +/- 5% p.a.# of new clients p.a. x% of borrowers whose revenue has decreased by more than 5% p.a.# of SME loans/total number of loans Average increase in revenues per borrower p/Loan cycle (in %)# of TPE loans/total number of loans# of low-end TPE loans/total number of loans Clients’ ability to generate employment% of poor1 borrowers (at various stages of clients history) % of borrowers whose employees have increased by more than 50%% of very poor2 borrowers (at various stages of clients history) Average number of jobs created by each borrower per year % of jobs preserved by the clientpoor= individual personal income below national poverty line1very poor= individual personal income below half of the national poverty line2 Variations of clients’ ability to plan for their future needs Evolutions of amounts saved by borrowersMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 25
  • B. SPM towards CLIENTS DO OUR BESTB.III. Quality and Adequacy of products and servicesC.III.1 A Large Range of Product Offer… A.III.2. … easily AccessibleIntention IntentionMicroCred has the objective to offer a full range of financial MicroCred has the objective to minimize time andproducts and services, in order to meet clients’ elementary financial money transaction costs through the development ofneeds. network, distribution channels and diverse payment systems.Processes ProcessesMicroCred affiliates shall ensure that: Channel & Credit Savings MicroCred commits to: ServicesA strategy Plan is designed annually(presenting development plan in terms Micro loan Savings Card  Facilitate access to products and servicesof products, channels, payment through development of appropriate SME loan Termsystem). ATM distribution networks (Outlets, Mobile Deposits Clean Banking, etc)Each affiliate builds local initiative to Tech Savings Remittance Plan sdevelop relevant innovative products  Accelerate transactions through the Housing Rural(Ex. of savings products adapted to M-Banking introduction of diverse payment systems Rural Savingsrubber collectors in IC, Loans dedicated Plan (ATM, Mobile Banking,..) Financeto funding of clean technologies, Insurancehousing, etc.) Leasing Indicators Indicators # # of Branches & outlets of products offered by the affiliate # # of external points of services (ATM, Network partners) of products used by clients # # Population having access to MC Services (total of clients per product # of transactions per clients per service population of areas covered) Distance to access the most remote clientMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura to access the most remote client Time 26
  • B. SPM towards CLIENTS DO OUR BESTB.III. Quality and Adequacy of products and servicesB.III.3. … and of High Quality Intention MicroCred has the objective to offer High quality services and to constantly improve and adjust its product offering to market evolution. Processes MicroCred affiliates shall ensure that:  Each new product is validated by a Market study and focus groups; its adequacy with the affiliate’s mission is checked  Clients’ opinions are collected through Annual Client Satisfaction study in a way that allows freedom of speech  Focus groups are conducted annually to ensure adequacy of product design with clients’ needs  Services are fast, secured, transparent and easily understandable.  Products are affordable, cost of services are defined in line with market offer and regulatory framework.  Repayment capacity of clients are taken into account to define loan amount.  Repayment timeline and installments are adaptable according to clients’ activities and household constraints Indicators Number of clients having participated in client satisfaction surveys p.a. % of satisfied clients Client retention rate Number of surveys of clients having resigned Main stated reasons for drop out Average length of treatment per loan Maximum waiting time in service points before being served Average waiting time in service points before being servedMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 27
  • B. SPM towards CLIENTSB.IV. Clients protection Principles (0/7)MicroCred Group subscribed to the Smart Campaign, that provide clients with internationally recognized minimum standards to protect themagainst abusive practices of MFIs. The seven principles are:1)Appropriate product design and delivery. Providers will take adequate care to design products and delivery channels in such a way that theydo not cause clients harm. Products and delivery channels will be designed with clients’ characteristics taken into account.2)Prevention of Over-Indebtedness. Providers will take adequate care in all phases of their credit process to determine that clients have thecapacity to repay without becoming over-indebted. In addition, providers will implement and monitor internal systems that support prevention ofover-indebtedness and will foster efforts to improve market level credit risk management (such as credit information sharing).3)Transparency. Providers will communicate clear, sufficient and timely information in a manner and language clients can understand so thatclients can make informed decisions. The need for transparent information on pricing, terms and conditions of products is highlighted.4)Responsible pricing. Pricing, terms and conditions will be set in a way that is affordable to clients while allowing for financial institutions to besustainable. Providers will strive to provide positive real returns on deposits.5)Fair and respectful treatment of clients. Financial service providers and their agents will