From the CEO of Small and Microenterprise Program SMEP (Kenya)

I am happy to inform you that SMEP has entered a new dawn in the following areas:-

a) Transformation into a DTM on 25th August, 2010 SMEP was issued with a letter of Intent by CBK, which is an approval in principle to conduct Nationwide Deposit Taking Microfinance Business. This letter takes SMEP a step closer, towards becoming a licensed Deposit Taking Microfinance institution. Currently we have a Nationwide Network with 32branches/satellites with over 70,000 customers , and Kshs 1billion outstanding portfolio. SMEP is working towards fulfilling the final phase of the requirements as set out by CBK. 

b) Governance- New Chairman- Mr. Gabriel Kivuti takes over the leadership from Mr Joseph Muriu who has spearheaded the institution since inception. Mr Kivuti has a wealth of experience in both Microfinance and Banking- having worked with Standard Chartered bank, been a board member of various institutions including Micro Finance Institutions. He has been and is still a practicing consultant in microfinance and banking. Currently consulting for world bank. 

c) Management Information system Upgrade T 24 Emerge 

We are delighted to announce that through financial support from Triple Jump Advisory Services, STRAJ T24 Consultants together with our ICT team have successfully upgraded our ICT system from Release RO5 WINDOWS Platform TO Release R08 LINUX / WEB BROWSER Platform. We are indeed grateful for the support given by Triple Jump.

To cater for the new dawn, SMEP has embarked on various reforms. These include but are not limited to construction of new state of art banking halls in Mombasa, Nairobi, Nakuru, Mwea, Maua and Kisumu amongst others, increasing its visibility through branding, reviewed agriculture products , and other products to provide a supermarket of products for our customers, training staff and upgrading the Company’s MIS to also consolidate both portfolio and finance.

We are looking forward to your continued support, financially or otherwise to enable us reposition SMEP be the preferred and model provider of high quality financial and non-financial services in Kenya in order to alleviate poverty and enhance a strong and equitable economy.

We sincerely thank you all for making SMEP what it is!!

God richly bless .

Mrs. Phylis I.Mbungu

Chief Executive Officer

---------------------------------------------------

Small & Micro Enterprise Programme

Kirichwa Rd off Argwings Kodhek Rd

P.O Box 64063 - 00620

NAIROBI.

Tel+254/020-2055761,020-2673327/8, 0711807040

E-Mail: ceo@smep.co.ke/info@smep.co.ke

www.smep.co.ke

Gabriel Kivuti

Chairman, SMEP

+254722361133

E-mail: gabrielkivuti@yahoo.com

NEWS FROM Lift Above Poverty Organisation (LAPO Nigeria)

After years of growth LAPO has entered a phase of consolidation in 2009.  This consisted of series of actions towards transformation into a regulated nation-wide microfinance institution and strengthening of our service delivery structures and systems. This had become necessary in order to address emerging issues and concerns in the international microfinance community and at the same time take advantage of current developments in the Nigerian microfinance market. Expectedly there have been obvious challenges but your support and understanding have been helpful in addressing them.

 LAPO with its strong  service delivery structures and systems; responsive products and services and  expertise in micro-lending remains  outstanding and acknowledged in the local microfinance market

Periodically, we shall use this e-newsletter to update our partners on significant developments in LAPO.

Central Bank of Nigeria Approves LAPO Microfinance Bank

The Central Bank of Nigeria has given approval to the application of LAPO Microfinance Bank Limited. With this LAPO comes under the regulation of the bank. The approval marks a significant development in the life of our institution and in addressing the issue of savings mobilization. With the approval by CBN, LAPO Microfinance bank now has a new board of 7 members and the CEO. Two of the seven seats are reserved for future investors and partners. Dr. Philip Osarenren Emokpae (economist; monetary policy, management and marketing) the former chairman of LAPO now chairs the new board. 

New CFO JOINS LAPO

A new Chief Financial Officer has joined LAPO. He is Dr. Kamakhya Narain Singh. Dr. Singh holds an MBA (finance and strategy) and a PhD (Strategic management of MFIs and their role in sustainable development) from Oxford University UK and the Banaras Hindu University, India,    respectively. He is a member of the Indian Institute of Chartered Financial Analysts (CFA) and the Indian Institute of Banking and Finance. Prior to this appointment, Dr. Singh was a microfinance specialist with the Asian Development Bank, and has more than 15 years of professional experience in the MF and SME sector in Europe, Asia and Africa. He resumed on May 3.

International Auditing Firm Preparing 2009 figures

After intensive discussion with our short list of international auditing firms based in Lagos on contents and fees we have now signed an agreement with Deloitte. Their auditors are starting with immediate effect to prepare the 2009 auditing report. It is expected to have the approved and authorized report by August/ September ready to be forwarded to our partners.

German Bank Manager as Volunteer

A German banker Barbara Hagelschuer from the “Sparkassen Gruppe” (largest banking organization in Germany) will be in LAPO in the next four months. She will be involved  in internal operational and financial system strengthening components of the transformation process.

