European Microfinance Week 2021

PRESENTATIONS

Violette CUBIER from the Grameen Credit Agricole Foundation (GCAF) opened the session. She presented a recent publication from GCAF on its Technical Assistance (TA) activities from 2013-2020. In this time, the foundation supported 47 organisations in 21 countries during 318 missions. She added that 60% of TA providers are local. The publication was produced to evaluate the outcome of the foundation’s TA offer and identify 10 recommendations to improve the impact and TA processes.

Cubier explained that TA missions need to be demand-driven to be successful, considering needs, demand, priorities, and constraints from beneficiaries. TA needs to have adaptable and agile intervention modalities, including a wide range of interventions. Beneficiary institutions should be involved at each stage of the mission. To ensure commitment, Cubier added that a project’s budget needs to incorporate a financial contribution from beneficiary organisations.

In addition, Cubier explained that it is key to secure involvement of governance and the management team, advising to assess the risk of non-appropriation of the mission from the start. She added that a TA model should have a strong link between the investment and TA teams. GCAF prefers local providers with good knowledge of local context, which was also a recommendation in the publication. Procedures and reporting should be simplified, and post-mission follow-up strengthened. The final recommendation Cubier shared was to promote a model to measure the direct impact of TA activities, with indicators from level of effort to perception of direct impact on the beneficiary.

After this introduction, the moderator welcomed Matthew GENAZZINI from ADA to present the organisations’ Smallholder Safety Net Upscaling Programme (SSNUP). Genazzini explained that this public-private partnership has three main objectives: 1) to enhance the productivity and/or resilience of smallholder households; 2) to strengthen agricultural value chains; and 3) to increase investments and finance the expansion of agricultural value chains that comply with global responsible agricultural investment principles and governance standards.

SSNUP is essentially a TA fund for projects that contribute to the objectives. Genazzini appreciated that the fund is demand-driven and flexible to finance projects based on what is needed on the ground. The fund is designed together with impact investors and responds to their needs as well. It covers development of financial and non-financial services, market building and internal management to strengthen investees themselves. He added that one of the challenges for TA is to ensure ownership of projects on the part of the beneficiary. In order to ensure this, ADA launched a number of pilot projects using a coaching approach. This innovative approach is different from a consulting approach whereby solutions are often presented to the beneficiary. The coaching approach is based on the fact that no one knows the context/situation/issues better than the organisation itself, and therefore it is about finding the solutions together with the organisation, thereby increasing the notion of ownership.

Subsequently Julie TORRES-SZANTYR from SIDI presented the investor’s approach to TA. Torres-Szantyr explained that as a social investor, SIDI looks at both financial and general capacity building needs of its partners, ensuring the mission and vision of the financial institution are implemented. The organisation has partnership officers that assess a financial institution to discuss its objectives along with its financial needs. SIDI aims to work with financial institutions with a vision that is aligned to its ecological and social transition goals. Moreover, Torres-Szantyr mentioned that with SIDIs long term interventions in capital and governance bodies, the investor can discuss development goals and capacity building needs of a financial institution at governance level.

Gabrielle ORLIANGE from SIDI introduced an evaluation of SIDIs TA programme, in which 120 projects were evaluated by an external team. Its results showed that involving a beneficiary in all steps of a project is key to ensure the success of a TA programme: identifying needs, objectives and TA providers. She shared the results of a TA project in West Africa, in which clients were not involved. FEFISOL set up a TA project to build accounting skills of 6 cocoa producers facing similar struggles, by designing a common terms of reference, and hiring a consultant to strengthen their accounting system. Even though their partner financial institution shared SIDIs objectives, they did not participate in the programme because they were not involved in this process and could not select a TA provider themselves.

Benedetta FERRARO, project manager at Microfinanza echoed what was shared by the panel. She highlighted the importance of involving management and governance of a financial institution. Involving governance in a needs assessment is fundamental to determine strategic needs and goals a financial institution sets. Getting an overview of management is important to ensure a programme is realistic as this assesses the financial institution operations. Ferraro summarised that ongoing communication with governance is key to align the financial institution with a TA fund and to ensure needs and expectations of stakeholders are understood. She added that although international experts bring in expertise, a good local presence is fundamental to understand the context of a financial institution.

DISCUSSIONS

The moderator then opened the floor for questions from the audience, asking Ferraro to comment how TA can contribute to lasting changes within a financial institution, as change can take longer than the TA programme lasts. Ferraro replied that involving management and governance is key for sustainability of the TA. She explained that, as part of the activities, Microfinanza encourages the development of an action plan and/or a strategic plan with the management and/or Board of Directors, which includes both the results of the TA and the activities to be implemented by the financial institution itself in the future. These key recommendations should also be discussed with the governance to ensure follow-up. She added that this is part of the accountabilities of the financial institution, TA providers and funder. An audience member suggested to allow for more time and direct follow-up in TA programmes as this is often lacking.

Cubier next asked Torres-Szantyr to elaborate on the role and responsibilities of the partnership officers SIDI works with. Torres-Szantyr explained that partnership is the backbone of SIDI’s TA strategy and programmes, adding that partnership officers coordinate all activities with a financial institution. They build the relationship with a financial institution and develop a partnership strategy based on the financial institution’s general objectives, development, long-term vision, and market share they aim to have. With these inputs, SIDIs capacity building team defines a programme that fits the demand.

Hans Ramm, Senior Policy Adviser from SDC recommended to broaden the scope of TA to the market investees operate in, in addition to supporting investees directly. He added that SSNUP also includes performance-based payment of local or global service providers in offering valuable services. By ensuring that other market actors can offer valuable services to financial institutions and their end clients, actors can build a local ecosystem for investees, which is often more sustainable.