Annual Report 2014 2 Swiss Capacity Building Facility | Annual Report 2014

TABLE OF CONTENTS

4 Public Private Development Partnership Members Technical & Financial Contribution - Phase I

6 SCBF at a Glance Mission & Approach Phase I: 2011 - 2014

8 SCBF Operations - Global Overview Financial Products per Country Regions of Implementation

10 Results 2014 Regional Overview - Completed Case Studies & Partner Interview

20 Operations 2014 Product Up-scaling, Feasibility Studies & Financial Education Regional Overview - Approved & Under Implementation

22 Operational Overview - Phase I Windows & Financial Products Partner Financial Institutions & Technical Assistance Providers

24 Institutional Achievements 2014 Revision Articles of Association & Policies and Procedures Secretariat Set-up & Additional Member Contribution Mid-Term Review

26 Financial Report

29 Outlook

31 Appendices 32 Appendix 1: In-kind Contribution 33 Appendix 2: Notes Financial Statement 2014 37 Appendix 3: Internal Structure 37 Appendix 4: List of All SCBF Operations

Photos Courtesy of Acre, Advans Bank Pakistan, Advans Bank Tanzania, Apoyo Integral Guatemala, ASA, Habitat Cambodia/Kea Sarith, Equity Bank Tanzania, Tinh Thoung, Women‘s World Banking 3 Swiss Capacity Building Facility | Annual Report 2014

PRIVATE PUBLIC DEVELOPMENT PARTNERSHIP

The Swiss Capacity Building Facility (SCBF) is a pu- The SCBF provides a platform that adopts a new and blic-private development partnership. It helps its innovative model of operation, giving the initiative Partner Financial Institutions (PFIs) - such as microin- to the market by involving financial institutions and surance service providers, microfinance banks, and consulting companies in the early stages of project postal, savings and commercial banks - to significant- planning. ly increase their outreach to low-income households, The SCBF also offers important networking oppor- smallholder farmers, and micro, small and medium tunities for the members and the possibility to be up- businesses (MSMEs). The SCBF works to broaden and to-date about trends and learn from challenges and deepen inclusive financial sectors in the South, which best practices. has proven to be an effective strategy for alleviating poverty.

“The development of the SCBF has been a very evolutionary process and “The SCBF provides impulses and it has been intersting to see how motivation to engage ourselves in new the organisation grows and further evolves. topics like mobile banking or It is a rare and precious platform of innovative microinsurance products.“ collaboration between the Gabriella Crescini, public & private sector.“ Swisscontact - Founding member Mario Wilhelm, Swiss Re - SCBF member

Members

4 Swiss Capacity Building Facility | Annual Report 2014

Mario Wilhelm - Swiss Re, Konrad Ellsässer - SMH, Christian Sinobas - KiWi, Klaus Maurer (mid-term review Brandon Mathews - Stonestep, Michael team leader), Markus Schär - FIDES, Gabriele Siegenthaler Kortenbusch - BFC, Hans Ramm - SDC, - SDC (guest), Ariane Appel - Secretary, Denis Garand (mid-term review consultant), Mayada El-Zoghbi (CGAP/mid-term review adviser), Maria Laura Hemrika - Credit Suisse, Gabriella Crescini - Teresa Zappia - Blue Orchard, Olga Speckhardt - Syngenta Swisscontact, Ximena Escobar - Bamboo Finance Foundation for Sustainable Agriculture, Michael Anthony - Allianz RE

Technical & Financial Contribution - Phase I

Technical & Financial Contribution - Swiss Public Sector In Phase I, the Swiss Agency for Development and Co- operation (SDC) committed a total of CHF 8‘850‘000 in financial contributions. Of this, CHF 2‘250‘000 was earmarked for the North Africa region, CHF 1‘000‘000 for feasibility studies, and CHF 800‘000 for financial education campaigns. Additionally, SDC committed the equivalent of CHF 182‘000 (representing 140 days) for technical expertise. By the end of 2014, CHF 4‘556‘835 was achieved for product up-scaling; CHF 1‘662‘754 for the North Af- rica region; CHF 1‘000‘000 for feasibility studies; and CHF 800‘000 for financial education campaigns. SDC had delivered 221 expertise days (equivalent of CHF 287‘300) by the end of 2014.

Technical & Financial Contribution - Swiss Private Sector In Phase I, the Swiss private sector committed financial contributions and technical expertise equivalent to CHF 1‘119‘800. By the end of 2014, the financial contribution amounts to CHF 450‘000, and the expertise contribution to CHF 578‘800 (representing 445 expertise days). This brings the sum total to CHF 1‘028‘800. For further details see Appendix 1, page 32.

Financial Self-Contribution - Partner Financial Institutions For Phase I, the target for financial self-contributions from Partner Financial Institutions and third parties was CHF 1‘000‘000. By the end of 2014, the actual self-contributions amounted to CHF 5‘090‘533.

5 Swiss Capacity Building Facility | Annual Report 2014

SCBF AT A GLANCE Mission

The Associations‘s specific objectives are to:

a) Foster the development of inclusive financial sec- b) Pool financial expertise and resources of the pri- tors that offer responsible, client-oriented and eco- vate and public sector, and in particular, leverage pri- nomically sustainable financial services that help vate investments to enhance the scale and effective- reduce vulnerability and contribute to income and ness of Swiss contributions to the growth of inclusive employment generation of low-income people (no- financial services in the South. tably women), smallholder farmers, and micro, small, and medium enterprises.

“The SCBF is unique since it pulls together a number of different private and public sector actors that are Swiss based and share a common goal to positively impact emerging market economies via innovative finance and insurance related Technical Assistance (TA) projects. The exposure to a variety of specialists across a multidisciplinary platform of interventions provides a unique opportunity to keep up-to-date with a number of means to promote financial inclusion. The combination of financiers/investors and TA practitioners is also very welcome as the two groups learn immensely from each other on how best to implement innovative projects.“ Maria Teresa Zappia, Blue Orchard - SCBF member

Approach

For SCBF‘s internal structure see Appendix 3, page 37 6 Swiss Capacity Building Facility | Annual Report 2014

Phase I: 2011 - 2014

2010 Founding

9.3 14 Members Million CHF - Financial Contribution

1.1 Million CHF - In-kind Contribution 5 Million CHF - Self-Contribution of Partner Financial Institutions

45 Product Up-scaling Interventions 8 Financial Education Campaigns 13 Feasibility Studies 26 Countries

55 Partner Financial Institutions

7 Swiss Capacity Building Facility | Annual Report 2014

SCBF OPERATIONS - GLOBAL OVERVIEW

HIGHLIGHT Mid Term Review 2014 page 24

NORTH AFRICA Egypt

Morocco

Tunisia

LATIN AMERICA Bolivia

Ecuador

El Salvador

Guatemala

Haiti

Honduras

Nicaragua

Peru

Financial Products per Country HIGHLIGHT Case Study on Housing Product Up-scaling page 12 BANKING MSME Lending

Savings INSURANCE

Delivery Channel Health

Microlending & Housing Credit Life Plus

Microlending & Energy Agriculture Financial Education Microlending & Water Distribution Channel & Feasibility Studies

Microleasing COMBINED Financial Education For further information Moneytransfer Savings & Insurance see page 22 Feasibility Study 8 HIGHLIGHT Case Study on Gendered Lending page 15 MIDDLE EAST Jordan

Palestine

ASIA Cambodia

India

Myanmar

Nepal

Pakistan HIGHLIGHT Case Study on MSME Vietnam page 16

SUB-SAHARAN AFRICA Benin

Burkina Faso

Ethiopia

Ghana

Ivory Coast

Kenya

Mali

Mozambique

Rwanda

Senegal

Tanzania

Zambia

Regions of Implementation

Product Up-Scaling Feasibility Studies Financial Education 9 Swiss Capacity Building Facility | Annual Report 2014

RESULTS 2014 Regional Overview - Completed

Middle East & North Africa Palestine, Product Up-scaling, 2013-02 Egypt, Feasibility Study, FSW-09 Cairo Amman Bank (CAB) planned a downscaling to ENPO (Egyptian National Post Organisation) - one of maximize outreach to MSEs all over Palestine, with a the largest financial service providers in Egypt - star- focus on remote areas. Due to the political situation ted analysing a prospective collaboration to offer only part of the intervention could be implemented savings-based microinsurance products. The feasibi- and was stopped in November 2014. lity study was put on hold, related to the change of For further information see the Final Report on SCBFs ENPOs chairman. website: For further information see the Feasibility Study on http://scbf.ch/product-upscaling-interventions SCBFs website: http://scbf.ch/feasibility-studies

