34162 ANNUAL REPORT 2003 CONSULTAT IVE GROU P T O A S S I S T T HE P OOR Building financial services for the poor African Development Bank Germany: Federal Ministry for Economic Cooperation and Development Asian Development Bank Kreditanstalt für Wiederaufbau European Bank for Reconstruction Die Deutsche Gesellschaft für and Development Technische Zusammenarbeit European Commission Italy: Ministry of Foreign Affairs, Directorate General for Development Inter-American Development Bank Japan: Ministry of Foreign Affairs/ International Bank for Reconstruction Japan Bank for International and Development (The World Bank) Cooperation/ Ministry of Finance, Development Institution Division International Fund for Agricultural Development (IFAD) Luxembourg: Ministry of Foreign Affairs/Ministry of Finance International Labour Organization United Nations Development The Netherlands: Ministry of Foreign Affairs Programme/United Nations Capital Development Fund Norway: Ministry of Foreign Affairs/ Norwegian Agency for Development United Nations Conference on Cooperation Trade and Development Sweden: Swedish International Australia: Australian International Development Cooperation Agency Development Agency Switzerland: Swiss Agency for Belgium: Directorate General for Development and Cooperation Development Cooperation, Belgian Development Cooperation United Kingdom: Department for International Development Canada: Canadian International Development Agency United States: U.S. Agency for International Development Denmark: Royal Danish Ministry of Foreign Affairs Argidius Foundation Finland: Ministry of Foreign Affairs Ford Foundation of Finland France: Ministère des Affaires Etrangères France: Agence Française de Développement ANNUAL REPORT 2003 JULY 1, 2002- JUNE 30, 2003 CONSULTATIVE GROUP TO ASSIST THE POOR Washington, D.C. Building financial services for the poor Photographs, front cover (background, then left to right): Two women holding money, Cambodia (Tim Hall/Getty Images); Women removing fish traps, Okavango River, Botswana (Peter Johnson/Getty Images); Farmer on carriage, Egypt (Hisham F. Ibrahim/Getty Images); Woman selling flowers at market stand, Ecuador (Corbis); Bulls pulling carts on a rainy day, India (Corbis). Photographs, back cover (background, then left to right): Outdoor market, Bombay, India (Eyewire Collection/Getty Images); People making food, Burkina Faso (©1993, The World Bank Photo Library/Curt Carnemark); Woman weaving, Kenya (© The World Bank Photo Library); Man with water buffalo cart, Philippines (©1975, The World Bank Photo Library/Edwin G. Huffman). Consultative Group to Assist the Poor Tel: (202) 473-9594 c/o The World Bank Fax: (202) 522-3744 1818 H. Street, N.W. email: cgap@worldbank.org Room Q4-400 http://www.cgap.org Washington, D.C. 20433 CONTENTS Letter from the Director ..............................1 Improving Donor Effectiveness .................43 Aid Effectiveness Initiative: Financial Services for the Poor: Donor Peer Reviews ................................43 The Basics .....................................................5 Country-Level Donor Harmonization .....44 What is Microfinance?...............................5 Advisory Services .....................................45 Challenges and Limitations .......................6 Support to Non-Microfinance How Does Microfinance Help the Poor? ...6 Specialists ................................................46 About CGAP.................................................9 Training ......................................................49 History and Evolution ...............................9 Training for MFI Managers .....................49 Our Vision ................................................9 Microfinance MBA Programs .................50 CGAP Strategy and Priorities ..................10 Training for Donor Staff..........................50 Governance Structure ..............................11 Other Training.........................................50 Donor Commitments to CGAP ..............18 Partnerships .............................................18 Communications and Publications ..........53 CGAP Web Site.......................................53 Strengthening a Diversity of Financial Microfinance Gateway.............................53 Institutions Serving the Poor .....................25 CGAP Publications .................................54 Industry Stocktaking ...............................25 Scaling Up ..............................................26 Consolidated (Unaudited) Financial Statements ..................................57 Broadening and Deepening Financial Updated Presentation ..............................57 Services for the Poor ..................................29 Key Highlights ........................................57 Transparency in Depth of Outreach ........29 Financial Statements Tables ................58-59 Agricultural Microfinance Research .........30 Notes to Consolidated Encouraging Innovation in Rural Areas ...30 (Unaudited) Financial Statements............59 Impact on End Clients ............................32 Notable Financial Results for Fiscal Year 2003 ........................................X Building Financial Transparency ...............35 The Microfinance Information Annexes eXchange (MIX)......................................35 