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PAMIGA Annual Report 2013

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I. Background Since 2012, the global socio-economic situation has not changed significantly in 2013. The crisis is still very present in the North, especially in Western Europe but is still affecting the USA, although in a lesser extent. Unemployment is still growing; governments are pursuing their austerity policies, affecting the budget for aid to developing countries and social assistance in general. In the microfinance field, major shifts have taken place led both by practitioners, investors and regulators, in the direction of broadening the scope from microcredit provision only, to fight poverty, to a much wider range of financial services and very often accompanied by other non financial services, in areas such as education, housing, energy, water, agricultural productivity enhancement / value chain building and business development for MSMEs…. That some call Microfinance +, others Inclusive Finance, or Impact Investing. A more holistic approach to address the needs of underserved clients is more widely recognised, as well as the necessity to listen and understand their perspectives to be able to adapt products and services to meet the needs, more widely accepted as standard for best practices. CGAP’s Fifth strategic plans, as well as the Mastercard Foundation Symposium in Turin during the summer 2013 are emblematic of these new mega trends for the sector. More and more articles, books and conferences around the world are emerging recently on the thematic of Africa Rising to become the fastest growing continent for the next decades. Next to the traditional news on wars, terrorism and famine, investors and other stakeholders discover a totally changed Africa, with an emerging well educated and well paid middle class that constitute both an attractive human resource and solvent market for goods and services, not forgetting key factors such as the phenomenon of youth (60% of population in Africa is less than 25 years old), technology (fastest growing intake for mobile usage) and arable land (largest reserve in the world). A country like Ethiopia has been transformed in just a few (2-3) years due to a model of “state capitalism” smartly combined with huge investment from emerging countries who have de-located manufactures (clothing and leather goods), creating thousands of jobs. Large cities are also growing very fast. In this context, PAMIGA 2’s objectives and activities, having anticipated these trends are well aligned and have therefore been able to seize opportunities in areas such as Energy and Microfinance, both in developing the partnership with Schneider Electric (and its CSR program Bip BoP) and in mobilizing new donors facilities such as SCBF and UNCDF’s CleanStart, as well as partnering with the Indian Basix Group in a South South cooperation and innovative programs such as Microlead and the African Livelihood Partnership (ALP). Pamiga Finance is also benefitting from the trend in positioning itself in the Impact Investing offer to institutional investors (who want to diversify from a strictly microfinance portfolio to a broader, greener and more responsible scope) as well as foundations and high net worth individuals. A successful closing in 2014 will confirm our hopes and reward our efforts in this direction.

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II. Highlights and main achievements The several funding has been awarded to PAMIGA for TA, especially in the space of Energy and Microfinance: Swiss Capacity Building Facility for Tanzania and for Ethiopia, UNCDF CleanStart. The African Livelihood Partnership (ALP) sponsored by the Swiss Government has also been launched for a pilot phase of 3 years (2013-2015). A proposal has been submitted to the European Facility for Renewable Energy for all PAMIGA members in the 10 Sub-Saharan countries. In 2013, PAMIGA and its partner, Schneider-Electric, have launched the Access to Energy through Microfinance program in three countries: Cameroon in March with 4 MFIs nation-wise, Tanzania in April with PRIDE RFW, and Ethiopia in September with 2 MFIs, Buusaa Gonofaa and Wasasa. Trainings, awareness meetings, planning, procedures and product design, marketing campaign have been conducted in close collaboration with the local distributors of Schneider. The first loans have been issued at year end. PAMIGA and Schneider-Electric’s solar energy initiative in Cameroon has been distinguished by winning the price of the 100 Innovation for Sustainable Development in Africa by the French Ministry of Foreign Affairs and AFD. An attractive video has been produced by the sponsors and shown during the award ceremony at the French Senate in December 2013, in the presence of the Minister of Cooperation and the CEO of AFD. In October, PAMIGA jointly with its main donors, have organized successfully an expert meeting in Dakar, Senegal, where 50 participants from 8 countries coming from MFIs, Ministries of Finance, BCEAO, the Central Bank of West Africa met to share experience in mergers and consolidation of MFIs in the context of the implementation of the new microfinance law in the sub-region: processes, tools, outcome, lessons learnt, factors for success. Very successful CEO meeting was held in October, in Saint Louis, Senegal. The topic for management training this year was: Management and Board of Directors relationship. Good and well balance governance is the key vision driver for the success of Inclusive Finance for tomorrow. The country Program Manager of ALP in Cameroon has been recruited: Racine Ly, a Senegal national who has graduated in Political Sciences in France, worked for Ecobank Accion, IFC and Cordaid in several West African countries and is fluent in French and English. Pamiga Finance SA has signed loan agreements with 3 MFIs for their water portfolio and has disbursed accordingly. The entire fund dedicated to water has now been committed. Fund raising activities have taken place to set a new SPV for Water and Renewable Energy for 9 countries and all members MFIs. At year end, an investor meeting was organized in Paris, hosted by EIB where 4 key investors met to discuss among themselves and with PFSA on objectives, requirements and conditions. A Due Diligence exercise has been conducted in Paris and in Africa. It should lead to a closing by June 2014.

