A first for Syria - Grameen-Jameel Joins Hands with Aga Khan Agency for Microfinance
Damascus, June 3, 2009: Grameen-Jameel, a social business that serves the Arab microfinance industry, has announced it has facilitated a multi-million dollar credit facility for the First Microfinance Institution (FMFI) Syria, part of the Aga Khan Agency for Microfinance (AKAM), to help improve the lives of 2,700 underprivileged Syrians through credit, deposits and other financial services.
Under the financing scheme, Grameen-Jameel issued a guarantee to support US$2.7 million in local currency financing (125 million Syrian Pounds). The guarantee backed a commercial overdraft facility disbursed by Bank Audi Syria, the first commercial bank to lend to the microfinance sector in Syria.
"We are proud to collaborate with the Aga Khan Agency for Microfinance, who is renowned in the Arab region and globally for its leadership in serving the less privileged," says Zaher Al-Munajjed, Chairman of Grameen-Jameel. "We hope this is the beginning of a constant collaboration between our two organisations."
Although this is Grameen-Jameel's first deal in Syria, the company has closed, to date, around US$20 million in partial credit guarantee transactions. The guarantees have been leveraged 2.2 times on average to raise US$44 million in total commercial financing for its partner microfinance institutions.
"This financing will support our ambitious outreach plan," says Jean-Lorenz Ehrentrant, CEO of FMFI. "Together with Grameen-Jameel we aim to empower the underprivileged to start their own business."
In November 2007, laws were introduced that allowed for the establishment of non-bank financial institutions (NBFI) and FMFI is the first microfinance institution to receive a license under these new regulations, which allows for savings mobilisation through deposits. Syria is the first country in the Arab region to enable the formation of NBFIs through a legal framework.
Ehrentrant added, "As part of our social responsibility strategy, we will bear the risk of providing them with loans to unleash their entrepreneurial potential, expand their staff base and ultimately improve the lives of even more people."
With poverty remaining a critical problem in the Arab world, microfinance targets the 75 million people in the region who live on less than US$2 a day by providing them with access to financial services. Grameen-Jameel is currently working with 11 MFI's in 7 Arab countries to help them increase the breadth and depth of their outreach.
Grameen-Jameel is a social business established in 2007 as a joint venture between Grameen Foundation and Bab Rizq Jameel Limited, a subsidiary of Abdul Latif Jameel Group. The company alleviates poverty in the Arab World through forming strategic partnerships with microfinance institutions and providing technical and financing support through its guarantee program. To date, Grameen-Jameel has facilitated local currency financing of US$44 million backed by US$20 million in guarantees to its partners. Grameen-Jameel has reached more than 360,000 new microfinance clients through its partners in Morocco, Tunisia, Egypt, Lebanon, Jordan, Palestine, Syria and Yemen.
About First MicroFinance Institution Syria
First MicroFinance Institution (FMFI) Syria is a limited joint stock company and obtained its operational license on August 25, 2008 from the Central Bank of Syria under the new regulatory framework announced in November 2007. The aim of FMFI is to be recognised as the leading microfinance services provider throughout Syria by contributing to poverty mitigation and economic growth through the provision of sustainable financial services primarily targeting the micro and small businesses as well as households.
About Aga Khan Agency for Microfinance
Since its establishment in 2005, the Aga Khan Agency for Microfinance has brought together over 25 years of microfinance activities, programs and banks that were administered by sister agencies within the Aga Khan Development Network. The underlying objectives of the agency are to reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion. AKAM is a not-for-profit, non-denominational, international development agency created under Swiss law. Its headquarters are in Geneva, Switzerland. It is governed by an independent Board of Directors. The Chairman of the Board is his Highness the Aga Khan.
Free Clinics in Pakistan Promote Microinsurance for Healthcare
Several hundred clients of the First Microinsurance Agency (FMiA) in Karachi were offered basic outpatient care, along with information on health insurance, in a new programme designed to make poor people aware of microinsurance services and their benefits. The clinics, which are sponsored by FMiA, are run by two qualified doctors.
The health clinics programme, which is expected to continue, is meant to help fulfill FMiA’s goal of providing affordable insurance products carefully tailored to the needs of poor families.
“FMiA hopes to keep playing an important role in making health care easily available to its clients and others that need it,” said Al Malik Khoja, the acting CEO of FMiA.
Microinsurance services offered by FMiA include: hospitalisation insurance, savings completion and credit life. Counselors at the clinics offer advice on microinsurance products, including how:
Health insurance provides cashless coverage for medical expenses incurred in private and medical hospitals due to serious illnesses, obstetric care and accidents,
Savings completion ensures that a family’s savings objectives are met even in the event of the death or injury of the breadwinner,
Credit life helps to protect the family of the loan borrower from debt in case of death or serious disability.
The clinics, which provide services related to outpatient care and basic screening, were offered in the Landh, New Karachi and Malir, all neighbourhoods of Karachi, starting on 22 October 2009. Sixty percent of the patients were female and 25 percent were children. The last of the clinics took place in the Baldia Town neighbourhood on 1 November 2009.
FMiA Pakistan is the first of two microinsurance institutions operated by the Aga Khan Agency for Microfinance (AKAM). FMiA focuses on the needs of poor families, in both the formal and informal economies, by providing them with a range of financial products that will help protect their assets and well-being.
For more information, please contact:
Aga Khan Agency for Microfinance
1-3 Avenue de la Paix
1202 Genève Switzerland
Tel: +41 22 909 7200
Fax: +41 22 909 7290
MoU signed to improve living standard of poor
Source: OUR STAFF REPORTER Submitted 1 day 17 hrs ago KARACHI -
The First Micro Finance Bank Ltd, Pakistan (FMFB-P) and the Aga Khan Planning and Building Service, Pakistan (AKPBS,P) signed an MoU to improve the living standards of the poor people in Pakistan by providing financial services along with technical advisory to support safe and self-built habitat improvement of the low income and poor communities in the country.
