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Centre for Microfinance – University of Pretoria:

Centre for Microfinance – University of Pretoria:

Reaction to a unique market

Gerhard Coetzee and Chiara Chiumya

Reaction to a unique market

Gerhard Coetzee and Chiara Chiumya

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Outline

The problem

The challenges

The reaction

Resource mobilisation

Learning and adjustments

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The problem

Market assessment as part of original proposal

Market training demand workshops with industry representatives

Course offerings and curriculum based on workshop outcomes

Thus research and training offerings in reaction to market challenges

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Challenges – Development Finance

Understanding of clients real market research

Expansion of products, expanded options

SMME finance – attacking the self employed market Regulatory environment - heavy burden of “red tape”

Registry of security interests

Explicitly target productive uses of microfinance

Transformation of NGO MFIs

Business Development Services

Commercial banks – already in there, but more focus needed

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Challenges – Asset accumulation

Savings and investment products

Targeted savings products

Smooth consumption, raise repayment, minimize risk

Are the banks making money, threat of cannibalization

Addressing negative real interest rates on savings instruments

Need for bundling lending and saving instruments.

Housing: embryonic township markets

Other investment products

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Challenge – Rules and enforcement

National Credit Regulator – impact on the market?

Other rules and impact on access?

Harmonisation of policy and legislation?

Main challenge – enforcement?

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Challenge – Information

Need for even better data and information Better credit scoring and pricing models

Having better information on individuals, households and firms applying for / using credit for policy development

Training and capacity building Major need, no recognition, not willing to pay

Short sighted – need to invest in most strategic asset

Consumer education Need for improved outreach

Focus on lower income strata

Distinct lack of innovation

Use of CE as a monitoring tool

Pricing issues, competition, monitoring

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Challenge – Management

Depth in Management

Numbers in Management

Understanding the market

Understanding reactions to the market

Understanding banking

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Challenge - Market Profile

Market status →↓Institutional status

Developing (SMME finance)

Developed (Personal finance)

Start-ups: Enterprise Consumer Mixed

XXX

Growth phase: Enterprise Consumer Mixed

XXX XXX

Mature and refocus: Enterprise Consumer Mixed

XXX

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Reaction – Centre for Microfinance

“Creating Inclusive Financial Markets Against Poverty”

Integrated approach

Stakeholder involvement

Functional areas (products)

Education

Research

Dissemination

Support

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Head of the School of

Management Science

Head of the School of

Management Science

Director:Gerhard Coetzee

Assistant Director:

Chiara Chiumya

Director:Gerhard Coetzee

Assistant Director:

Chiara Chiumya

EducationEducation Research Programmes

organised according in focus

areas with dedicated senior research leaders

Research Programmes

organised according in focus

areas with dedicated senior research leaders

Dissemination•African Microfinance Conference “Series”

•Round Table•Research Publications

•Invited and other conference papers

Dissemination•African Microfinance Conference “Series”

•Round Table•Research Publications

•Invited and other conference papers

Executive Management Programme

Executive Management Programme

Certificate ProgrammesCertificate

Programmes

Academic leader:

Gerhard Coetzee

Academic leader:

Gerhard Coetzee

Admin

support:Katherine Blaine

Admin

support:Katherine Blaine

Centre Advisory Board 4 Academics and 4 Industry

Representatives

Centre Advisory Board 4 Academics and 4 Industry

Representatives

Support to other

Institutions

Demand AnalysisAssessment

DevelopmentEvaluation and

Monitoring

Support to other

Institutions

Demand AnalysisAssessment

DevelopmentEvaluation and

Monitoring

MBA ElectivesMBA Electives

M Course in Post Grad

School for Rural & Ag Dev

M Course in Post Grad

School for Rural & Ag Dev

Masters and PhD in

Entrepreneurship

Masters and PhD in

Entrepreneurship

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Education

Certificate Programme in Microfinance

Certificate Programme for Microfinance Managers

MBA Electives

Masters Course in Post-Graduate School for Rural and Agricultural Development

Masters and PhD Course in Entrepreneurship

Executive management course

Project Based: Swaziland Microfinance Sector Training (15) BankSeta Unemployed (30)

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Education: Certificates

Certificate Programme in Microfinance

Fundamentals of microfinance

Loan Officer

Market research for microfinance (MicroSave material)

Introduction to management in context

Certificate Programme for Microfinance Managers

Operational management

Financial management (using Microfin)

Strategic planning and budgeting

Strategic marketing

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Research Policy, Legislation and Regulation

National Credit Act Regulatory Impact Assessment study design (completed) National Credit Act Regulatory Impact Assessment Academic publication – Introduction to the National Credit Act (Juta) Assessing the possible regulatory impact of the National Credit Act on

microfinance institutions: A case study of a small to medium size consumer credit provider (completed)

The potential effect of the National Credit Act on the future of selected, specialised micro-lending institutions in South Africa

Comments on the Financial Cooperatives Bill (completed) FAIS and FICA impact on Financial Cooperatives Credit information sharing: Guidelines towards credit information market

development in Africa (completed) Member based financial services

Informal finance for middle and high income individuals in South Africa: A case study of high budget "stokvels" in Pretoria (completed)

Case study of Yebo multi-purpose cooperative Rural Finance

Review of the Rural Finance Learning Centre of the FAO (completed) Enhancing livelihood strategies of rural communities prone to climate risk in the

Caprivi region of Namibia

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Research (2) Market integration / inclusion

Microfinance in rural and urban Africa: Reality, Context and Challenges Inclusive financial sectors and market integration: Some evidence from

Africa (completed)

Financial services and channels Social protection cash transfers: Learning from microfinance delivery

systems The Mzansi account: A response to the access challenge of the financial

sector charter in South Africa (completed) Demand analysis of life insurance products in LSM 3-5 in Tembisa Investing behavior and product needs for the poor: A case study based

on Alexandra residents Agricultural finance products for small-scale cane growers Small-scale property entrepreneurs: A South African perspective

(completed)

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Dissemination

Publications

Roundtable

Website

Conferences

Attend and speak (several)

Organise / Support

• 2007 African Microfinance Conference – Kampala

• 2007 Conference on the measurement of impact of microfinance

• 2005 African Microfinance Conference – Cape Town

• 2003 African Microfinance Conference – Johannesburg

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Support

Development Phase – culminating in Support Support Toolkit Assessment

Context, Market demand, Human resources, Material

Development of curricula Electives, Short courses

Course development and implementation Provide material as input, Training of personnel

Course Quality Assessment Monitoring and evaluation

Not sure whether we can continue with this…

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Resource mobilisation Human

Core permanent staff

• Chiara Chiumya, Katherine Blaine, Jacob Nyambe

Part-time staff

• Gerhard Coetzee

• Teaching (6)

• Research (4) plus the MBA, Masters and PhD students

Financial Sponsorships

• MFMI initial financing establishment (2004 – 2007)

• SA Banking Sector Education and Training Authority (2007 – 2010)

• Other private sector support (ABSA, MFSA, etc)

Income from courses

Income from research

Break-even approach

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Lessons and adjustments

Clients not eager to pay for training – use learnership system in SA

MBA domain vs. electives – interest vs. uptake

Integration now easier in new home

Need adjustment for countries outside southern Africa

Need good permanent human resources

Takes time to set up the Centre

Learned what is core need in terms of resources and structure – base and incremental

In general, successful structuring and operation