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III. Activities Report

III.1. Activities implemented and main outcomes

III.1.1. Core Activities Activities planned For the core activities, the focus will be on Knowledge Management and sharing, especially in the area of Consolidation, Merger and Transformation, in view of preparing for the Regional Conference to be held in Dakar on October 2nd and 3rd, 2013 in co-promotion with BCEAO, EUACP, IFAD and Mastercard Foundation, where 2 cases of mergers in Mali and Burkina Faso will be presented and where a toolkit will be disseminated to an audience of practitioners, professional associations, policy makers, regulators as well as donors active in supporting Financial Inclusion in West and Central Africa. Many opportunities for advocacy will be seized through participations in national, regional and global events and forums on Financial Inclusion and on Environment and Microfinance, involving different members of the staff: ie The joint AFRACA and CTA Sub-Regional Workshop in Niger in March on “Financing Value Chains: Case Studies on experiences of Warehouse Receipts in Central and Western Africa”; “The African Microfinance Week” jointly promoted by African networks such as AFMIN, MAIN, AFRACA; Convergences 2013 session in September this year, as well as the European Microfinance Week at year end. Finally, around November-December, preparatory activities will be carried out in the view of the mid-term evaluation of the PAMIGA II Business Plan that should take place end of 2013 – beginning of 2014: assessing performance, measuring impact and drawing lessons learnt for dissemination and advocacy. Activities undertaken The Expert Meeting in Dakar took place, as planned, more than 50 participants joined, coming from BCEAO, Ministries of Finance in charge of regulatory supervision of the microfinance institutions from Mali, Burkina Faso, Senegal and Cameroon, leading MFIs from West African countries as well as Professional Associations, academics, banks and donors. The 2 cases of mergers facilitated by PAMIGA were presented by their respective CEO, followed by a presentation by PAMIGA’s expert in Consolidation, René Azokli on the process and methodology applied. Lessons were drawn from key success factors for a merger: Human Resource & Change Management, good and balanced Governance and close communication and interaction with the authorities to ensure compliance. These thematic were presented by experts involved in the processes. The Expert Meeting was a success since a dialog took place between the practitioners and the authorities on how best to ensure close communication and understanding as the sector is evolving fast and innovative initiatives such as the two mergers are taking place in the field, which could lead the way to a process of sector-wide consolidation, provided that the authorities understand and support the rationale and that MFIs consider the authorities as their counsellors and not only as the stick. PAMIGA staff participated to a number of national, regional and global events and in spoke as panellists in 9 of them: - The CEO, Renée Chao-Béroff intervened at IFAD and FAO in March, jointly with Vijay

Mahajan on Livelihood Promotion in Africa; she also intervened in September at the global forum of Convergences on Access to Renewable Energy on a panel with major investors; and presented PAMIGA and Schneider-Electric initiative at the Bangkok Conference organized by UNCDF CleanStart, jointly with Joel Lelostec, the Head of BipBoP, the CSR program of SE. She also took part in a Knowledge Sharing event at

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IFAD, in Rome, on strengthening Community Based Financial Organisations (CBFOs) in February and presented PAMIGA’s experience on mergers.

- The Regional Representative of PAMIGA for West and Central Africa and expert on Mergers and Transformation, René Azokli, intervened in two national events organized by Professional Associations and Local Authorities on the stakes and challenges of transformations in Microfinance: Lomé, Togo and Abidjan in Cote d’Ivoire.

- Marion Allet, the senior program officer in charge of the Energy and Microfinance program has been speaker in an international event in Stockholm and a national event in Paris at the Club de Microfinance to present our initiative in this field.

- Claire Ozanne, the senior program officer in charge of Institutional Strengthening intervened in a panel at the European Microfinance Week in Luxemburg in November on linking CBFOs to MFIs and banks.

Contacts have been taken by year end to identify a suitable consultant to conduct the mid-term evaluation of the on-going Business Plan of PAMIGA (Pamiga 2). Finally, Planet Rating has been selected and contracted for this task. It will be a team of 3 experts, led by Emmanuelle Javoy, Planet Rating’s former head, who will perform this exercise. The actual work will start in January and should allow a first draft report by mid-February, to be presented at the virtual board meeting on February 25th, 2014.

III.1.2.Thematic Activities

III.1.2.1. Consolidation, merger, acquisition of rural MFIs Activities planned In the field of Consolidation, Merger and Transformation, while finalizing the activities in Mali and Burkina Faso (mainly getting the licence and implementing the new business plan), the focus for 2013 will be on Cameroon, with the streamlining of the delivery channels for A3C (Business Plan, review of policy and procedure manuals, training of staff and governance on new procedures), on Kenya, in pursuing the transformation process with WPS Microfinance to spin off the Microfinance Department into a Microfinance Company applying a nation-wide licence as deposit taking institution and in assisting WAGES in Togo, to make an informed decision for its transformation or not into a microfinance share company (feasibility study in March). Activities undertaken

! Finalizing the TA activities in support to APFI in Burkina Faso, Benso Jamnum and San Jenné in Mali

- Support APFI (Burkina Faso ) in implementation of its post merger Business Plan, in

particular in opening branches and training loan officers for these branches and outlets: training taken place in March 2013.

- Support APFI (Burkina Faso) in implementation of its post merger Business Plan, in particular in advising the management in implementation of integration and centralization of financial resources from former entities, preparation of a communication plan for the merged entity and in operating the new branches under the new modalities. Mission taken place from May 28th to June 3rd 2013.

- Support APFI-Burkina, merger of CVECA Boucle du Mouhoun and Soum (Burkina Faso) in reintroduction of an updated license application according to the recent decision of the Central Bank. Main supports provided by PAMIGA to APFI in this framework include :

" recruiting a consultant to update the business plan; " evaluating the current management information system (MIS) of APFI, " designing the new management information system

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" developing a funding proposal to select and implement the new management information system;

" remote support to help APFI’s management to take in consideration of all comments of the Central Bank about the license application.

PAMIGA has provided TOT assistance to APFI to build the capacity of 13 staff on these manuals of policy and procedures (June 11-18th). In turn, APFI has committed to train all its staff so as to put the new procedures in place in the merged structure.

- After the needs assessment in MIS and the preparation of APFI’s computerization

program by PAMIGA’s IT Department, PAMIGA’s Representative for West and Central Africa has initiated discussions with officials of UNCDF in Dakar in order to raise fund for APFI’s MIS. These discussions are ongoing and may allow APFI to be supported by the new rural finance project of UNCDF in Burkina Faso.

