Post on 16-Jan-2016
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MICRO FINANCE SKILLS PROJECT
TRANSFORMING MICRO FINANCE
Richard Plant
General Secretary: BANKSETA
BANKSETA MissionBANKSETA Mission
“To support and give effect to legislation by establishing an education, training and
development framework to enable stakeholders to advance the national and global
position of the banking sector.”
The need for the The need for the MFSPMFSP
Enhance skills & professionalism
Lack of business knowledge inhibits growth in the sector
Consumer protection and education
Development of SMME entrepreneurs
Micro Finance Micro Finance Skills ProjectSkills Project
MFSP was set up in 2002
Micro finance sector provides services to small, medium & micro enterprises,
and individuals
Bridges the gap between the traditional banking sector and the emerging
market
Three year, three phase project funded by the National Skills Fund
Unique approach: targets service providers & their clients
Recognizes the critical role that MFIs are playing in providing access to finance
to the larger South African population
- Overview -- Overview -
Enterprise Zone: Enterprise Zone: Overview of the projectOverview of the project
The project’s The project’s objectivesobjectives
To implement skills development initiatives for:
1200 learners in micro-finance institutions over a three-year cycle between
2002 and 2004;
1200 SMME borrower enterprises by 2004;
6000 individual borrowers/consumers;
To build capacity of:
Education and Service providers within all provinces to deliver skills
development initiatives.
Principles of the Principles of the projectproject
Governance & management
BANKSETA
Project Steering Committee (PSC)
BANKSETA, Banking Council ,Organized Labour, MLA,
MEA, & MFRC
Project Management
SDS Consortium
Guiding principles
Ensuring buy-in of stakeholders
Incorporating and supporting SMME and BEE contractors, and
Strong focus on thorough research in all phases of the project
Research & Research & Development Phase Development Phase Feb 2002 – Feb 2003Feb 2002 – Feb 2003
