1. Financial Services for the Poor Presentation by Karin Dahlström Division for Market Development, Sida May 12, 2004

2. Poor people need a range of financial services for: Lifecycle events Seasonal events Emergencies Business opportunities Asset building

3. Challenging Basic Premises Old Paradigm Microcredit = short-term working-capital loans to microentrepreneurs

4. The New Vision All poor people use and need financial services Poor people need a variety of financial products and services Secure and convenient deposit services Flexible terms Variety of loan products Insurance Transfer payments Remittance services

5. The New Vision Microfinance = financial services for the poor

6. Challenges Huge unmet demand for wider range of services Existing products and institutions not viable Opportunities Increase outreach and product range Ensure permanent and sustainable access

7. Measure Success with Appropriate Indicators Increased stability & sustainability Wider range of services Broader client outreach Better fund mobilization

8. South Africa: Marang Financial Services Marang´s vision: To become a sustainable, leading independent provider of financial services for micro enterprises in South Africa Sidas objective: To support the emergence of a role model institution that provides sustainable microfinance services to the poor in South Africa, which would entice other players to enter into the sector

9. Products : Group loan (4-8 members). Piloting individual product. Targets set by Sida: Portfolio at Risk < 10% Financial Self-sufficiency > 50% (yr 1), >75% (yr 2), > 100% (yr 3). Proof that Marang has access to additional (debt) financing required to implement business plan. Sida support: up to 12 MSEK over 3 years based on performance