Post on 28-Dec-2015
EBRD’s Objective in MSE FinanceEBRD’s Objective in MSE Finance
Provide private micro and small enterprises, throughout our countries of operations, not catered to by the formal financial sector with sustainable access to financial services regardless of the industry sector.
Approach to MSE FinanceApproach to MSE Finance
Ensure fast and wide outreach including remote and depressed areas
Ensure commercial viability of MSE lending as building block for sustainability
Integration of MSE lending operations into formal financial system as standard
Efficient use of Technical Assistance funds with clear and measurable performance benchmarks
Donor Co-ordination & Harmonization - in On-lending, Project Management, and TA-Institution Building
PBs, MFIs and NGOsPBs, MFIs and NGOs
Where there are commercial banks that meet standards of integrity, commitment and financial stability, TA and loan funds are provided (40).
Where no suitable commercial banks are available, or where these banks are unwilling to adopt necessary procedures and client orientation, specialised MFIs are set up (12).
NGOs being explored – ‘best-practice’, track-record, and preferably ‘commercialising’ so that they can attract capital market funds rather than scarce donor resources for lending (1 NGO upgrade, 1 NGO loan and 1 NGO TC only).
Results & Successes Overall Results & Successes Overall (to end Dec 2004)(to end Dec 2004)
EBRD has been promoting MSE development throughout the region for 10 years. It is now operating in 19 countries with 55 partners, through 944 branches employing 3,671 loan officers
Results & Successes Overall Results & Successes Overall (to end Dec 2004)(to end Dec 2004)
to end Dec 03
to end Dec 04
%Change
Total No. of loans disbursed
454,651 785,855 75%
Total volume of loans disbursed
3,134,485,865 5,095,057,243 65%
Average loan amount 6,894 6,483 -6%
Outstanding portfolio – number
170,526 295,069 73%
Outstanding portfolio – volume
937,155,312 1,602,394,279 71%
Arrears > 30 days 0.60% 0.68% 13%
Results: Number of Loans DisbursedResults: Number of Loans Disbursed(to end Dec 2004)(to end Dec 2004)
Caucasus68,699
Balkans211,100
Russia225,082
Central Asia157,386
Ukraine + Belarus123,512
Results: Volume of Loans DisbursedResults: Volume of Loans Disbursed(to end Dec 2004)(to end Dec 2004)
RussiaUSD 1,914,683,190
CaucasusUSD 300,177,654
BalkansUSD 1,387,074,493
Central AsiaUSD 800,188,024
Ukraine + BelarusUSD 694,638,377
Agricultural Loans – Volume of Loans Agricultural Loans – Volume of Loans Outstanding Outstanding ( to end Dec '04)( to end Dec '04)
BosniaUSD 11,787,796
Albania USD 5,727,964
UkraineUSD 560,654
BulgariaUSD 11,075,657
GeorgiaUSD 6,848,841Kosovo
USD 8,183,086Macedonia
USD 1,112,362
MoldovaUSD 516,937
RomaniaUSD 2,974,481
Serbia & MontenegroUSD 28,580,553
Outstanding Portfolio Outstanding Portfolio (to end December 2004)(to end December 2004)
Other SectorsUSD 5,096,761,738
Agrocultural Loans, USD 10,820,226
Main Lessons:Main Lessons:
Economic impact is substantial on regional/national basis, but only if large number of enterprises reached rather than “token” levels
Financial viability of Micro and Small lending for partner institutions requires “critical mass”, i.e. volume and efficiency needed for these transactions to make good business sense
Know-how to fill finance gap exists - there is a model that works
Factors that limit or unleash impact:
– TA availability for institution building– Consultant Quality– Legal regulatory environment: key impediments must be tackled– Cannot totally rely on existing banks (design innovation needed).
