After a selection process, InFiNe.lu has awarded 2 scholarships to its members to attend the Boulder Microfinance Training 2015 in Turin from July 20th to August 7th. During the 3 weeks of training, our grantees, Chiara Baldassare and Caroline Morilhat will share with us what they are learning.
Week 1: 22/07/2015 – Master class
Introduction
The 21st Edition of the Boulder Microfinance Training has started on Monday 20th of July 2015. The program is attended by 300 professionals from 78 different nationalities encompassing employees of Microfinance Institutions (MFIs), Central Banks, consulting firms, networks, and Non-Governmental Organizations (NGOs). This year the greatest innovation introduced by the Boulder Institute consists in the launch of a new program covering agricultural finance which is promoted in partnership with the Food and Agriculture Organization (FAO).
The program starts every morning with an elective class held by Robert Peck Christen, president and founding member of the Boulder. The first plenary lesson consisted on a general introduction to the topic of inclusive finance. The main topics covered were the history of the financial inclusion since inception as described by reputable economists as well as the main evolution phases of providing financial services to low income individuals. The different phases of providing financial services to inclusive finance customers are:
The course therefore focuses on this latest dimension, Customer Centrism, and tries to answer important questions such as: how to better understand the customer and his needs in order to enhance product offering and deliver value. The key highlight of the course is the need that MFIs have to shift gear from a one-product fit-all-needs mindset towards a multi-product offering tailored to answer customers’ needs.
The special guests intervening during this session were Monique Cohen and Gerhard Coetzee executives specialized in Microfinance from the Consultative Group to Assist the Poor (CGAP).
The key subject presented by the guest speakers was how to rethink the customers and measure the value delivered to them. In order to rethink customers, first MFIs have to understand the customer, categorize it in one of the key customer segments dependent on the level of poverty as well as their management of liquidity.
As published on the study from CGAP (Insights into Action), the Customer Centricity is founded on 5 main pillars, be it:
Value creation is possible through long-term collaboration with client and co-creation from both parties involved (i.e. firm and customer). The key highlight from this session has been the importance of understanding the cost incurred by the customer when engaging and using the services provided by the MFIs. This cost is not only financial, but also economic, social, psychological and cultural.
When MFIs can understand the cost of customer, indirectly can calculate the value delivered to the customer and therefore identify how much value they have created.
Authors: Chiara Baldassare and Caroline Morilhat
Week 1: 24/07/2015 – Elective course in English (author : Chiara Baldassare)
The Boulder Microfinance Training (BMFT) runs classes in two languages, French and English. The selection of courses offered slightly varies amongst the French and English version of the program, however broadly covers the same topics. Beyond the plenary Masterclass, which is common to all participants, attendees can opt to join two out of fourteen classes each week.
As participant of the BMFT in English, during the first week I have chosen to attend the following topics:
1. Operations Risk Management for the 21st Century: a focus on Financial product innovation taught by Luis Fernando Neri of Pary-CB, a consulting firm;
2. Analysing MFIs performance run by Stephens Blaine of MIX Market, Data service and analytics player in Financial inclusion
1. Operations Risk Management for the 21st Century: a focus on Financial product innovation
The main objective of Operations Risk Management for the 21st Century: a focus on financial product innovation, is to introduce to risk management as well as to provide with practice tools to analyze and manage the risk. The perspective adopted to run the class is that of a microfinance institution or a bank keen to new product development.
During the first day we had a general overview of the risk events and risk analysis. Afterwards, we covered the risk management feedback loop, which is the main process to assess and prioritize risk, develop risk management strategies and tactics and finally implement and monitor them to assess their effectiveness. We had the opportunity to put these learnings into practice through well-developed case studies encompassing, for instance, a change in the political risk led by an instable government in a developing country or the cross-portfolio risk impact of T-Bills interest rates drop. Finally, we focused on risks inherent to new product development and innovation. By using tools and frameworks provided, we developed the concept for a new financial product to mitigate climate change effects in poor countries and performed the complete institutional risk assessment of the MFI introducing such product in the market.
To conclude, I found the class extremely interesting and interactive. The thing I have appreciated the most it has been the perspective adopted: introducing risk management as early as at the phase of product development.
2. Analyzing MFIs performance
Analyzing MFIs performance has the ambitious goal to equip attendees to effectively monitor and systematically analyze the performance of MFIs. The course is presented under the holistic perspective of the process of analysis which stems from understanding industry reporting standards, collecting information to performance analysis.
