小微金融融资途径英文课件.ppt

1、1The Centre for Micro FinanceA comprehensive approach of MicrofinanceKarachiNovember 1st,20062Agenda Microfinance in India:an overview The Centre for Micro Finance Research Unit MFI Strategy Unit 3Microfinance:who are the targeted clients?Poor and vulnerable households economically at the Bottom of

2、the PyramidLow IncomeMiddle ClassHNIUltra poorHow can microfinance improve their lives?4Microfinance:what is it?whereas objectives areOften perceived asSuite of financial services Thrift/savings Credit Insurance and Investments Transfer Payments and RemittancesGroup and individual lendingSustainable

3、 activityMicro-creditGroup lendingSocial/charitable activity5The challenge ahead:demand vs.supply gap to bridgeSupplyDemand 60%of MF services in South Several un-served areas 20K FTEs to hire(TBD)Financial training for top mngt Training for middle mngt&field staff Incentive schemesIFMR centers(CAFS,

4、insurance)ICICI trainingsHBS,Duke,IIMCoordinate existing providersMicroSave,Care India,Basix school of livelihood,EDASet up new facilities(if required)Cocoon?232Training/capacity building for MFIs:questions to be answeredIdentify&prioritize immediate and recurring training needs at top/middle manage

5、ment levels and field staff for top 10 MFIs Market review(cost,location,duration)of the existing facilities in India(Priority1)and internationally(Priority2)Identify gaps for supply to match demand=use MicroSave(CMF partner)study as a starting pointSet up new entities to fill these gaps(if necessary

6、)Explore funding solutions for MFIs to be trained=Interactions with top 10 MFIs,mainly CEO and HR director=Interviews of main training institutions and financial universities in India and abroad(HBS)233MIS:partnership with FINO3 To develop a common end to end delivery platform shared across Indian M

7、FIs Created as sectoral resource to serve 700M customersObjective To access reliable data on MFIs operations performance Easier portfolio rating through creation of historical dataBenefits for MFIsBenefits for investors To reduce initial CAPEX required per MFI To improve product depth and capability

8、 To improve business management and reduce transaction costs data reliability and timeliness(product,clients)To better service liabilities and investments To allow single-window monitoring of customer relationshipsCurrent status Currently sized for 12-50M customers Proof of concepts completed,final

9、contract negotiations(IBM/iflex)Entire infrastructure,hosting,operations outsourced First phase launch with 5 partners by May 200634Market linkage creation:approachCorporatesMFI Local presence in identified region?Willingness/Capacity of MFI toProvide customized financial products?Identify entrepren

10、eurs(if necessary)?Provide/coordinate technical training at the field level?Volume generated(absorbed)?Quality?Cost of production?Capacity to contract&payback loan?Existing capabilities/training need?Product to be sourced(retailed)?Region?Volume?Price?Quality?Required investments(capital or capabili

11、ties)for tie up?Expected return(in value)?Timeframe of return?Risk undertaken by company(quality)?Previous pilot already undertaken?CustomersDemandSupplyICICI Commercial teamsICICI Sectoral teamSectoral experts/NGOsMarket dynamics435Market linkage example:cattle feed distribution through Godrej Agro

12、vet-Spandana(1/2)4Objective To increase farmers revenues from milk production through improved yield and quality of milk produced by cattle feed utilization To reduce the risk on Spandanas loans that go toward buffalo purchaseExpected Impact Expected net revenue increase in Guntur 300-600Rs/month/ho

13、usehold with a single buffalo fed with cattle feed up to 2400Rs/month,ie.by 34%*,once households scale up to 4 buffalo after demonstration effect on one buffalo Marketing the feed product to traditional/low income farmers and educating them to utilization of such product Designing a credit product t

14、hat caters to the clients needsChallenges*:average monthly household income of 60 families surveyed was 7000Rs Dairy activity is a low revenue activity for farmers in spite of a growing milk demand and therefore remains a marginal source income Milk yields from buffaloes is low because these are not

15、 fed good quality feed Farmers perceive dairying as a subsidiary activity because it only offers marginal income:they have no incentive to own more that 1 or 2 buffaloes Farmers however willing to invest in dairy(cattle feed,high quality breeds,artificial insemination)often lack the funds to do so G

16、odrej Agrovet,a concentrate cattle feed producer,is not presence in the areas where Spandana(MFI with 700,000 clients)operates.Initial Situation36Market linkage example:cattle feed distribution through Godrej Agrovet-Spandana(2/2)Godrej AgrovetSpandana Provide credit at 0%int.rate for the purchase o

17、f feed Delivers the product to weekly center meeting Has assigned 1 project leader Does not make any profit out of this initiative Increase yields and fat%Increase income by 10-20 Rs/day Are offered doorstep delivery Are able to purchase the feed on credit at 0%Delivers concentrate feed in 50 kg bag