Annex 1 Consultative Group IDB-CGAP Rating Fund.........................36 Member Donors......................62 Information Technology (IT)...................37 Annex 2 CGAP Staff Biographies..........64 Annex 3 CGAP Microfinance Enhancing the Policy and Publications.............................69 Regulatory Framework ...............................39 Annex 4 CGAP Commitments, Consensus Guidelines .............................39 1995–2003..............................72 Country-Specific Engagements ...............39 New Database on World-Wide Policy Frameworks...................................40 CGAP Annual Report 2003 iii Women in local office of the “Peoples Bank” with primitive abacus and modern calculator, Uzbekistan © 2002 World Bank Photo Library/Anatoliy Rakhimbayev LETTER FROM THE DIRECTOR THE FIRST CRACKS IN THE WALL L ast year in this space, I wrote about with low-cost card readers, point-of-sale devices, CGAP’s vision of the day when “[t]he and automatic teller machines to deliver banking term ‘microfinance’ will no longer be and insurance services to poor families through- necessary as we remove the walls—real and out rural India. Similar experiments are underway imaginary—that separate the microfinance com- in Latin America and Central Asia. munity from the much broader world of finan- cial systems, markets, and development.” Today Working partnerships are springing up between we already hear the term microfinance much less institutions who would never even have entered often. All over the world, it is being replaced by dialogues a few years before. In places as differ- the phrase “financial systems for the poor.” ent as Haiti, Georgia, and Mexico, partnerships between banks and microfinance institutions The difference is more than semantic. enable the microfinance providers to use banks’ “Microfinance” suggests that there is something branch networks to transfer funds and collect inherently different about poor people’s financial payments. needs, something that is—and should be—segre- gated from the financial mainstream. “Financial Microfinance institutions are working with systems for the poor” describes a self-evident truth: insurance carriers to develop and deliver new lines that it is neither just nor economically logical that of pro-poor insurance products. Information any country’s financial system should exclude the technology providers and software developers are majority of its population. In partnership with waking up to the huge market for automation in likeminded financial institutions, donors, service the microfinance sector—and microfinance prac- providers, policy makers, and opinion shapers, titioners are waking up to the huge efficiency CGAP is working to help build democratic, inclu- gains they can achieve through technology. Credit sive financial systems all over the entire developing bureaus are being established to track—and world that serve the majority—the poor. potentially reward—the financial behaviors of clients who a few years ago were considered We are finally beginning to see promising exam- beneath notice. ples of a financial democratization that was hard to imagine even a few years ago. In Kazakhstan, Mainstream socially responsible investors are commercial and state savings banks are competing stepping up their investments in microfinance. to deliver microfinance products to the poor. In Ten new funds will be launched in 2004, and the Mongolia, the state agricultural bank restruc- total amount invested is expected to more than tured, privatized, and moved into microfinance. It double. Governments, too, are keeping pace now serves half of all the rural households in with this rapid evolution. More than 50 coun- Mongolia through 350 branches. And it is mak- tries are developing or implementing new micro- ing money. India’s second-largest bank is building finance regulatory frameworks to ensure that a network of thousands of village internet kiosks their poor citizens’ financial assets are protected. CGAP Annual Report 2003 1 LETTER FROM THE DIRECTOR CGAP works to increase the capacity of existing private sectors. And at a global level, we aim to microfinance institutions, to encourage new help build the architecture that will underpin entrants into the sector, and to broker partner- large scale, robust, and healthy financial systems ships that graft the collective wisdom of the for the poor—a supportive legal and policy envi- microfinance industry—how to make uncollat- ronment and ready availability of high quality eralized loans and get paid back—onto institu- financial information. tional models that can reach the poor on a much more massive scale. The next phase of microfinance will succeed as the best of different worlds are integrated: the mission focus from the development origins of “CGAP’s flexible approach—strengthening what microfinance with the efficiencies of the banking needs to be strengthened, building what needs to sector and the force multiplier of commercial be built—is informed by a sense of urgency. More capital. It is deeply exciting to see so much of than a billion people still lack access to basic CGAP’s vision—the dismantling of the walls— financial services.” starting to be realized. But as with any wall that finally comes down, it is not so much the final blow that does the