Palestine & Jordan, Feasibility Study, FSW-04 UNRWA MD received support to prepare for the Sub-Saharan Africa transformation into an independent financial institu- Tanzania, Product Up-scaling, 2012-07 tion operating in Palestine, Jordan and Syria. Advans Bank Tanzania developed a client-oriented For further information see the Feasibility Study on SME loan product and improved its SME methodo- SCBFs website: http://scbf.ch/feasibility-studies logy, commercial strategy and marketing and adjusted its risk management requirements. Additionally Tunisia, Feasibility Study, FSW-05 they improved their human resources management Enda was supported in developping a microinsurance systems. strategy in Tunisia. A product up-scaling intervention For further information see the Case Study on page with SCBF followed the successful feasibility study. 17 and the Final Report on SCBFs website: For further information see the Feasibility Study on http://scbf.ch/product-upscaling-interventions SCBFs website: http://scbf.ch/feasibility-studies

10 Swiss Capacity Building Facility | Annual Report 2014

India, Product Up-scaling, 2012-09 Ujjivan Financial Services received technical assistance to expand and adjust its individual lending programme, offering more flexible and demand-driven products, with a particular focus on meeting the needs of women entrepreneurs. For further information see the Case Study on page 15 and the Final Report on SCBFs website: http://scbf.ch/product-upscaling-interventions Tanzania, Feasibility Study, FSW-01 Stonestep and FINCA International conducted a fea- Vietnam, Product Up-scaling, 2012-12 sibility study to analyse the microinsurance market in Tinh Thuong Microfinance Institution (TYM) created Tanzania with the goal of reforming or starting a new an independent analytical risk management function microinsurance entity. at their Head Office to support the further expansi- For further information see the Feasibility Study on on of sustainable and cost-appropriate financial ser- SCBFs website: http://scbf.ch/feasibility-studies vices. For further information see the Final Report on SCBFs website: Latin America http://scbf.ch/product-upscaling-interventions Latin America, Feasibility Study, FSW-03 Swisscontact identified the opportunity to transfer Pakistan, Product Up-scaling, 2013-04 their successful microleasing product from East Afri- Advans Pakistan improved the productivity of its exis- ca to Latin America and evaluated the feasibility of ting microloan products and launched an enterprise introducing the solution in Bolivia, El Salvador, Hon- loan to expand its outreach beyond current levels. duras and Peru. The feasibility study was followed by Besides, the intervention enabled Advans Pakistan to several product up-scaling interventions to conduct strengthen the technical skills of its staff on various pilots in three Latin American countries. phases of the credit cycle. For further information see the Feasibility Study on For further information see the Case Study on page SCBFs website: http://scbf.ch/feasibility-studies 16 and the Final Report on SCBFs website: http://scbf.ch/product-upscaling-interventions

Asia Myanmar, Feasibility Study FSW-08 Nepal, Product Up-scaling, 2011-04 FIDES conducted a feasibility study to prepare for the Manushi redesigned and piloted its microlife endow- start of a new MFI in Myanmar, aiming at registering ment product and created a new product including the company, applying for the deposit taking license a health insurance component, which was very well and getting a deeper and precise understanding of received by the clients and distinguishes Manushi the demand in the pre-selected areas. form its competitors. An additional product up-sca- For further information see the Feasiblity Study on ling intervention as follow-up started during 2014. SCBF website: http://scbf.ch/feasibility-studies For further information see the Final Report on SCBFs website: http://scbf.ch/product-upscaling-interventions

Cambodia, Product Up-scaling, 2012-05 In preparation for future investment, Thaneakea Phum Cambodia (TPC) increased the number of HMF loans disbursed and tested whether construction technical advice would help clients improving their living conditions, while Hattha Kaksekar Limited (HKL) improved its general construction loans and created new products that respond to client needs and specifically target residential non-commercial construction activities. For further information see the Case Study on page 12 and the Final Report on SCBFs website: http://scbf.ch/product-upscaling-interventions

11 Case Study on Housing in Cambodia & El Salvador

Housing microfinance consists mainly of loans to low-income people for improvement of an existing home, construction of a new home and basic inf- rastructure. It offers small, incremental loans that allow building progressively and over time. Ac- cording to CGAP1, the demand for housing microfinance is high and MFIs say that clients already channel a good portion of loans to home improvement. Housing is important. Shelter is a basic human need as it helps to ensure personal safety and health. Furthermore, a home constitutes a personal asset and an investment. Often, micro entrepreneurs use their homes to produce goods, store in- ventory, and conduct business - hence, as produc- tive assets in generating income (ibid.).

Since its inception, SCBF has supported three housing In preparation for an investment by the MicroBuild microfinance interventions across five countries. The Fund, the SCBF supported TPC in increasing the num- objective was to build the capacity of six financial in- ber of housing loans disbursed and testing whether stitutions serving low-income households to diversify construction technical advice would help clients im- their housing products. Furthermore, the SCBF has proving their living conditions. Furthermore, it sup- supported one feasibility study to determine the bu- ported HKL in improving its construction loans by siness case for housing microinsurance for low-inco- creating two separate products that respond to client me homeowners and explore distribution strategies needs. through a financial institution. In order to provide a better understanding on the achievements of these Results: Today, both TPC and HKL have an enhanced interventions and to generate lessons learnt for fu- home improvement loan product for repair and re- ture activities, SCBF is planning an outcome study. novation of existing housing - targeting poorer -mar kets - and a housing loan product for either building In 2014, following two up-scaling interventions were or purchasing a new house. Both products include a completed: non-financial technical service that assists clients in the construction/ renovation process.

PUW 2012-05 Cambodia: Up-scaling of Housing • As of end of June 2014, TPC had disbursed 1’781 Microfinance Products of Hattha Kaksekar Limi- housing microfinance loans totaling USD 3,5 million, ted (HKL) and Thaneakea Phum Cambodia (TPC) with construction technical assistance.

Context and bottlenecks: Poverty in Cambodia has • As of close of the pilot in December 2014, HKL had fallen considerably over the past ten years, but many disbursed 598 housing microfinance loans totaling families remain vulnerable to poverty. 29,4% of USD 3,3 million. Overall, HKL had disbursed 36’959 households live in dwellings constructed with soft or housing microfinance loans as of end of 2014. temporary wall materials and 53,6% have no access to improved drinking water. 55,8% of households Clients, particularly those who wanted to make more nationwide do not have latrines within their residen- complex improvements, appreciated the construc- tial premises. Furthermore, there is a shortage of tion technical assistance provided. One aspect they housing for low-income immigrants seeking work in highly valued was that during the application stage, the capital city of Phnom Penh. Urban poverty is ex- skilled workers would review and validate that the pected to be rising. improvement plans could be completed with the loan amount requested.

12 Swiss Capacity Building Facility | Annual Report 2014

Furthermore, they appreciated the possibility of in- The following examples provide a picture of some of cremental home improvements, completed in stages the results achieved at the client level: that were affordable.

Meas and her husband Eam live in Angk Romeas, The family’s new house a farming community near Phnom Penh. They grow is made of concrete and two rice crops a year. Between crops, Eam works treated lumber with a as a taxi driver. Meas and Eam have three grown metal roof. It has a sepa- children - all of whom work for a nearby garment rate sleeping room for manufacturer - and one grandchild. In August 2013, the single daughters, who the couple took a loan of CHF 4’200. Meas recei- now have more security ved constructi- and privacy. The brightly on technical as- painted house is built on sistance allowing stilts, following tradition, so that during the rainy her to learn season the living rooms stay dry. During the dry about materials season, the space under the house provides a cool, and construction shady spot. “This is a big house, compared to our techniques. old one,” Meas said. “Our lives have improved. It feels good to have more room and to be safe.”