Under the arrangement, FMFB shall provide need-based, short to medium term financial services (housing finance) for both structural and non-structural improvements in the houses. FMFB would provide loans amounting from PKR 10,000 - 500,000 to poor individuals in a group at a relatively lower interest rate to help the poor build social and physical capital over time. For structural house improvements, the clients would save prior to the release of the loan to build up their equity contribution, as well as save after disbursement to mitigate any cash flow changes over time. To support the clients in repayment, a grace period would also be provided to them during the construction period.
AKPBS,P shall provide technical consultancy to the client for developing a sketch of the proposed construction/improvement and monitoring construction of the houses to ensure safe built environment and mitigate natural risks. Seismic resistance, sanitation and energy efficiency are aspects which have been made an integral part of the product design.
FMF Bank, PPO ink sign for poverty alleviation
Published: January 29, 2010
KARACHI - The First Micro Finance Bank Ltd Pakistan (FMFB-P) and the Pakistan Post Office (PPO) renewed their agreement to alleviate poverty by reaching out to the poor populations of Pakistan by providing micro-finance services through PPO sub offices.
Aimed at addressing the key challenge of inaccessibility to the poor faced by the micro-finance industry across the globe, this unique public-private partnership between PPO and FMFB was initiated in 2008 and has allowed for rapid scaling up of quality micro-finance services to the very poor populations residing in remote rural and urban areas of Pakistan.
President The First Micro Finance Bank Hussain Tejany and Additional Director General Financial Services, Pakistan Post Ghulam Panjtan Rizvi signed the agreement for reaching out to the poor segment of the country particularly in the rural unbank areas of Sindh and Punjab, under the approval of the State Bank of Pakistan. Muhammad Ahmed Mian, Director General Pakistan Post and Federal Secretary Pakistan Post were also present at the occasion.
“Our partnership with the Pakistan Post, which has an extensive network of Sub Offices (SO) across Pakistan, has enabled FMFB to reach out to the remote and vulnerable poor by providing microfinance services through 68 PPO Sub Offices in Southern Punjab, Central Punjab, Upper Sindh and Lower Sindh regions, disbursing over 88,000 loans amounting to Rs 1.3 billion across the country in 2009” said Hussain Tejany, President FMFB. Given that 71pc of the poor in Pakistan are women, about 21pc of loans disbursed were to women entrepreneurs. He added that “the Bank has also been able to maintain the quality of its portfolio through the SO network, which has given us the confidence to take this partnership forward and expand our operations through the PPO network in the next three years. Our areas of intervention will continue to be the poverty focused areas of Sindh and Punjab”.
This unique public-private partnership has marked a major breakthrough in the microfinance sector and is bringing The First Micro Finance Bank Ltd closer to its clientele, while Pakistan Post benefits from optimum utilisation and development of its resources, including human capital.
The First Micro Finance Bank Ltd, a part of the Aga Khan Agency for Microfinance (AKAM), is a premier, non-commercial, private sector Microfinance Bank licensed by the State Bank of Pakistan. FMFB has been ranked as 7th among the top 100 Micro-finance Institutions of the world by the World Bank affiliate, CGAP.
Aga Khan Agency for Microfinance Expands in Damascus, Syria
Damascus, 28 January 2010 – The First MicroFinance Institution Syria’s (FMFI-S) newest branch in Maysat, in the northern part of Damascus, was opened today by the Deputy Prime Minister, H.E. Dr. Abdullah Dardari, in the presence of the Governor of the Central Bank of Syria, Dr. Adeeb Mayaleh, and the Aga Khan Development Network (AKDN) Resident Representative in Syria, Mr. Mohamed Seifo.
The new branch will expand services offered to marginalised segments of the population with the aim of providing more poor people with financial services. According to studies undertaken by the International Finance Corporation (IFC) and KfW Bankengruppe (KfW), an estimated 260,000 to 420,000 households in Syria require access to microcredit for business purposes. One million households require credit for non-business purposes such as housing, education and medical care. FMFI-S is the largest provider with over 14,500 loans.
“This is another forward step in our plan to focus on making financial services accessible to everyone, helping to include the poor and marginalised segments in the economic cycle,” said Jacques Toureille, General Manager of the Aga Khan Agency for Microfinance (AKAM) who also attended the opening ceremony.
FMFI-S is the leading private-sector microfinance provider in Syria. Originally established in 2003 as a microfinance programme, FMFI-S completed its transition to a deposit-taking institution in October 2008. Over the next five years, FMFI-S’s network will grow to 23 branches throughout the 14 Syrian Governorates. Its network-wide portfolio is also expected to grow to over 86,000 loans.
In order to assist in the expansion of the bank, the Prime Minister of Syria recently approved the entry of capital from foreign entities into FMFI-S. In the coming months, KfW, the International Finance Corporation, and the European Investment Bank will become shareholders of the institution so that FMFI-S can expand its financial services to the poorest populations of Syria.
FMFI-S is a part of AKAM, which currently operates microfinance institutions in 14 countries throughout Asia and Africa. AKAM is a private, international, non-denominational and non-profit development agency that strives to assist vulnerable populations by providing them with a range of financial services. AKAM’s ultimate aim is to help enhance the quality of life and improve economic security.
For more information, please contact:
Ms. Aliyah Esmail
Aga Khan Agency for Microfinance
1-3 Avenue de la Paix - 1202 Genève
Tel: +41 22 909 7347
Fax: +41 22 909 7290
The First MicroFinanceBank Ltd and Pakistan Post Office Agree to Expand Microfinance Services for the Poor
Islamabad, 28 January 2010 - The First MicroFinanceBank Ltd - Pakistan (FMFB-P) and the Pakistan Post Office (PPO) will further expand operations to provide microfinance services through post offices. Ghulam Panjtan Rizvi, Additional Director General Financial Services, Pakistan Post and Hussain Tejany, President of The First MicroFinanceBank, signed the agreement. Muhammad Ahmed Mian, Director General of Pakistan Post was also present at the occasion.
