1. contact@e-mfp.eu www.e-mfp.eu Supporting microfinance in the European Union: business models, impact assessment and lessons learned from EU initiatives Antoine Navarro – Planet Rating anavarro@planetrating.com Planet Rating’s learnings and methodological adaptations

2. contact@e-mfp.eu www.e-mfp.eu Planet Rating  Created in 1999, it became a private independent rating firm in June 2005  Mission to contribute to the development of microfinance thanks to increased transparency on the financial and social performance of MFIs  Enjoys a global coverage, thanks to a network of six offices spread over four continents (Paris, Lima, Dakar, Nairobi, Beirut, Manila)  A team of 16 experienced analysts, with backgrounds in investment banking, management consulting, non-profit, microfinance

3. contact@e-mfp.eu www.e-mfp.eu JASMINE initiative Joint Action to Support Microfinance Institutions in Europe (JASMINE): A 5 year project (2009-2013), managed by the European Investment Fund (EIF) funded by the EC  Objectives To promote good practice in the field of microcredit. To provide additional funding for microfinance institutions. In the long term, to improve the environment of the European microcredit sector, by developing partnerships between the banking and non-banking actors.  How does it work? Evaluation: providing an assessment or rating to the MFIs by specialized microfinance rating agency Technical assistance: provide dedicated training in areas where improvement is needed. Funding: After the technical assistance, MFIs may apply to the European Microfinance Facility Fund managed by the EIF, which offers guarantees and equity/loans funding.  Implementation 24 MFIs selected in 2010 and 2011 already received an evaluation and TA. After a second call for proposals, an estimate 20-30 MFIs will receive an evaluation and TA in 2012.

4. contact@e-mfp.eu www.e-mfp.eu JASMINE 2010  Créa-Sol (France)  CP’AC (Spain)  FEA (Hungary)  Mikrohitel (Hungary)  PRIMOM (Hungary)  PSBYT (Scotland) JASMINE 2011  Credal (Belgium)  Jobs MFI (Bulgaria)  Mikrofond (Bulgaria)  Nachala (Bulgaria)  Qredits (The Netherlands)  Patria Credit (Romania) Kosovo  KEP Serbia & Montenegro  AgroInvest Bosnia Herzegovina  10 MFIs: EKI, Mikrofin, Partner, LOK micro, Mi-Bospo, Prizma, Benefit, Sunrise, Women for Women, Sinergija Plus  26 ratings Russia  5 MFIs: FFECCC, RWMN, VRFSBS, Doveriye, Narodnyi  8 ratings Moldova  MicroInvest Ukraine  Hope Ukraine JASMINE 2012  6 MFIs in Germany  And 9 others in Romania, Slovak Republic, UK, Malta, Poland, Belgium, Bulgaria and Sweden Turkey  TGMP Ratings and assessments conducted for the JASMINE program Experience in other EU countries

5. contact@e-mfp.eu www.e-mfp.eu  Context Higher level development of financial services  narrow potential market Lower margins of businesses of micro-entrepreneurs in EU countries:  Low level of informality  Higher costs (taxes)  Cannot always afford higher interest rates  Consequences on the business models Specific targeting: financially marginalized population represent a smaller share of the population than in developing countries  target unemployed, start-ups, and SMEs which have difficulties to access finance Different business models : often includes business development services as a core service  Specific training on admin, legal processes  Entrepreneurial and business planning trainings  find a market niche Dependent on grant funding from public or private donors and socially oriented investors for their sustainability  Different approach needed for the analysis of the sustainability of MFIs from Western or Eastern Europe Main differences of microfinance in Western Europe with “traditional” microfinance

6. contact@e-mfp.eu www.e-mfp.eu GovernanceInformationRiskActivities FinancingEfficiency Financial Inclusion Social Change Factors have been added Outreach to the excluded Adaptation of services Cost of Services Factors have been added Fight vs. Unemployment Business creation Empowerment Ratios and scales have been adapted and benchmarks collected Client Protection GIRAFFE-S Evaluation Framework for EU MFIs A rating methodology tailored for European MFIs

7. contact@e-mfp.eu www.e-mfp.eu THANK YOU FOR YOUR ATTENTION! www.planetrating.com