Moreover, he was available by phone when Vit and Leang had questions. “We used to live in a old woo- den house, and were always afraid that the wind would destroy it because it was old and damaged by termites,” said Leang. Today, the family uses this space as kitchen and for animal storage. “Now we are happy. We can marry our children now that the house is complete.” The family plans to lay a concrete floor and build a balcony space in the future. Vit and Leang’s family of three children and three grandchildren grows rice and corn, and raises fish, pigs, and cows. Two daughters work in garment fac- tories. The family lives in Por Village in a new house built on stilts, financed through a HKL’s housing loan of CHF 8‘500. A civil engineer provided technical assistance for a reasonable fee. He designed the house, helped purchasing materials, and provided advice to the skilled workers.

HKL Home Improvement Loans 2014 TPC Home Improvement Loans 2012 2013 2014 (HIL) Indicators (Dec) (HIL) Indicators # of HIL disbursed 598 # of HIL disbursed 467 996 687 % of total portfolio - HIL Loans 1,25 % of total portfolio - HMF Loans 1 3 4 Loan Disbursed - HIL Loans (CHF) 3'269’960 HMF Loan disbursed (CHF) 714’946 2’222’480 1’700’970 # Branches offering HIL 5 HMF Loan outstanding 616’103 2’126’340 3’259’770 Average Loan Size - HIL Loans (CHF) 3’530 # Branches offering HMF 8 38 51 Average Loan Size – Housing Loans (incl. Average loan size - HMF Loans 9’600 1’685 1’845 1’970 Construction) (CHF) (CHF) PAR % > 30 days housing clients 0,00% PAR % > 30 days housing clients 0,00% 0,00% 0,00%

HKL received a CHF 1,9 million investment TPC is in the pipeline for an investment. from MicroBuild Global Fund in January 2014 to increase its housing portfolio.

1CGAP Donor Brief. No. 20, August 2004. Helping to Improve Donor Effectiveness in Microfinance. Housing Microfinance. http://www.cgap.org/sites/default/files/CGAP-Donor-Brief-Housing-Microfinance-Aug-2004.pdf (retrieved April 27, 2015) 13 PUW 2013-11 El Salvador: Building Capacity to Expand Housing Microfinance

Context and bottlenecks: Around 30% of the population in El Salvador lives in poverty. The country has one of the lowest levels of use of formal financial services in Latin America. Most credit and deposit-taking activities still occur in the capital of San Salvador. In 2014, 17,2% (age 15+) had a loan from a financial institution (compared to 3,9% in 2011) and 12,4% had a loan from family or friends. Another challenge for the country is the housing deficit in terms of quantity and quality (e.g. lack of proper roof, floor, space or basic services as potable water). The SCBF supported Cre- diCampo to improve its existing housing microfinance product and to include housing support services SCBF Outcome study on Housing soon such as construction technical assistance. available on SCBFs website: www.scbf.ch

Results: As of end of December 2014, CrediCampo had granted 320 housing credits with a balance of CHF • Loan officers face particular challenges in terms of 427’000. During the pilot of the housing product, ch- the variety of improvements that clients plan. Their anges in clients’ life conditions have been identified, training must be continuous and an effective and- ef particularly in a) safety: in a country where violen- ficient division of labour between financial services ce is an issue, building additional rooms allow family and non-financial services is required. members to continue living together and provide security; b) health: improving roof conditions protects families from respiratory and skin illness brought on Mrs. Mayra Mirtala Argueta Díaz: by harsh weather conditions such as rain and wind; “I am a single mother with a two year old child. c) wellbeing: building additional private spaces and We both live together with my mother, sister and diminishing overcrowding conditions; and d) increa- niece in my mom’s very small house. I have lived se of family income: clients who had to use a great here for many years, but it is hard to live in such part of their income for rent now have managed to limited space. Therefore, I decided to build my invest in their own house. Clients expressed “their own room. Thanks to God I can now work as a satisfaction for living independently” and also “being secretary at the City Hall in Morazán for two years extremely happy to live in their own home instead of and I received a loan of CHF 750 from CrediCam- paying rent”. Additionally, several families now have po for the construction of a new room. I started access to electricity, concrete floors (instead of soil with the foundation and then slowly finished the floors), fences (cyclone type mesh), toilets and other walls thanks to the mason who has helped me improvements. with the work. With the support of CrediCampo, Lessons learnt: I’m fulfilling my dream and improving the quality • Prior to expanding any product offering, and parti- of life for my daughter.” cularly housing microfinance, board and senior management buy-in is crucial. • All interventions showed the importance of esta- blishing partnerships and aligning expectations with key stakeholders prior to the execution of the pilot. • As a non-financial, additional service, construction technical assistance requires specific conditions and preparation to be successfully implemented. It needs suitable human resources (construction professio- nals) capable of providing support on technical as- pects such as design, budget, and supervision.

14 Case Study on Gendered Lending in India

PUW 2012-09 India: Leading The Expansion of Genered Individual Lending

Maniyamma is a 39 year old business woman and asked for an individual loan of CHF 1’160 working mother of two children who lives with her husband capital to buy a new refrigerator. With the loan, in Bangalore. Some years ago, Maniyamma joined she was able to grow her business. Today she has a group of women who had access to small group around five companies to which she delivers lunch loans from Ujjivan. After receiving a multiple group each day. With Ujjivan’s support, she was also able loans, Maniyamma and her husband, five years ago, to open a bank account that allows her customers decided to start a catering business to be run out of to pay on a weekly basis. Maniyamma’s profitable their home. This was the only source of income for and growing catering business has enabled her to their family. They started small - providing snacks to improve the living conditions of her family and to friends and neighbours. After a while, Maniyamma pay for her kids’ education.

Context and bottlenecks: Despite its impressive eco- management capacity at the branch level, loan officer nomic development, India still faces many challen- productivity has increased and average loan applica- ges. More than 400 million people – one-third of the tion turnaround time has been reduced to 10 days. world’s poor – still live in poverty. Financial inclusion Ujjivan - Key remains out of reach for many people. In 2014, 53% March 2013 March 2014 Growth performance indicators (start of project) (end of project) of the population aged 15+ had an account, but only Total active clients 1’006’052 1’297’131 29% 6,4% borrowed from a financial institution and 14,4% Number of active IL 17’401 28’393 63% saved at a financial institution. While the microfinan- clients Share of IL clients / total 1,7% 2,2% 27% ce sector is relatively well developed, the market is clients (%) dominated by group loan offerings with loan maxi- Women clients IL 100% 100% Total portfolio mums that no longer meet the needs of many female 169’629’000 243’637’000 44% micro-entrepreneurs. As a result, business growth is outstanding (CHF) IL loan outstanding (CHF) 6’932’050 17’053’300 146% significantly constrained. The SCBF co-funded WWB’s Share of IL portfolio / 4,1% 7,5% 84% technical assistance to Ujjivan in expanding its indivi- total portfolio dual lending programme, with a particular focus on PAR > 30 days (IL) 0,53% 0,42% Average loan size IL (CHF) 400 600 51% meeting the needs of women entrepreneurs. Productivity Indicators Loan Officers 113 191 69% Caseload of Loan 145 148 2% Officers (# active IL clients) Average # of IL loans disbursed by Loan 11 15 36% Officers / month

Lessons learnt: The essential success factor was that Ujjivan management took the risk of substantially changing its individual programme. During the intervention, Ujjivan decided to shift from a group lending driven organization to one that offers a wider range Results: Today, Ujjivan offers more flexible and de- of products to a broader client base. This decision mand-driven products, with terms and amounts was motivated by the success of the intervention that are better adapted to the capacities of clients. as well as increasing competition and general trend Strong relationship with customers, clear product towards product diversification in the Indian micro- explanations and consistently good service contri- finance sector. With SCBF’s support, the groundwork bute to client satisfaction. Since March 2013, the for success and future expansion has been establis- outstanding individual lending portfolio almost hed. tripled from CHF 7,1 million to 17,7 million. Ujji- van’s individual client base grew by 63%. The individual lending program serves 28’393 active clients with a PAR of 0,42% as of March 2014. Thanks to an adapted methodology and strengthened 15 Swiss Capacity Building Facility | Annual Report 2014

Case Study on MSME Lending in Pakistan & Tanzania

PUW 2013-04: Fine-tuning Advans Pakistan Products to Increase Financial Inclusion

Context and bottlenecks: Due to continued security issues, political instability and severe floods, Pakis- tan’s economy is highly vulnerable. A fifth of the population is estimated to live below the poverty line. Only 13% of the population aged 15+ had an account at a formal financial institution or/and a mobile account; only 2% had a formal loan and 3% had formal savings (2014). Through Horus Development Finance (see interview, page 19), the SCBF supported Advans Bank Pakistan, a greenfielding institution, in increasing and fine-tuning its MSME offering.