Originally created in 2008, the unique public-private partnership has allowed rapid scaling up of quality microfinance services to very poor populations residing in both remote rural areas and urban areas of Pakistan. The agreement is particularly important for reaching rural areas of Sind and Punjab where there are no banking services for the poor. Over 88,000 loans amounting to PKR 1.3 billion were disbursed in 2009. Over 20 percent of the loans were made to women entrepreneurs.
“Our partnership with the Pakistan Post, which has an extensive network of Sub Offices (SO) across Pakistan, has enabled FMFB to reach out to the remote and vulnerable poor by providing microfinance services through 68 PPO Sub Offices,” said Hussain Tejany, President of FMFB. “We now have the confidence to take this partnership forward and expand our operations through the PPO network in the next three years. We will continue to focus on impoverished areas of Sindh and Punjab.”
The First MicroFinanceBank Ltd, a part of the Aga Khan Agency for Microfinance (AKAM), is a non-commercial, private sector microfinance bank licensed by the State Bank of Pakistan. FMFB strives to alleviate poverty through sustainable economic development by offering credit, savings and life insurance services along with efficient, low cost funds-transfer services. It operates in 157 locations, including 89 automated branches all over Pakistan, as well as through 68 Pakistan Post outlets. As of December 2009, FMFB had disbursed over PKR 12 billion (US$ 142 million) in the form of 677,000 loans while generating a deposit base of PKR 5.2 billion (US$ 61.9 million). FMFB has been ranked as seventh among the top 100 Micro-finance Institutions of the world by the World Bank affiliate, CGAP.
For further details, please contact:
Head of Communications & Brand Management
The First MicroFinanceBank Ltd
Tel: +92-21-35822432, 35370095
About Aga Khan Agency for MicroFinance (AKAM)
Since its establishment in 2005, AKAM has brought together over 25 years of microfinance activities, programmes and banks that were administered by sister agencies within the Aga Khan Development Network. The underlying objectives of AKAM are to reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion. AKAM is a not-for-profit, non-denominational, international development agency created under Swiss law. Its headquarters are in Geneva, Switzerland. It is governed by an independent Board of Directors. The Chairman of the Board is His Highness the Aga Khan.
About the Aga Khan Development Network (AKDN)
The Aga Khan Development Network is a group of non-denominational development agencies, created by His Highness the Aga Khan, with complementary mandates ranging from health and education to architecture, culture, microfinance, rural development, disaster reduction, the promotion of private-sector enterprise and the revitalisation of historic cities. The AKDN agencies work to improve living conditions and opportunities for the poor, without regard to their faith, origin or gender. Working in the fields of economic, cultural and social development, AKDN aims to provide choices and opportunities to communities so that they can realise and determine their own development.
MICROCAPITAL BRIEF: MasterCard Foundation, CARE Canada, Aga Khan Foundation Canada (AKFC) to Extend Microfinance Services in Tajikstan and Rwanda
» Posted by Eric McKay in Category: Africa at 12:02 am
The MasterCard Foundation, a private Canadian foundation that supports microfinance; CARE Canada, an international humanitarian organization; and the Aga Khan Foundation Canada (AKFC), a nonprofit organization that supports international development, recently announced that they are providing CAD 9 million (the equivalent of USD 8.8 million) to fund two new programs that aim to extend savings services to 900,000 residents of Tajikistan and Rwanda.
AKFC will begin introducing village savings and loan associations (VSLAs) to Tajikstan over the next five years. This program will receive CAD 4 million (the equivalent of USD 3.9 million) from the MasterCard Foundation and CAD 1 million (the equivalent of USD 975,000) from AKFC. AKFC aims to help 360,000 villagers identify and develop viable businesses and connect them to markets.
Over the next three years, CARE will create VSLAs in Rwanda as part of a CAD 4 million (the equivalent of USD 3.9 million) program, funded equally by the MasterCard Foundation and CARE. The savings program will aim to extend basic financial services to an estimated 540,000 Rwandan residents .
About the MasterCard Foundation
Based in Canada, the MasterCard Foundation is an independent, private foundation with over CAD 3 billion (the equivalent of USD 2.9 billion) in assets. The foundation’s goal is to enable people living in poverty to improve their lives with increased access to microfinance and education. The Foundation was established in 2006 by a gift of shares of MasterCard Worldwide during the company’s initial public offering.
About CARE Canada
CARE Canada was started in the 1940’s to aid in the compilation and distribution of food to survivors of the Second World War. CARE Canada is now an independent organization that works to reduce poverty and alleviate the suffering associated with poverty around the world.
About Aga Khan Foundation Canada (AKFC)
A member of the international Aga Khan Development Network, Aga Khan Foundation Canada (AKFC) is an international nonprofit agency that supports social development programs in Asia and Africa. Founded in 1980, AKFC aims to solve the root causes of poverty. AKFC is currently supporting more than 25 initiatives in Africa and Asia that involve microfinance, health and education.
The First MicroBank Mozambique is Inaugurated as a Rural Microfinance Bank
Pemba, Mozambique, 8 May 2010 - The First MicroBank Mozambique (FMB-M) was inaugurated today, in a ceremony attended by President Armando Guebuza of Mozambique and Governor Eliseu Machava of Cabo Delgado.
Other officials included Mr. Nazim Ahmad, Representative of the Aga Khan Development Network (AKDN) in Mozambique, Mr. Jacques Toureille, the General Manager of the Aga Khan Agency for Microfinance (AKAM), as well as members of the local and provincial government, officials from the Central Bank, members of the diplomatic corps in Mozambique, and senior staff from the AKDN and its agencies.
In his remarks, President Guebuza stated that “from a macro-economic point of view, the opening of the microfinance bank also responds to our policy of encouraging the extension of services of these institutions outside of the capital city Maputo and congratulated the decision of The First MicroBank SA owners to settle in Pemba. He added that "with the presence of this Bank, the people win, the economy wins and Mozambique wins.”
