Microfinance November 6th, 2013

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Keynote Speakers

Speaker Company and Function

Sophie Manigart

Prof. Dr. Ir. Vlerick Business School

Loïc De Cannière Managing Director, Incofin

Luc Haegemans Secretary General & Member of the Executive Committee of BNP Paribas Fortis

Marion Cahen Manager, Microstart Gent

Philippe Duhamel Head of credits of Hefboom - Impulskrediet

AGENDA

Welcome - by Vlerick Finance Alumni

Introduction to tonight’s debate – by Prof. Dr. Ir. Manigart

Incofin - Microfinance: Definition, Investment funds and Incofin IM

Microfinance at BNP Paribas Fortis

MicroStart - “Klein krediet voor grote plannen”

Impulskrediet - “Because your projects deserve our support”

Q&A

Networking reception

5

Loïc De Cannière

CEO, Incofin Investment Management

Luc Haegemans

Secretary General & Member of the Executive Committee

BNP Paribas Fortis

Microfinance at BNP Paribas Fortis

Responsible Engaged Bank Platform

November 2013

Agenda

CSR

Microfinance to fight poverty, financial & social exclusion

Group support to microfinance

microStart

Volunteership

Incofin - Rural Impulse Fund II

4 pillars

12 Commitments

CSR : 4 pillars & 12 commitments

Microfinance to fight poverty, financial & social exclusion

Microfinance allows to achieve at the same time various objectives:

Financial Inclusion:

• Providing small loans for productive investments purpose to people that do not have access to the traditional financial system.

Social inclusion:

• Targeting women and minority groups

Microfinance as an instrument to achieve the UN Development Goals

Solidarity opportunity :

• Volunteership program for employees, who are highly motivated to help microfinance institutions (MFI’s).

Group support to microfinance in 2012 : 78,8 M€

12

Investissement products proposed to customers: 10,4 M€

out of which:

Obli Etheis ResponsAbility (retail) 6,2 M€

ResponsAbility (WM) 4,2 M€

‘Epargne salariale’ : 9,25 M€ out of which

SIFA France Active 4,8 M€

Adie 3,7 M€

France initiatives 500 k€

SIDI 250 K€

Donations to IMF : 1,52 M€ out of which Adie 1,15 M€

France Initiatives 216 k€

Planète Finance 125 k€

Microstart 30 k€

Investissements in Equity (cumul ) : 7,4 M€ out of which

Microstart 2,36 M€

Per Micro 1,5 M€

LMDF 1,05 M€

Rural Impulse II 1,25 M€

Planet Guarantee 625 k€

Microcred Côte d'Ivoire 500 k€

Gamifi (Gabon) 100 k€

Taysir (Tunisie) 185 K€

Financements

Epargne clients

Epargne salariale

Dons

Fonds propres

Micro crédits personnels

Credits : 49,7 M€ out of which

Emerging Markest 33 M€

Domestic Markets + RU 16,7 M€ ‘Micro-crédits personnels’ : 0,5M€

Group support to microfinance in june 2013 : 123 M€

13

Investissement products proposed to customers : 14,4M€

out of which:

Obli Etheis ResponsAbility (retail) 7,8 M€

ResponsAbility (WM) 4,9 M€

Proximité (FIP) 1,7M€ (BNP PE dans SIFA)

‘Epargne salariale’ : 14,7 M€ out of which

SIFA France Active 9,15 M€

Adie 3,7 M€

Initiative France 500 k€

SIDI 250 K€

ACTED 1,04 M€

Donations to IMF : 1,9M€ out of which

Adie 1,15 M€

Initiative France 216 k€

Microstart 30 k€

BoW 550k€

Investissements in Equity (cumul ) : 7,9 M€ out of which

Microstart 2,36 M€

Per Micro 1,75 M€

LMDF 1,05 M€

Rural Impulse II 1,25 M€

Planet Guarantee 625 k€

Microcred Côte d'Ivoire 500 k€

Gamifi (Gabon) 100 k€

Taysir (Tunisie) 185 K€

Alterfin (Belgique) 50 k€

Credits : 79,5 M€ of which:

Emerging Markets 44,5 M€

Domestic Markets + RU 35 M€

‘Micro-crédits personnels’ : 0,5M€

Micro-insurance : 3,9M€

microStart

An innovative enterprise to

promote social cohesion

microStart

Overall statistics on August 31, 2013:

4 branches (BXL, Gent, Luik)

1050 entrepreneurs met

250 projects already financed

Average micro-loan = EUR 4700

90% of entrepreneurs from minority groups

Various training sessions

Various promotional activities within communities (local festivals, markets, etc.)