Results: As of end of May 2014 (end of the SCBF intervention), Advans Pakistan had a portfolio of 1’192 active loans for an outstanding loan portfolio of Development of Advans Pakistan's Entreprise Loan since its launch

CHF 520’000. The introduction of the new Ba-Ikhti- Volume of outstanding loans Number of outstanding loans

ar enterprise loan, which specifically targets entre- 25'000'000 100 preneurs in need of higher loan amounts (see client 90 20'000'000 80 profile), has significantly contributed to the growth 70 of the loan portfolio. As of end of May 2014, and only 15'000'000 60 50 seven months after its launch, it represented 35% of 10'000'000 40 30 the bank’s gross outstanding loan portfolio with a to- 5'000'000 20 10

tal of 88 loans disbursed amounting to CHF 218’000 volume (PKR) Outstanding -00 -00 Number of of Number loans outstanding with one loan of CHF 1’900 disbursed to a woman. Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

The credit officers’ productivity for microloans and the quality of services have improved (see figure on No. of loans Volume of loans disbursed per disbursed per the right). Likewise, the collection and recovery pro- credit officer credit officer cess are improving: as of end of May 2014, the reco- May 2013 2,0 CHF 1’100 very unit received payments from 43 of the 66 active May 2014 3,3 CHF 2’300 clients it was in charge of. Since September 2013, the portfolio entering the PAR was divided by 2,25.

2013 2013 2014 Advans Pakistan (Jan) (Dec) (May) Number of active borrowers 2 886 1192 Women as % of active borrowers 0 16,3 16,4 Average loan balance (CHF) 290 484 447 Number of savings & deposit accounts 33 2’083 3’227 Women as % of active depositors 15,1 16,1 16,4 Average deposit balance per account 4 48 40 (CHF) Breakdown of portfolio per outstanding loan size (in %) < 1’240 CHF 100 79,4 65 [ 1’240 ; 4’760 CHF ] 0 20,6 35 Break-down of deposits per deposit size (in %) < 125 CHF 92 91,6 97,5 [ 125 ; 1’250 CHF] 8 7,9 2,1 ] 1’250 ; 12’370 CHF] 0 0,4 0,4

16 Swiss Capacity Building Facility | Annual Report 2014

Mr. K.’s banking relationship with Advans Pakistan began in April 2013 with a first micro loan of CHF 950. The loan allowed him to obtain more supplies and increase income. After this, Mr. K. was able to upgrade to a larger Ba-Ikhtiar Loan, which was double the amount of his first credit. Mr. K. is confident that thanks to the extra stocks bought with the loan, he will be able to maximize sales and further expand activities, especially during the run up to the Islamic Feast of Eid. Mr. K. especially appreciates the friendly customer service and that his relationship with the bank is based on mutual understanding and trust. Mr. K. finds the staff highly motivated, well trained and supportive which, for him, sets them apart from staff of other banks.

PUW 2012-07: Launch of Advans Bank Tanzania‘s SME Lending Operations Context and bottlenecks: Although poverty rates have declined in recent years, Tanzania still has a high national poverty rate (28% in 2012). Financial inclusion has improved thanks to mobile banking over the past years, but still needs to be boosted. In 2014, 40% of the population (aged 15+) had a bank or/and a mobile money account. 32% were active mobile money account users, 2% were only active bank account users and 6% both. Only 6% had formally borrowed and only 9% had formally saved. The SCBF supported Advans Bank Tanzania in developing client-oriented SME loans, up-scaling on a sustainable basis in Dar Es Salaam and Mzanza and in reinforcing the human resource policies and incentive systems. Small and medium enterprises (SMEs) represent Results: Advans Bank Tanzania offers an impro- a large and economically important sector in near- ved, demand-driven loan with a flexible repayment ly every country in the world. In order to grow and schedule matching the client’s cash-flow variations to continue having positive impacts on the eco- over time. Furthermore, it now offers higher loan nomy, SMEs need access to financial services. Ho- amounts. To answer SME needs, it further launched wever, SMEs, particularly in low- and medium-in- mobile banking services, a microinsurance product come countries, have historically lacked access to and a specific savings account. From January 2013 financial products and services. SME finance is to May 2014, 259 SME loans were disbursed amoun- referred to as the “missing middle” because SME ting to CHF 2,8 million. The Gross Loan Portfolio was financial requirements are too great for most MFIs multiplied by almost 3, from CHF 560’000 at the end and SMEs have been viewed as too small, risky, or of 2012 to CHF 1,4 million at the end of May 2014. costly for traditional commercial banks. However, SME loans’ PAR 30 was reduced from 4,73% to 3,55% in recent years, this has begun to change. Finan- (with a 1,97% SME loan write-off ratio in 2013). Client cial institutions are now demonstrating that the satisfaction has increased as shown by drop-out rates SME segment can be served profitably, provided it of borrowers which decreased from 29,3% in 2012 is properly understood.2 to 15,7% in 2013. The drop-out rate of depositors decreased from 31,3% in 2012 to 2,4% in 2013.

2http://www.ifc.org/wps/wcm/connect/b4f9be0049585ff9a192b519583b6d16/SMEE.pdf?MOD=AJPERES 17 Swiss Capacity Building Facility | Annual Report 2014

Advans Tanzania 2011 2012 2013 Number of active borrowers 581 1’470 2’757 Queen S. is dealing with cosmetics, children Number of outstanding loans 581 1’482 2’761 toys and accessories at the Kariakoo market. In Of which individual MSE loans 577 1’427 2’605 2013, she took her first loan with Advans Bank Of which individual SME loans 4 55 156 % of female active clients 42,6 N/A N/A of TZS 90 million (ca. CHF 42‘000) to increase her % of female active borrowers N/A 41,7 50,1 stock. She then was granted a TZS 27 million (ca. % of clients in rural areas 0 0 0 CHF 13‘000) Spot Loan to help her dealing with Average loan balance (CHF) 1’150 1’320 1’640 Number of savings & deposit accounts 1’725 3’443 10’438 customs issues. After full repayment, she recei- % of female depositors N/A 38,2 47,5 ved a renewal of TZS 130 million (ca. CHF 60‘000) Average deposit balance per account 138 60 380 (CHF) in 2014. Satisfied with Advans’ services, she clo- Clients according to income level sed one of her loans with another bank and is Break-down of Portfolio per Outstanding Loan Size – in % now working with Advans and only one other fi- < 1’200 CHF 65,4 71,5 62 [ 1200 ; 11’950 CHF ] 34,6 27,9 37 nancial institution. Despite the development of ] 11’950 CHF ; 59’780 CHF ] 0 0,7 1 her business, she did not hire new employees, > 59’780 CHF 0 0,1 0 but still works with her son and a niece who is Break-down of Deposits per Deposit Size < 122 CHF 94,2 92,9 89 helping out regularly. Most of her benefits are [ 122 ; 1’200 CHF] 5,1 5,9 9,2 reinvested in the construction of a house being ] 1’200 ; 11’950 CHF] 1 0,9 1,6 built on a plot she acquired in 2014. > 11’950 CHF 0 0,2 0,2

Mr. T., one of Advans Bank Tanzania’s very first cli- Lessons learnt: ents, sells hair, namely braids, weavings and wigs, • Despite all of the improvements in human re- - imported from source management, good training and career countries such as Ni- opportunities for staff, staff turnover remains an geria and Dubai - at issue for both Advans Bank Pakistan and Tanzania. the Kariakoo market Commercial banks with higher salaries or public in Dar Es Salaam. sector positions with lifetime employment attract When Mr. T. started many employees. taking loans, he only • In Tanzania, the MSME sector is highly depen- had a small shop at dant on the external economic context. Moreo- his home. Thanks to ver, the local predominately agrarian economy is five loans of respec- highly seasonal: the second half of the year, when tively TZS 2 million (ca. CHF 920), TZS 4 million people have money after the harvesting period (ca. CHF 1‘800), TZS 5 million (ca. CHF 2‘300) and and buy goods, is favourable for business while the two times TZS 10 million (ca. CHF 4‘600), he has first half generally been able to significantly increase his stock and displays a low level purchase large premises in Kariakoo. Mr. T. is cur- of activity. rently repaying his fifth loan and plans to apply for a sixth. He is a loyal and satisfied customer: “I started with one small shop in Manzese, now I own two big shops and am able to provide my family with all they need. Advans Bank Tanzania has been and continues to be a very big support to my business and I can’t imagine banking with anyone but them.” When asked if there were any improvements to be made, he replied: “To me everything is satisfactory, we business people are longing for affordable and easy access to loans, which is exactly what Advans offers.”