During the first lesson we covered the different data types and sources as well as the typical standardization adjustments to ensure the comparability of data pertaining to MFIs operating under different countries and jurisdictions. Besides, we have emphasized the importance of data quality to build effective indicators so as to analyze the multiple dimension of performance, be it: efficiency, productivity, financial performance, risk, and liquidity. Due to the nature of the institutions analyzed, we focused on core industry business reporting, including key outreach and got acquainted with basic notions of social performance monitoring. Indicators for each category of performance were scrutinized in detail together with the correlation effects amongst the different figures. Short exercises and case studies were used to teach basic elements of trend analysis and benchmarking, thereby allowing attendants to analyze the overall performance of MFIs and present their own analysis. Data were retrieved from the MIX Market, which provides market data and insight related to MFIs.
Furthermore, drawing on market reports and studies, we were given the chance to debate current issues related to MFI performance, such as boosters of MFIs growth, efficiency drivers for MFIs as well as microfinance synergies and trade-offs between social and financial performance.
To sum up, I found the course extremely useful. Beyond its content which was very valuable, the true added value has been the interaction, whilst analyzing the case, with professionals from different backgrounds and perspectives, be it: regulators, investors, analysts, auditors, NGOs employees and senior executives from MFIs.
Week 1: 24/07/2015 – Elective course in French (author : Caroline Morilhat)
1. Cours Gestion stratégique de la croissance des institutions
Intervenant : Fouad Abdelmoumni est consultant international en développement et microfinance, il est le fondateur et était le directeur général de l’association Al Amana jusqu’en 2010.
Sous la pression d’un environnement contraignant et difficilement prévisible et des ressources toujours limitées, les acteurs de la finance inclusive ont besoin de cadrer leur gestion et leur croissance par une démarche stratégique. Partant de ce constat et appuyé de son expérience, Fouad Abdelmounni a fait réfléchir les participants sur la stratégie de leur propre organisation afin de faire prendre conscience de l’intérêt de la mise en place d’une démarche adaptée. Il a introduit le cours par les concepts de base en partant des définitions de la stratégie, du métier et de la mission d’une organisation. Le cours s’est poursuivi sur les caractéristiques des décisions stratégiques et les modes de formation de la stratégie selon Mintzberg et Waters pour finir sur l’identification des différentes options à mettre en place.
Après avoir étudié les mouvements de pensées et la théorie, une application a pu se faire pour les institutions de microfinance en identifiant les paramètres stratégiques du portefeuille de prêts par sa taille, sa qualité et ses coûts de gestion, nous avons pu établir un calcul de croissance du portefeuille et en retirer les conséquences sur l’organisation. Nous avons conclu la semaine par le constat que pour croître il faut un marché, des fonds et une organisation.
2. Cours Financer la microfinance : nouveaux enjeux et perspectives
Intervenante : Elodie Parent, Chargée d’affaires à Proparco de 2007 à 2013 et actuellement coach certifiée et formatrice au CEFEB, l’université d’entreprise du groupe AFD, Agence française de développement.
Ce cours est basé sur des questions que se posent aussi bien les responsables et managers d’IMF que les bailleurs et investisseurs ou les autorités de supervision. Quels sont les outils de financement les plus adaptés pour accompagner les IMF selon leur stade de développement ? Quels sont les critères d’éligibilité financiers et sociaux utilisés par les financeurs publics et privés ?
Pour pouvoir répondre à ses grandes questions, nous avons déterminé les outils financiers existants, la structuration d’un financement et les acteurs du financement. Selon une étude du CGAP “Cross-Border Funders” de 2012, les engagements transfrontaliers de la microfinance sont estimés à un total de 25 milliards de dollars fin 2013, dont 2/3 proviennent de financements publics. D’autre part, les investissements privés croissent à un rythme plus rapide.
Elodie Parent a également mis en exergue l’importance d’une bonne gouvernance. Il a été prouvé que des sociétés bien gouvernées pouvaient améliorer considérablement les performances financières.
Cette riche matière a été illustrée tout au long de la semaine par des exemples, des cas pratiques et des exercices de groupe. Notamment grâce à un jeu de rôle qui permet de se mettre dans la peau d’un financeur, d’une IMF ou encore d’un observateur pour pouvoir analyser et prendre du recul face à la situation.
InFiNe is the Luxembourg platform that brings together public, private and civil society actors involved in inclusive finance. The value of InFiNe lies in the wide range of expertise characterised by the diversity of its members.
With the support of
Inclusive Finance Network Luxembourg
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