FMB-M was launched in 2004 as a microfinance programme which evolved into a rural micro bank earlier this year. The bank is part of the Aga Khan Agency for Microfinance, (AKAM) which is an international financial institution with the objective of achieving the double-bottom line of maximising social impact while generating growth, expansion, and sustainability. By late 2009, FMB-M had disbursed over 2,000 outstanding loans, amounting to approximately USD 1 million.
Nazim Ahmad explained that the microfinance programme has evolved over the past eight years, culminating in the creation of The First MicroBank. “The microfinance component complements the activities of the Aga Khan Foundation in the province of Cabo Delgado,” he said, noting “the results achieved by our Rural Development Programme are reflected in food security indicators, levels of nutrition, access to education and income generation.”
The microfinance activities in the province of Cabo Delgado are a part of an integrated approach taken by AKDN and its agencies to reach out to remote populations and alleviate poverty. The inauguration of the bank and the procurement of the rural banking license, which permits it to accept public deposits, will enable FMB-M to assist in the impoverished areas of Mozambique’s northern provinces which have the highest poverty rates in Mozambique and lack access to financial services. FMB-M will offer its clients agricultural, entrepreneurial and salary-based loans in urban, peri-urban and rural areas.
For over a decade, Mozambique has championed microfinance as a means of empowering communities to play an active role in the socio-economic development process. In areas where resources are scarce, and financial services are made available to the poor, communities achieve faster economic growth.
For more information, please contact:
Aga Khan Agency for Microfinance
1-3 Avenue de la Paix - 1202 Genève
Tel: +41 22 909 7347
Fax: +41 22 909 7290
Interim CEO of The First MicroBank Mozambique
Aga Khan Agency for Microfinance
Av. 25 de Setembro, 986
Tel: +258 (272) 21340
Management and Programme Liaison Officer
Aga Khan Development Network
Avenida Julius Nyerere 1187
Maputo - Mozambique
Tel: +258 21 49 05 15
Fax: +258 21 49 05 38
Mobile: +258 82 507 11 22
"The Agha Khan Foundation provides a substantial service in the same field. According to Khaled Al-Gazawi, CEO of Agha Khan Agency for Microfinance, the agency has recently launched an SME funding programme to provide graduation loans to help small businesses grow. "Assistance is also provided to help with soft skills related to branding, designing, and packaging, along with other more sophisticated matters related to settling taxes, watching the books, planning and developing the business," said Al-Gazawi."
Microfinance Focus, June 15, 2010: Aga Khan Agency for Microfinance (AKAM) is an industry pioneer in developing micro health insurance products. Realizing the fact that a near absence of health insurance, often leaves the poor impoverished due to illnesses and sudden causalities, AKAM opened the First Microinsurance Agency Pakistan in 2007 and the First Microinsurance Agency Tanzania in late 2008. To further extend its services, it has recently tied up with Pakistan’s New Jubilee Insurance Company (NJI), which developed micro health insurance products to be distributed through MFIs/NGOs to the uninsured poor.
Peter Wrede, Microinsurance Specialist(photo)
AKAM’s hospitalisation insurance, for example, helps families prepare for both expected and unexpected health expenditures by encouraging saving for the future and providing insurance safety nets for catastrophic events. The insurance safety nets kick in when households experience an event requiring immediate hospitalisation, such as accidents, obstructed births and acute illnesses. Other products protect families from the death of a breadwinner. Crop, livestock and asset insurance products are also being developed
In an exclusive interview with Microfinance Focus, AKAM’s Microinsurance Specialist, Mr. Peter Wrede discusses some of the complexities of Microinsurance products and the progress made so far. Before joining AKAM Mr. Peter was the Chief Marketing Actuary in Hannover Re. Here are the excerpts from the interview.
Microfinance Focus: Aga Khan Agency for Microfinance was among the industry pioneers in developing micro health insurance products. What factors in your opinion are essential to be considered before creating a micro-insurance product?
Peter Wrede: Firstly try to understand what people need and what people want. It may not be the same in respect of risk transfer. In the case of health microinsurance, the most important element is the existence of affordable quality health care providers to work with, and their willingness to cooperate allowing the degree of control necessary to limit overutilization and fraud; ideally you will also get special discounted fees from them in view of the limited payment capacity of the insured (and in exchange for more clients and more predictable cash flows).
For health and all other forms of microinsurance, further fundamental elements that need to be present include a communication channel to inform the potential clients, a distribution channel to get the insurance to the clients, and the enrolment information to the insurer, and a premium collection channel to get the premium to the insurer.
And of course, if you are not an insurance company yourself and don’t want to operate outside the laws and regulation, you will need an approved risk carrier like insurer, mutual insurance company etc. Once all that is in place, the procedures for operating and servicing the insurance are as important as the product itself – or you might consider it to be part of the product so that should be well established before the launch.
Microfinance Focus: In terms of healthcare what are the biggest financial risks for poor households that you have come across?
Peter Wrede: In patients hospital care can be much more expensive than any episode requiring only out-patient care: the really expensive things happen in hospital and take some days, and it is them that throw families into poverty and are particularly suited to be insured. Chronic illness also has the potential to impoverish families, but is more difficult to insure due to its long term nature and the fact that many people in your target market may already be suffering from it, so unless there is enough solidarity among the healthy insured you’ll have to exclude these pre-existing conditions.
Microfinance Focus: Given the premium or the cost of insurance, are the microfinance clients willing to pay for health insurance? What measure is AKAM taking to educate them?
Peter Wrede: They are often not willing to pay, and there is a general mismatch between what they are willing to pay for an insurance and what they can be observed to actually pay for the same services in the absence of insurance; that is because when asked for their willingness to pay insurance premium, they are not in a stress situation, whereas when required to make high medical spending decisions, a family member is actually suffering they are under stress.
Insurance can bridge that gap to some extent by reducing inefficiencies in health care delivery and passing on bulk purchasing power to insured individuals. However, it is necessary to influence people’s attitude towards insurance by raising the awareness of the risks that they face and by building up trust in the mechanisms we propose to deal with them.
