Académique Documents
Professionnel Documents
Culture Documents
Oman
The Seeds of Growth
RWanDa
A Cow Lease Supports a Family
Page 40
Page 56
KyRgyz Republic
Small Lease, Big Results
china
Ducks, Rice Paddies, and Fish
Page 20
Page 16
OuR impact
Telling Their Stories
We are pleased to bring you this publication, which describes the transformative effect of giving the poor and small businesses access to financial services that previously were out of reach. These are the stories from around the world of 20 people whose lives have changed and small business owners who have profited.
For more than 40 years, IFC has worked with the financial sector to make financial services affordable, accessible, and transparent for people and businesses that need them. Using investment money and advice, we work with financial intermediaries including banks, nonbank financial institutions, and microfinance institutionsto strengthen their ability to deliver these services. At the household level, access to reliable financial services helps families to build assets, manage risks, and have a consistent supply of income. When appropriate services are matched with the needs of a poor family, the services can result in increased income and improved health, allowing children to spend more days in school and the entire family to eat more regular meals. For small and medium businesses, access to capital and financial services allows them to make needed investments in fixed assets, grow their turnover, and employ more people. Savings, insurance, and payment services are needed for these businesses to better manage risks and to be confident in making new investments. Our client financial institutions had portfolios of
2 | Capturing Our impaCt
more than 3.2 million loans to small and medium businesses worth $181.2 billion, and more than 19 million microloans worth $19.7 billion, in 2011. Here are the stories behind those numbers. They are stories of why access to financial services can make a sustainable difference in the lives of people around the world. These people include an unemployed Chinese factory worker who built an eco-friendly farm, a Rwandan genocide survivor who leased a cow to provide for her children, and a Colombian farmer trying to survive after devastating floods. We hope you enjoy their stories, and learn from them. IFC is committed to increasing access to financial services worldwide. Despite our efforts, more than 75 percent of the worlds poor do not have bank accounts and more than half the 400 million businesses in emerging markets lack the credit they need. We have much more to do. Working together with our clients and partners, we can do it. We can help people, and help the small businesses that are the one of the most powerful economic forces in the developing world. Peer Stein and James Scriven
The World Banks Global Findex shows that three quarters of the worlds poor do not have a bank account. Dont have an account at a financial institution:
59%
aDults eaRning less than $2 a Day
77%
aDults in high-incOme ecOnOmies
11%
In all regions, with the exception of high-income economies, borrowing from friends and family is the most commonly reported source of credit for current loans.
On the cOveR
55%
In India and elsewhere, microfinance is a powerful tool in the fight against poverty. IFCs goal is to scale up access to a range of microfinance servicesincluding loans, savings, and money transfersfor underserved populations.
www.iFC.Org | 3
glObal gaps
2.5 Billion Unbanked People and Millions of Underfinanced Businesses
Almost 2.5 billion people in developing countries have no bank accounts or other access to formal financial services. At the same time, more than half the 400 million businesses in emerging markets have unmet credit needs, with the gap estimated at more than $2 trillionan amount equal to the gross domestic product of some of the worlds wealthiest countries.
These numbers matter because financial services such as savings accounts, loans, and money transfers are a powerful instrument for reducing poverty. They allow low-income households to reduce their vulnerability to economic shocks by increasing their incomes and building assets, so they can improve their nutrition, the health and education of their children, and their living standards in general. We should care about the credit gap for businesses because small and medium enterprises account for about 90 percent of businesses and more than 50 percent of employment worldwide. They are critical engines for creating jobs and stimulating economic growth in developing countries, particularly after the recent global financial crisis. However, banks are lending smaller amounts than before the crisis, and small and medium enterprises in many emerging markets still have severely constrained access to financing. Financial inclusion has emerged as a prominent topic on the international development agenda.