Volunteership

As a complement to the banking component of BNP Paribas microfinance activity, the

Group mobilizes its volunteers (retired/active) by launching a double-approach initiative:

-International Approach : Microfinance Sans Frontières (MFSF)

Volunteers’ mobilization to bring their professional skills to MFIs in emerging

countries

-National Approach : via microStart Support (microStart)

Volunteers’ mobilization to support microStart’s micro-entrepreneurs

Growing demand for social commitment from employees: at BNPP Fortis, more

than 130 employees have spontaneously expressed their interest to participate

in the program of MFSF and microStart Support

17

Volunteership’ achievements

MFSF (Belgium, France, UK, USA, …):

100 missions implemented since 2008

30 countries : France, Syria, Niger, Madagascar, Mali, Burkina Faso, Bénin, Togo, Burundi, Argentina, Cambodia, Ecuador…

450 volunteers declared available

microStart Support (Belgium):

96 active volunteers (64 at Bxl, 19 at Gent and 13 at Luik)

1/3 are BNP Paribas Fortis Employees

Mainly Coaching

Investment in Equity, and in Debt

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Plus de détails en annexes

Incofin- Rural Impulse II

Rural Impulse Fund II financing and Investing in RIFII managed by IncoFin

Incofin will then invest 45% in the Equity part of some selected MFI and 55% in loans to other selected MFI

Our investment (30/09/2013):

• 2.5 Mio € in the equity part of the fund

• 2.5 Mio € in the senior loan part of the fund.

Marion Cahen

Manager, Microstart Gent

About us

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A group of Social Entreprises

microStart SCRL-FS

• Cooperative company

• Social Purpose

• Capital: 3,2 M EUR

• 12 employees

microStart support asbl

• Non For Profit

• Subsidized

• Budget: 250 K EUR

• 5 employees & 80 volunteers

22

Network of 6 branches

23

Products & Services

Business Loans

• 100-10.000 EUR

• 36 Installments max.

• Fees: 5% flat

• Interest Rate: 8,25%-9,75%

• Individual-Group Lending

• Investment-Treasury

Business Development Services

• Idea Development

• Expert Meetings

• Group Trainings

• Individual Coaching

• Free of Charge

• Provided by Volunteers

24

Our Clients

25

Selfemployed

30%

Jobseeker 29%

Employee 18%

Social Welfare

15%

Not Active 8%

Profesionnal occupation before microloan

Below Poverty Line

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80%

Factsheet

Outstanding amount: 2 Million EUR

Average loan: 4,800 EUR

PAR 90: 10%

Transformation Rate: 25%

BDS: 35% of the portfolio

27

Disbursments (Since March 2011)

0

100

200

300

400

500

600

700

Loans disbursed (Cumulative)

28

New Jobs (since March 2011)

29

400

Regulatory Framework

Immediate loss of Social Income

High Amount of Social Contributions

University Degree to get your VAT Number

If not, exam organized by the Fed. Min.

30

Business Model

31

Cooperative - % Revenues

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2017

2013

2011

Financial Revenues

Subsidies

Capital

32

NGO - % Revenues

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2017

2013

2011

Public Subsidies

Private Donations

Own Revenues

33

Loans/year break-even

34

2500

Break-Even in 2015

35

20%

3.000.000 € Equity needed until 2018

36

650.000 € Subsidies needed until 2018

37

How Much ?

Annual Direct & Indirect Costs of a

unemployed person

Source: Study 2012 of the European

Federation of Services

Annual Costs of BDS Services and

Extra Costs to access Financial

Services (per Client)

38

30,000 € 3,000 €

Main Issues

39

Stay focused on the poorest

Innovate in new services that fit the needs

(microinsurance…)

Keep a reasonable amount of loan

Word of Mouth

40

Improve our performances

Processes

Management & Information System

New Technologies

Improve our Portfolio at Risk

41

Provide nice services at a fair price

Adapt the European Code of Good Conduct

Keep a reasonable amount of fees/interest

Let our clients be commited in the designing

of our products

42

Spend less time in Fundraising

More accessible funds

Procedures fit the size !