- Additionally, PAMIGA assisted both financially and technically APFI management to organize and proceed to the training of the staff (56 employees) on the 8 new manuals of policies and procedures. PAMIGA had over the past year developed these manuals for and with APFI, and trained the trainers (top management, branch managers and internal auditors).

- Assist CVECA San Djenne to withdraw from a merger process where the other party

appears to be in serious difficulty. An external audit commissioned by the Supervisory Authorities in Mali took place from March onwards, to assess the financial situation of JIgifa, a MFI involved in a merger with CVECA San Jenne. The final report was disclosed to major stakeholders (including PAMIGA) on July 2nd and diagnosed a serious case of mismanagement. A General Assembly was organized to decide to exclude Jigifa from the merger as well as the integration of its assets and liability in the new institution. The authorities will follow up on this decision at legal level. A Consultative Group pf technical and financial Partners will meet during the 3rd quarter to decide on actions to take to assure the sustainability of CVECA San Jenné after this failed merger.

- Assist Benso Jamanun (Mali – 27 March to 9th April 2013) to recruit and deploy its staff. Support Benso Jamanun (Mali) in lobbying to obtain the license approval. PAMIGA’s expert in charge of mergers and transformations has met during the period, two times the Director of the Microfinance of the Central Bank in Dakar. The outcome of all these activities is the non-objection of the Central Bank about Benso Jamanun’s license application. But the Central Bank have sent this non-objection with comments and requested Benso Jamanun’s management to take into consideration these comments before receiving the final license. PAMIGA is already assisting Benso Jamanun’s management to take into consideration Central Bank’s comments. During the period, PAMIGA provided remote support and recruited a local consultant to help BesoJamanun’s team to prepare all documents to address BCEAO’s comments about the licence application of the institution. All these documents were submitted to the supervisory authorities on December 23, 2013 and we are now waiting for the issuance of the licence. ! Assistance to A3C in Cameroon to integrate all the technical experts,

professionalize its operations and streamline its distribution channels - Develop the Business Plan of A3C while assisting in streamlining its distribution

channels: 11 – 29 March 2013, by two experts – René Azokli and Claire Ozanne.

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- Finalize the Business Plan of A3C in Cameroon and sending it for validation. A General Assembly was organized on May 24th and has adopted the Feasibility study and the Business Plan prepared with the support of PAMIGA. A Steering Committee has been set up to monitor progress. René Azokly has been invited to be part of this SC to represent PAMIGA.

- Support A3C (Cameroon) in :

" facilitating the operation of the Steering Committee by developing he terms of reference and the bylaw of the steering committee;

" developing a communication plan of the reconfiguration process; " preparing and participating as a member, in the 2 first meetings of the steering

committee that helped to validate all the above documents; " preparing and conducting a training of trainers on the implementation of the

communication plan; " developing manuals of policies and procedures, through organization of a

workshop with key stakeholders, in order to take decisions and choose options on new procedures consistent with new business plan.

- A3C received from PAMIGA, remote supports and a field mission in Yaoundé from

November 22 to 29th to help the team of the institution to better implement the communication plan of the reconfiguration process and to start working on the staff redeployment plan. Discussions took place with A3C management and key stakeholders on new policies and procedures needed following the new organization of the institution. These inputs have then been used by PAMIGA to draft the different manuals. As of 12/31/2013, out of 10 manuals, 4 have already been drafted, and reviewed by the partner.

! Assist WAGES, in Togo, to define its strategy for transformation

- Diagnosis study for institutional transformation of WAGES in Togo (5 – 8 march 2013, by two senior experts, René Azokli and Kimanthi Mutua). Finalize the report for the diagnosis study for institutional transformation of WAGES in Togo. Sending it to the key stakeholders for validation and planning for the next steps.

! Assist WPS, in Kenya for the spinning off of its Microfinance Department

and its transformation into a licensed Microfinance Company - After a year of turbulence at the governance level, a CEO was recruited and put in

place. It took her at least six months to get the SACCO to be running properly again and called for PAMIGA to come back and assist it in the vast project of transforming its microfinance department.

- PAMIGA did a few short diagnostic missions to sort out the status of the SACCO and also to assess its IT needs (see next section); however, problems started again at governance level where conflicts raised with the new CEO who has not received any support to implement the reforms needed. In December, the CEO left WPS. Under such circumstance, it is not timely for PAMIGA to pursue its assistance in transformation: the project will suffer again from delays incurred.

III.1.2.2. Technology for security and efficiency

Activities planned In the area of Technology, 9 diagnoses (for APFI, CAURIE, PRIDE RFW, VOLA MAHASOA, WPS, Buusaa Gonofaa and Wasasa) will be made during the year, leading to tailored recommendations and action plans and assistance will be provided for 2 pilots in

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strengthening the MIS in a situation of post-merger or transformation: APFI in Burkina and WPS in Kenya. An exchange visit will be organised in Ethiopia to learn from the branchless banking experience of Buusaa Gonofaa who will implement, with the technical assistance of Basix, using a hand held device to deliver transactions in rural areas. The lessons drawn will be capitalized for dissemination to other MFIs of the network who are interested to find a cost effective solution to reach out to remote areas. CAMIDE/Benso Jamanum’s money transfer experience with Malian migrants in France sending money back home to the villages in the Kayes region will also be documented to see if replicable to other MFIs where similar needs exist. Activities undertaken ! A total of 10 on site missions were implemented during the year. 7 in-depth diagnosis

was performed to assess the MIS of member MFIs: ACFB in Benin, APFI in Burkina Faso, CAURIE in Senegal, PRIDE RFW in Tanzania, UIMCEC in Senegal, Vola Mahasoa in Madagascar and WPS in Kenya.

! Follow up were performed to assist some MFIs in implementation of the recommendations from the mission report: ACFB, APFI, CAURIE, Vola Mahasoa and UIMCEC.

! PAMIGA has assisted PRIDE RFW in its data centralization process, especially by

facilitating negotiation with IT service providers.

