Green Inclusive Finance: Status, Trends and Opportunities!
At the NpM annual conference organised with FMO and Hivos, Green Inclusive Finance was the topic. NpM asked Enclude to carry out a short research on the current status of the green inclusive finance sector. The inclusive finance sector traditionally focuses on creating social impact in developing countries by enabling access to financial services. Besides social impact, the sector increasingly attaches value to creating environmental impact as well. At this stage, the emphasis is put on assessing how also environment-conscious aspects can become a fixed focus or even determinant in investment decisions.
A more elaborated overview is included in the short research realised by Enclude which addresses the current status, trends and opportunities in the green inclusive finance sector.
Summary Report: Finance for Smallholders: Opportunities for risk management by linking financial institutions and producer organisations
Case Studies Report: Finance for Smallholders: Opportunities for risk management by linking financial institutions and producer organisations
A Billion to Gain? Dutch Contributions to and Trends in the Microfinance Sector – 2014 Edition
In 2012 NpM and ING presented the ‘A Billion to Gain?’ study on Dutch contributions to and trends in the microfinance sector. NpM took the initiative to update this information and made an analysis of the data resulting from the CGAP Funder Surveys 2010, 2011, 2012 and 2013. The ING Economics Department has, in cooperation with Israel Unger (researcher involved in the last two studies of ‘A Billion to Gain?’), checked and translated the analysis into a full report. The editorial board included members of the Ministry of Foreign Affairs (IOB), Triple Jump, ING and NpM.
One of the interesting outcomes is that despite diminishing government support and turbulence in international financial markets, the Dutch investments grew from € 2.1 billion in 2010 to € 2.5 billion in 2013. It is expected that this trend will continue and that the Dutch microfinance sector will grow with 9% in 2014 and 10% in 2015.
To read the full report, click below. Please note that the report involves a correction (erratum) made based on some findings. There is also an infographic about this report available.
Paying Taxes to Assist the Poor? Balancing Social and Financial Interests
The report addresses tax avoidance related to inclusive finance and its relevance in the global discussion. In the report the NpM members have agreed that they “should, in principle, invest in the country where the activities take place. Second, NpM and its members hold that there is no justification for profit shifting or the deliberate structuring of companies – including the use of SPVs – with the sole purpose to avoid taxation. Nevertheless, NpM acknowledges that investors may have sound reasons for investing in developing countries through SPVs set up in jurisdictions that are particularly apt for attracting and transferring capital to microfinance entities in developing countries”.
Full Report: Finance for Smallholders: Opportunities for risk management by linking financial institutions and producer organisations
Via one of NpM’s working groups, a research has been carried out titled: “Finance for Smallholders: Opportunities for risk management by linking financial institutions and producer organisations”
The NpM Rural Finance working group focuses on improving its members’ activities to increase access to financial services in rural areas.
In this light, the group decided in February 2014 to research which bottlenecks exist to finance smallholders, thereby identifying opportunities for risk management through linking financial institutions and producer organisations, in the countries Ethiopia, Mali, Rwanda and Uganda. The research has been carried out in cooperation with AgriProFocus (APF) and the Wageningen University and Research centre (Wageningen UR), and is funded by the Food & Business Knowledge Platform (F&BKP).
The NpM Rural Finance working group consists of the following NpM members: Cordaid, FMO, Hivos, ICCO, ICCO Terrafina Microfinance (formerly: Terrafina Microfinance), Rabobank Foundation and Oxfam Novib. ICCO Terrafina Microfinance coordinates the working group. The report has been realised in coordination with other stakeholders who are active in this field on an international level: Agriterra, the European Microfinance Platform (e-MFP) and the Consultative Group to Assist the Poor (CGAP).
Financial Services for Women: Women’s Participation in Savings and Credit Cooperatives in Ethiopia
NpM commissioned a study on women’s participation in financial cooperatives as part of a broader study on promotion of women entrepreneurship in agriculture through access to finance. Our rural finance working group observed that women often do not access financial services in agriculture and, in particular, that larger loans are needed to continue their participation in the agricultural value chain.
This paper presents the results of the case study “Women’s participation in savings and credit cooperatives in Ethiopia”. It describes the experiences of female members and leaders of two Savings and Credit Cooperatives (SACCOs) in Ethiopia, Lelewut Eninesa and Wub Bahil. The SACCOs were selected out of the SACCOs that are supported by the ICCO-Terrafina Microfinance capacity building program funded by the Church of Sweden.
The study started with a desk review of recent studies on women’s participation in SACCOs, followed by a field study in the end of 2017. For the analysis, we used the ‘reach, benefit and empower’ framework. This framework points out that simply reaching women (e.g. by including them as clients, as member of a cooperative or in trainings) does not ensure that they will benefit or that they will be empowered. In general, projects should aim to go beyond merely reaching women and strive to empower them to strengthen their ability to make strategic life choices and to put those choices into action.
Financial Services for Women: Agri-finance Products for Female Farmers in Vietnam
NpM, Platform for Inclusive Finance commissioned a study on suitable agri-finance products for female farmers in Vietnam as part of a broader study on the promotion of women entrepreneurship in agriculture through access to finance. The NpM rural finance working group observed that women often do not access financial services in agriculture and, in particular, that larger loans are needed to continue their participation in the agricultural value chain.
This paper presents the results of the study aimed to analyse if and how women encounter constraints to effectively access financial services in agriculture and if they benefit effectively from accompanying non-financial services. The study explored the potential strategies for women to access larger loans. Furthermore, it intends to explore the business case for financial institutions to include women in larger lending segments. The study distinguished three categories of female rural clients: (1) poor rural women, (2) female farmers on family farms and (3) female entrepreneurs of micro, small and medium enterprises. The study focusses on the second category.
Summary Report: Geodata for Inclusive Finance and Food
On 24 June, NpM hosted its seminar of “Geodata for Inclusive Finance & Food” in Nairobi. As a pre-day event to the SPTF and Smart Campaign’s Summit on “Inclusive Digital Future”, we heard from each of the winners of the NpM Innovator’s Challenge – Agri-wallet, Apollo Agriculture, and VanderSat – about their projects and the opportunities of geodata. Their insights gave way to an interactive Q&A session about the innovative practicality of their applications.
The second part zoomed in on the issue of data privacy when using geodata-based information. Isabelle Barrès of the Smart Campaign introduced major data privacy issues and the client protection principles. Ben Wellington of MicroFinanza Rating (MFR) then provided emerging good practices coming from case studies with FinTechs.
The seminar ended in lively group discussions reflecting on the great potential of geodata, but also the risks that the use of geodata-based information could carry.
Reach, Benefit and Empower Women with Financial Services
NpM, Platform for Inclusive Finance, analyzed three cases on women’s access to financial services in three different countries:
1. Saving and credit cooperatives (SACCOs) in Ethiopia;
2. Services provided by TYM, an MFI in Vietnam;
3. Financial services provided to female farmers in the maize and beans value chains in Rwanda.
With this paper, we showcase the importance of appropriate financial services for women to increase female entrepreneurship in agriculture and to secure the highly necessary agricultural growth. We aim to encourage the NpM members (inclusive finance investors) and other professionals working in the financial sector to ensure that women are reached by financial services, but also to ensure that women benefit and that they are empowered.