1. 1 By Tom Sanderson

2. 2 Outline Financial Exclusion Microfinance Five Talents’ work New Developments Future Plans

3. 3 Financial Exclusion 1.5bn people without financial access

4. 4 Barriers to Access Distance Fees Collateral (few assets, no property rights) Illiteracy Dis-Empowered

5. 5 Other Market Failures? Individual credit risk is too high for banks Cost of small lending is too high for banks

6. 6 Microfinance Dr Muhammad Yunus & the Grameen Bank, Nobel Peace Prize 2006 Now reaching 130 million of the poorest people

7. 7 Group-based Microfinance Preparation Loan and Mentoring Repayment And Recycling Group Formation Training Saving Planning

8. 8 Multi-dimensional benefits

9. 9 Smooth consumption Coping with emergencies Handle life cycle events Invest in opportunities

10. 10 A Dynamic Industry Individual lending/SMEs Trust groups Solidarity groups Self-help groups Average size of first loan

11. 11 Major MF Players – 2010 data InstitutionNo. ClientsTerritory National Bank (NABARD)54mIndia Womens World Banking23mWorldwide Grameen Bank8mBangladesh SKS Microfinance5.5mIndia BRAC NGO4mBangladesh ACCION NGO3mWorldwide ICICI bank1.2mIndia Opportunity International2mWorldwide FINCA NGO0.75mWorldwide World Vision NGO0.6mWorldwide TOTAL102m

12. 12 Five Talents 14 microfinance partner programmes £1.3 million loan capital in circulation Reaching over 30,000 clients (mostly women)

13. 13 Faith-based organisation “One aspect of Five Talents that sets it apart from other microcredit enterprises is its effort to provide business training and one-on-one business counselling to loan recipients, thereby enabling them to pursue new and creative ways to use their skills and talents.” (p.211) “Development & Faith: Where mind, heart and soul work together” 2007

14. 14 Wealthy Middle class Moderate Poor Vulnerable Poor Extreme Poor Destitute Targeting the active poor Poverty Line

15. 15 Emphasis on Training Planning Marketing Recording

16. 16 Emphasis on Savings The poor Can Do Want to save

17. 17 Five Talents’ Distinctives Smaller, poorer, riskier Holistic transformation Using the church network Shortlisted 2010 Sustainable Banking Awards Banking at the Base of the Pyramid

18. 18 Small Loans, Big Impact Ephraim: £160 loan to buy new stock 1 employee Supports extended family

19. 19 Mrs Nganga SunRise Hotel 6 employees £160 loan Small Loans, Big Impact

20. 20 Michael: £100 loan Dairy cows, rabbits, biogas Retirement income Small Loans, Big Impact

21. 21 Programme Delivery Local staff Interest rates 1-3% pcm Loan term 4-6 months Examples: Tanzania: I borrow £50, I repay £55 (2.5% pcm, 4 months) Uganda:I borrow £50, I repay £59 (3% pcm, 6 months)

22. 22 Repayment Rates 89-100% on time Group guarantee Reschedule Forfeit savings Write-off (4% pa)

23. 23 New Developments

24. 24 More than Just Credit Income protection Income generation The poor need a wide range of services to address their various financial services

25. 25 Recent Controversies Going Public (Compartarmos and SKS) Muhammad Yunus forced to resign India crisis Does MF alleviate poverty?

26. 26 Microfinance is alive and kicking “There is plenty of scope for development through micro-lending.”

27. 27 For more information: See: www.fivetalents.org.ukwww.fivetalents.org.uk Contact: info@fivetalents.org.ukinfo@fivetalents.org.uk Tel. 0845 054 7525