! A full project proposal was also developed to help APFI to raise fund for the implementation of its MIS.

! PAMIGA has organized and facilitated the exchange visit for 4 senior managers of

ACFB to see the organization of CAURIE’s (Senegal) IT department, as this MFI has a successful deployment of the software PERFECT in place and it is the one chosen by ACFB who is struggling with it.

! Finally, the chief IT advisor of PAMIGA organized a IT working Group Meeting in Kenya

for the IT managers of 10 MFIs of the network to be exposed to the use of technology to advance microfinance operations in Mobile Banking and Agent Banking (July 28th to August 2nd).

! The visit to Ethiopia to visit the Microlead (BASIX)’s experience in putting in place

hand held device to deepen rural outreach in a secured and cost efficient way has been postponed to 2014, as the activities in this country has encountered some delays. Documenting the Malian experience has also been delayed by the political and security crisis in the country during all 2013.

III.1.2.3. Environment and Microfinance

Activities planned

a) Water and Microfinance Initiative in West Africa The Water and Microfinance component will have reached in 2013 its full deployment with 5 MFIs (APFI, UIMCEC, WAGES, ACFB, CAURIE) in 4 countries (Burkina Faso, Senegal, Benin and Togo) involved and at least 3 of them providing access to funding for water related productive projects in a significant way.

b) Access to Clean Energy for rural Africa

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The component of Access to clean Energy will be launched in Cameroon, Kenya and Tanzania in March and April, with the objective of testing the market for the 3 segments (individuals, MSME, Communities and Villages) while delivering the first loans in all 3. Building concretely in the field the partnership with Schneider-Electric and its BipBop program will be an important factor for success. Similarly as for the Water program, a TA process from market study to product design and organizational enhancement will be provided by Pamiga to partner MFIs while marketing, installation and maintenance services will be done by the Schneider – BipBop local team in every country.

Activities undertaken Water and Microfinance Initiative (WMI) ! Supervision and monitoring of implementation in Burkina Faso and Senegal

(especially during disbursement season.) ! Mission to develop technical partnerships for UIMCEC in Senegal (10th to 16th March,

by GM, Manager, program officer and a external consultant specialized in preventing and assessing environmental impact)

Tools have been developed for MFIs to assess, analyze, make lending decisions, M&E their water related portfolio, TOT performed involving the in-house “champion” who is in charge of replicating. After a relatively slow adoption, the process is now well owned by the participating MFIs and progress is expected to speed up soon. ! The on-site missions in APFI in Burkina Faso was focused on assisting the MFI in

identifying and building technical partnerships with local Service Providers as well as for extension workers and research institute on agronomic and environmental issues. This Burkina mission in June 2013. Monitoring missions were also performed to assess the quality of applications for water projects and the appropriateness of their analysis by the ad hoc credit committees, using tools provided by PAMIGA.

! Mission to identify the market and design the products for the Water Initiative at WAGES, Togo in May, involving both the TA team (manager and officer) and PFSA’s investment director for assessing the financial needs of WAGES in terms of refinancing the water portfolio for the next years to come.

! The Water Initiative Working Group also met in May in Dakar to exchange experience and develop a common learning process. This group has taken the initiative to set a joint objective for 2013 and 2014.

While loan disbursements have been smoothly growing in Burkina Faso as the team is learning new skills, it has been slow in Senegal due to a prudent approach used by the MFI that has less agronomic/ rural financing experience and is more risk adverse. ! U-IMCEC in Senegal benefitted from the location of the regional PAMIGA headquarters

in Dakar. Hence, the program officer worked more closely with the MFI officers on their programs for HR (training and incentives for the staff, and expansion to two new locations in Matam and Saint Louis), marketing (promotion of the product), quality management (developing relationships with providers for technical advise and training on farming and environment, mastering the relationship with the equipments’ vendors, administrating the baseline impact surveys and helping with the financial literacy) and production (administrating loans and dealing with difficulties, including technical problems with the use of their equipments).

! The program officer went in a mission to Burkina Faso, to help APFI master the processes of financing irrigation investments for farmers, mainly by reviewing one by one the beneficiaries of the loans and the prospects, hand in hand with APFI management and officers. He also provided a session of training on financial literacy to 5 of APFI staff.

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! The program officer went in a mission to Togo, to help APFI develop and adapt its WMI’s tools. They reviewed together the procedures and the financial analyses tool.

! In Burkina Faso, the pilot done with APFI (former CVECA Boucle du Mouhoun and

CVECA Soum) has been limited in number of beneficiaries and loans distributed and took longer to develop than expected but did not prevent it to be satisfactory as all the process of introducing a new complex product in a MFI has been put in place and lessons are learnt allowing roll out in 2014.

! In Senegal, the major shortcoming of the program was the quality of providers of

equipments and their maintenance system. UIMCEC, the program’s MFI partner signed 4 MOUs with service providers selected among the best offers available in the country. Only 2 delivered in a satisfactory manner. Finally, in November, with all these delays and problems, UIMCEC had to allow clients to purchase equipments where they choose to and submit pro forma to the MFI only for final checking. 63 loans were distributed to 545 beneficiaries individually or in groups, 75% to women and 25% for men. The total amount is 100 Million CFA , the average loan size was 1.5 Million CFA and average duration was 16 months. 86% went to purchase of moto-pumps and 10% for dripping irrigation. Similarly, UIMCEC is now convinced by the existence of the demand and sets an objective of providing 3000 loans to 10 000 clients in 2014, notably through the Agriculture Finance Center that it is aiming at putting in place to serve in a more professional way farmers and value chains. This Center will have in-house agriculture and marketing skills to address most of the technical needs of clients. In 2014, UIMCEC will scale its water operations to 15 new branches and outlets and accompany the program with additional communication and extension work.