job as the accumulated CGAP’s flexible approach—strengthening what impact of all the blows that came before it. needs to be strengthened, building what needs to be built—is informed by a sense of urgency. Many groups have shared and continue to share More than a billion people still lack access to CGAP’s vision of financial democratization: basic financial services. Our approach is sys- microfinance practitioners, donors, service temic. In developing countries, we believe the providers, governments, and not least, the poor entire financial system should serve the poor themselves. It is CGAP’s honor to serve them all. majority. Our aim is to strengthen a wide range of complementary and competing providers that might serve the poor. In developed countries, we aim to help improve aid effectiveness, addressing systemic problems that hinder donor effective- Elizabeth Littlefield ness, especially in supporting the financial and 2003 2 CGAP Annual Report 2003 Woman handrolling cigars, Santa Rosa de Cupan, Honduras © World Bank Photo Library/Alfredo Srur FINANCIAL SERVICES FOR THE POOR: THE BASICS WHAT IS MICROFINANCE? However prevalent, these mostly informal finan- L ike everyone else, poor people need and cial services currently available to the poor have use financial services all the time. They serious limitations in terms of cost, risk, and con- need financial services to take advantage venience. Moneylenders, for instance, charge of business opportunities, invest in home repairs exorbitant interest rates on loans. Buying supplies and improvements, and meet seasonal expenses on credit is far more expensive than paying cash. (school fees and holiday celebrations, for exam- More often than not, local rotating savings and ple). They also need financial services to prepare credit circles only allow deposits and loans at very for life-cycle events, such as a daughter’s wed- specific time intervals and in strict amounts. A ding, or to cope with emergencies, like the sud- cow is not a divisible asset that can be sold incre- den death of a family wage-earner or a monsoon mentally to meet small cash needs, and it can be that wreaks havoc on their village. Access to stolen, get sick, or die. Lastly, existing financial financial services enables the poor to increase institutions may not offer financial products that income, build assets, and reduce their vulnera- are appropriate to the needs of the poor. bility to external shocks. To address these myriad needs, the poor utilize a “The mostly informal financial services currently wide range of financial services and have done so available for the poor have serious limitations in for centuries. Some poor people are already terms of cost, risk, and convenience.” clients of formal institutions, such as savings and credit cooperatives, government-owned develop- Recognizing the need to extend the poor’s access ment banks, postal banks, commercial banks, to formal financial services is not new. Initially, in and state banks. Most, though, usually lack the 1950s, development projects began to intro- access to the formal financial system and the duce subsidized credit programs targeted at spe- poor, in fact, have developed a variety of finan- cific communities. For example, governments cial relationships. Informal systems—such as and donors provided subsidized agricultural cred- moneylenders, savings clubs, rotating savings it to small and marginal farmers with the goal of and credit associations, and mutual insurance raising productivity and incomes. These subsi- societies—are pervasive in nearly every develop- dized schemes were rarely successful because the ing country. In addition, the poor use livestock funds seldom reached the poor, ending up in the or gold, or similar assets, as a form of savings hands of better-off farmers. Moreover, subsidized that can be cashed in when the need arises or interest rates introduced a culture of non-repay- opportunity knocks. Burying money in the back ment, which in turn made it difficult for lasting yard or stashing it under a mattress are also pop- financial systems to emerge. ular means of savings among the poor. For more specific purposes—for instance, buying fertilizer The general failure of large subsidized credit or seed—they may be able to obtain credit from schemes inspired social entrepreneurs in developing input suppliers or commercial vendors. countries to test alternative ways to offer credit to CGAP Annual Report 2003 5 FINANCIAL SERVICES FOR THE POOR: THE BASICS poor people. Beginning in the 1970s, experimental leaving behind many poor people for whom programs run through non-governmental organi- credit products are not particularly suited. zations (NGOs)—in Bangladesh, Bolivia, and a few other countries—extended tiny loans to groups • The financial needs of the poor extend far of poor women so they could invest in micro-busi- beyond working capital loans to encompass nesses. This type of microenterprise credit was savings, credit, insurance, and money transfer based on solidarity group lending in which every services. Convenient, safe, and secure deposit member of a group guaranteed the repayment of all services are particularly crucial. other members. • NGOs, while essential for conducting research and developing new models, face serious chal- “By the late 