treat their clients fairly and respectfully. They willnot discriminate. Providers will ensure adequate safeguards to detect and correct corruption as well as aggressive or abusive treatment by theirstaff and agents, particularly during the loan sales and debt collection processes. (This criterion includes the criteria formerly named “AppropriateCollections Practices” and “Ethical Staff Behavior”) Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA6)Privacy of client data The privacy of individual client data will be respected in accordance with the laws and regulations of individualjurisdictions. Such data will only be used for the purposes specified at the time the information is collected or as permitted by law, unlessotherwise agreed with the client.7)Mechanisms for complaint resolution. Providers will have in place timely and responsive mechanisms for complaints and problem resolutionfor their clients and will use these mechanisms both to resolve individual problems and to improve their products and services.Each MicroCred subsidiary shall implement the standard processes developed by the group and ensure that systems are in place to guarantee therespect of those principles.Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 28
  • B. SPM towards CLIENTS DO NO HARMB.IV.2 Client Protection - Avoidance of Over-Indebtedness (2/7)IntentionMicroCred takes reasonable steps to ensure that credit will be extended only if borrowers have demonstrated an adequate abilityto repay, and do not have an excessive level of debt.ProcessesMicroCred ensures that:An on-site evaluation and indicators calculation is performed for each loan renewal, including evaluation of the client repaymentcapacity: (Section 3.1.5 Repayment Capacity, Operational-Guidelines).A maximum of 70% of the monthly repayment capacity shall be used for monthly repayment installation.The evaluation of financial ratios of the client is done and checked by credit committee during the risk analysis. Over-indebtedclients are prohibited from receiving a loan:(Section 3.1.11 Financial Ratios, Ope-Guidelines).Future indebtedness of the business < 60% (liabilities of business including new MC loan / total business assets)Future total indebtedness < 30% (liabilities of business including new MC loan + liabilities of household / total business assets +total household properties)Loan sizes increase only with a demonstrated repayment capacity for the larger loan (Section IXV, Loan Renewal, Master Loan REVNUSHOLD ING207(EUR) Budget Budget%var.Manual) aprouvé(1) revisé(2)al3/1 Nombredanqus6 54 REVNUS3067 1043275% RevnusdAT3067 10436275%9 Revnusfiacr 1849NA Autresvn 576120NA9%Regular audits of clients are completed :(Section XX. Audit Manual)  Validation of consistency of expenses and revenues data, which were collected by Commercial Officers.  Validation of use of loan.Credit bureau information is used when available (Section 3.1.10 Loan Evaluation, Ope- Guidelines)Loans are restructured if clients experience a significant reduction in income (Section 3.1.20 Restructuring, Ope-Guidelines)Commercial Officers are educated on the risk of Over-Indebtness (List of Training Manuals: CPP Training Module)Clients are warned about the danger of over-indebtness. (Leaflet on Clients’ prevention against Over-indebtness)Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 29
  • B. SPM towards CLIENTS DO NO HARMB.IV.3 Client Protection - Transparency (3/7)IntentionThe pricing, terms and conditions of MicroCred products (including interest charges, insurance premiums, fees, etc.) will betransparent and will be adequately disclosed in a form understandable by clients.ProcessesMicroCred shall ensure that:General Banking Conditions (GBC) are redacted and available to all staff (3.1.28 GBC, Ope-Guidelines- Master GBC).General Conditions of the Bank are exposed in all branches (Master GBC Poster and Master Price List Leaflet for each product).  General Banking Conditions (GBC) are displayed on posters on the wall of branches (clients waiting area)  GBC are detailed on Leaflets (Price List & condition per product) available to clients in each branchAll terms and conditions of the product are listed to the client before the signature of the contract, (Master Loan Manual,Section I- Loan Process)Loan contracts are clearly understandable by clients and read upon request (Master Loan Manual, Section I- Loan Process) Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NAReceipts are provided for each transaction (Section VII. Reimbursement, Master Loan Manual)Benchmark on competitor pricing offer is realized annually by each subsidiary. (Section I/ Product Definition/ Master LoanManual)Commercial Team is trained to : (COsTraining Modules)  Communicate General Conditions of MicroCred to clients in an understandable way.  Understand competitors offer and explain MC pricing in comparison to that of competitors.Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 30