Microfinance Focus: What medical benefits does your health insurance package include?
Peter Wrede: We insure hospitalisation – both cashless in our network of panel hospitals and via reimbursement in case of emergency treatment in non-network hospitals – and complement that with pre-paid medicine (such as out-patient consultation and ante-natal care at discounted fixed cost) and related services such as access to discounted drugs and lab tests and tele-consultation.
Microfinance Focus: What are the risks associated with health insurance products?
Peter Wrede: From the point of view of the insurer or facilitators, among the many risks there is a risk of lower than expected uptake i.e. less people than expected buy the insurance, higher than expected claims, if premium is not enough to cover claims, the risk of higher than expected operating expenses and margins are not enough to cover costs, and the usual business risks of fraud, misunderstanding, disruption of partnerships, failure of partners (e.g. to scale up), turnover of trained / key staff, natural calamity, civil wars etc.
Microfinance Focus: The insurance products need to be adapted to the heterogeneity of the customer base. Can you elaborate how AKAM customized its insurance products according to the different regions and customer base that it is serving?
Peter Wrede: Giving an overview I would say that the main distinctions are urban versus rural, because both the morbidity and the available health care infrastructure differ considerably and again they differ from city to city and from rural area to rural area. Other parameters that affect the product design are willingness/ability to pay and the priorities of your local distribution partners. In addition, you may want to address different health issues with different products, e.g. hospitalisation without maternity and a dedicated maternity product for pregnant women being sold at the same time in the same market.
Microfinance Focus: Can we get an estimate of the number of clients getting benefitted by AKAM’s micro health insurance worldwide?
Peter Wrede: Currently close to 60,000, all in Pakistan so far.
Microfinance Focus: With New Jubilee Insurance Company, AKAM is following a ‘partner-agent model’. Are you following a similar model in other regions also? What are the benefits of this model?
Peter Wrede: Yes, we are following the same model in East Africa with the Jubilee Insurance Group, and look forward to establish similar ventures in other countries with insurers that are not part of the Aga Khan Development Network. We believe that the benefit of forging a strong trusting relationship with one reputable and top-class partner outweighs the potential benefit of shopping around the cover in the market as brokers would do; because we also assume that there is not enough supply for health microinsurance to provide a choice of insurers.
Microfinance Focus: What is the average cost of your insurance products?
Peter Wrede: 3 USD per person per year
Microfinance Focus: Which technological tools has AKAM deployed to achieve efficiency in micro-insurance services?
Peter Wrede: So far our attempts to deploy technology such as smart chip cards have not been successful.
Microfinance Focus: Which technology platform AKAM is using for micro-insurance. What features does this platform holds and how satisfied are you with the performance?
Peter Wrede: We opted for Gradatim’s MF-Insure because it is web-based, providing the functionality we needed like data collection/warehousing/aggregation/query, and claims management support, also to our distribution partners at the point of sale, providing an offline functionality to overcome limited internet access. We were comforted by the fact that Gradatim had track record in the field, and we believe in software as a service. So far, we are satisfied with their support and service during the customisation of MF-Insure to our products and processes, and early end user feedback is positive.
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Microfinance Bank in Pakistan Receives CGAP’s Silver Category Award for Social Reporting
Second Consecutive Social Performance Reporting Award
The First MicroFinanceBank Ltd. Pakistan (FMFB-P), an institution of the Aga Khan Agency for Microfinance, was awarded a certificate of recognition in the silver category for reporting on social indicators to the Microfinance Information Exchange (MIX) by the World Bank affiliate, CGAP (Consultative Group for Assisting the Poor), in the year 2010. This is the second consecutive Social Performance Reporting Award won by FMFB-P. The award was initially launched in 2009 by CGAP together with its partners the Michael & Susan Dell Foundation, the Ford Foundation, and the Social Performance Task Force (SPTF).
The award is designed to promote greater transparency in social performance reporting of Microfinance Institutions (MFIs) and recognises the efforts of MFIs in establishing a strong social performance outlook within their organisation.
Around 350 MFIs submitted reports on their social performance to the MIX this year for the Awards, easily surpassing the 200 that were received in 2009. “This is a tremendous response to the call for greater transparency,” said Xavier Reille, Lead Microfinance Specialist at CGAP. “We have seen nearly a doubling in the number of applications to the Awards in a single year, and it shows the sincerity of MFIs in their mission of providing financial services to the poorest people, as well as to their own financial bottom lines.”
“FMFB has been working over the last two years to establish its own unique set of poverty-measurement indicators and to mainstream its efforts to measure poverty levels of clients throughout the country,” said Hussain Tejany, President / CEO of FMFB. He added that FMFB-P had been reporting on a set of social performance monitoring indicators that had been developed through the Social Performance Task Force in cooperation with the industry leaders. Important indicators included the degree to which MFIs were measuring the poverty level of their clients and the poverty-measurement tools being used.
The Social Performance Reporting Awards provide a yardstick for those wanting to assess an MFI’s commitment to showing progress in helping their clients, supporting their staff, and protecting the environment. MFIs across the world are showing a strong commitment to transparency and accountability in their efforts to reduce poverty, with a growing number reporting on the social benefits of their activities to their investors and to the public.
For further details, please contact:
Head of Communications & Brand Management
The First MicroFinanceBank Ltd
Tel: +92-21-35822432, 35370095
Microfinance Beneficiaries Showcase and Sell Products in Maadi District of Cairo
Cairo, 9 December 2010 - The First Microfinance Foundation Egypt (FMF-E), an institution of the Aga Khan Agency for Microfinance, is holding a three day exhibition, 9-11 December 2010, in the Maadi neighbourhood of Cairo, to offer artisans from the Darb al Ahmar, Gamaleya and Mansheyat Nasr districts an opportunity to showcase and sell their products to a broad audience of the city’s local and international residents.
