1. 1 Centre for Microfinance – University of Pretoria: Reaction to a unique market Gerhard Coetzee and Chiara Chiumya Reaction to a unique market Gerhard Coetzee and Chiara Chiumya

2. 2 Outline  The problem  The challenges  The reaction  Resource mobilisation  Learning and adjustments

3. 3 The problem  Market assessment as part of original proposal  Market training demand workshops with industry representatives  Course offerings and curriculum based on workshop outcomes  Thus research and training offerings in reaction to market challenges

4. 4 Challenges – Development Finance  Understanding of clients  real market research  Expansion of products, expanded options  SMME finance – attacking the self employed market  Regulatory environment - heavy burden of “red tape”  Registry of security interests  Explicitly target productive uses of microfinance  Transformation of NGO MFIs  Business Development Services  Commercial banks – already in there, but more focus needed

5. 5 Challenges – Asset accumulation  Savings and investment products  Targeted savings products  Smooth consumption, raise repayment, minimize risk  Are the banks making money, threat of cannibalization  Addressing negative real interest rates on savings instruments  Need for bundling lending and saving instruments.  Housing: embryonic township markets  Other investment products

6. 6 Challenge – Rules and enforcement  National Credit Regulator – impact on the market?  Other rules and impact on access?  Harmonisation of policy and legislation?  Main challenge – enforcement?

7. 7 Challenge – Information  Need for even better data and information  Better credit scoring and pricing models  Having better information on individuals, households and firms applying for / using credit for policy development  Training and capacity building  Major need, no recognition, not willing to pay  Short sighted – need to invest in most strategic asset  Consumer education  Need for improved outreach  Focus on lower income strata  Distinct lack of innovation  Use of CE as a monitoring tool  Pricing issues, competition, monitoring

8. 8 Challenge – Management  Depth in Management  Numbers in Management  Understanding the market  Understanding reactions to the market  Understanding banking

9. 9 Challenge - Market Profile Market status → ↓Institutional status Developing (SMME finance) Developed (Personal finance) Start-ups:  Enterprise  Consumer  Mixed XXX Growth phase:  Enterprise  Consumer  Mixed XXX Mature and refocus:  Enterprise  Consumer  Mixed XXX

10. 10 Reaction – Centre for Microfinance  “Creating Inclusive Financial Markets Against Poverty”  Integrated approach  Stakeholder involvement  Functional areas (products)  Education  Research  Dissemination  Support

11. 11 Head of the School of Management Science Director: Gerhard Coetzee Assistant Director: Chiara Chiumya Director: Gerhard Coetzee Assistant Director: Chiara Chiumya Education Research P rogrammes organised according in focus areas with dedicated senior research leaders Dissemination African Microfinance Conference “Series” Round Table Research Publications Invited and other conference papers Dissemination African Microfinance Conference “Series” Round Table Research Publications Invited and other conference papers Executive Management Programme Certificate Programmes Academic leader: Gerhard Coetzee Academic leader: Gerhard Coetzee Admin support: Katherine Blaine Admin support: Katherine Blaine Centre Advisory Board 4 Academics and 4 Industry Representatives Centre Advisory Board 4 Academics and 4 Industry Representatives Support to other Institutions Demand Analysis Assessment Development Evaluation and Monitoring Support to other Institutions Demand Analysis Assessment Development Evaluation and Monitoring MBA Electives M Course in Post Grad School for Rural & Ag Dev Masters and PhD in Entrepreneurship

12. 12 Education  Certificate Programme in Microfinance  Certificate Programme for Microfinance Managers  MBA Electives  Masters Course in Post-Graduate School for Rural and Agricultural Development  Masters and PhD Course in Entrepreneurship  Executive management course  Project Based:  Swaziland Microfinance Sector Training (15)  BankSeta Unemployed (30)

13. 13 Education: Certificates  Certificate Programme in Microfinance  Fundamentals of microfinance  Loan Officer  Market research for microfinance (MicroSave material)  Introduction to management in context  Certificate Programme for Microfinance Managers  Operational management  Financial management (using Microfin)  Strategic planning and budgeting  Strategic marketing

14. 14 Research  Policy, Legislation and Regulation  National Credit Act Regulatory Impact Assessment study design (completed)  National Credit Act Regulatory Impact Assessment  Academic publication – Introduction to the National Credit Act (Juta)  Assessing the possible regulatory impact of the National Credit Act on microfinance institutions: A case study of a small to medium size consumer credit provider (completed)  The potential effect of the National Credit Act on the future of selected, specialised micro-lending institutions in South Africa  Comments on the Financial Cooperatives Bill (completed)  FAIS and FICA impact on Financial Cooperatives  Credit information sharing: Guidelines towards credit information market development in Africa (completed)  Member based financial services  Informal finance for middle and high income individuals in South Africa: A case study of high budget "stokvels" in Pretoria (completed)  Case study of Yebo multi-purpose cooperative  Rural Finance  Review of the Rural Finance Learning Centre of the FAO (completed)  Enhancing livelihood strategies of rural communities prone to climate risk in the Caprivi region of Namibia

15. 15 Research (2)  Market integration / inclusion  Microfinance in rural and urban Africa: Reality, Context and Challenges  Inclusive financial sectors and market integration: Some evidence from Africa (completed)  Financial services and channels  Social protection cash transfers: Learning from microfinance delivery systems  The Mzansi account: A response to the access challenge of the financial sector charter in South Africa (completed)  Demand analysis of life insurance products in LSM 3-5 in Tembisa  Investing behavior and product needs for the poor: A case study based on Alexandra residents  Agricultural finance products for small-scale cane growers  Small-scale property entrepreneurs: A South African perspective (completed)

16. 16 Dissemination  Publications  Roundtable  Website  Conferences  Attend and speak (several)  Organise / Support 2007 African Microfinance Conference – Kampala 2007 Conference on the measurement of impact of microfinance 2005 African Microfinance Conference – Cape Town 2003 African Microfinance Conference – Johannesburg

17. 17 Support Support  Development Phase – culminating in Support Toolkit  Assessment  Context, Market demand, Human resources, Material  Development of curricula  Electives, Short courses  Course development and implementation  Provide material as input, Training of personnel  Course Quality Assessment  Monitoring and evaluation  Not sure whether we can continue with this…

18. 18 Resource mobilisation  Human  Core permanent staff Chiara Chiumya, Katherine Blaine, Jacob Nyambe  Part-time staff Gerhard Coetzee Teaching (6) Research (4) plus the MBA, Masters and PhD students  Financial  Sponsorships MFMI initial financing establishment (2004 – 2007) SA Banking Sector Education and Training Authority (2007 – 2010) Other private sector support (ABSA, MFSA, etc)  Income from courses  Income from research  Break-even approach

19. 19 Lessons and adjustments  Clients not eager to pay for training – use learnership system in SA  MBA domain vs. electives – interest vs. uptake  Integration now easier in new home  Need adjustment for countries outside southern Africa  Need good permanent human resources  Takes time to set up the Centre  Learned what is core need in terms of resources and structure – base and incremental  In general, successful structuring and operation