SPBD is a Samoan NGO that provides microcredit to the poor on the island of Samoa using the Grameen Bank methodology. It aims to eliminate poverty in the South Pacific region. Most people in the South Pacific, including Samoa, live in rural poverty with GDP per capita under $2,000. SPBD fills an important need by being the only organization that provides unsecured microloans to the poor in Samoa. It has grown to serve over 2,100 clients across 60 villages. SPBD follows best practices and has achieved a high repayment rate, demonstrating that the poor can be creditworthy. Its loans have helped many start successful small businesses and improve living conditions.

1. Creating a Successful MFI in a
Small Remote Low Income Nation
South Pacific Business Development
Foundation (SPBD)
Samoa
Greg Casagrande

2. What is SPBD?
 SPBD is a Samoan based NGO dedicated to
eliminating poverty in the South Pacific.
 SPBD provides micro credit to the poor for the
purpose of starting a small business.
 SPBD follows the Grameen Bank methodology to
micro finance.
 SPBD currently serves the island nation of Samoa.
 www.spbd.ws

3. The South Pacific
 Total Population – about 7 million.
 Most people in the South Pacific live in
rural villages on small islands. Most live on
a GDP of less than US$2,000 per year.
 Major Countries
– Papa New Guinea, Fiji, Samoa, Solomon
Islands, Tonga, Vanuatu, Micronesia, Marshall
Islands, Kiribati

4. The South Pacific

5. Samoa

6. Samoa
 Samoa has been an independent nation since 1962
and is governed by an elected parliament.
 Samoa consists of two main islands, Upolu and
Savaii, and covers 1,100 square miles.
 Samoa has a population of 204,000 people.
 Samoa is very rural. Apia, the capital, is the only
town of any significance in Samoa.
 Samoa is considered the cultural heart of
Polynesia.

7. Samoan Economy
 Economy
– 75% of Samoans are involved in subsistence
agriculture.
– There are few major employers providing traditional
waged employment.
– The economy is very dependant upon foreign aid.
– There is mass migration of the brightest to New
Zealand, Australia and the USA to pursue better
opportunities.
– GDP - US$930 per year - similar to Pakistan.
– Poverty – In 1999, the UNDP estimated that 48% of all
Samoans live beneath the poverty line.
– WHO rates Samoa’s Health system as one of world’s
worst – similar to Yemen.

8. Typical Lives in
Samoa and the South Pacific
 Poverty of Opportunity
– No jobs (75% of families not in waged sector)
– No Credit available for the poor
 Typical living condition
– Grass roof
– Pebble floor
– Poor sanitation
– Poor access to running piped water and electricity
 Childhood education is not free
 Unsophisticated, little experience with banks

9. Samoan living conditions

10. Samoan Living Conditions

11. Samoan Living Conditions

12. History of Microfinance in the
Pacific
 The Pacific is littered with failures
 Samoa has had several failures
– UNDP, SPC, MoWA
– Church run
– Government run
– Volunteer run
 Continuing Failures
– Fiji
– Samoa – WIB
 Bee keeping
 Handouts
 Forced solutions

13. Competition
 SPBD has no direct competition in Samoa.
 The three commercial banks and the Development
Bank each require collateral or steady income for
loans. They do not serve the poor.
 SPBD Advantage:
– SPBD is the only financial institution in Samoa able to
DELIVER credit throughout Samoa.
– SPBD is the only financial institution in Samoa able to
provide on a large scale completely unsecured credit to
the poor.

14. SPBD - Business Practices
 Target poor women.
 Provide unsecured credit for :
– micro entrepreneurial purposes,
– home improvements and
– childhood education.
 Businesses are based on existing livelihood skills.
 Encourage and train self-formed groups of five.
 Organize groups into village based centers.
 Members guarantee one another within a group.
 Deliver credit directly to the villages.
 Charge market rates of interest.
 Collect small repayments at weekly center meetings in the villages.
 Strive to achieve financial self-sufficiency via strong financial
planning and effective use of technology.

15. SPBD Business Practices
 Very structured program with clear rules
 Helps counter:
1. A very laid back culture
2. Low levels of education
3. No experience with financial institutions
 Train staff and motivate them
– Huge task because skill levels are low
 Have strong local government support

16. SPBD in Action
Preliminary Meeting

17. SPBD in Action
Payment at Center Meeting

18. SPBD has a Business / Banking
Mentality
 Privately and commercially funded
 Started and maintained on commercial
enterprise principals
 Trustee, management and staff have
business and banking backgrounds.
 Funders – we speak your language

19. Cost Structure
 Very low
 Lean organization
 CM’s to reach 500-800 clients each
 Yet very competitive and comprehensive
compensation and benefits structure

20. SPBD Methodology &
Innovation
 Created a Culture of Continuous
Improvement
 Client Identification
– Formal invitation into the villages from local
matai (chiefs)
– Poverty assessment tool
 Identify the poor
 Measure impact

21. SPBD Methodology &
Innovation
 Product/Service Design
– Variable loan sizes
– Variable repayments
– Flexible loans
– Housing improvement loans
– Childhood education loans

22. SPBD Methodology &
Innovation
 Delivery Methodology
– CM’s support >400 clients each
– In-house training program
– In house loan utilization forms
– Individualized weekly center reports
– Center secretaries have professional
bookkeeping
– Ongoing business education

23. SPBD Methodology &
Innovation
 In the pipeline
– Process
 Move from weekly to fortnightly meetings
 Group sizes to become flexible 4-7 members
– New Services
 Health Education series
 Improved Business Training Modules
 Savings
 Insurance
 Money Transfer