! In Togo, in the last quarter 2013, a mission took place for monitoring the water related activities in the branches and Pamiga Finance finalized and signed a million euro loan with WAGES, the MFI partner for it to expand loans to clients. 8 branches were involved in the pilot in December 2013. TOT was performed by the program officer of Pamiga in Financial Education in the area of debt management. WAGES has committed to disseminate this training to its water related clients as well as launch the baseline survey for impact monitoring. The objective was to provide 300 loans by end 2013, early 2014.

! Organize and undertake a meeting in Dakar (May 8th and 9th) for the “Consolidation

Working Group” involving 6 MFIs that are supported by PAMIGA in a merger or transformation process in the Western and Central Africa regions. The meeting aims at exchanging experiences, good practices and knowledge on the on-going processes and capitalizes on them.

Renewable energy: ! Launching of the Energy & Microfinance program in March (25th February to 5th March

by GM, Environment and MF manager and Energy and MF senior program officer), Cameroun, for 4 rural MFIs including A3C (member) jointly with Schneider-Electric,: confirmation of existence of demand, segmentation of market (individuals, MSMEs and Village / communities, setting common objectives and a individualized working plan for each participating MFIs.

! A product design mission was organized in Cameroon with the 4 participating MFIs who received appropriate training in understanding basics in solar powered energy. Communication campaign has also been developed in close partnership with Schneider France and Central Africa.

! In Cameroon, thanks to PAMIGA’s support, the 4 partner MFIs have organized

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awareness sessions on solar energy with over 1,400 microfinance clients sensitized on solar energy, its benefits and limitations, on available solar solutions, and on the availability of a new financial product to invest in solar solutions. Around 50 “Lighting Loan” applications have been approved following the awareness sessions. To boost the demand, specific marketing tools (posters, flyers) have been developed. PAMIGA regularly organizes meetings, participatory workshop, and calls to help partners coordinate and adjust procedures during the pilot phase.

! In Cameroon, the 4 partner MFIs continue implementing the pilot for “Lighting Loans”,

which finance small solar kits for domestic needs. In addition, partner MFIs have developed another innovative product, the “Energy Loan”, to finance larger photovoltaic systems for productive use of energy. PAMIGA provided them with technical support to do so, through the organization of a participatory workshop, training on risk management and financial product design for access to energy, writing of adapted procedures in coordination with energy partners, and development of a specific tool to strengthen financial analysis for these medium-term loans. Techno-economic fact sheets have also been developed to calculate the profitability of a solar solution for micro and small enterprises, per sector of activity (e.g.: for fisheries, small restaurants, hair salon, millers, etc.). These fact sheets will help loan officers in the prospection and financial analysis phases. Partner MFIs are now expected to train their staff on this new product.

! Launching of the Energy & Microfinance program in April 2nd to 9th, by GM, Environment and MF manager and Energy and MF senior program officer), in Tanzania with PRIDE RFW, jointly with Schneider-Electric,: confirmation of existence of demand, segmentation of market (individuals, MSMEs and Village / communities, setting objectives and a detailed working plan. Meeting with KIITEC, a specialized training institute, partner of Schneider-Electric, who will be involved as a technical service provider to train staff, clients and potential MSE in installation and maintenance of solar solutions implemented locally.

! In Tanzania, a workshop was organized by PAMIGA with PRIDE RFW in order to define the characteristics and procedures of a new financial product (Mwangaza Loan) to facilitate access to small solar solutions for lighting and mobile phone charging. The MFI staff was trained on the new financial product. Awareness sessions were conducted in 20 rural villages, with over 700 rural people sensitized on solar energy and on the new financial products. First loan applications are currently being analyzed.

! Similar activities were conducted to design the “Nishati Loan”, equivalent to the

Cameroonian “Energy Loan” which aims to finance larger solar solutions for productive use. During last quarter, the pilot for “Mwangaza Loan” (equivalent to “Lighting Loan”, to finance small solar kits for household needs) was launched in 2 branches.

! In Ethiopia, a launching workshop was organized with 2 partner MFIs and solar

energy providers in order to set the partnership and define the objectives and action plan of the pilot phase. A market study was conducted (100 clients interviewed through focus groups + 402 questionnaires) and confirmed the high demand for decentralized and clean energy solutions in rural Ethiopia.

! Discussions were conducted between 2 partner MFIs and selected energy providers to set up new partnerships. Reflections on product design and adapted procedures were initiated and will be finalized in the coming weeks during participatory workshops and meetings.

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! All planned activities have been implemented in 2013, although more time is needed to overcome the communication gaps that exist between MFIs on one hand and the local providers on the other hand as well as to put a reliable supply chain in place from the producing countries to Africa and from the capital cities all the way to the rural areas where the MFIs are operating and where clients reside. At year end, good progress has been made in this direction and assistance is still much needed to build trust between stakeholders.

III.1.2.4. Social performance management and Financial Education to clients ! Finalize a training module of Financial Education for Women Entrepreneurs

commissioned by GIZ for APSFD, Senegal ! On-site mission at CAURIE in Senegal (April 22nd to 26th) to train CAURIE’s internal

trainers (14 officers) in 2 of Microfinance Opportunities’ Financial Education modules and test the GIZ module for women entrepreneurs. The mission also assisted the MFI in developing a Financial Education dissemination Plan towards clients.

! Participate to the Social performance Task Force annual meeting in Panama (June 4th to 8th), advocate for Social Performance Management for rural MFIs and learn more on the “Universal Standards for Social Performance Management” (USSPM) and its application using the CERISE SPI4 tool in support to the members of PAMIGA network

! A training of trainers on financial education for clients was held in Cameroon for A3C

and 3 other Cameroonian MFIs. 11 participants, all of them experienced operations officers and managers, were trained on 3 financial education thematic: Savings, Debt Management, and Budgeting. Action plans were developed for the deployment of the training to end-clients of those institutions. For A3C, the objective is to train 2,000 clients in the next year. Remote technical assistance will be provided by PAMIGA’s expert for the implementation of A3C’s action plan.