Consultant to support the Change Process

LAPO is closely working with a management coach and consultant Bernhard Vester. He is involved in consulting on change management, strategy and organizational development. 

Strategic Functions Are Now Operating From Lagos

An annex of LAPO’s Head Office has been established in Lagos. Strategic functions such as finance, credit relationship management are carried out in the Lagos office. The office in the Lagos a commercial nerve center of West Africa will facilitate interface with our partners, regulators and other collaborators. The office is located at 65, Kudirat Abiola Way, Oregun, Ikeja.

Interest Rates And Charges Reviewed

In addition to the reduction in interest rate in October 2009, LAPO has again reviewed its charges. Registration fee and loan application fee of N500 and N200 respectively have been removed. There is training and loan processing fee of 1%. Insurance cover will now be provided at a premium of .6%. These changes take effect in June 2010. It is expected that as a regulated microfinance bank with easy access to public savings, LAPO will be able to offer lower rates on its facilities in the near future.

Volume of Operations is in the Increase

Monthly disbursement rose from N500 million in January to N1.5billion in April.  January to April disbursement is N5.2 billion. This represent 30% increase over the figure of N4 billion for the same period of 2009. The N21billion for the year is realizable.

INSURANCE COVER FOR LAPO CLIENTS

LAPO has launched an insurance scheme for her clients. This is in collaboration with GoldLink Insurance a major insurance company in Nigeria. Cover provided includes life, fire in market place and medical (hospitalization only). The premium rate is .6% of loan amount.

Improvements in our Data Processing

The migration of our existing software M2 to the more robust software FOCUS by the Fern company in North Ireland was successfully activated. This will not only lead to more reliable data but will also help reduce workload on branch level.

Publisher:        Godwin Ehigiamusoe, CEO of LAPO

INAFI Africa Trust conducts training of Trainers for Branch Managers

INAFI Africa recently conducted  training for trainers (TOT) for branch managers of member organizations. The first training was conducted in Lusaka, Zambia last July 12-14 and in Dakar, Senegal last August 16-18.

In total, 34 enthusiastic and dedicated branch managers attended the TOT course both in Dakar and Lusaka. The participants were particularly pleased with the training level especially the very resourceful facilitators who have vast experience in the field of Microfinance as practitioners. However, the participants preferred the training to have been at least five days instead of the three days.

The tool kit has been designed to provide MFI branch managers and operation staff with the relevant knowledge, skills and values on how best to support operations and other support staff in order to enhance their productivity, maintain high portfolio quality and lead to branch profitability and growth. This has been developed both as an orientation and in-service guide for branch managers of Member Microfinance Institutions affiliated to International Network of Alternative Institutions (INAFI) Africa.

The specific objectives of the training was to: provide branch managers with relevant skills and knowledge required to perform the general management of the branch and field offices; to enable branch managers play the crucial role of marketing of the institution existing and new products and services, to build their capacity in the area of risk management and to manage quality portfolio and growth through prudent portfolio management skills.

The tool kit was presented in a systematic format that outlined clear training process. Mrs. Rose Mwaniki, who also helped in developing the training module the training for the English speaking members, facilitated the training in Lusaka. Meanwhile the training for French speaking members was conducted and delivered in Dakar led by the main facilitator, Mr. Adama Thiam, who also helped in developing the French training module.

The training was largely based on a participatory training approach, which allowed the participants share experiences from their respective institutions. To further enhance participation of the entire team, the learning was conducted through small working groups. This enabled the participants discuss issues together and develop new skills and knowledge through teamwork.

INAFI has developed other modules/courses relevant to microfinance sector namely; Credit Officer Course, Financial Ratio Analysis and Interpretation Course, Strategic Business Planning Course, Governance and Leadership Course, Key Performance Indicators in Microinsurance. These courses are available upon request.

INAFI Africa wishes to thank all the organizations that showed interest and subsequently sent their staff for the training program. It is through emphasis of on continuous financial education that we anticipate improved productivity and performance of the staff as a result improving the Institution bottom-line.

ABOUT THE TRAINING

It is not without mentioning the branch managers of MFIs play a significant role in the success or failure of their respective institutions. They are in-charge of the overall supervision of staff within the branch; they manage operations and other important assets of MFI. In a sense, they are in-charge of the nerve center of the organization.

One of the key pillars of profitable and growing MFIs is the quality of supervision provided to the frontline staff. A stringent supervisory process does boost staff morale especially where the performance indicators are clearly articulated and understood across the institution.

The branch managers can only be able to provide relevant support to the field staff if they themselves are able to internalize and appropriately apply operations and institutional policies and procedures effectively. In other words, they must be well versed with their job requirements and continually be on top of things to be able to support those that they supervise. This is the main reason why INAFI considers this toolkit as an important contribution to both its Members’ human resources management and the sector in general.1

1 Source: B. Gray et al., “Can Financial Education Change Behavior?: Lessons from Bolivia and Sri Lanka,” Working Paper 4 (Microfinance Opportunities: Washington, D.C.: 2010).