4 | Capturing Our impaCt
Financial inclusion means that a diverse group of sound and sustainable institutions provide a range of financial products and services for everyone needing them in a fair, transparent, and cost-effective manner. Micro loans are a particularly potent tool to help entrepreneurs, especially women. Yet despite microfinances rapid growth over the past 15 years, it still reaches less than 20 percent of its potential market among the worlds 3 billion or more poor. IFC uses both investments and advice to encourage banks and other financial intermediaries, including microfinance institutions, to improve financial services to households, and to lend to small and medium businesses. The barriers to having a bank account include the cost, travel distance, and amount of paperwork involved in opening one. Women are particularly disadvantaged. Only 37 percent of women in developing countries have an account, whereas 46 percent of men do.
The World Banks Global Findex shows gaps in financial inclusion across demographic groups.
men
55%
WOmen
Those aged 1524 are 33% less likely to have an account, and 40% less likely to have saved formally (compared to those aged 25-64).
In developing economies, the richest 20% of adults in a country are more than three times as likely to save in a formal financial institution as the poorest 20% of adults.
incOme
47%
In developing economies, adults with a tertiary education are more than twice as likely to have a formal account as those with a primary education or less.
eDucatiOn
ResiDence
uRban ResiDents
35%
RuRal ResiDents
22%
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To improve access to finance for small and medium businesses, IFC works to increase the depth and breadth of local financial markets and to boost the competitiveness of the private financial sector. IFC also advises and invests in financial intermediaries. Worldwide, IFC investee banks had more than 3.2 million loans outstanding to small and medium enterprises, totaling $181.2 billion, as of December 2011. IFC had committed $10 billion to financial intermediaries for them to loan to small and medium enterprises as of June 2012. Furthermore, IFC gave advice on small-business banking to 42 clients in 33 countries in 2012. IFC is the World Bank Groups lead investor in microfinance, and it is one of the top multilateral investors in terms of outreach to microfinance institutions, working with more than 150
institutions in more than 60 countries. IFCs investee clients had an outstanding portfolio of more than 19 million microloans, worth $19.7 billion, as of December 2011. IFC had committed $2.2 billion to institutions for them to loan to micro entrepreneurs as of June 2012. Since 2009, IFC has worked closely with the Group of Twenty major economies, known as the G-20, in scaling up access to financial services through various efforts including by co-leading the Global Partnership for Financial Inclusion, serving as a technical advisor on the G-20s agenda for boosting access to finance for small and medium enterprises (SMEs) , and launching the SME Finance Foruma new knowledge-sharing initiative to strengthen small businesses role in economic growth, employment, and poverty reduction.
abOut ifc
iFC, a member of the world Bank group, is the largest global development institution focused exclusively on the private sector. we help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. in FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the worlds most pressing development challenges. For more information, visit www.ifc.org.
6 | Capturing Our impaCt
cOntents
east asia & the pacific
12 Philippines From microentrepreneur to Small Business Microfinance Papua New Guinea Creating a Savings Culture Mobile Banking China Ducks, rice paddies, and Fish Microfinance
sOuth asia
48 Bangladesh a Stairway to their Dreams Small and Medium Enterprise Banking India From Street Vendor to Shop Owner Microfinance India Homes for the poorest Housing Finance
50
14
34
52
16
36
56
Rwanda a Cow Lease Supports a Family Leasing Sub-Saharan Africa a Big Boost for Business Leasing Kenya insuring against the ravages of weather Insurance
58
22
42
60
24
44
26
28
sOuth asia
Page 46
sub-saharan afriCa
Page 54
28%
Rest Of the DevelOping WORlD
10%
China
Page 16
philippines
Page 12
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Nolie Estocado built a small enterprise that now employs as many as 60 people, many of whom are women, have physical disabilities, or are senior citizens, using an initial $100 microloan from The Center for Agriculture and Rural Development Inc. (CARD).
www.iFC.Org | 13
Mobile banking has made payments from buyers faster and more secure for cocoa and coconut farmers in the island province of East New Britain. Growers also can withdraw their money using a bank card at electronic funds transfer machines, ATMs, bank branches, or more than a dozen local shops.