III.1.2.5. Institutional Strengthening and Risk Management Several joint missions in this thematic have been undertaken jointly with the Consolidation and Merger pillar, such as developing a Business Plan, reviewing and completing/updating manuals of policies and procedures and training staff and directors in application of these procedures: in A3C in Cameroon and in APFI in Burkina Faso. New areas of expertise and service offer have been developed and tested in 2013, especially in financial controlling and risk management.

On site mission to UIMCEC in Senegal (2-10 May 2013) to identify and design the role and responsibilities of a financial controller, develop methodologies and tools (dashboard, reporting, and budgetary planning) and train the financial controller on budgetary and dashboard monitoring, while developing jointly these tools for full ownership. A short, medium and long term action plan has also been developed during the mission and is included in the deliverables. Risk Management expertise and service offer has been developed and tested under Microlead Ethiopia (see below) with Wasasa and Buusaa Gonofaa.

The senior officer in charge of this thematic has also joined a financial projection training in Washington DC (May 13-17th), aiming at learning how to use a software, Microfin to develop financial projections for a microfinance institution, practical approaches to planning and to master the most important financial ratios to monitor and to interpret

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them correctly. Critical operational issues such as designing products to meet client needs, pricing your products, and focusing on loan officers to leverage institutional productivity How to develop long-term, diversified financing strategies The course was run by Chuck Waterfield. Upon her return, the officer, in turn, has trained three of her colleagues to financial projections using Microfin.

III.1.1.3. Specific Projects and Programs:

Activities Planned The two Microlead programs in Ethiopia and Cameroon, in collaboration with Basix India will be in implementation, involving for Pamiga delivery of TOTs as well as tailored TA missions to member MFIs (Buusaa Gonofa and Wasasa in Ethiopia and A3C in Cameroon) and to the sector, in areas such as “governance strengthening”, “financial education”, “risk management” and “product development”. The ALP (the African Livelihood Promotion) program should normally be launched in April 2013 in 3 countries: Cameroon, Mozambique and Tanzania with the financial support of SDC. 2013 will be a crucial year to set up the hub of ALP in Arusha, install the COO and the 3 thematic experts in their respective focal countries from where they will operate and cover the 2 other countries, build the partnerships with local organizations while delivering cutting-edge TA services to enhance capabilities of existing organizations to better serve rural poor, women and youth in agriculture and employment creation. PAMIGA as part of the executive committee will have to take a very active part in setting up this new program. It will involve several missions in Africa for the CEO of Pamiga. Activities Undertaken under Microlead Ethiopia and Cameroon ! Animate a training in Financial Education for vulnerable clients (food unsecure and

living with HIV AIDS) while developing the module in a participatory way with 20 MFIs in Ethiopia in a AEMFI workshop

! Review the work plan for dissemination of Financial Education modules by incorporating elements in loan officers’ programs at Buusaa Gonofaa in Ethiopia, in the frame of the Microlead Program. Both activities were performed from 17th to 28th March in Ethiopia.

! Remote technical assistance was provided to Wasasa (Ethiopia) in September in order to facilitate the implementation of the pilot phase of the financial education program. The financial education modules were re-designed, impact monitoring tools and satisfaction questionnaires for clients and trainers were developed. Those tools will be used during the pilot phase. This will help PAMIGA provide a follow-up mission in December to : - review the work done and analyze the results of the clients’ and trainers’ feedback questionnaires - make the necessary modifications to the modules and develop a detailed action plan for the implementation to the whole organization - provide a ToT on another financial education module.

! In November and December 2013, two missions were organized to accompany A3C in

Cameroon and BuusaaGonofaa in Ethiopia, in the self-assessment of their social performance. The tool used for this was the SPI tool version 3.3, which helps measure the social performance of an institution through the lens of 4 dimensions, corresponding to the key concerns of microfinance institutions: targeting and outreach ; adaptation of product and services to target clients ; economic and social benefits for clients ; social responsibility of the institution towards clients, employees, community and environment. This version of the tool is also fully compatible with the social indicators of the Mix

14

Market, and incorporates the latest initiatives of microfinance sector: client protection principles of the Smart Campaign, social responsibility towards the environment, the SPTF Universal Standards, MF Transparency, Label of Excellence of the Global Microcredit Summit , etc. The missions helped highlight the strengths and weaknesses of the 2 MFIs in terms of social performance management, make recommendations and identify areas for improvement of their processes and systems, in order to enable the institutions to go further in the fulfillment of their social mission in an effective and sustainable manner.

! A follow-up mission was held in December 2013 for Wasasa in Ethiopia. The

objectives were to make a review of the activities implemented in financial education and provide additional training of trainers on a third financial education module. 11 regional coordinators and branch managers were trained on the Budgeting module. After having identified difficulties and best practices in the implementation of the first action plan, advice was also provided by PAMIGA’s expert on how to achieve targets in terms of financial education and fully implement the action plan, whose final quantitative objective is 900 clients per branch to be trained by the end of the implementation phase.

! Technical assistance was provided on the 2 Ethiopian MFIs, Busa Gonofa and Wasasa,

to review progress on implementation of a risk management framework, and to set up an updated action plan for 2014, using a participatory methodology.

! Several missions reported earlier were conducted under the two Microlead programs:

a mission Marion in product design for the Energy program in Ethiopia, missions of transformation of A3C in Cameroon, of Social Performance in Ethiopia and Cameroon.

Activities undertaken under the African Livelihood Program ! 2 Missions conducted by the General Manager in Cameroon and in Tanzania for the

launch of the program, for the identification of local knowledge and implementation partners in the field. Two Steering Committees also were organized in Berne at SDC to review progress.

III.1.5. Cross-cutting and overall activities

! Capitalize on the process and tools used for assisting MFIs in mergers, in the view of

producing a tool kit that will be disseminated to key stakeholders in the Regional Conference in Dakar in October 2013.