The exhibit, which is designed to introduce the work of microfinance clients to a broader market of shoppers from Cairo and tourists from the Middle East and beyond, will have 35 stands with leatherwork, arts and crafts and the traditional mother of pearl boxes created by the artisanal community in Darb al Ahmar.
This exhibit is part of a broad effort to revitalise Darb al Ahmar, one of Cairo’s poorest districts, through a number of coordinated initiatives, including the Cairo Economic Livelihoods Project (CELP). The Project uses career and job counselling services, craft development, business development services and access to microfinance to increase and improve employment opportunities for men and women in the area. Other projects of the Aga Khan Development Network include the 35 hectare (74 acre) Al-Azhar Park, a number of restoration projects in Darb al Ahmar, including the Umm al Sultan Shabaan mosque, the Khayrebek complex and Aslan Mosque and Square, as well as health, education and civil society programmes.
“Watching businesses grow and Darb al Ahmar become a thriving community with healthy families shows that microfinance and business development services are highly complementary and can further the success of clients,” said Khaled Al-Gazawi, the Chief Executive Officer of FMF-E. “Microfinance alone cannot alleviate poverty.”
CELP is a bilateral agreement funded by the Canadian International Development Agency (CIDA) and the Aga Khan Foundation Canada in collaboration with FMF-E and the Darb al Ahmar Community Development Company (CDC).
As part of this project, the CDC complements the work of FMF-E by targeting the under-employed and unemployed with vocational training. After training is received, CDC clients can be referred to FMF-E for a loan to build their own businesses. The CDC also supports artisans through access to international designers, training courses to refine their traditional craft and the tools to market their products.
In a neighborhood where few residents have a formal education, business development services teach entrepreneurs how to operate and manage their businesses more efficiently. Courses include instruction on financial literacy and basic accounting, business planning, marketing and sales. They also help businesses reduce the environmental impact of their activities on their neighborhood and help micro-businesses to transition into the formal economy. In 2009, with the financial support of CIDA, FMF-E established a Business Development Center. FMF-E now offers five courses at the training centers located in Darb al Ahmar and Mansheyat Nasr. At the end of September 2010, FMF-E had extended fee-based training to 4,360 clients, of which approximately 56% were female.
“All of these factors combined will benefit the community by strengthening and establishing a more gender and environmentally sensitive business sector,” said Ferry de Kerckhove, Ambassador of Canada to Egypt in his speech at the opening of the exhibit.
Through this exhibit, FMF-E is helping to revitalise a community that until 2003 lacked basic infrastructure and services. By strengthening businesses and improving the income and employment potential of its clients, FMF-E is playing an active role in the socio-economic development of the region.
Dec 07, 2010 (Tanzania Daily News/All Africa Global Media via COMTEX) -- LOW income earners will have access to cheap insurance services that will cover areas of lending, agriculture and health facilities.
The 5-year project to be carried by the First Microinsurance Agency Limited (FMiA), a non profit organization will be co-financed by the Bill Gates Foundation and the Aga Khan Agency for Microfinance.
According to Mr Wilson Mzava, the FMiA Project Manager, the project will support government efforts to alleviate poverty particularly to rural people. He said farmers who preserve their harvests in warehouses will also be insured in case of damage that may be caused by fire.
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"FMiA provides additional solutions to savings cover and warehouse receipt cover to members and borrowers of partners organizations from the banks and microfinance institutions," said Mr Mzava at the launch of Afya Njema Brand in Dar es Salaam on Monday.
He said the insurance agency had insured all the loans provided by the Tanzania Women Bank (TWB) to make sure that the bank does not incur losses in case of disabilities or death of the borrower.
He said by including the poor in the formal economy and providing a range of insurance services, the quality of life and economic security will be enhanced. To begin with, he said the FMiA will involve people who are members of the Savings and Credit Cooperatives Organizations (SACCOS), cooperatives, village savings, loan associations, banks and other forms of microfinance institutions.
He said only 3 per cent of Tanzanians have access to insurance products, thus the project in pipeline will definitely increase the number of people into the insurance sector. He said for example, the studies carried out by the FMiA showed that health microinsurance is highly demanded and a necessary product.
"Based on the widespread challenges towards access of health insurance services especially by the low income families, it has been established that hospitalizations often destabilizes them as they might have to exhaust their little savings or fall victim of other predatory lending schemes to pay hospital bills," he said.
He said the Afya Njema insurance product is geared to empower members and borrowers of partner organisations to safeguard their health and that of their families.
Monday, August 23, 2010
MICROCAPITAL BRIEF: Oikocredit Invests Equivalent of $3.95m in IMON International of Tajikistan, The First Microcredit Company of Kyrgyzstan and Credit Union ABN of Kyrgyzstan
» Posted by Lindsey Shaughnessy in Category: Deals, Eastern Europe and Central Asia at 1:20 pm
Oikocredit, a Dutch cooperative investment fund, recently reported to MicroCapital the details of recent investments in three microfinance institutions (MFIs) in Central Asia: IMON International of Tajikistan, The First Microcredit Company of Kyrgyzstan and Credit Union ABN, also of Kyrgyzstan. The details of these transactions are as follows.
Oikocredit loaned TJS 7.89 million (the equivalent of USD 1.8 million) to IMON International LLC, an MFI serving vulnerable populations in Tajikistan through loans, leasing and consulting and advisory services. According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, as of year-end 2009 IMON International reports assets of USD 37.2 million, a gross loan portfolio of USD 29 million and approximately 26,600 borrowers.
Oikocredit also loaned KGS 96.2 million (the equivalent of USD 1.5 million) to the First MicroCredit Company (FMCC), a microfinance bank based in Kyrgyzstan. As of year-end 2009, FMCC reports to the MIX total assets of USD 8.8 million, a gross loan portfolio of USD 8.8 million and 11,987 active borrowers.
Finally, Oikocredit loaned USD 650,000 to Credit Union ABN, a credit union based in Kyrgyzstan that provides microcredit and voluntary savings to its clients. As of year-end 2007, ABN reported to MIX assets of USD 1.2 million, a gross loan portfolio of USD 1.06 million, 432 active borrowers, a return on assets of 14.37 percent and a return on equity of 37.95 percent.