18 Swiss Capacity Building Facility | Annual Report 2014

Horus Development Finances Experience Partnering with the SCBF Interview with Steven Duchatelle, Deputy CEO, Horus Development Finance

Steven, who is Horus Development Finance distinct topics that together contributed to the over- and what do you do? all development. This was very helpful as donors Horus Development Finance (HDF) is originally a usually tend to be focused on a single topic of sup- consulting company and technical assistance (TA) port. Furthermore, the SCBF was open to adapt the provider in development finance. With the support TA to an evolving situation that had not been predic- of Development Finance Institutions, Horus set up table, e.g. delays in approvals by authorities to open Advans SA, SICAR in 2005, an investment company new branches. SCBF has paid particular attention to whose aim is to establish a network of financial in- designing common reporting standards with other stitutions catering for the needs of Micro, Small and donors, which allows transparency and effectiveness. Medium Enterprises in developing and transition eco- How do you judge the achievements of the inter- nomies. The Advans network now consists of eight vention supported by SCBF in the context of Advans “greenfield” MFIs: Advans Cameroun, Advans Ghana, Bank Pakistan and Advans Bank Tanzania‘s work? Advans Banque Congo, Advans Bank Tanzania, Ad- vans Côte d‘Ivoire, Advans Pakistan, Lafayette MFB The contribution of SCBF proved instrumental for Nigeria, and Advans Tunisie, and one more mature Advans Bank Tanzania in branching out to remote investment: AMRET Cambodia. As of March 2015, cities outside of Dar es Salaam in 2014. It allowed the network had 538’000 cli- “SCBF was eager for the secondment of ents, of whom 56% were wo- experienced middle ma- men and 54% rural clients. to understand the needs nagers enabling them to Advans affiliates are commit- of the financial institution oversee the operations ted to providing clients with and to support while training their Tan- affordable and demand-dri- zanian colleagues, be- ven financial services as well the topics where TA fore handing over the as excellent customer service. was most needed.“ responsibility to them. Horus is the Manager of Ad- Steven Duchatelle SCBF supported Advans vans SA but also the privileged TA provider of Advans’ Pakistan in improving productivity, launching a new affiliates. Its role is to promote exchange -of infor Entreprise Loan in order to better serve informal and mation and facilitate the dissemination of common semi-formal enterprises and adapting the collection standards across the network. and recovery process to the Pakistani context. The contribution of SCBF proved instrumental as it allo- Why did you approach the SCBF for financial wed accelerating the development of its microloans support? portfolio but also in enterprise loans, which now re- SCBF was referred to HDF by SANAD, a co-shareholder present 55% of the portfolio (June 2015). Also, reco- of Advans SA in Advans Tunisia. In 2012, HDF made a very has improved significantly with PAR30 having proposal asking SCBF to support TA to Advans Tuni- decreased from 11% to 5% now. sia. A programme was designed jointly and its cost is What were/are the major challenges after these supported by Advans Tunisia, SANAD and SCBF. The interventions? objective was to provide Advans Tunisia with a set of tools and skills it needed to start and develop its ac- One important challenge in Tanzania is staff turnover. tivities. The contribution of SCBF concentrates on the The bank struggles to retain experienced senior and launch of a range of loan products. middle managers. Capacity building initiatives must be regularly repeated in order to make sure that the What was your experience with working with SCBF? skills and experience are available within the institu- The experience was very positive. SCBF has shown a tion. Similar to Tanzania, the key challenge for Pakis- lot of flexibility when it came to meeting the needs tan is staff turnover and retaining experienced loan of the financial institutions it supported. SCBF was officers. Therefore training and bonus schemes are eager to understand the needs of the financial insti- currently being reviewed. In addition, security issues tution and to support the topics where TA was most have hampered the ability of international experts needed. In Pakistan for example, being a greenfiel- to provide on the field coaching to local staff. Thus, ding institution, Advans Bank needed support ina a rapid transition to local experienced managers has range of areas. SCBF was willing to support three been carried out in 2014.

19 Swiss Capacity Building Facility | Annual Report 2014

OPERATIONS 2014

Product Up-Scaling In 2014, the SCBF approved ten product up-scaling The self-contribution of Partner Financial Institutions intervenions - two of which were in North Africa - for and third parties stood at 33%, surpassing the recom- a total amount of CHF 1‘996‘359, and CHF 1‘121‘759 mended target of 20%. SCBF contribution. The self-contribution of Partner Financial Institutions and third parties stood at 44%, doubling the minimum target of 20%. Financial Education Campaigns Eight financial education campaigns were approved Feasibility Studies in 2014 - two of which were in North Africa - for a total amount of CHF 1‘715‘166, and CHF 976‘712 SCBF Four feasibility studies were approved in 2014 for a contribution. The self-contribution of Partner Finan- total amount of CHF 611‘106 and CHF 409‘172 SCBF cial Institutions and third parties stood at 43%. contribution.

Regional Overview - Approved & Under Implementation

Middle East & North Africa In 2014, two product up-scaling proposals were Three feasibility studies were comple- approved in North Africa with a total budget of CHF ted during 2014 (see page 10), and 539‘110 and a 51% co-funding contribution from the two financial education campaigns SCBF. There were eight ongoing product up-scaling were approved in NorthAfrica interventions in Middle East & North Africa (MENA) with a total budget of and one product up-scaling intervention was comple- CHF 424‘300 and a 45% co-funding ted during 2014 (see page 10). contribution from the SCBF.

Product Up-scaling Feasibility Studies Financial Education Campaigns Region Unit approved ongoing completed approved ongoing completed approved ongoing completed # 0 2 1 0 0 1 0 0 0 Budget (CHF) - 373'455 167'000 - - 203200 - - - East

Middle SCBF Share (CHF) - 290'160 78'450 - - 107'000 - - - # 2 6 0 0 0 2 2 0 0 Budget (CHF) 539'110 1'704'003 - - - 249'355 424'300 - - North Africa SCBF Share (CHF) 272'800 1'062'858 - - - 173'115 191'400 - - # 2 8 1 0 0 3 2 - 0 Budget (CHF) 539'110 2'077'458 167'000 - - 452'555 424'300 - -

MENA SCBF Share (CHF) 272'800 1'353'018 78'450 - - 280'115 191'400 - - 20 Swiss Capacity Building Facility | Annual Report 2014

Sub-Saharan Africa During 2014, six product up-scaling proposals were Three feasibility studies were approved in SSA during approved in Sub-Saharan Africa (SSA) with a total 2014 with a total budget of CHF 538‘736 and a 67% budget of CHF 1‘240‘623 and a 57% co-funding cont- co-funding contribution from the SCBF. One feasibi- ribution from the SCBF. There were lity study was completed during 2014 (see page 11). seven ongoing product up-scaling interventions in SSA during 2014 Four financial education campaigns were approved and two product up-scaling in- in SSA with a total budget of CHF 853‘106 and a 56% terventions were completed co-funding contribution from the SCBF. (see page 10).

Product Up-scaling Feasibility Studies Financial Education Campaigns Region Unit approved ongoing completed approved ongoing completed approved ongoing completed # 6 7 1 3 0 1 4 - 0 Budget (CHF) 1'240'623 1'483'622 322'296 538'736 - 166'080 853'106 - - SSA SCBF Share (CHF) 705'934 875'530 147'041 358'572 - 119'200 481'031 - -

Latin America During 2014, one product up-scaling proposal was One feasibility study was com- approved in Latin America with a total budget of CHF pleted during 2014 for Latin 79‘920 and a 70% co-funding contribution from the America (see page 11). SCBF. There were four ongoing product up-scaling interventions in Latin America during 2014.