1990s, however, a number of limita- lenges in terms of governance, legal frame- tions inherent in the microenterprise credit model works, and cost structures. More importantly, became apparent.” they have generally not reached large numbers of poor people or independence from donors (although there are major exceptions). Throughout the 1980s and 1990s, these NGO- based microcredit programs improved upon the • Institutions with large existing infrastruc- original methodologies and bucked conventional tures, such as commercial and state-owned wisdom about financing the poor. First, it was banks, credit union networks, financial coop- shown that poor people, especially poor women, eratives, and even retail chains, may offer sig- repay their loans. Near-perfect repayment rates, nificant potential to deliver financial services unheard of in the formal financial sectors of most to the poor on a large scale. developing countries, were common among the HOW DOES MICROFINANCE HELP better microcredit programs. Second, the poor THE POOR? were willing and able to pay interest rates that Microfinance allows poor people to protect, allowed microfinance institutions (MFIs) to cover diversify, and increase their sources of income, their costs. Third, the combination of these two which is the essential path out of poverty and features—high repayment and cost-covering inter- hunger. It helps safeguard poor households est rates—enabled some MFIs to achieve long- against their extreme vulnerability. Loans, sav- term sustainability while reaching large numbers ings, and insurance help smooth out income of clients. The promise of microfinance as a strat- fluctuations and maintain consumption levels egy that combines massive outreach, far-reaching even during lean periods. The availability of impact, and financial sustainability makes it financial services acts as a buffer for sudden unique among development interventions. emergencies, business risks, and seasonal slumps CHALLENGES AND LIMITATIONS that can push a family into destitution. By the late 1990s, however, a number of limita- The ability to borrow a small amount of money to tions inherent in the microenterprise credit take advantage of a business opportunity, to buy model became apparent. more food, or to bridge a gap in cash flow can be • Not all poor people run microenterprises. a first step in breaking the cycle of poverty. Experience has shown that the supply-driven Similarly, poor households will use a safe, conven- microenterprise credit methodologies have ient savings account to accumulate enough reached a relatively narrow band of clients, cash to fix a leaky roof or pay for health care. 6 CGAP Annual Report 2003 FINANCIAL SERVICES FOR THE POOR: THE BASICS Microfinance gives the poor the means to fight important to recognize that, in many cases, there the multi-dimensional aspects of poverty, and are better tools for poverty alleviation than empowers them to make their own choices and microcredit. The destitute who do not have any chart their own path out of poverty (see box). source of income are not appropriate clients for microcredit, and might be better served initially Of course, microfinance on its own is not suffi- through targeted safety-net or grant programs. cient to reduce poverty. Alleviating poverty Successful models in a few countries demonstrate requires a comprehensive approach with concert- that very poor households are better able to ed efforts on many fronts. Financial services for assume the risks that microfinance entails after the poor should be complemented by other inter- participating in grant and skills development ventions, such as access to education, adequate programs that enable them to build assets slowly physical infrastructure, and fair markets. It is also and develop their skills. ■ Box 1. Microfinance, Poverty Reduction, and the Millennium Development Goals (MDGs) The international community has committed to achieving the Millennium Development Goals by 2015. The targets of the MDGs are: 1) Eradicate extreme poverty and hunger (reduce by half the number of people living on less than $1 a day) 2) Achieve universal primary education 3) Promote gender equality and empower women 4) Reduce child mortality 5) Improve maternal health 6) Combat HIV/AIDS, malaria, and other diseases 7) Ensure environmental sustainability 8) Develop a global partnership for development Microfinance contributes directly to the MDGs by giving the poor more power and choice to pursue their own strategies for escaping poverty. Because microfinance services can be delivered sustainably within relatively short periods of time, these benefits can become permanently available, well beyond the duration of donor or government programs that rely on continuous subsidies. Various studies, both quantitative and qualitative, show the impact of microfinance on several aspects of poverty and hence the MDGs: • Eradicate extreme poverty and hunger. Extensive evidence demonstrates that microfinance helps to reduce poverty by increasing incomes, allowing the poor to build assets. • Achieve universal education. Households with access to microfinance spend more on education than non-client households. Increased school attendance and the provision of educational materials are widely reported in microfinance households. Participation