Access to financial services

Microfinance technical assistance

Significant investment to build the capacity of existing and new MFIs is necessary to meet the potential demand for financial services in the sector.

In 2007, we committed to establishing a formal technical assistance strategy for the microfinance sector. After consultations with stakeholders we finalised a technical assistance strategy in 2008. This strategy aims to use the Bank’s expertise in governance, risk management and operations and will help us to introduce best practices to our MFI partners.

Our technical assistance initiatives comprise:

  • Thought leadership platforms and conferences including specifically promoted events
  • Targeted training of MFI partners
  • Sector-wide training in partnership with microfinance networks and experts

Thought leadership platforms

The Bank’s senior management actively contribute to international seminars and conferences promoting microfinance in Asia, Africa and the Middle East. We sponsored several major conferences for clients and regulators in 2008, to help channel microfinance investment to Asia and Africa, including:

  • The Microfinance: Cracking the Capital Markets – South Asia Conference, held in Delhi, encouraged MFIs to access international capital markets. The event brought together financial institutions, leading microfinance practitioners, private investors and development organisations and showcased innovative deals and ways interested investors could participate
  • The Global Microfinance Investment Congress, hosted in New York, convened experts from MFIs, rating agencies, bilateral and multilateral institutions, specialised microfinance funds, and industry associations to share best practices and the way forward for microfinance investment
  • Nepal’s challenging microfinance sector was the focus for a gathering of senior microfinance professionals who met to review the experiences, share the lessons and examine ways to address current and future challenges such as risk management at the Microfinance Summit in Nepal

Training and capacity building

Governance

Management quality and governance are the biggest risks facing the microfinance industry, according to a report by The Consultative Group to Assist the Poor. In 2008, to share best practice and build on previous learning in the critical areas of risk management, governance and transparency, Standard Chartered hosted a conference for industry leaders in India and successfully migrated the programme on governance for Zambian MFIs, developed in 2007, to the participants.

Risk management

In 2008, we published Managing Environmental and Social Risks in Microfinance, a research paper urging MFI partners to embed social, environmental or ethical impact considerations in their lending decisions. These standards and principles now form part of the loan agreements signed between MFIs and Standard Chartered.

In India, we sponsored a training programme on individual lending for MFIs. The training assisted MFIs to develop appraisals for new types of loans based on clients’ cash flows, improving management of the associated risks.

Investment readiness

MFIs require adequate access to finance and investment to remain sustainable. In India and Nigeria, to support MFIs in becoming ‘investment ready’ – a critical element if they are to attract commercial capital – we partnered with ACCION International, a microfinance network, to deliver workshops to educate MFIs on the issues that commercial and socially responsible investors consider when investing in the microfinance sector.

Innovation

At Standard Chartered, we help develop new MFIs as well as supporting existing ones. In 2008, Standard Chartered in India was the lead award sponsor for SRIJAN, a microfinance business plan competition aimed at encouraging start-up initiatives in microfinance.

Internal capacity building

Building internal capacity is important to encourage growth in the sector. In 2008, Standard Chartered relationship managers from eight countries in Africa gathered in Nairobi for in-depth training on the microfinance sector in the continent. The training focused on developing their knowledge and understanding of trends in the sector’s growth, due diligence and financing options for MFIs.

Highlights

  • $385min credit and financial instruments to microfinance institutions
  • 52microfinance partners in our markets
  • 5new markets with microfinance partners