  • B. SPM towards CLIENTS DO NO HARMB.IV.5 Client Protection – Fair and respectful treatment of clients (5/7)a) Appropriate Collections PracticesIntentionDebt collection practices will be neither abusive nor coercive. Appropriate training to COs will be implemented ensuring bestpractices in loan recovery and risk management.ProcessesMicroCred shall ensure that:The Code of Ethics, defining the behaviour to adopt towards clients is signed by all MicroCred staff (Master -Code of Ethics)The “Collections Code of Conduct” is signed and adopted by all MicroCred staff involved in the collection process.(MasterCollections Code of Conduct)The disciplinary policy is applied in case of violation of the codes (Section II.8 Sanctions, Internal Rules)Loan is restructured if client experiences a significant reduction in income (Section 3.1.19. Rescheduling, Ope-Guidelines)A periodical audit on collection practices is conducted by the internal audit department and reviewed by the CEO and seniormanagement (Section XX, Audit on Collection practices). REVNUSHOLD ING207(EUR) Budget Budget%var. aprouvé(1) revisé(2)al3/1 Nombredanqus6 54 REVNUS3067 1043275% RevnusdAT3067 10436275%9 Revnusfiacr 1849NA Autresvn 576120NA9%System of Clients complaints collection is in place , under three ways : Box in Branches, SMS System and Hotline are available.(Procedures for Clients complaints Management)Procedures for Resolution of Clients complaints are applied (Procedures for Clients complaints Management)Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 31
  • B. SPM towards CLIENTS DO NO HARMB.IV.5 Client Protection – Fair and respectful treatment of clients (5/7)b) Ethical Staff behaviourIntentionMicroCred staff will comply with high ethical standards in their interactions with clients. MicroCred will train its staff toprofessional ethics and good practices and sanction any kind of favouritism or corruption. This is supported by the largelystandardized decision making process, which eliminates moral hazard between clients and staff.ProcessesMicroCred shall ensure that:The Code of Ethics, defining the behaviour to adopt by staff at their work place is signed by all MicroCred staff (Master -Code ofEthics)A Sexual Harassment Policy, is read, signed, well-known and applied by all MicroCred staff.Disciplinary policy is applied in case of violation of the codes (Section II.8 Sanctions, Internal Rules, & Procedures of DisciplinarySanctions)Training is provided to all staff on Code of Ethic and to Commercial Agents on Collection Code of Conduct (list of Staff Training Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NACessions).System of Clients complaints collection is in place through three ways : “Suggestions Box” in Branches, SMS System and Hotlineservice. (Procedures for Clients complaints Management)Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 32
  • DO NOB. SPM towards CLIENTS HARMB.IV.7 Client Protection – Mechanisms for Complaint Resolution (6/7)IntentionMicroCred has timely and responsive mechanisms for complaints and problem resolution for its clients (SMS, oral, written).ProcessesMicroCred shall ensure that: (Procedures for Clients complaints management)A hotline is available to clients during office hours.A dedicated person is in charge of collecting complaints and manage each issue until resolution.Suggestion Boxes together with adapted forms and pencils are available in each branch (for written suggestions or grievances)A mechanism for the handling and redress of grievances is in place.Quarterly report on complaint resolution is provided to the management. BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620%Clients’ opinion are collected through Annual Client Satisfaction study (Master Client’s Satisfaction Study)Focus groups are conducted annually to ensure adequacy of product design and client’s needs.Clients are informed of the two tools at their disposal: Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t  Green line and SMS Services are mentioned on the contract. REVNUS3067evnusdATfiacrt 1043275%698NA  Suggestion BoxAudit of Monthly Complaint report and resolution (Master Manual of Audit)Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% 33
  • B. SPM towards STAFF DO DO NO OUR HARMB.b.1 Diversity and Equal Opportunity BESTIntentionAs an international company, MicroCred wish to respect all cultures and relies on the diversity of its teams and the broadest scopeof talents available to be more innovative, more effective and more competitive.To do so, MicroCred ensure that recruitment and promotion processes are free from any discrimination.ProcessesMicroCred ensure Diversity and Equal Opportunity :In Recruitment:HR Policy prohibits all recruitment based on race, color, national origin, religion, sex, physical disability, medical condition, age, sexual orientation or citizenship discrimination. (Section I.1 Code of Ethics)MicroCred promotes diversity in its recruitment while complying with skills adequacy to the job.In Promotion:No discrimination of any kind for staff promotion (Promotion based on performance) Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NADevelopment of promotion opportunities within the group (Career Plan) Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Every year, the HR Manager provides indicators of Staff diversity. Indicators % of women staff Women/Men average salary ratio (for similar responsibilities) % of local branch managers % of local middle managers % of staff from each religion % of staff from each ethnical groupMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA 34