! Developing partnerships for the Energy & Microfinance program: with Schneider-Electric and its CSR BiPBoP program in Africa, with UNCDF/ CleanStart for a matching grant involvement for rural electrification of communities and villages. Participating at the CleanStart event in Bnagkok with Schneider-Electric, meeting with other potential providers

! Finalizing a innovative South – South cooperation program to promote livelihoods for rural and urban youth, in partnership with Basix India: the African Livelihood Partnership (ALP) in 3 countries: Cameroon, Mozambique and Tanzania.

III.1.6. PAMIGA FINANCE SA

Cf 2013 Report of PFSA in annex

III.3. Results / Outputs delivered

Results planned for Year 2 (2013)

15

For objective 1:

Expected Results / outputs Actual Results / Outputs

• Finalize the implementation of the new systems in the 3 merged entities in Mali and Burkina Faso

Benso Jamanum (Mali): 70%

San Jenne (Mali): 70%

APFI (Burkina Faso): 90%

• Organize a Regional Stakeholders’ Conference (in Dakar, Senegal, involving governments, Central Banks, MFIs and their national associations, donors and TA providers) on Consolidation, Mergers and Transformation to share experiences, methodologies, tools and build sector-wide Knowledge

Achieved 100%

• Pursue the transformation process in Kenya with WPS

Started but frozen by governance issues: 20%

• Start a transformation process in Cameroon with A3C (a member MFI): feasibility study, business plan, procedures review, training of governance and staffs, MIS

Achieved: 70%

• Perform a diagnosis study for the transformation of WAGES in Togo

Achieved: 100%

For objective 2:

Expected Results / outputs Actual Results / Outputs

• 8 need assessment for IT / diagnosis of existing system performed with 8 member MFIs, leading to a IT strategic plan for each and a IT TA work plan for the CTO

7 diagnosis achieved + a mapping

• Implement 2 IT development programs

Assisted ACFB and PRIDE RFW in their IT development programs, while not the original plans (APFI and WPS).

16

For objective 3:

Expected Results / outputs Actual Results / Outputs

• Water and Microfinance initiative expanded in 5 MFIs (APFI, UIMCEC, WAGES, ACFB and CAURIE) in 4 countries (Burkina Faso, Senegal, Benin and Togo)

WMI expanded to 3 MFIs (APFI, UIMCEC, WAGES) in 3 countries (Burkina Faso, Senegal and Togo). ACFB and CAURIE having essentially women in petty trade business found from market study that the demand was not sufficient for them to embark into this program.

• Renewable Energy and Microfinance initiative launched with 4 MFIs (A3C, PRIDE RFW, WPS and Vola Mahasoa) in 4 countries (Cameroon, Tanzania, Kenya and Madagascar)

RE and MF was launched with 7 MFIs (A3C, CEC, UCCGN, ICS, PRIDE, BG and Wasasa) in 3 countries (Cameroon, Tanzania and Ethiopia).

• A dedicated debt vehicle for refinancing Water and Renewable Energy in these 4 new countries is in place for a good synergy with TA provided

A debt vehicle for water and RE for 9 countries (all but Ethiopia) is developed, equity and debt investors are identified, have shown interest and performed due diligence in Paris and in the field. Expected closing by end of June 2014.

For objective 4:

Expected Results / outputs Actual Results / Outputs

• Accompany 5 MFIs in their Social Performance assessment and monitoring

2 MFIs were accompanied: A3C and Buusaa Gonofaa

• Assist them in developing a social performance management plan

2 SPM developed

• Provide Financial Education ToT in at least 5 MFIs, in synergy with the Water and Renewable Energy Programs and in consistence with the SPM plans

TOT in Cameroon for 4 MFIs in synergy with the energy program

• Develop partnership and synergies with other SP movements: CERISE, MISION/CRS, Smart Campaign etc.

Worked with CERISE in developing “Environmental Performance indicators” and participation to the SPTF annual meeting.

17

In terms of outcomes, although not directly attributable to PAMIGA, the total outreach of the network is now over 1 million members/clients (10% growth), out of whom 55% are in rural areas and 59%, are women. Loans outstanding is at 83.5 million € and deposit outstanding is at 52 million €. PAR is stable at around 6%.

IV. Lessons learnt and way forward Coordination, good planning and respect for the pace and absorption capacity of partner MFIs are essential. In 2013, progress has been made in these areas, due to more efficient monthly staff meetings and good consultation process during the annual CEO meeting in setting priorities and explicating TA needs for the coming year. More collaborative work, cross pillars and with officers working on cross-cutting thematic have also helped in being more synergetic and more efficient. Knowledge Management has also progressed due to the intense preparation of the Expert Meeting in Dakar on Mergers. This is an area where more efforts need to be put in place so as to systematize the formalisation of processes, tools and methodologies tested and validated. We will pursue while preparing for the next Expert Meeting in Addis Abeba on Environment and Microfinance. The area where major efforts will need to be undertaken is in Monitoring and Evaluation, both in collecting the data regularly, comparing with what was planned, analysing gaps and developing measures to overcome constraints or difficulties. PAMIGA has organized its Staff Retreat Week of December 2013 on this issue, and has started immediately applying the method in its reporting and planning. It has been helpful in preparing for the midterm evaluation. We will commission a M&E specialist to work on a robust and easy to manage system in 2014, jointly with Snezana Jovic who will have the responsibility of a part time M&E officer. Operationally, the water and energy programs have both confirmed the huge demand existing in the field and also confirmed that they are far from being simple activities to roll out. The complexity reside in the multiplicity of actors involved, coming from very different background and having very few opportunities to work together and for which, building trust, common language and modus operandi may take time and a lot of good will. Bringing equipment and installation services to remote rural areas for large providers is another challenge to overcome. From the delays, we have learned to be more realistic in planning and estimating results to expect. We may even have to integrate some technical expertise in-house to address some of the problems raised where objective assessments are required. All in all, at mid-term, PAMIGA is learning to adjust to the reality and constraints faced by several partner MFIs that are still organization-wise weak to embrace efficiently innovations.

