The AFRACA Executive Committee 2007/2008

Mission “Improve rural finance environment through promotion of appropriate policy framework, support member institutions, provide sustainable quality financial services to the rural population through introduction of appropriate rural banking practices and innovative products”

SUB SAHARA AFRICA

Innovations in Products to meet new challenges New Challenges and opportunities Technology – Mobile phones - Internet Climate Change – e are not to blame - Can we embrace opportunities arising out of issues coming out of this situation - Long term view

Innovations in Technology Mobile Phones – Growth Internet and connectivity Hand computers for collecting data –What are we committed to as an institution –Can we look for tools to help us meet our objectives in a sustainable manner

Domestic Transfers

 M-PESA is electronic value [e-money] backed by real money in a conventional bank account  Users can buy e-money for cash send it to others by SMS instruction sell e-money in exchange for cash  M-PESA has the Trust Account with the real money  M-PESA records to whom that money belongs How does M-PESA work ?

Users can buy e-money for cash send it to others by SMS instruction sell e-money in exchange for cash How does M-PESA work ? M-PESA is electronic value [e-money] backed by real money in a conventional bank account M-PESA has the Trust Account with the real money M-PESA records to whom that money belongs

Future M-PESA Services Sending Money Home is just the start Many other services are being developed  Bulk Payments B2C [e.g. salary, Pension, Kwachua]  Utility payments  International Money Transfers  Merchant payments  Facilitating Microfinance and Banking services  Social Payments

Per transaction range in Kshs Agent Commission – Withdrawals Agent Commission - Deposits , ,501-5, , , , , , , M-PESA RegistrationKShs 80 per registration SIM SWAPSKShs 70 per transaction Revenue Sources –Agent Commissions/Transfers

Organizations can use the service for collecting payments for: Utilities, e.g. Power & Water accounts E-Ticketing Membership subscriptions Insurance premium etc In future this will be expanded to facilitate in-store payments for merchants Utility Proposition –Bill Payment

To Consumers –Convenience –Speed of service –Affordability –‘Pay as you go’ model –Availability –Safety To Businesses –Access to potential customers –Cost effective means of revenue collection / funds disbursement –Additional income & ‘feet through the door’ as Agent –Complements other services as Agent Benefits of M-PESA

Benefits to institution Incremental Sales (foot print) Improves “Brand” Good PR Member engagement Staff engagement Climate Change

Some Products

Key Questions: What are the main drivers & trends behind green financial product/service development? What is the current & potential demand for green products/services? What green financial products/services are currently being offered around the world? What best practices & lessons learned can be identified? What are some key opportunities to consider in terms of the development & marketing of green financial products/services?

Awareness “As environmental understanding and awareness grows in Africa, so does the demand for products and services that advance environmentally sustainable lives, livelihoods, and communities.”  BarclayBreathe Card (BarclayCard)  Fleet Loan (Bank of America)  Home Equity Loan (New Resource Bank)  Climate Change Mortgage (VanCity)  Green Building Replacement and Upgrade Coverage (California Fireman’s Fund)

Recent Polls and Market Research 75% of Americans acknowledge their own behavior can help reduce global warming 81% of Americans feel it is their responsibility to take action against this environmental challenge. 75% of the US public is willing to purchase solar panels, and 67% would consider buying a hybrid vehicle. 63% of Americans believe that the US is in as much danger from environmental hazards….as it is from terrorists According to a recent poll by Yale University:

The Business Case  Improved market share  Increased profits  Customer acquisition and loyalty  Higher employee satisfaction and retention  Reputational benefits (improved brand image)  Positive media attention  Environmental awareness and benefits  Improved license to operate  Strengthened relationships and partnerships with external stakeholders

Green Retail Product Areas RETAIL BANKING Green Loans Lower interest rates than market level for loans to purchase cars with low GHG intensity and high fuel efficiency, to purchase energy efficient appliances or solar, biomass and other renewable installations at homes Green Mortgages Lower interest rates than market level for mortgages to purchase new energy efficient homes, invest in retrofits and energy efficient appliances Green Cards, Sales, Accounts Deposit accounts and debit/credit cards linked to donations to environmental NGOs by the bank. Carbon neutral credit/debit cards (i.e. emissions due to production of the card are offset or emissions linked to the purchases made by the client are offset). Green Leasing Leasing of environmental and GHG abating technology Green Insurance Insurance premium differentiation on the basis of environmentally relevant characteristics. Microfinance/micro-credits Microfinance in developing countries of emission reduction technologies, practices or projects

Retail Banking: Lessons Learned True innovation is not simply the introduction of new niche green products for retail clients, but the integration of environmental incentives into mainstream offerings. A number of product designs can transcend eco-areas. For instance, a climate product can be tweaked to encourage water conservation or waste reduction. The most successful products over the long- term will ensure the delivery of real and verifiable environmental benefits.

Emerging Opportunities  Achieve high levels of financial performance?  Attract a particularly large number of customers?  Last over time, and is re-launched year after year?  Raise the environmental awareness among all stakeholders?  Receive positive attention from the media and ENGOs?  Prompt the introduction of other eco-products and services?  Improve brand recognition and corporate image among stakeholders?

Emerging Opportunities Sun - Use of our abundant sunshine for solar power in cookers, Wind – wind power in wind mills for irrigation and water transportation Land - Land for planting woodlots and carbon sewers Biodiversity – Bio gas, fuel etc Other opportunities for new products

Be Innovative Embrace Environmental Leadership Ensure Environmental Integrity Educate & Motivate Stakeholders Collaborate with Stakeholders Be Consistent Take Home Messages

Mercy/Regarde/Thank you AFRACA End