As of year-end 2009, Oikocredit reported USD 665 million in total assets with 790 active investments, of which 543 were in MFIs.
By Lindsey Shaughnessy, Research Associate
About Oikocredit: Oikocredit is a Dutch cooperative investment fund comprised of church groups, social support groups and individual investors. Established in 1975, it works in 70 countries worldwide, investing mainly in microfinance institutions (MFIs), as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of year-end 2009 Oikocredit reported USD 665 million in total assets with 790 active investments, of which 543 were in MFIs.
About IMON International of Tajikistan: IMON International LLC is a microfinance institution (MFI) serving vulnerable populations in Tajikistan through loans, leasing and consulting and advisory services. Founded by the National Association of Business Women of Tajikistan and Mercy Corps in 1999 as Microloans in Tajikistan, the organization soon opened seven branches and 33 field offices. In 2007, the founders transformed the organization into a commercial operation, IMON International. According to the Microfinance Information Exchange (MIX), as of end-year 2009, IMON International reports assets of USD 37.2 million, a gross loan portfolio of USD 29 million and approximately 26,600 borrowers.
About The First Microcredit Company (FMCC) of Kyrgyzstan: Aga Khan Development Network (AKDN) launched its microfinance programme in the Kyrgyz Republic in 2003. The First MicroCredit Company (FMCC) was established in October 2006 and took over the activities of the AKDN microfinance programme. This transformation was an intermediate step towards the conversion into a fully-licensed microfinance bank. As of end-year 2009, FMCC reports to the Microfinance Information Exchange (MIX) total assets of USD 8.8 million, a gross loan portfolio of USD 8.8 million and 11,987 active borrowers.
About Credit Union ABN of Kyrgyzstan: Credit Union ABN is a credit union based in Kyrgyzstan that provides microcredit and voluntary savings. As of end-year 2007, ABN reported to the Microfinance Information Exchange (MIX) assets of USD 1.2 million, a gross loan portfolio of USD 1.06 million, 432 active borrowers, a return on assets of 14.37 percent and a return on equity of 37.95 percent.
Sources and Additional Resources:
 Per data submitted by Oikocredit to MicroCapital July, 2010
Microfinance Client Wins Micro-Entrepreneurship Award
ISLAMABAD, Mar 11 (APP): A client of the First MicroFinanceBank in Pakistan, Purdum Wali, won the “Best National Micro-Entrepreneur Award Male” at the recent Citi-PPAF Micro-entrepreneurship Awards 2010 ceremony held here this week.Purdum Wali, from Mastuj, Chitral, was awarded a cash prize of Rs.200,000.Ms. Hina Rabbani Khar, Minister of State for Foreign Affairs, presenting Purdum Wali with the Best National Micro-Entrepreneur Award, Male at the recent Citi-PPAF Micro-entrepreneurship Awards 2010 ceremony held here, says a statement of the Aga Khan Development Network (AKDN) here.
Another FMFB client, Sirajuddin from Chitral, also won the runner up Best Entrepreneur award in the regional category from the Khyber-Pakhtunkhwa region.
The objective of the Citi-PPAF Micro-entrepreneurship Awards Programme is to illustrate and promote the effective role that micro-finance plays in poverty alleviation. It recognises the extraordinary contributions that individual micro-entrepreneurs have made to the economic sustainability of their families as well as their communities.
Purdum Wali’s journey began a few years ago when he approached The First MicroFinanceBank Ltd (FMFB) for a loan to purchase a crop-insect spraying machine and some basic pesticides.
He was soon able to diversify his small business by offering vegetable and crops seeds and livestock medicine to his clients through his small shop.
To increase his sales, he began providing door-to-door service to other farmers in the village, often travelling up to 15,000 feet above sea level in the mountainous areas of Chitral to assist his clients, providing them with livestock medicine, feeds and seeds etc.
He was further able to diversify his business by taking a livestock loan from FMFB to start the business of rearing and selling livestock.
Currently, Purdum owns two shops in the main Mastuj bazaar and keeps more than 200 cattle. Purdum also owns a tractor, thresher and trolley and earns a good income from his diversified businesses.
Mr. Wali’s success has also spurred positive social change in his surroundings. Today, Purdum has the basic amenities of life, including access to quality education for his children, housing and health facilities for his entire household, but he also trains many young women to improve their livelihoods.
Coming from the remote, mountainous area of Chitral, where participation of females in income generation activities is not common, Mr. Wali has changed the concept of formal farming and rearing livestock by educating and training females in this area, encouraging them to participate in income generating activities.
The First MicroFinanceBank Ltd, a part of the Aga Khan Agency for Microfinance (AKAM), is a non-commercial, private sector microfinance bank licensed by the State Bank of Pakistan.
The FMFB strives to alleviate poverty through sustainable economic development by offering credit, savings and life insurance services along with efficient, low cost funds-transfer services.
It operates in 147 locations, including 83 automated branches all over Pakistan, as well as through 64 Pakistan Post outlets. As of December 2010, FMFB had disbursed over PKR 16.03 billion (US$ 188.59 million) in the form of 888,000 loans while generating a deposit base of PKR 5.35 billion (US$ 62.95 million).
Since its establishment in 2005, AKAM has brought together over 25 years of microfinance activities, programmes and banks that were administered by sister agencies within the Aga Khan Development Network.
The underlying objectives of AKAM are to reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion.
AKAM is a not-for-profit, non-denominational, international development agency created under Swiss law. Its headquarters are in Geneva, Switzerland. It is governed by an independent Board of Directors. The Chairman of the Board is His Highness the Aga Khan.
March 20, 2012 RECORDER REPORT 0 Comments The First MicroFinanceBank Ltd (FMFB) has marked 10th anniversary.
FMFB, an agency of the Aga Khan Development Network, is a leading bank established in 2002 as the first private sector micro-finance bank in Pakistan.