In some cases the creation of a “Greenfield” bank dedicated to MSE finance is required (for example, KMB in Russia)
Next Steps for MSE lending Next Steps for MSE lending programmesprogrammes
Increase rural lending and village outreach Farm Lending – specialised loan officers Push extremes –express micro loans and
longer term fixed asset loans as borrowers grow
Partner Banks: continue to include new banks as long as sufficient TA is available (a long-term proposition). Mature partners to continue business without consultants’ (80% of branches have ‘graduated’)
MSE banks - increase deposit mobilisation and gain independence from IFIs; diversify creditors; widen branch networks, increase financial services for the ‘poor’
“Loan officers in Kyrgyz Republic solve
transport problems in rural areas by using
bicycles”
IntroductionIntroduction
ProCredit Bank Serbia (former MFB) started in March 2002
Now operating through 28 branches
Faculty of Agriculture, Novi Sad Great potentials in Vojvodina Novi Sad-training and database
centre Agriculture-long tradition in
Vojvodina Vojvodina-regions
AgricultureAgriculture
● 21% of GDP, second only to manufacturing (24%)
● 25% of GDP together with associated food and beverage products
● 44% of population lives in rural areas, a third of whom rely wholy, or in part, on agriculture for their livelihoods
AgricultureAgriculture
● 17% of total exports are agri products, processed food, beverages, and tobacco products.
● Agriculture producers: private farmers, Agro Kombinats (460) and co- operatives (400)
● Private farmers own 83% of the 3.35 mill. ha of arable land. The average farm is 2- 5 ha, usualy in several plots
● 3% of land is irrigated
Variety of Agricultural ProductionVariety of Agricultural Production
Vegetables/CropsFruits/CropsVegetables/HogsHogs/CropsHerbsCows/CropsCrops
Crop YearCrop Year
Revenues
Soybean,Sunflower,
Corn Sugar Beat
B BarleyW Wheat
Sep Oct Nov Dec Jan Feb Mar Apr Jun Jul
Wheat, Barley
Corn,Soybean,Sunflower,SugarBeat
Investment period
Agro Credit Agro Credit TechnologyTechnology
Technological Maps
Financial resume
Income statement
Cash flow
Agricultural analysis
Technological mapTechnological map
Lists all necessary operations
Gives the timing for these operations
Includes all expenses (seed, fertilizers, fuel…)
Map has two sections
Comment
We have about 40 maps
Maps for cattle breeding
Financial resumeFinancial resume
A continuation of the technological map
Its role is to sum up the expenses listed in the technological map
The financial resume does not include yields eaten by animals
Serbian Chamber of Commerce
Stock exchange
Risk in AgricultureRisk in Agriculture
Risk Measures taken for Risk Mitigation
Long production process
Farmers with a minimum of one year’s experience
Weather Meteorological posts, Farmers with a minimum of three crops
Diseases Veterinary institutes
Land Map with six types of soil
Agriculture perspectiveAgriculture perspective
Privatisation and restructuring of AK and agro-processors
Land restitution and strengthen land markets
Rejuvanate food marketing chain
Rehabiltate drainage canals
Regional development
Rural finance
Business Loans Outstanding – numberBusiness Loans Outstanding – number
31%
36%
9%
21%3%
Agriculture
Trade
Production
Services
Other
Business Loans Outstanding – volumeBusiness Loans Outstanding – volume
19%
38%20%
19%4%
AgricultureTradeProductionServicesOther
NumberNumber of of AgrAgrii Loans Loans Disbursed By Disbursed By BranchesBranches
0
100
200
300
400
500
600
700
800
900
Novi Sad Subotica uključujući Sombor Čačak Šabac
Novi Pazar Beograd 1 Beograd 2 Beograd 4
Beograd 6 Niš Užice Kragujevac
Krusevac Kraljevo Vranje Becej
Kikinda
VolumeVolume of of AgrAgrii Loans Loans Disbursed By Disbursed By BranchesBranches
EUREUR
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Novi Sad Subotica uključujući Sombor Čačak Šabac
Novi Pazar Beograd 1 Beograd 2 Beograd 4
Beograd 6 Niš Užice Kragujevac
Krusevac Kraljevo Vranje Becej
Kikinda