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Ding Gang has begun to cultivate organic vegetables, in addition to raising ducks and fish in flooded rice paddies. The former factory worker started his environmentally friendly farm in Sichuan Province with a micro loan of about $2,300.
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61%
Rest Of the DevelOping WORlD
32%
russian federatiOn
Page 26
uKraine
Page 28
tajiKistan
Page 22
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Esen Alamanov grew his fish farm on Issyk Kul lake with new equipment he purchased using a $3,500 long-term micro-leasing contract.
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Forced to provide for her children when her husband became ill, Kamila Ismatova of Sugd Province began to bake and sell flatbreads. Six micro loans totaling $2,560 have allowed her to boost her production to 300 to 400 loaves a day.
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After the 1992-1995 war, which destroyed a major part of the countrys economy, commercial banks were unable to finance the emerging private sector. Microfinance institutions stepped in to fulfill this need and more than 250,000 Bosnian clients were able to get loans.
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Dubrovka, a town in Russias northwestern frontier, got a new boiler house that provided a stable supply of hot water for 6,000 people, and saved the town up to $185,000 in energy costs a year. The project came about when IFC helped Russias Prime Finance bank develop financial products targeted at energy efficiency needs.
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IFC developed a new agri-insurance product for Ukraine that covers winter wheat for the entire production cycle. Agrofirma Imeni Dovzhenko, a producer in the Poltava Region, used the new insurance in 2010 and was fully compensated for weatherrelated losses, Director General Viktor Skochko says.
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19%
Rest Of the DevelOping WORlD
5%
haiti
Page 36
hOnduras
Page 32
COlOmbia
Page 34
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A mortgage buys peace of mind for a soldier and safety for his family
In Honduras, where two-thirds of the population lives in extreme poverty, IFC has trained local bank Ficohsa to better serve the housing finance market. The value of Ficohsas outstanding housing finance loans jumped by 86 percent in three years.
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Advice and investment provided by IFC helped Bancamia, a leading microfinance institution in Colombia. Loans by Bancamia saved the vegetable farm of Jose Arquimedes Rodriguez in rural Central Colombia after devastating floods (above), and helped a family-owned Bogota lumberyard to expand (left).
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cash collateral
Small businesses are expected to play a key role in rebuilding Haitis economy after the January 2010 earthquake, but many of them have difficulty securing financing. IFC has worked with Haitian bank Sogebank to help it develop a regular program of lending to small and medium enterprises.
www.iFC.Org | 37
17%
Rest Of the DevelOping WORlD
10%
afghanistan
Page 44
paKistan
Page 42
Oman
Page 40
www.iFC.Org | 39
of coffee cafs
Talib Mohammed Shaaban Al Farsi opened an international-style coffee shop in Muscat with the help of a $7,600 credit line from BankMuscat. IFC had given the bank advice and investment to encourage it to lend to smaller businesses in Oman.
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employs about 60 people and has a checking account with HBL. HBL created a sales and relationship management team that was trained in selling to and managing relationships with owners of smaller businesses. Marketing material should be in Urdu as most small business owners cannot read or understand English. Zahid Munir, owner of Chaudhary Traders, which supplies household and confectionary items to more than 7,000 retailers in Lahore. He employs 15 people and has a checking account with HBL. HBL unveiled a new Urdu brand name for its dealings with smaller-business customers: HBL Business Faida. The bank also created a brochure that described all its products for small and medium enterprises in both Urdu and English. Banks should offer transaction facilities such as debit cards on [lines of credit]. This will add a lot of convenience. Humayun Khalil, owner of Baby House, a small bicycle store. He employs 5 people has a line of credit from HBL that helps him finance his inventory. He had just received a debit card against his loan. HBL developed a new debit card for both checking accounts and lines of credit.
banks approach
HBL bank asked some of its small business customers in Lahore how it could work more effectively with them. Among those who gave their advice were Humayun Khalil, owner of a bicycle store (top); and Mian Saud Hanif, chief executive of a shoe manufacturer (bottom).