18、s to central locations from where Spandana receives the product Region:Guntur Price:325Rs/50 Kg Has assigned 2 officers to coordinate projectCustomersDemandSupply437Godrej Agrovet-Spandana:productivity improvementInitial situationDealer GodrejDistributorFarmerDealerDairyAfter Spandana-Godrej partner

19、shipTo be pilotedSpandana Farmer GodrejSpandana Chiller Entrp.DairyMilkCattle feedCattle feedPiloted Loan Sales Sales Loan 438Godrej Agrovet-Spandana:productivity improvementAfter Spandana-Godrej partnershipsSpandana buys cattle feed in bulk at distributors price(premium for delivery costs)Spandana

20、provides a 0%loan for farmers to buy cattle feed delivered at village level and farmer pays back according to seasonalityThe entrepreneur pays back his loan through direct sales to the dairy Spandana supports a chiller set up by providing a loan to a local entrepreneur Details 21Spandana Farmer Godr

21、ejSpandana Chiller Entrp.DairyMilkCattle feedCattle feedPiloted Loan Sales Sales Loan 123344To be piloted4Pilot on 300 women for 5 monthsMilk production increases by 50%(from 2L to 3L)Increased net revenue for the farmer:2200 INR per month*(4 buffaloes)Spandana provides buffalo loan for farmer to ta

22、ke up milk production Results39Market linkage example:Mint cropping(1/2)Traditional crops are being produced in the Eastern Uttar Pradesh by low-income clients of one of the top 10 MFIs.Mentha cultivation is not done at the commercial level although it is feasible.Mint production company is trying t

23、o secure it raw material sourcing to serve a growing demand Business model needs to be downscaled initially(low profit for the Company)Financing the Distillation Unit(Rs 22-25 K)Solving logistics(extension support)and pilot project funding issuesCurrent SituationObjective Encourage and provide oppor

24、tunity to the low income clients(having cultivable land)to grow mentha(Commercial)Link procuring company to the low income clients directly Organize producers in a commercial ventureChallengesExpected Impact Enhanced returns through the mint cropping(Rs 21K/Acre)as compared to Rice(Rs 10K/Acre)and W

25、heat(Rs 8.4 K/Acre).440Market linkage example:Mint cropping(2/2)Mint Procurement Companies RequirementMFIs Role Identify client on the basis of land availability in the selected districts.Finance Distillation Unit(Cost Rs.20K-22K)and raw materials.Design package loan covering the credit and insuranc

26、e needs.Plant Mint yielding 55-60 Kg/Acre and can be harvested twice in 7-8 months.Proper irrigation and timely crop management.Shift from Wheat(Traditional)Mint(Commercial).Invest(financed from MFI)Rs 22K-25K for the Distillation Unit(Collectively owned)and raw materials.Product:Good quality Mentha

27、 arvensis.Region:Eastern Uttar Pradesh Price:At Prevailing market rates(Rs 450-Rs 750/Litre Mentha oil).Scale of Operation:Aggregated produce from 15 Acres Bigha land.Tie-up with mint firms for procurement through their local offices.Risk:Crop failure due to water logging(Weather/Crop Insurance)and

28、the demand fluctuations.Customers RoleDemandSupply441 Handicraft Fisheries/Seaweed Trees plantation Food processing Vegetables/Mint croppingMarket linkage creation:other projects442Thank youFor any questionannieifmr.ac.in or sdjariifmr.ac.in 43Information AsymmetryNo collateralNo credit historyDiffi

29、cult to evaluate enterprises potential successHigh Costs of Intermediation Low value transactionsGeographical isolationHigh supervision costs(no financial literacy)Informal activities:need flexible accessIlliteracy:traditional services inappropriateHigh cash handling costsConstraints to scaling acce

30、ss for the poorProvision of microfinance is constrained byRegulatory IssuesStaff Incentives not aligned to maximise access to financial services for poorHigh transaction costsPoor Technology44How to release these constraints?To improve impact of microfinance on the poorTo increase access to the rele

31、vant suite of financial services45CMF:Who are we?Permanent staff:23 Research associates and 8 MSU Associates from Kennedy School,Yale,IFMR,XIMB,IRMAShort-term Interns:Masters and Phd students from Kennedy School,Harvard,Yale,MIT,DSE etc.Research Committee to give advice on submitted proposals:Jonathan Morduch(NYU),Abhijit Banerjee(MIT),Byomkesh(SKS),Mr.Thiagarajan(MCFI),Chandrasekar(IFMR),Bindu Ananth(CMFR founder)46CMFs ObjectivesResearchInfluence practiceAdvocacyStrategybuildingTraining