It is licensed by the State Bank of Pakistan under the regulatory framework of the Microfinance Institutions Ordinance 2001.
The Bank has played an instrumental role in reaching out to the poor segments of society by enabling individuals to strengthen their entrepreneurial base and build financial, physical and human capital for a sound and secure future.
The Bank strives to alleviate poverty through sustainable economic development by offering credit, savings and life insurance services along with an efficient and low cost funds transfer service to its target populations.
Speaking at the occasion, Akberali Pesnani - Chairman, FMFB said "the journey of the last ten years has been challenging and full of accomplishments.
The Bank has come a very long way in serving the poor population of the country while developing into an institution that has demonstrated exceptional growth, outstanding performance and international recognition".
With over 80 automated branches all over Pakistan and 50 alternate delivery outlets in collaboration with Pakistan Post, FMFB has disbursed more than one million Microfinance loans over a span of 10 years.
FMFB takes pride in pioneering a unique banking model as it is one of the few Microfinance providers in Pakistan that fund its entire loan book through indigenously mobilised deposits.
Expanding its frontiers from the villages in the Karakoram to the peri-urban areas in Karachi, the Bank has established its network in all the five provinces of the country and AJK.
With a team of almost 1,000 professionally qualified management and trained field staff, the Bank is bringing its home grown solutions to the poor residing in the remotest villages and thickly populated slums in the urban cities, creating new growth platforms in years ahead.-PR
The service provider spectrum - from microfinance to financial inclusion
The term microfinance covers a multitude of financial service providers. Joanna Ledgerwood argues for an approach that recognises their distinctions and plays to their collective strengths.
The Mountain Societies Development Support Programme (MSDSP), an NGO set up and supported by the Aga Khan Foundation in Tajikistan, is a good example of a market systems approach where a variety of financial initiatives work collaboratively. Launched as a relief and humanitarian initiative, MSDSP transitioned to become a development organisation, promoting good governance and local economic development. Recognising that the legacy of distrust in the formal financial sector has been particularly damaging to people living in mountainous areas — already subject to isolation, marginalisation, and deep poverty — MSDSP aims to address the lack of accessible financial services.
This call centre run by
FMFI Syria is helping the institution further its outreach and better understand what its
clients want.At the First MicroFinance Institution Syria (FMFI-S) it was found that beside the branch network, FMFI-S had no other channels in place to sell its products and/or service to its clients. The institution decided that the set-up of a call centre would improve its service and eventually its outreach. International best practices have also shown that for the microfinance client target group, this channel can be very successful and cost effective.
Some seven million Syrians, about 38 percent of the country’s population, have a mobile phone. This makes getting in touch with clients and others who have shown an interest in getting a microfinance loan easier. With the help of the Frankfurt School of Finance & Management, FMFI-S started the process of improving customer service by upgrading the staffs’ skills and reducing loan approval time.
To ensure that the clients were getting the best possible service, FMFI-S established a call centre to handle customer complaints; customer queries; or to get information to dormant clients or to people referred by other clients.
The call centre handles product issues including promotional campaigns. This call centre also allows the institution to diversify and expand the SME client base using lower cost solutions than the expansion of the branch network.
By the end of 2010, seven outbound campaigns had been executed. The result of this campaign was that 32 percent of those who were called had a conversation with an FMFI-S staff member. Of this 32 percent, about 10 percent of them went into a branch and got a loan. Although the actual outreach through the call centre only equaled three percent of total loans disbursed, this is expected to increase in the coming months.
All branches have anecdotally noticed that the call centre has played a role in attracting new clients. Though there is an increased traffic burden on the branches, the call centre has contributed to the increasing number of visitors (potential clients) in Damascus and Masyaf branches. The call centre has also helped in achieving the target sales in Lattakia branch during the fourth quarter of 2010.
At FMFB Tajikistan, remittance services are now available at 29 banking service centres throughout the country, reflecting the importance of remittances in the Tajik economy.Tajikistan has one of the lowest gross domestic products per capita among the 15 former Soviet Republics and nearly two-thirds of the population continues to live in poverty. In recent years, the economy has become heavily reliant on migrant remittances. More than 43 percent of Tajikistan’s GDP is made up by remittances.
The average Tajik migrant is a 32-year old, male, who has three dependents, spending 14 months at a time (cyclically) in Russia and remitting US$ 2,000-2,500 on average per year (US$ 150-200 per month). Remittances are generally seasonal and peak between September and December each year, around the time migrants return home after the completion of a contract. Recipients of remittances are most often women who remain to care for the family.
Over the last year, FMFB-T has worked on increasing the number of access points for banking operations so that many communities can access remittances close to their homes. In 2009, the National Bank of Tajikistan granted FMFB-T the right to engage in money transfer activities in its banking service centres because remittance recipients are more inclined to receive remittances through banks or operators that have locations close to where they reside.
The bank is also advertising its remittance services so that it can begin to build a visible presence in Tajikistan. In Russia, FMFB-T has established a greater presence to attract remittance business and promote the services of the bank.
Establishing a stronger presence in Russia enables the bank to engage more with the migrant communities, building relationships which can be further strengthened by remittance officers in Tajikistan.
FMFB-T has started to develop several remittance-linked products to help its clients increase the amount of the remittances that go into asset building as opposed to income smoothing. In 2010, FMFB-T started considering a remittance-linked savings product to foster the building of assets of its clients.
Alinoro Rajaomarosata: Financial inclusion in Madagascar
Alinoro Rajaomarosata grew up in a large family, with parents who could not afford to put her or her sibilings through school. For several years, as a young single mother, she was juggling a number of odd jobs to make ends meet. In 2011, she learned about the Premiere Agence de Microfinance (PAMF), and decided to take out a loan to start up her own business. Today, Alinoro operates three successful businesses and has 15 employees. With a much more stable and higher household income than before, Alinoro is able to realise her greatest priority: providing her daughters with a quality education. She says that achieving better life conditions has really changed how people see and treat her.
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