Training Training DevelopmentDevelopment
Curriculum Curriculum DevelopmentDevelopment
Training Training Provider Provider SelectionSelection
Risk ManagementRisk Management
Loan Book ManagementLoan Book Management
Marketing Marketing
Cash ManagementCash Management
Customer ServiceCustomer Service
Staff ManagementStaff Management
Learner Learner selectionselection
Learner Learner SupportSupport
Assessment
Business Business Development Development
SupportSupport
Delivery TargetsDelivery Targets
Phase ONE – Pilot phase
Phase TWO –
Phase THREE –
GautengKwa Zulu NatalWestern CapeEastern CapeMpumalanga
GautengKwa Zulu NatalWestern Cape
All 9 provinces
PHASES TARGETS REGIONS
MFI 200
MFI 400SMME Borrowers 500Individual Borrowers 2200
MFI 600SMME Borrowers 700Individual Borrowers 3800
Accessing MFIsAccessing MFIs
Print mediaPrint mediaPrint adverts:RegionalNational
Press Releases
Advertorials
Media Surveys
Face to FaceFace to FaceContact SessionsOne-on-one
meetings
Electronic mediaElectronic mediaRadio InterviewsTV interviews
Industry stakeholders
Website - internet
activities
Pamphlets
Newsletters
Email bulletins
Tele-promotion
Accessing SMME & Accessing SMME & Individual BorrowersIndividual Borrowers
Provincial Consumer Desks Advice Centres NGOs Word of mouth
ITHALA SACCOL Churches
Partnerships
Intermediaries
Radio Adverts Radio interviews TV Interviews TV shows
Newspaper Adverts Newspaper articles
Media
Pamphlets
Achievement for the Achievement for the Pilot PhasePilot Phase
Exceeded target by 38.5%
Number of Companies
Number of Learners
Gauteng 21 159
Kwa- Zulu Natal 12 66
Western Cape 15 52
Total 48 277
Delivery Phases 2 & 3Delivery Phases 2 & 3
MFI SMME Borrowers
Individual Borrowers
Enterprise Zone: SMME Enterprise Zone: SMME TrainingTraining
Overall phase 2: MFI Overall phase 2: MFI TrainingTraining
364
56
527
62
178
25
301
44 5313
0
100
200
300
400
500
600
GP KZN WC EC Mpl
LearnersWorkshops
Total: 1423
Exceeded
Exceeded
target by 356%
target b
y 356%
Overall Phase 2: SMME Overall Phase 2: SMME TrainingTraining
*Including numbers achieved by Ithala
Region Number workshopsconfirmed
Number of
learners
Average learners
per workshop
GP 18 127 21
KZN 11 180 20
WC 12 110 17
EC 10 131 31
MPL 11 62 16
Total 62 *610 21
Exceeded
Exceeded
target by 22%
target b
y 22%
Overall Phase 2 :Overall Phase 2 :Individual borrower Individual borrower
trainingtraining
318
1246
474
107
505
0
200
400
600
800
1000
1200
1400
GP KZN WP EP MPL
Individual Learners
Total: 2650
Exceeded
Exceeded
target by 20%
target b
y 20%
Delivery Phase 3 – to Delivery Phase 3 – to datedate
637864
3465
0
500
1000
1500
2000
2500
3000
3500
4000
Phase 3
MFI SMME BORROWERS INDIVIDUAL BORROWERS
MFI modulesMFI modules
1. Conduct a market analysis
2. Develop repayment policies & procedures
3. Manage loan portfolios
4. Develop advanced client service skills
5. Market your product
6. Process a loan (2 days)
7. Collect & administer loans
8. Help clients understand their rights and responsibilities
9. Build relationships with clients
10. Basic business principles
Training sessions
Training sessions
SMME modulesSMME modules
1. How do you know if your business idea will work?
2. What resources do you need to start your business?
3. What do you need to know about loans?
4. What do you need to know about financial management to run your
business?
5. How can you budget your finances effectively?
6. How do you draw up a business plan?
Training sessions
Training sessions
Individual borrower Individual borrower modulesmodules
You and your accounts
You and your budget
You and your debt
You and your loan 1
You and your loan 2
You and your savings
You and your rights
MFI MFI -Lessons learned -Lessons learned
There were no existing training interventions direct to MFIs – therefore investment in
training was a new culture in the industry;
Methods of communication needed to be more targeted to MFIs:
One-on- one meetings
Telephone promotion
The project could not rely on existing industry associations to access learners – MFIs had
to be targeted directly;
To access learners business owners needed to have:
Confidence that the SETA and the training would benefit their business;
Proof of tangible benefits – word of mouth became critical;
Consultative Forums became contact sessions with active dialogue –MFIs with real
interest in the project attended.
MFI MFI - Lessons continued…- Lessons continued…
Training for MFIs had to exclude : the 1st, 15th, 25th, 30th and 31st of the
month, and Fridays;
Recognized that MFIs have different training needs and the industry is not
necessarily homogeneous –the curriculum needed to be impactful and
target different size MFIs and staff levels – front, back office and
managers;
MFIs needed support to select and register learners;
We had to innovate creative means to assess learners.
SMME Borrowers SMME Borrowers - Lessons learned - Lessons learned
Difficult to access the correct level of SMME and matching training materials to the
SMME level;
There is an “Informal approach” to learning – e.g. arriving late etc;
Word of mouth leading to big numbers at some workshops – difficulty in predicting
numbers;
Some learners refuse to give their identity numbers;
Individual follow up required rather than organizational follow up – more time
consuming;
Its better to reach SMMEs through NGOs, Advice Centres, and Consumer Affairs
offices – the market is extremely fragmented.
Individual Borrowers Individual Borrowers - Lessons learned - Lessons learned
The best way to reach communities would be through community
based organizations such as Provincial Advice Centres;
Intermediaries were identified and trained on how to deliver the
material;
Support and quality assurance structures were set up and monitored;
The project needed to incentivise intermediaries to reach more
borrowers in communities: An Intermediary incentive strategy for
Individual and SMME borrowers was introduced;
Intermediaries compete against each other in all provinces;
AccomplishmentsAccomplishments
MICRO FINANCE INDUSTRY
The number of people who have accessed training for the first time in their lives;
The project introduced a training and staff development culture;
The industry players have began to collaborate on issues of common interest;
Now there are service providers who know the industry and have focused on the
best possible ways to deliver training to the industry;
Industry training needs have been exposed and appropriate training material
developed, which can be used beyond 2004;
There are trained assessors and quality assurance measures;
The above are indications of a professional and sustainable learning culture.
MFI Training Statistics MFI Training Statistics to dateto date
- Demographic - Demographic Breakdown - Breakdown -
0
50
100
150
200
250
300
350
400
450
AfricanMale
AfricanFemale
ColouredMale
ColouredFemale
IndianMale
IndianFemale
WhiteMale
WhiteFemale
Phase 1 Phase 2 Phase 3
AccomplishmentsAccomplishments
SMME & INDIVIDUAL BORROWERS
Capacity of Consumer Affairs Offices, NGOs and Advice Centres has
been built through train the trainer programmes;
Project has built partnerships with ITHALA & SACCOL;
Appropriate training material;
Regional reach;
Quality assurance & support;
Response received has revealed the real need for this type of training
in communities.
SMME Borrower SMME Borrower Statistics to dateStatistics to date
- Demographic - Demographic Breakdown - Breakdown - Phase 2
Phase 3
African Male 239
340
African Female 365
500
Coloured Male 0
2
Coloured Female 0
7
Indian Male 0
4
Indian Female 0
0
White Male 2
0
White Female 4
0
Disabled Male 0
7
Disabled Female 0
4
Individual Borrower Individual Borrower Statistics to dateStatistics to date
- Demographic - Demographic Breakdown -Breakdown -
0
200
400
600
800
1000
1200
1400
1600
1800
2000
AfricanMale
AfricanFemale
ColouredMale
ColouredFemale
IndianMale
IndianFemale
WhiteMale
WhiteFemale
Phase 2 Phase 3
Certification CeremonyCertification Ceremony
Interest from other Interest from other partiesparties
During the research phase we consulted with micro finance institutions, donors
and industry stakeholders in Uganda and Kenya;
Micro Finance Outreach Plan in Uganda, a Uganda government initiative, have
visited the project, to learn how to roll out simultaneous training to MFIs, SMME
and Individual Borrowers;
Consumer Desks have commended the training material highly and have
expressed a strong desire to use the material developed by the project beyond
2004.