Product Up-scaling Feasibility Studies Financial Education Campaigns Region Unit approved ongoing completed approved ongoing completed approved ongoing completed # 1 4 0 0 0 1 0 - 0 Budget (CHF) 79'920 736'644 - - - 232370 - - -

LATAM SCBF Share (CHF) 55'650 427'012 - - - 138050 - - -

Asia During 2014, one product up-scaling pro- One feasibility studies was approved in posal was approved for Asia with a total SSA during 2014 with a total budget of budget of CHF 136‘706 and a 64% co- CHF 72‘370 and a 70% co-funding funding contribution from the SCBF. contribution from the SCBF. One feasi- There was one ongoing product up- bility study was completed during scaling intervention in Asia during 2014 (see page 11). 2014 and five product up-scaling interventions were completed during 2014 Two financial education campaigns (see page 11). were approved in SSA with a total budget of CHF 437‘760 and a 63% co-funding contribution from the SCBF.

Product Up-scaling Feasibility Studies Financial Education Campaigns Region Unit approved ongoing completed approved ongoing completed approved ongoing completed # 1 1 5 1 0 1 2 0 0 Budget (CHF) 136'706 249'723 843'870 72'370 - 206060 437'760 - - ASIA SCBF Share (CHF) 87'375 149953 611'745 50'600 - 113000 275'700 - -

21 Swiss Capacity Building Facility | Annual Report 2014

OPERATIONAL OVERVIEW - PHASE I

Product Up-scaling Window (PUW) 2014 since inception (2011) Product Up-scaling Interventions approved 10 45

Total Product Up-scaling Intervention budget (CHF) 1'996'359 9'509'657

Approved SCBF contributions (CHF) 1'121'759 5'826'423

Average SCBF contribution (CHF) 112'176 129'476

Average cost share of PFIs and third parties 44% 39%

Feasibility Studies Window (FSW) 2014 since inception (2013) Feasibility Studies approved 4 13

Total Feasibility Study budget (CHF) 611'106 1'951'242

Approved SCBF contributions (CHF) 409'172 1'277'968

Average SCBF contribution (CHF) 102'293 98'305

Average cost share of PFIs and third parties 33% 35%

Financial Education Window (FEW) since inception (2014) Financial Education Interventions approved 8

Total Financial Education Intervention budget (CHF) 1'715'166

Approved SCBF contributions (CHF) 976'712

Average SCBF contribution (CHF) 122'117

Average cost share of PFIs and third parties 43%

For a list of all interventions see Appendix 4, page 37 Financial Products supported since inception

Product Development 22 Product Development 7 MSME Lending 15 Agriculture 2 Savings 5 Health 3 Money Transfer 1 Credit Life Plus 2 Insurance Microleasing 1 Distribution Channel Development - Microlending & technical services 7 Banking Housing 2 Savings with insurance component 3 Water 2

Energy 3 2 Combined Insurance with savings component Delivery Channel Development 8 22 Swiss Capacity Building Facility | Annual Report 2014

Partner Financial Institutions supported since inception (PUW only)

9 Commercial Banks 14 Deposit-taking MFIs 3 Primary Insurers

4 Postal Banks 12 Microcredit Organisations 2 Insurance Brokers

8 Micro Banks 1 Aggregator/Agent

Alexandria Businessmen Association Equity Bank Rwanda Acre Africa FIDES Microfinance Senegal Advans Bank Pakistan FINCA Haiti Advans Bank Tanzania FINCA Nicaragua Advans Bank Tunisia Fundacion Campo Al Barid2 Bank Hattha Kaksekar LImited Alliance for Microfinance in Myanmar Hekima Apoyo Integral Guatemala KiWi Morocco ASA Initiative Letshego Rwanda Limited Association Al Amana Manushi Banco Pichincha Micro Banco FIDES Mozambique Banco Popular Myanmar Microfinance Ltd. Bank of Kigali NMB Bank LImited Buusa Gonofaa Pride RFW Cairo Amman Bank Sonapost Commercial International Life Insurance Company Thaneakea Phum Cambodia Comixmul Tinh Thoung Microfinance Institution Credifé Ujjivan Financial Services Crédit Immobliier & Hôtelier UNRWA Microfinance Department Dakahlya Businessmen Ass. f. Community Development Vitas Jordan EFC Zambia Wasasa Egyptian National Post Organization ENDA Inter-arabe Equity Bank Tanzania

Technical Assitance Provider supported since inception (PUW, FSW & FEW)

Accion MicroInsurance Centre Bamboo Finance Pamiga Business & Finance Consulting PlaNet Finance Financial Systems Development Services responsAbility FINCA International Swiss Microfinance Holding GFA Consulting Group Stonestep Habitat for Humanity International Syngenta Foundation for Sustainable Agriculture Horus Development Finance Swisscontact KiWi Women’s World Banking MCril Microfinanza (Consultants)

23 Swiss Capacity Building Facility | Annual Report 2014

INSTITUTIONAL ACHIEVEMENTS 2014 Revision of Articles of Association & Operational Poicies and Procedures The SCBF Articles of Association were adjusted to re- flect a new organisational set-up and to allow written approval to amendments to the Articles of Associa- Financial Education Window tion by the majority of all members, in an effort to In order to support ongoing product up-scaling inter- streamline the approval process. ventions, a third window, earmarked for members Additionally, the Operational Policies and Procedures and SDC partners only, was established in January were further developed regarding the organisational 2014. The ´Financial Education Window´co-funds fi- structure and processes as well as responsibilities nancial education campaigns that are pre-conditions among the bodies of the SCBF as to maximise institu- for introducing insurance and other new financial tional effectiveness. services, and in operational areas of PFIs where fi- Eligibility criteria for Partner Financial Institutions and nancial literacy level are low. selection criteria for product up-scaling interventions were revised and refined. Members also decided to set the ceiling for any intervention at a maximum of Additional Member Contributions CHF 150‘000 and to abandon tendering procedures. Based on SCBFs unexpected fast growth, the funding There was a strong focus on the improvement of for product up-scaling interventions became fully monitoring guidelines, including clarification on the committed by March 2014. As the SCBF already had monitoring tasks set for SCBF members and on the a concrete pipeline for this window, the public sector reporting requirements for the Grantees. The appli- member confirmed an additional financial contributi- cation forms as well as the contract templates were on over CHF 800‘000 to ensure that SCBF‘s successful adjusted accordingly. growth momentum would be utilized. To indicate their commitment in driving the SCBF forward, the private sector members also increa- Secretariat Set-Up sed their in-kind contrbution between five and thirty days of technical expertise, over one to two years, to Due to SCBF‘s swift expansion in 2012-2014 and rapid a total value of CHF 247‘000. institutional growth, members decided to establish an independent management structure within the SCBF Association to increase support for the work Mid-Term Review being done. Members agreed to assign further resources to the An external mid-term review (MTR) of the SCBF was administration of the organisation, whereupon also conducted by a team of independent experts bet- confirming the objective of maintaining lean proces- ween July and September 2014, assessing the opera- ses. The structure consists of the Secretariat with tional and institutional development of SCBF so as to three part-time positions (equivalent 1.4 full time lay the basis for its future strategic planning. position) and a Management Oversight and Advisory The guiding methodology for this review were the Committee (O&A Committee) formed by two private standard evaluation criteria of the Development As- relevance, sector and the public sector member to supervise the sistance Committee (DAC) at the OECD effectiveness, efficiency sustainability Secretariat and provide strategic advice and support. and and the Portfolio Review Methodology developed by CGAP for financial inclusion.

Twenty-four sample interventions were assessed in details, which represents 43% of all SCBFs interventions as of July 2014. Additionally, interviews were conducted with all members and other stakeholders and the experts visited eleven SCBF funded interventions in Tanzania and Egypt. The evaluation- confir med that the SCBF is generally on a good path towards achieving its targets for phase I.