24. SPBD - The Leadership Team
 The Trustees
– Greg Casagrande – Founder and Managing Director
 Education:
– BA (Economics) - Colgate University
– MS (Accounting) - Stern Graduate School of Business, New York University
– MBA (Finance and Marketing) - JL Kellogg Graduate School of Management, Northwestern
University
 Work Experience
– CPA with Coopers and Lybrand in New York.
– Several financial and general management positions with Ford Motor Company in Detroit,
Chicago and Japan.
– Founder and Managing Director of SPBD.
– Jerry Casagrande – Trustee
 Education
– BA (Political Science) – Dartmouth College
– MBA, MA (Latin American Development) - Stanford University
 Work Experience
– UNHCR, World Bank, Ashoka – Various management positions
– 3D Life Adventures – Founder and Executive Director

25. SPBD – The Leadership Team
(cont’d)
 Jim Young – Trustee
– Education
 BA (Economics) – Princeton University
– Work Experience
 Goldman Sachs – Vice President – Institutional Equity Sales
 Minh-Huy Lai – General Manager
– Educated with MBA from Thunderbird School.
– 7 years of investment banking experience with JPMorgan in NY, Hong Kong and Singapore.
– MF experience in Kosovo.
– Lived in worked in many developing nations.

26. SPBD – The Local Team
 All of our professional staff have strong prior
work experiences (several with local commercial
banks).
 All are proficient in both Samoan and English.
 All staff are proficient on the PC and have been
trained in micro finance best practices.
 All staff are eligible for performance bonuses
based on individual and team performance.

27. SPBD - Achievements to Date
 Building an Organization
– We have a team of 10 full-time, well trained and
dedicated professionals.
 Infrastructure and Processes in Place.
– Our loan officers have vehicles to access rural villages.
– We have a strong set of documented operating and
administrative processes and procedures.
 Villages Served
– We serve over 60 villages throughout Upolu, Samoa.
 The Poor Trained and Funded
– We have trained and funded over 2,100 businesses.
– Distributed over US$800,000 of unsecured credit.

28. Achievements
 SPBD has demonstrated that:
– Poor Samoans are creditworthy
– They are receptive to financial products
– Capable of starting and sustaining small
businesses
 Leading academic opinion in the region said
contrary.

29. Measurements of Success.
 Successful businesses for all of our micro
entrepreneurs.
– Food preparation
– Clothing production
– Copra (coconut oil) production
– Vegetable farms, Plantations
– Chicken and pig farms
– General Stores, Roadside stands, market place trading
– Weaving
– Traditional arts and crafts
– Tourist operators

30. Successful SPBD Micro-Businesswoman
Bakery Business

31. SPBD Successful Micro-Businesswoman
Village Store

32. Measurements of Success
 Quality of life indicators
– High quality roof on the home
– Proper flooring
– Electricity in the home
– Easy access to clean water
– Easy access to good sanitation
– Children in school
 SPBD Ensures quality of life improvements by
also providing:
– Housing improvement loans
– Childhood Education loans

33. SPBD has staying power
 Where other regional MFI’s have failed, SPBD
has persevered, learned, improved and grown.
 We’re still here after 3 years
 We have handled internal corruption and theft.
– Cleaned out and strengthened controls and processes
 We have continually refined our process to reflect
the local realities.
 Aggressively pursuing Institutional Financial
Sustainability

34. SPBD Complaints
 The South Pacific is not on the world’s radar
screen
– Too small
– Too remote
– Obscure cultures
– Difficult to administer
 The voice of the poor is not heard
– Region is misunderstood
 No Funds for MFI in regions
– UNDP, USAID, IFC, SPPF, Major MFI corporate and
other donors are not interested in MF in the region.

35. Current State of Development in
the South Pacific
 Most development agencies have abandoned the
region. (e.g. USAID has left the region due to
difficulties in serving a remote population).
 The need for economic development remains.
Most of the population lives in rural poverty.
 South Pacific nations are small and remote. None
are currently served by a world class micro
finance organization.
 SPBD is now the largest micro finance
organization in the region, despite the fact that it
only serves Samoa.

36. Opportunities
 There is now an excellent opportunity to create a:
– well-managed,
– large
– efficient,
– region-wide micro finance organization in the South
Pacific
 A region-wide, micro finance organization could
leverage a larger base of talent and financial
resources and could thus help more people than
could several struggling small organizations.

37. Major Constraints
 Ongoing violence and instability in Papua New
Guinea and the Solomon Islands is a major
constraint in those nations. SPBD will initiate
efforts first in stable nations.
 Due to the small populations on each island, a
successful organization must be exceptionally well
managed and efficiently run. This is a key item
for SPBD.
 Funding is also a major constraint since most
international funding organizations do not operate
in the region.

38. Plans for the Future
 Growth in Samoa
– Expand to the island of Savaii
 Growth in the region
– Tonga
– Vanuatu
– Micronesia
 Outreach
– Could grow to 50,000+ long term
 Capital is the key constraint

39. Concerns of Funders
 SPBD is too small
– We can breakeven with less than 5000 active clients
and an average loan size <US$300
 Area is too small
– Samoa is small but the region is big
– Many LDC’s in the region, totally neglected by world
class MFI’s
– We have developed a replicable model that can be
replicated throughout the region and reach out to over
50,000 people

40. Wants
 Look for opportunity to affiliate with large
networks
– Financial assistance
– Share procedures/ processes
– Share technology
– Staff development
 Looking for Capital
 Looking for Technical partners

41. Thank you
 South Pacific Business Development
Foundation
– PO Box 1614
– Saleufi, Apia, Samoa
– Phone: 011-(685)-20189
– Email: greg@spbd.ws
– Web: www.spbd.ws