Start-Up Grants, loans & equity for FS

No more than 3 or 4 donors for BDS

43

The right question is not whether

the Interest Rate is high or not, but

probably who will pay the difference

between a fair price and a break-

even price

44

Thank you for your attention

45

v

i

s www.microStart.be

Philippe Duhamel

Head of credits of Hefboom - Impulskrediet

Philippe Duhamel

6 November, 2013

Agenda

Mission

Strategy

Microfinance at Hefboom: IMPULSKREDIET

Conclusions

Mission statement “Hefboom strives for a social and durable society & wants to support

this goal in close collaboration with companies, organizations and

persons”

Hefboom provides ethical investments, consulting services and

financing solutions towards social and durable initiatives. We want

to create an added value for vulnerable organizations with limited

financial capacity, who have need for additional management

consulting support and want to launch new innovative projects and

commercial activities.

All this is only possible through the shareholders community who

provide the necessary capital on the long term.

Strategy Focussing on the social profit sector in Flanders & the Capital region

Brussels the target group has been defined around the following

pillars:

– organizations in relationship towards the social integration economy

like social workplaces, protected workplaces, centers for education,...

– organizations in relationship with vulnerable groups like children,

youngsters in difficult educational situations, persons with

handicaps,...

– Social organizations or companies, co-operations, people and

environmental companies

– Innovative projects or activities related to the social economy

Microfinance at Hefboom: IMPULSKREDIET

Target group

Offering

Partners

Guidance

Marketing

Results

Analytical view on customers

Lessons learned

Target Group

Entrepreneurs or startups who do not have access to adequate bank

credit because of:

- Insufficient collateral or capital insertion

- history of their credits (filed at NBB)

- insufficient income (unemployed, depending on life wage,...)

- professional history (bankruptcy)

- Necessity of commercial & administrative skill

Our target group goes towards trustable & experienced entrepreneurs with activities who need not a lot of capital (rather services) that are well prepared (business plan available, eventually some clients) and with limited private costs or expenses

Our Partners

Flemish Government

NV Waarborgbeheer (public guarantee fund, Ltd)

Agentschap Ondernemen (public agency Entrepreneurship)

Collaboration with banking industry: operational support, funding,

consulting services, introducers,....like Belfius, Febelfin,...

Patronage

European Microfinance Network

Introducers of candidates:

Agentschap Ondernemen, Unizo, Activiteiten Coöperaties, Steunpunten

Participatiefonds, NFTE, Accanto, KUM, …

Offering

For easy to use, transparency, clear communication and comprehensive offer

our proposal is articulated around 4 different products:

GO “Existing entrepreneur or starter becoming independent as

main activity”

PART “Entrepreneurs starting as additional job”

COOP “Starting through activity co-operative”

START “Jobseekers wanting to start their own business in close

collaboration with “participatie fonds”

56

How to proceed?

1. You fill up a contact-form from the site (www.impulskrediet.be ),

2. We check if you, your activity our your investment can be

considered for an Impulskrediet. (no access to bank credit,

independent activity , micro-enterprise, …)

3. We send an application form. You send it back, filled up with the

needed additional documents. (for instance certificates , contracts,

licenses….).

4. If it seems acceptable you are invited.

5. We gather the needed information and figures to estimate the

application.

6. Based on the business plan and the information, we make a file.

If good enough we introduce it on our credit committee.

7. The credit committee takes a decision on the amount and on the

conditions taking the human factor into consideration.

8. If the loan is accredited, we indicate a coach and we make up a

contract.

9. If all conditions fulfilled the Impulskrediet is paid, based on

evidences.

10. During 2 years coaching free of charge by one of our coaches.

He gives practical support, stays in contact and gives advice.

Results 2012 – The start of Impulskrediet is a success

Coaching

team of volunteers

2 years

Obligatory

Free of charge

On the floor

Always available, flexible

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Conclusions

– We have seen a definite social impact for the borrower

– The combination of Credits and Consultancy has a positive effect on

the relationship with the customer and the quality of the file

– Related to the financial risk, micro finance has not yet demonstrated

its positive business case. External funding funding is necessary to

get in the money

– Future development based upon controlled growth and differentiation

through product offering

Q&A

Finance Alumni, Your Financial Network

Thank you

Finance Alumni, Your Financial Network

Networking Drink

Finance Alumni, Your Financial Network