Contracts…Contracts…
A total of 71 contracts awarded
54 Contracts awarded to HDI
Organisations - 76.1% of total allocations
17 Contracts awarded to non-HDI
Organisations - 22.5% of total
allocations
8 Contracts awarded to non-SMME
Organisations - 11.3% of total allocations
63 Contracts awarded to SMME
Organisations - 88.7% of total allocations
Details %
Total amount contracted 100.00%
% HDI amount 52.80%
% SMME 93.70%
% non-HDI 47.20%
% non-SMME 6.30%
Service Provider Service Provider Support CentreSupport Centre
Comprehensive support provided:
Monthly meetings, presentations and minutes
Orientation of new providers
Support and assistance with project plans and budgets
Coaching of assessors and moderators
Venue database and checklist
Accreditation support – through all phases
Quality assurance and feedback
Training tips
Training of 52 assessors
Training of trainers in new methodology and the training modules
Initial thoughts & Initial thoughts & changes..changes..
Nation-wide incubator:
Shared services
Call Centre
We assumed that people would know what they needed;
Research results showed that we had to change our approach;
Business Development Support became Business Networking
Sessions
Our approach Our approach changed…changed…
BDS•Shared services
•Call Centre
Assumptions SMME know what they need;SophisticatedAccess to internet
BNS•One-on-one interactions
•Networks•Coaching
Secondary research was inconclusive;Market is fragmentedDiffering life cycles of businesses;Low uptake by learners
Infrastructure High cost infrastructure Low cost infrastructurePlanned targets
Progress On track but very limitedNo go
Number of Number of beneficiaries beneficiaries participatingparticipatingMFI’s SMME’s
WC 8 56
Gauteng 19 147
Eastern Cape 9 57
KZN 16 92
Mpumalanga 8 43
Totals 60 395
FinanceFinance Inception to 30 September 2004 Inception to end (Forecasted)
BudgetR
ExpenditureR
% of budget
BudgetR
ExpenditureR
% of budget
MFI Training Delivery 11,063,089 7,859,593 71.0 12,932,089 12,883,935 99.6
SMME & Individual Borrower Training Delivery 13,694,047 5,315,670 38.8 13,949,494 9,452,414
67.8
BDS Support Centre 21,675,847 1,357,795 6.3 23,892,407 1,961,844 8.2
Learner Assessments 1,142,400 741,349 64.9 1,058,400 760,850 71.9
Project Evaluation 1,274,517 259,765 20.4 1,374,850 794,425 57.8
SPSC Activities 1,174,949 712,903 60.7 1,262,150 1,063,303 84.2
Curriculum Revision – MFI & Borrower materials 4,208,550 3,801,376 90.3 4,208,550 3,954,780 94.0
Other Activities, Procurement, Project design review etc 2,878,950 387,128 13.4 3,338,299 387,128 11.6
Finance cont…Finance cont…
Inception to 30 September 2004 Inception to end (Forecasted)
BudgetR
ExpenditureR
% of budget
BudgetR
ExpenditureR
% of budget
Total Curriculum development, Skills Transfer & Business Development 57,112,348 20,435,579 35.8 62,016,239 31,258,679 50.4
Marketing 7,427,054 5,345,938 72.0 8,208,804 6,173,253 75.2
Project & Financial Management 5,847,515 5,831,085 99.7 6,459,735 6,446,123 99.8
External & Internal Audit Fees 106,745 Nil 0.00 145,172 98,040 67.5
Grand Total 70,493,661 31,612,602 44.8 76,829,950 43,976,095 57.2
Summary of FinancesSummary of Finances
Micro-Finance Skills Transfer Project (VAT Inclusive)30 September 2004
R %
Project budget 76,829,950 100.0
Actual Expenditure 31,612,602 41.1
Balance of contracted amounts 12,265,452 16.0
Future contracts (ToRs) Nil 0.0
Audit fees 98,040 0.1
Projected total expenditure 43,976,095 57.2%
Projected saving 32,853,855 42.8%
In conclusionIn conclusion
The project has been highly successful:
High quality training material developed;
Delivery to all stakeholders has been achieved;
Industry buy in has exceeded expectation;
Intermediary and partnership strategy has paid off;
Project Management has delivered to targets, in time and under budget;
Media exposure for the project has been very good;
The procurement strategy to select and empower SMME HDI providers was
difficult but has paid huge dividends;
Most important the objectives of the skills development act have been
achieved for the micro finance industry and its customers.