  • B. SPM towards STAFF DO DO OUR NO BEST HARMB.b.2 EmployabilityIntentionMicroCred builds up resources and tools to ensure that each employee develop and preserve a high level of employability through:Maintaining and Developing skillsTraining Implementation and skills acquisitionBuilding of career Opportunity and MobilityProcessesMicroCred implement the following processes in each institution of the Group:5 year Career plan defined for each position with RH DepartmentInitial training provided to each new incomer, including on social performance managementRegular internal trainings provided, including on social performance managementAnnual Individual assessment of performance (including social performance) and skills evaluation realized by the management.Mobility opportunities offered to each staff at least once in his/her career. International mobility is extended to “high level” localemployees.External Training opportunities offered to high potential staff (seminar / conferences) Indicators BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA # of staff trained p.a. # of refreshment training p.a. # of internal promotion p.a. # of internal promotion from commercial officer to middle manager p.a.Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA 35
  • B. SPM towards STAFF DO DO NO OUR HARM BESTB.b.3 Fair CompensationIntentionMicroCred offer each employee fair and competitive remuneration levels, fairly structured according positions and experience, andin line with market offer.MicroCred implement processes to share the value created between shareholders and collaborators of the group.ProcessesThe following systems are in place:Financial Compensation:Transparent Salary Grid based on responsibilitiesFix and variable remuneration based on experienceNo discrimination in remuneration against gender, handicap or physical characteristicBonus System based on achievement of social objectives defined annually for each employeeEvolution of Salary according to cost of lifeNon Financial Compensation:Medical Insurance coverage offered to all employees BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% Indicators Remuneration Ratio CEO / average Commercial Officer (not necessarily made public) Average salary CO / Average salary CO of competition (not necessarily made public) % of salary increase p.a. on average Average salary/GNI per capita Average salary of front office staff/average salary of back office staffMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 36
  • B. SPM towards STAFF DO DO NO OUR HARM BESTB.b.4 Transparent CommunicationIntentionSocial dialogue and employee information in MicroCred shall be based on respect and dialogue.Processes In addition to legal requirements, dialogue with employee representatives has per objective to : Bring regular and transparent information on the company evolution to the employee (Strategy, Results, Organizational and Management changes…) Dialogue with staff on subjects allowing collaborators to anticipate all necessary evolution to succeed in company strategy. => Dialogue concerns incentive, working conditions, training, as well as organization evolutions. Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620%Indicators # of meetings between top management and staff p.a. # of newsletters displayed to all staff members in their own languageMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA 37
  • B. SPM towards STAFF DO DO NO OUR HARM BESTB.b.5 Well-being at WorkIntentionMake MicroCred one of the best places to work, creating optimal working conditions and working environment, ensuring goodsecurity and health conditions for all the employees.ProcessesMicroCred ensure that processes are in place to ensure:1)Internal Rules ensuring:Commitment to treat all employees with fairness, dignity and respect. (Code of Ethics)Respect of collaborator, prevention of moral harassment (Internal Rules)Prevention of sexual harrassment through a Sexual Harassment Policy which is read, signed, well-known and applied by allMicroCred staff. Disciplinary policy is applied in case of violation of the Sexual Harassment Policy.Implication of staff in strategy, encourage social dialogue, train Management on importance to consider / respect its staff,relation to performance, etc.2)Optimal working conditions: BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NASecurity rules and guideline are established locally for the security of local and international staff (Security Guide)Measures taken in favor of good working conditions (Ergonomic material, embellishment of work place, etc).3)Measure Staff satisfaction :Mechanism in place to collect staff complaints at any time. The process ensures confidentiality & prevention of retaliationStaff satisfaction is evaluated regularly Indicators Turnover rate Dropout rate # of exit interviews/#of exitted staff % of staff having had accidents at work BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% % of staff satisfactionMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 38
  • B. SPM towards the ENVIRONMENT DO NO HARMB.c.1 Limit Social & Environmental Impact of ActivitiesIntentionMicroCred took the commitment to respect International and national legislations and to exclude financing of activities listed inthe exclusion list defined by its shareholders.MicroCred wants also to limit the negative social and environmental impact of the activities it finances, by introducing tools ofmeasure and follow up.ProcessesAs defined in the Social & Environmental Procedures, MicroCred commits to: Increase staff awareness on Social and Environmental risk, by appropriate Training on Social & Environmental Procedures. Implement Social and Environmental Tools through the loan cycle, including:  Respect of Exclusion List  Measure of negative Social & Environmental Impact of the loan (Risk classification A to C)  Take appropriate measures according to risk (Awareness form , S&E clause)  Increase clients awareness and encourage them to modify some of their habits. Follow up of indicators, propose measures to improve a given sector of activities (if negative impact on environment is identified for a particular activity.) Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% Annual Audit on SEMS implementation, realized by MCH Indicators % of loans with Environmental risk A, B, C % of loans with risk linked to Env, S&S, W Activity(ies) presenting highest repartition of risk (A) (% of risk per type of activity financed) % of clients throwing their waste into the streetMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA 39