Nigeria's microfinance policy review underway

Nigeria's microfinance sector has failed to make the expected impact on the economy due to misconception by the operators, but this will soon change.

Lamido Sanusi, the Central Bank governor, said the bank will come up with a reviewed policy framework in order to make it more effective.

Akintunde Sowunmi, deputy director, development finance, who represented Mr. Sanusi at a conference organised by Credit Awareness yesterday in Lagos said less than three percent of the rural population of Nigeria have access to microfinance services.

Mr. Sowunmi said one of the challenges is to create awareness about credit acquisition in order to make more people interested in accessing it.

"Despite the importance and benefits of credit, there are socio-economic barriers inhibiting access to financial services such as education, gender, age, irregular income, poor infrastructure, and even geographical location," he said.
Read more

Hints of the Subprime in New Microcredit

Enthusiasm for microfinance has surged since Professor Muhammad Yunus and his Grameen Bank shared the Nobel Peace Prize in 2006.

This November, APEC finance ministers will be asked to adopt an initiative on “financial inclusion” when they meet in Kyoto.

Unfortunately, this coincides with a wave of financialization of micro-lending, a phenomenon Yunus deplores. Read more

FDEA launches new website

Femme Développement Entreprise en Afrique (FDEA) or Women's Business Development in Africa is a Senegalese non-governmental organization, non-profit organization founded in 1987 and a member of INAFI International just launched its new website.

FDEA’s mission is to create an institutional framework adapted to the needs, technical capabilities, and socio-economic realities of women entrepreneurs. FDEA provides African women with a credit system of training, coaching and consulting in the field of micro, small and medium business. In Senegal, FDEA works in 6 regions: Dakar, Louga, Kaolack, Dourbel, St. Louis, Tambacounda and Bakel. The headquarters is in Dakar, with a regional office in Kaolack. FDEA works closely with other African NGOs: Cooperative for Education of Women, Family Health and Sanitation in Mali, Relief Society of Tigray in Ethiopia, NGO Coordination mutilation in Guinea, and the network of the Caisses Populaires Burkina. FDEA is affiliated with Conseil des ONG D’Appui au Developpement (CONGAD) Senegal.

FDEA has 20 branches located in eight regions of Senegal and has approximately Euro 27.5 million cumulative credit portfolio. Outstanding savings accumulated as of 31 December 2009 is Euro 1.967,244,267 while outstanding loan for the same period is Euro 2,051,195. FDEA is serving more than 200,000 clients and processes more than 5,000 credit records per year, of which 80% are for young women entrepreneurs from different categories.

INAFI congratulates FDEA!

SEDPI CEO TO PRESENT MICROFINANCE PAPER IN UK

Mr. Edwin Salonga is one of the nine (9) selected speakers at the international conference on Global Partnerships in Microfinance. The conference is organized by the University of Greenwich, in collaboration with the University of Birmingham and Burgundy School of Business. Mr. Salonga is the Chief Executive Officer (CEO) of the Social Enterprise Development Partnerships, Inc. (SEDPI) and a concurrent lecturer at the Ateneo de Manila University’s Development Studies Program.

The conference will be held on 6-7 September 2010 at the University of Greenwich in London. The event will be graced by Her Royal Highness Princess Máxima of the Netherlands as a guest speaker. The conference intends to look at all potential partnerships in microfinance and to discuss their accomplishments in meeting the microfinance goals. The conference will focus on the following topics a) Strategic Partnerships; b) Enhance New Partnerships; c) The Role of Institutions Involved; d) Collaborative Relations; and e) Global versus Local Partnerships.

The paper of Mr. Salonga is entitled “Fund Guarantees with Clear Exit Strategy: Donors Building the Confidence of Commercial Banks in Funding Microfinance Institutions.” It delves on how the partnership of international donor agencies and commercial banks may support the operations of microfinance institutions (MFIs). One of the major challenges of MFIs is access to commercial funds to increase their loan portfolio, which in turn will be utilized to carry out their mission to reach out to more poor people. However, commercial banks view microfinance as a risky investment due to the traditional banking approach they are more familiar with. It is in this context that international donors at present establish partnerships with commercial banks to build the confidence of the latter on microfinance through a risk-sharing mechanism by virtue of fund guarantees. It is through this scheme that a portion of the funds released by commercial banks to MFIs is guaranteed by the donors. In case that the MFIs fail to pay off their loans to the commercial banks, the respective donors would cover such payments. The challenge however for the donors is to map out a clear exit strategy, in terms of timeframe or milestones, that the MFIs need to observe as this guarantee scheme is a financial intervention that will have to be discontinued over time.

To learn more about the conference, click here.


SEDPI is a member of INAFI Philippines