24 Swiss Capacity Building Facility | Annual Report 2014

The relevance of the SCBF and its role for deepening The institutional set-up at the SCBF, including the im- financial inclusion was considered high by the assess- provements made during 2014, were viewed as ef- ment. The MTR saw this manifested in the SCBF‘s ficient and conducive to reaching the SCBFs overall emphasis on massive up-scaling of financial services goals, objectives and targets. The direct-award pro- and its strong focus on Africa, on rural areas, and on curement methods were shown to be as cost-effec- savings and insurance services. tive and principally acceptable, with the recommen- Nonetheless the experts had the impression that dation to further improve checks and balances to some greater strategic clarity should be required prevent conflicts of interest and reputational risks. A with respect to the SCBFs objective. recommendation was made to increas the budget for A Working Group of SCBF Members have discussed management and administration, in order to ensure this recommendation from the MTR and will present good monitoring, reporting and oversight functions. a rationalization for approval by the members at the As a result, members decided to further strengthen beginning of 2015. the Secretariats position and discussion around the employment of a Financial Administrator & Control- “Overall, the SCBF is a lean, fast ler were started and later approved at the beginning and efficient facility.“ of 2015. MTR team “SCBF has Regarding effectiveness, the MTR stated that the ´torn down the firewall´ SCBF was on a good path towards achieving most of between the private corporate its objectives, with the exception of the institutional banking and finance industry and learning and the leveraging of capital from social investors. They recommended to further structure ins- the development finance sector titutional learning and to set goals and targets more in Switzerland.“ realistically on the project level. The MTR alsore- MTR team commended further improvement of monitoring and reporting systems in order to measure effectiveness The MTR stated that it was too early to assess sus- and to improve the learning loop within the SCBF. tainability on a project level. Nonetheless they noted Based on this feedback, the minimum target for the that some key design features of the SCBF in principle interventions was revised and conversations were in- enable high potential for sustainability. itiated around knowledge management and enhan- At the institutional level, it was emphasized that sus- ced monitoring procedures. tainability will primarily depend on further funding from the public and the private sector. The MTR therefore recommended exploring a variety of oppor- “The diversity of members tunities to attract additional financial contributions. with complementary skills has become a key strength of the SCBF. The spirit among the members is high and the ownership is strong. Member organisations are represented with senior people with expertise and experience.“ MTR team

25 Swiss Capacity Building Facility | Annual Report 2014

26 Swiss Capacity Building Facility | Annual Report 2014

27 Swiss Capacity Building Facility | Annual Report 2014

For the notes see Appendix 2, page 33

28 Swiss Capacity Building Facility | Annual Report 2014

OUTLOOK Strategic Orientation for 2015

An agricultural microleasing feasibility study in Latin Since inception, the SCBF envisaged conducting out- America, which was completed mid-2014, paved the come studies on specific topics, once sufficient data way for several pilots in the region. Three microlea- from SCBF interventions was available for such an in- sing product up-scaling interventions for Peru, El Sal- depth assessment. vador and Honduras are in the pipeline to prepare For 2015, the SCBF now plans to conduct an outco- and test microleasing, based on the findings of the me study on micro housing finance by independent successful feasibility study. This will enable smallhol- researchers. They will collect and analyse outcome der farmers to access income-generating assets, such data at the end user level and from Partner Financial as livestock and agricultural implements, which they Institutions to generate key lessons for the SCBF and would not be able to acquire through loan financing. interested stakeholders.

Feasibility studies for the agricultural microinsurance In line with a key recommendation of the mid-term operations of ACRE are in the pipeline - depending review, the SCBF will employ a Chief Financial Admi- on the results of a planned in-depth assessment of nistrator & Controller who will set the consultancy fee ACRE‘s operations by SDC in Tanzania and Kenya - so levels - as independant authority in line with SCBF‘s as to support ACRE in entering new markets in addi- global database on consultancy fees (to be further tion to Tanzania. In line with its priority to help im- developed) - and will enter into negotiations with prove the livelihoods of smallholder farmers through the Grantees. This financial administration and pro- client-oriented financial services, the SCBF is keen to curement specialist will relieve the members of the support the expansion of ACRE in providing agricul- Sub-Steering Committees from discussing and deci- ture insurance solutions for smallholder farmers that ding on consultancy fee levels and thereby concen- are embedded in the business operations of seed trating on operational issues only. This will strengt- producers and lending institutions. hen the governance of the Sub-Steering Committees where SCBF members will no longer decide on the Following the launch of the Financial Education fee levels of interventions by their peers. Window, the SCBF has planned a Financial Education workshop in India for 2015 to ensure that learnings As recommended by the mid-term review, the SCBF were shared between similar initiatives in different has started a Working Group on Resource Mobilisati- regions. The event will be organised by Accion and on to discuss growth plans, including mobilisation of Micro Banco FIDES Mozambique as well as the Alli- new partners and sponsors from the Swiss public and ance for Microfinance in Myanmar. They will join to- private sector. gether to present their experience with SCBF co-funded campaigns in offering financial education to low-income people, notably low-income women and smallholder farmers.

Contact Swiss Capacity Building Facility

Route de la Fonderie 6, CP 53 1705 Fribourg Switzerland

Seebahnstrasse 85 8003 Zurich Switzerland

Phone: +41 79 132 93 23 Email: [email protected] 29 30 Swiss Capacity Building Facility | Annual Report 2014

APPENDICES - Appendix 1 In-kind Contribution of Swiss Private Sector & SDC (status 31.12.2014)

- Appendix 2 Notes on Financial Statement 2014

- Appendix 3 Internal SCBF Structure

- Appendix 4 List of All SCBF Operations (status 31.12.2014)

31 Swiss Capacity Building Facility | Annual Report 2014

APPENDIX 1: In-kind Contribution of Swiss Private Sector & SDC

as per 31.12.2014

26'300

86'000

26'300

70'000

182'300

156'000

value

182'300

value

days

Self-Contribution

Self-Contribution*

350

-4'200

-3'850

value

0.5

Secretariat

-5.5

-6.0

Secretariat

days

7'260

18'480

11'220 -3'300 18'480

15'400

10'450

33'000

-34'650

value

Manager

6.6

9.5

16.8

10.2 -3.0

Manager

14.0

30.0

-31.5

days

Remainingper 31.12.

260

910

780

130

4'680

7'670

9'750

3'770

1'300

7'280 8'580

2'470

2'730

6'500

-1'040

3'120

1'950

-3'900

-4'680

-8'580

5'460

-3'900

4'680 -2'730

-6'630

11'310

24'830

90'480

-3'120

-2'210

-5'330

14'820

13'000

12'350 25'350

10'075

11'310

26'845

10'400

-53'300

15'080

-35'100

-16'900

-16'250

-11'180

-105'300 -105'300

value

Expert

3.6

8.7

5.9

7.5

2.9

8.7

6.6

1.0

5.6

2.1

1.9

0.2

5.0

5.0 -

9.5

-0.8

2.4 -81 -81

1.5

- 0.7

0.6

0.1

-6.6

-3.0

-3.6

4.2

7.8

8.7

-5.1

-3.0

3.6 -2.1

8.0

19.1

-8.6

-4.1

-2.4

-1.7

19.5

10.0 -11.4

69.6

20.7

11.6

-81.0

-41.0

-27.0

-13.0

-12.5

days

10'150

14'700 24'850

value

Secretariat

35.5

14.5

21.0

Secretariat

days

2'530

9'020

6'490

34'650

83'600

46'750

83'050

257'400

248'050

value

Used

Manager

8.2

2.3

5.9

234

Used

Manager

31.5

76.0

42.5

75.5

225.5

days

8'320

8'580

9'230

4'940

8'970

5'980

7'280

2'990

6'500

3'900

9'880

6'370

8'710

7'540

2'925

4'940

8'320

2'600

6'500

14'040

16'250

13'000

47'190

27'170

16'900

17'680

16'250 50'830

11'700

13'000

49'920

16'250

13'650

19'630

87'100

68'900

26'000

10'270

13'000

16'250

39'650

29'250

14'300 69'680

16'250

12'220

18'590

16'120

24'830

15'405

287'300

396'500

17'420

683'800

105'300

287'300

value

Expert

526

6.4

6.6

7.1

3.8

9.0

6.9

4.6

7.9

5.6

2.3

5.0

221

305

3.0

7.6

9.4

4.9

6.7

5.8

2.3

3.8

6.4

36.3

2.0

5.0

10.8

12.5

20.9

10.0

39.1

13.0

13.6

12.5

38.4

10.0

12.5

15.1

10.5

81.0

67.0

53.0

20.0

30.5

10.0

12.5

53.6

22.5

11.0

12.5

14.3

19.1

12.4

11.9

13.4

221.0

days

value

Secretariat

days

99'000

66'000

231'000

value

Manager

210

Manager

90.0

60.0

210.0

days

Purchasedresources (expertise)

value

Expert

days

21'000

10'500

21'000

10'500

value

Secretariat

30.0

15.0

Secretariat

days

27'500

13'750 27'500

13'750

27'500

13'750

value

Manager

25.0

12.5

Manager

25.0

12.5

days

3'250

9'750

3'250

6'500

13'000

6'500

13'000

16'250

58'500

16'250

22'750

13'000

16'250

52'000

13'000

16'250 42'250

13'000

58'500 16'250

16'250

13'000

52'000

26'000

13'000

19'500

13'000

16'250

65'000

16'250

13'000

16'250 58'500

16'250

13'000

19'500

13'000

19'500

13'000

16'250 42'250

182'000

487'500

13'000

32'500 669'500

182'000

value

Allocatedannual ressources (expertise)

value

Allocatedannual ressources (expertise)