18

V. Key focuses for 2014

With the results of the mid-term evaluation, start developing a new Business Plan for 2015-2018 and dialog with potential core donors for support. Consolidation, merger, transformation: focus on “impact” on growth and performance. Identify a funding source for 2014, as Mastercard Foundation’s grant is phasing out. IEM: develop a network of local technical partners for implementation, deepen our approach on environmental footprint and scale up in number of countries/ MFIs but also in number of beneficiaries reached. A good “technical partner” for water would be a + Energy: hire a community development expert with experience in access to clean energy to work on rural electrification in partnership with local governments and to help mobilize matching grants from partner donors and governments. Technology: Implement sound and reliable MIS in MFIs that come out of mergers or transformation to accompany growth and start 2 mobile banking initiatives in Senegal (CAURIE) and Tanzania (PRIDE). Risk Management: a significant innovative approach for Rural Finance worth publishing that will promote Pamiga and its know-how. PFSA: Compartment C for Energy and Water with a first closing at 5 M EUR subscribed and Compartment B fully disbursed. A strategy for 2015-2020 will be developed.

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Annex 1

PAMIGA NETWORK’s OUTREACH in 2013

INDICATOR 2012 2013 Growth MEMBERS/CLIENTS 952 563 1 049 038 10% ACTIVE BORROWERS 438 031 479 099 9% ACTIVE SAVERS 765 172 868 996 12% WOMEN CLIENTS 558 857 622 997 10%

% of total clients 59 59 CLIENTS IN RURAL AREAS 532 391 572 633 7%

% of total clients 56 55 GROSS LOAN PORTFOLIO (€) 80 073 102 83 541 569 4% SAVINGS (€) 48 184 917 52 030 752 7% PAR 30 (%) 6,4 6,7 0,3% PAR 90 (%) 5,6 6,3 0,7% Number of MFIs with OSS >100% 11 Not yet available SPI evaluation <2 years old 4 6 Number of MFIs reporting to Mix within 6 months after yr end 5 7 Smart Campaign Endorsers (number of MFIs) 9 Not yet available Number of clients who received financial education 5 600 2 300

ALP 3%

CORE FUNDS 52%

SCBF ETHIOPIE 1%SCBF TANZANIE 2%

UNCDF 0%

6356,86

59190,27

34536,58

8075,99 8285,18

0

10000

20000

30000

40000

50000

60000

70000

20

ETUDES CIDR 0%

FIDA SPECIFIQUE 5%

IEM SDC 16%

MASTERCARD 8%

MICROLEAD CAMEROUN 4%

MICROLEAD ETHIOPIE 3%

NON AFFECTABLE 0%PAMIGA FINANCE SA 6%SCBF ETHIOPIE 1%

PAR CONTRAT DE FINANCEMENT

8285,182766,81 5002,35

8348,82

586,223512,68

9118,95

19001,01

PAR IMF (en EUR)

Annex 2

MICROLEAD CAMEROUN 4%

MICROLEAD ETHIOPIE 3%

PAR CONTRAT DE FINANCEMENT ALP

CORE FUNDS

ETUDES CIDR

FIDA SPECIFIQUE

IEM SDC

MASTERCARD

19001,0115331,17

29060,85

Total

RISK MAGEMT - RENFORC INSTIT 7%

SOCIAL PERF -EDUCATION FINANCIERE 7%

TECHNOLOGIE 6%

PAR AXE STRATEGIQUE

AT FINANCE

MICROFINANCE ET EAU

NON AFFECTABLE

SOCIAL PERF -EDUCATION FINANCIERE

TRANSFORMATION ET FUSION

REUNION EXPERTS 2%

VOYAGES ET DEPLACEMENTS 12%

FRAIS CA PAMIGA 1%

DOT. AMORTISSEMENTS 0%

PAR TYPE DE COUT

AUTRE

CEO ANNUAL MEETING

REUNION EXPERTS

FRAIS CA PAMIGA

COUTS OPERATIONNELS

21

AT FINANCE 8% GOUVERNANCE 1%

MICROFINANCE ET EAU 13%

MICROFINANCE ET ENERGIE 11%NON AFFECTABLE 31%

TRANSFORMATION ET FUSION 16%

PAR AXE STRATEGIQUE

GOUVERNANCE

MICROFINANCE ET EAU MICROFINANCE ET ENERGIE

RISK MAGEMT - RENFORC INSTIT

EDUCATION FINANCIERE TECHNOLOGIE

TRANSFORMATION ET FUSION

AUTRE 0% AUTRES COUTS, SERVICES EXTERIEURS 2%

CEO ANNUAL MEETING 4%

RESSOURCES HUMAINES 57%

DOT. AMORTISSEMENTS 0%

COUTS OPERATIONNELS 15%

FONCTIONNEMENT BUREAUX 7%

PAR TYPE DE COUT

AUTRES COUTS, SERVICES EXTERIEURS

RESSOURCES HUMAINES

VOYAGES ET DEPLACEMENTS

DOT. AMORTISSEMENTS

FONCTIONNEMENT BUREAUX

MICROFINANCE ET EAU 13%

MICROFINANCE ET ENERGIE 11%

RENFORC INSTIT

AUTRES COUTS, SERVICES EXTERIEURS 2%

CEO ANNUAL MEETING 4%

AUTRES COUTS, SERVICES EXTERIEURS

VOYAGES ET DEPLACEMENTS

FONCTIONNEMENT BUREAUX

22

6356,86

59190,27

34536,58

8075,99 8285,182766,81 5002,35

8348,82

586,223512,68

9118,95

19001,0115331,17

29060,85

0

10000

20000

30000

40000

50000

60000

70000

PAR IMF (en EUR)

Total

23