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First MicroFinance Bank Afghanistan offers tiny home loans with monthly payments of less than $100 for Afghans to buy or upgrade their houses. These loans have allowed Bibi Sediqa Musawi to buy steel doors and windows for her house (top); and Adul Majid to build an additional room for his house, where 25 members of his family were crowded into five rooms (bottom).
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sOuth asia
percentage of people in south asia who have a formal bank account (highest gender gap of any region):
men
41%
WOmen
25%
india
Pages 50 and 52
bangladesh
Page 48
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South ASiA
Bangladesh / India
Eastern Bank offers Mukti (independence) loans for women-owned small and medium enterprises. They are designed to satisfy their clients needs by offering low interest rates and not requiring either collateral or six months of bank statements.
www.iFC.Org | 49
South ASiA
Bangladesh / India
Street vendor Phool Pati Devi used a $200 micro loan to open a small grocery store in her house in the low-income state of Uttar Pradesh. The stores sales have allowed her to send her children to a better private school and put $50 in the family savings account each month.
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South ASiA
Bangladesh / India
An $11,000 loan was all that Vidya Devi needed to buy land for a house where she could retire and live with her son and his family in the low-income state of Uttar Pradesh. She got the money from Dewan Housing, Indias first privately-owned housing finance company.
www.iFC.Org | 53
sub-saharan afriCa
percentage of people who have used a mobile phone to pay bills or send or receive money in the past 12 months:
sub-sahaRan afRica
16%
Rest Of the DevelOping WORlD
3%
Kenya
Page 60
sub-saharan afriCa
Page 58
rwanda
Page 56
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Sub-Saharan africa
Single mother Tharcissia Mukagatare, who was widowed during the genocide in 1994, leased a cow and sold the milk, using the proceeds to support her four children.
www.iFC.Org | 57
Sub-Saharan africa
An IFC effort to expand the leasing sector in Sub-Saharan Africa by providing advice and finance to banks and other financial institutions resulted in dramatic growth in leasing portfolios in some countries. Leasing provides small businesses with financing to invest in equipment.
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Sub-Saharan africa
Automated weather stations in each agricultural region of Kenya measure rainfall during the planting season. If the rainfall falls below or above a pre-determined amount, there is a payout to farmers who have a new kind of weather insurance.
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cOntact us
glObal / heaDquaRteRs
Washington, D.C. 2121 pennsylvania ave., n.w. washington, D.C. 20433 uSa telephone: + 1 202-473-3800 www.ifc.org/accesstofinance peer Stein, global Business Line Leader, advisory pStein@ifc.org James Scriven, Director, investments JScriven@ifc.org
sOuth asia
Jennifer isern, advisory, regional manager Jisern@ifc.org ayaan adam, regional industry manager, investments aadam@ifc.org
sub-sahaRan afRica
David Crush, advisory, regional manager DCrush@ifc.org ian weetman, regional industry manager, investments iweetman@ifc.org
cReDits
pRODuceD by
iFC access to Finance advisory & Financial markets investments
phOtOgRaphy
Cover Front 12 15 19 21 23 25 27 29 33 35 37 40 43 45 49 51 53 57 59 61 iFC commissioned (lr) manar Korayem, iFC staff; Kimberlee Brown, iFC staff; Bai-tushum; mr. Jun Luo, microcred nanchong K2 interactive Sara King, iFC staff mr. Jun Luo, microcred nanchong Bai-tushum arvand Staff Haystacks: aduze traveller (CC BY-nC-Sa 2.0); iFC staff iFC commissioned Olesya Zhuchenko, iFC staff Jose Luis Duron (CC BY-nC-Sa 2.0) iFC commissioned Liliana pozzo, iFC staff manar Korayem, iFC staff akbar Khan, iFC staff First microfinanceBank afghanistan iFC commissioned iFC commissioned iFC commissioned Kimberlee Brown, iFC staff iFC commissioned iFC staff
Design paRtneR
Daniel Kohan, Sensical Design & Communication
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