Expert

2.5

7.5

375

515

7.5

2.5

5.0

45.0

10.0

5.0

10.0

12.5

40.0

17.5

10.0

12.5

32.5

140

10.0

12.5

45.0

10.0

12.5

10.0

40.0

20.0

10.0

50.0

15.0

10.0

12.5

45.0

12.5

10.0

12.5

15.0

10.0

15.0

10.0

32.5

10.0

12.5

25.0

10.0

140.0

days

Partner

year 1 -4 1 year

publiconly

privateonly

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 3 (2013)

year 4 (2014)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 1 (2010-11)

Total

year 2 (2012)

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012)

year 1 (2010-11)

Total

year 4 (2014)

year 3 (2013)

year 2 (2012) year 1 (2010-11)

Zurich

Syngenta

Swiss Re Swiss Swisscontact Stonestep SDC KiWi SMH FIDES Credit Suisse Credit Blue Orchard Blue BFC Bamboo Allianz

32 Swiss Capacity Building Facility | Annual Report 2014

APPENDIX 2: Notes on Financial Statement 2014

33 Swiss Capacity Building Facility | Annual Report 2014

34 Swiss Capacity Building Facility | Annual Report 2014

35 Swiss Capacity Building Facility | Annual Report 2014

36 Swiss Capacity Building Facility | Annual Report 2014

APPENDIX 3: Internal SCBF Structure

APPENDIX 4: List of All SCBF Operations as per 31.12.2014

Product Up-scaling Support Completed 2011-02 Senegal Better outreach and productivity for financial services in rural areas through the use of mobile phone technology

2011-03 Cambodia Developing a sustainable savings strategy with leading MI in Cambodia

2011-04 Nepal Innovative microinsurance products for rural poor in Nepal

2011-06 Tanzania Promotion of women small businesses in Tanzania

2011-08 Nicaragua Building risk management capacity to increase outreach in Nicaragua

2011-09 Ecuador Promoting access to savings for the working poor in Ecuador

2012-02 Rwanda Fostering financial inclusion in rural areas through innovative channels in Rwanda

2012-03 Zambia EFC Zambia Branch Interconnectivity – Improving banking services and rural outreach

2012-05 Cambodia Capacity building for housing microfinance

2012-07 Tanzania Launch of ABT’s SME lending operations

2012-09 India Leading the expansion of gendered individual lending

2013-01 Morocco Tailoring a mobile banking application to BoP

2013-03 Tanzania Access to water and energy through microfinance

2013-04 Pakistan Fine-tuning of products range and adaptation of the Advans model to Pakistan

37 Swiss Capacity Building Facility | Annual Report 2014

Product Up-scaling Under Implementation 2011-05 Morocco Innovative distribution channel: "Barid Cash" – Postal Banking

2011-07 Egypt Launch of savings-based microinsurance product in Egypt

2012-01 Senegal Introduction of microinsurance in the product offer of rural MFI in Senegal

2012-04 Tunisia Launch of MSME loan products

2012-06 Guatemala Institutional strengthening for financial inclusion

2012-08 Mozambique Strengthening asset building strategies through microinsurance

2012-10 Mozambique Outreach expansion through mobile banking services

2012-11 Nepal Downscaling to increase outreach to microfinance clients

2012-12 Vietnam Achieving lasting financial sustainability by setting up a modern risk management system

2013-02 Palestine Bank Downscaling in Palestine

2013-05 Morocco Replicating Caregiver: Providing health microinsurance to low-income clients of Association Al Amana

2013-06 Senegal Strengthen SLF position in the Senegalese SME market

2013-07 Ethiopia Access to water and solar energy through microfinance (replication of #2013-03)

2013-08 Morocco Scaling up mobile banking: Delivering G2P benefits to rural areas

2013-09 Honduras Strengthening middle management & reviewing products and segments offer in MSMEs

2013-10 Haiti Providing access to finance for Haiti’s rural and agricultural populations

Honduras, El 2013-11 Building capacity to expand housing microfinance in Central America Salvador

2013-12 Tanzania Promotion and acceleration of women small businesses

2013-13 Morocco Bank Downscaling in Morocco

2013-14 Jordan Development of small enterprise lending at Vitas Jordan

2014-01 Tanzania Introducing agricultural insurance to smallholder farmers in the Arusha region

2014-02 Tanzania Introducing agricultural insurance to smallholder farmers in the Iringa region

2014-03 Morocco KiWi eKiosk pioneering integrated cards & mobile payments for micromerchants

2014-04 Ghana Introduction and up-scale of microloans for the distirbution of bichar stoves

2014-05 Nepal Scaling up of innovative Microinsurance products for rural poor

2014-06 Burkina Faso Development of savings and insurance products for migrants through international postal transfers

2014-07 El Salvador Microleasing pilot

2014-08 Rwanda Building capacity to expand housing microfinance

2014-09 Rwanda Fanikisha+ Rwanda: Promotion and acceleration of women small businesses

2014-10 Tunisia Support to launch first commercial microinsurance product in Tunisia

Product Up-scaling Suspended 2011-01 Palestine Pilot test of savings products in a MFI in Palestine

38 Swiss Capacity Building Facility | Annual Report 2014

Feasibility Studies Completed FSW-01 Tanzania Feasibility study and business case development for Tanzania

FSW-02 Morocco Development of an ePayment solution adapted to micromerchants

FSW-03 Latin America Microleasing Latin America

FSW-04 Palestine, Jordan Support to the transformation of UNRWA MD into a microfinance bank

FSW-05 Tunisia Microinsurance - Strategic business development for ENDA Interarabe

Senegal, Mali, Benin, FSW-06 Business plan for microinsurance in West Africa Ivory Coast, Burkina Faso

FSW-07 Tanzania Feasibility study on agricultural insurance in Tanzania

FSW-08 Myanmar Myanmar Microfinance Ltd. - Preparation Phase

Feasibility Studies Under Implementation FSW-09 Egypt Assessing options for distribution of microinsurance through ENPO

FSW-10 Kenya & DRC Kenyan housing microinsurance feasibility study

Feasibility study for implementation of key performance indicators and program linking of independent PACT FSW-11 Myanmar programs PGMF and VRF

FSW-13 Ghana Inclusive financial services for cocoa growing families through a holistic outgrower finance approach

Feasibility Studies Approved But Not Launched 2014 FSW-12 Mozambique Feasibility study for agricultural insurance

Financial Education Campaigns Under Implementation FEW-01 India Financial education for underserved clients

FEW-02 Tanzania Introducing agricultural insurance to smallholder farmers in the Arusha region

FEW-03 Tanzania Introducing agricultural insurance to smallholder farmers in the Iringa region

FEW-04 Morocco KiWi eKiosk pioneering integrated cards & mobile payments for micromerchants

FEW-05 Mozambique Financial education in an inclusive finance approach based on the development of Savings and Credit Groups

FEW-06 Rwanda Financial education: Fanikisha+ Promotion and acceleration of women small businesses

FEW-07 Tunisia Financial education to support the first microinsurance products in Tunisia

FEW-08 Myanmar Financial education in Myanmar