Microfinance in the Banking Sector October 2011. Content Overview of microfinance in the banking...
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Transcript of Microfinance in the Banking Sector October 2011. Content Overview of microfinance in the banking...
Content• Overview of microfinance in the banking sector
• Analysis of landscape
• Drivers of change
• Skills implications
Estimated number of MFI employees
% distribution staff
Small enterprise financiers (mostly not for
profit) 3.8%
Cooperatives 1.0%
Incremental/Low cost housing 0.5%
Small micro lenders 37.3%
Large micro lenders 24.6%
Alternative banks (African Bank/Capitec/U-
Bank) 31.6%
Large/Commercial Banks 1.2%Source: NCR Registration August 2010 with RUDO estimates
Drivers of change in the sector• Political and social environments
– Speeding up growth and transformation to create decent work and sustainable livelihoods
– Massive programme to build economic and social infrastructure
– Comprehensive rural development strategy linked to land and agriculture reform and food security
– Strengthen the skills and human resource base
– Build cohesive, caring and sustainable communities (Address inequalities and halve poverty and unemployment by 2014)
Drivers of change in the sector• Technological factors
– Competitiveness through technology
– National loan register no longer compulsory so no longer a source of accurate information
– Cooperatives have mostly manual systems
– Those who have purchased sophisticated custom designed software do not use it
Skills implications• A need for management talent
– Loan officers promoted through the ranks lack management skills
– Managers in commercial banks not familiar with business models for serving low-income markets
– Paradigm shift – inclusive banking models that need managers with entrepreneurial spirit
• Credit Management, Legislation, Marketing and Compliance
• Cooperatives and ME lenders: Basic Accounting, Credit Management, Corporate governance skills