  • B. SPM towards the ENVIRONMENT DO OUR BESTB.c.2 Promote positive impact of our products on the environmentIntentionMicroCred wishes to promote integration of new products with a positive impact on the environment and clients (reduce energycosts, improve sanitary conditions, bring access to clean technologies..). MicroCred believes the introduction of such productscan bring a positive return for the company (in terms of outreach, image) and for the local community (better integration,recognition).ProcessesIntroduce new products and support funding for their introduction, such as: Clean, renewable technology which both reduce adverse environmental impacts and create economic assets (Clean cookstoves, biogaz, LED,..) Eco-business opportunities for micro-entrepreneurs Ecological building with local, natural building materials Safe water and improved sanitation systems – creating assets out of waste Use Carbone Finance to finance them BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620% Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Indicators # of environmentally friendly products # of "clean Tech" loans disbursedMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA 40
  • B. SPM towards the COMMUNITY DO OUR BESTB.d.1 Build Local CapacityIntentionAttracting talent is a major challenge for the future of MicroCred. Therefore, the Group wants to invest in enhancing its reputationand become an employer of choice. In this context, developing relationships with schools and universities can offer studentsmany opportunities to discover microfinance and integrate local institutions.ProcessesBuild Relationships with schools and universities:MicroCred plan to develop relationships and sustainable partnerships with a selection of local schools and universities, givingstudents the opportunity to discover microfinance and be informed of career opportunities within the Group, while benefitingfrom the expertise of MicroCred experts.The contribution of MicroCred teams to develop talent and knowledge of students, coupled with training programs andindividual coaching, will help them to grow and better address their professional lives.Indicators # of man-hours dedicated to community projects Budget dedicated to community projects # of schools/universities served # of students served NombredanqusRE VENUSHOLDIG207(Budgetaprové1)isl654 R)t3%var.(/12 REVNUSevnusdATfiacrt 306714285 25479061%3NA # of courses offeredMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 41
  • B. SPM towards the COMMUNITY DO OUR BESTB.d.2 Support Local EntrepreneurshipIntention MicroCred intent to favor local entrepreneurships in the countries were institutions are settled.ProcessesIn front of equal quotes (similar price and quality), MicroCred will privilege local providers. (Code of Ethics I.1 Relation toproviders).Microfinance / Inclusive Finance: where are the investment opportunities – TBLI Conference – Arnaud Ventura 42
  • B. SPM towards SHAREHOLDERS DO NO HARMMicroCred takes the following responsibilities towards its shareholders:Effective transmission of information: The shareholders of MicroCred are provided at regular intervals completeinformation about the activities, financial and operational results, as well as Social Performance Indicators.Address their concern/ Reactivity: MicroCred Management made its best efforts to address efficiently and quickly allrequirements expressed by the Shareholders and obligations as defined in the Shareholder Agreement.Indicators Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA BudgetREVNUSHOLD ING207(EUR)Budget%var. aprouvé(1)Nmbednqs6REVUS307AT revisé(2)al3/15407%69 RevnusfiacrAt 1849NA57620%% of of timely delivery of information NombredanqusRE VENUSHOLDIG207(Budgetaprové1)isl654 R)t3%var.(/12 REVNUSevnusdATfiacrt 306714285 25479061%3NA Budgetaprové(1)Nmbnqs6REVUSHOLD ING207(EUR)Budgreviséal3%./154t REVNUS3067evnusdATfiacrt 1043275%698NA MicroCred Group- SPM Policy–October 2011 43
  • B. Reporting obligations of affiliatesIntentionEach affiliate shall be accountable for its social performance, be it towards the microfinance sector OR to its own staff, to theHolding and to the shareholders.ProcessesAccountability towards the microfinance sector:Each new affiliate shall register to the Smart CampaignAll affiliates shall: oProvide the required financial data to the Mix Market on an annual basis oProvide the required social data to the Mix Market on an annual basisAccountability to affiliates’ staff, to the Holding and to shareholders:All affiliates shall internally report their SPM indicators quarterly (developed in 2012)All affiliates shall provide the SPM section of the Management monthly. MicroCred Group- SPM Policy–October 2011 44
  • Contact: Isabelle Levard Member of the Management Board Deputy CEO MicroCred Group Executive President MicroCred China ilevard@microcred.org 44 rue de Prony Tél. 33 (0) 1 49 21 26 47 483177093 RCS Paris 75017 Paris Fax 33 (0) 1 49 21 26 27 Société anonyme à directoire France www.microcredgroup.com et conseil de surveillance au capital de 28.973.964 EurosMicrofinance / Inclusive Finance: where are the investment opportunities – TBLI Conference 45