in credit and savings programs has enabled many families to send several children at a time to school and has reduced drop-out rates in higher primary grades. • Promote gender equality and women’s empowerment. Microfinance clients are overwhelmingly female. Microfinance has been widely credited for empowering women by increasing their contributions to household income, the value of their assets, and control over decisions that affect their lives. • Reduce child mortality, improve maternal health, and combat disease. Microfinance contributes to improved nutrition, housing, and health, especially among women clients. CGAP Annual Report 2003 7 Local women’s group learning about math, money, and how to qualify for a loan, Bangladesh © 2002 World Bank Photo Library/Shehzad Noorani ABOUT CGAP tions and donors, developing a performance- M ore than a billion poor people in the world lack access to basic financial based approach to funding microfinance institu- services essential to managing their tions, disseminating best practice information, precarious lives. The Consultative Group to and funding a small number of promising micro- Assist the Poor (CGAP) is a consortium of 28 finance institutions and networks. public and private development agencies work- ing together to expand access to financial servic- “The mission of CGAP is to help create es for the poor in developing countries. The mis- sustainable financial services for the poor sion of CGAP is to help create sustainable finan- on a large scale.” cial services for the poor on a large scale. Because of its unique membership structure and large network of worldwide partners, CGAP has At the end of the three years, CGAP was become an important convening platform to renewed for another five years (1998–2003). generate global consensus on standards and best This second phase built on the achievement of practices, and to serve as a resource center for the CGAP I, but more explicitly emphasized institu- microfinance industry as a whole. tion building and poverty outreach. During this period, significant effort was spent on building CGAP serves four groups of clients: develop- the capacity of microfinance institutions ment agencies; financial institutions that serve through training and technical tools. In addi- the poor, including specialized microfinance tion, greater emphasis was placed on finding institutions (MFIs); government policy makers mechanisms for extending microfinance to the and regulators; and private service providers, very poor and for assessing the impact of micro- such as auditors, rating agencies, and informa- finance on their lives. tion technology specialists. To each of these client groups, CGAP provides technical advice, In September 2002, following an independent training, research and development, informa- external review, CGAP’s member donors voted tion, and funding for innovations. to extend CGAP’s work for a third phase, 2003–2008. This five-year term, which began in HISTORY AND EVOLUTION July 2003 with the new fiscal year, will directly CGAP was created in 1995 as a three-year pro- address the challenge of “scaling up” microfi- gram to work with microfinance practitioners and nance by broadening and deepening financial donors to bring microfinance into the main- services for the poor. stream. From 1995–1998, CGAP played a pivotal role in developing a common language for the OUR VISION industry, catalyzing the move toward best practice CGAP’s vision is a world in which microfinance performance standards, and building consensus is no longer viewed as a marginal or niche sec- among its varied stakeholders (in particular on the tor—a world where poor people are considered importance of financial sustainability in microfi- legitimate clients of their country’s financial sys- nance). Much attention was placed on defining tem. All poor people should have permanent and setting standards for microfinance institu- access to diversified financial services, delivered CGAP Annual Report 2003 9 ABOUT CGAP by a wide array of institutions and through many ties, poor people use financial services to different channels. Microfinance is an integral invest in health and education, manage part of a competitive and diverse financial sys- household emergencies, plan for future tem that fosters innovation and growth in all expenditures, receive funds from relatives liv- segments of society. ing elsewhere, and meet a wide variety of other cash needs. To respond to these various CGAP STRATEGY AND PRIORITIES needs, an increasingly broad range of finan- cial services is being designed. New prod- To achieve this vision, CGAP works in partnership ucts—from flexible door-to-door deposit with various actors at international, regional, collection services, domestic money trans- national, and community levels to pursue the fol- fers, crop and health insurance, and others— lowing five key priorities. (See pages 18–23 for the can help meet the needs of various segments institutions with which CGAP has worked.) of the poor, so more people, both the very poor as well as the better-off small enterprise • Develop a wide range of financial and owners who also lack access to capital, can be non-financial institutions serving the reached. poor. Expanding microfinance to a billion poor people requires the engagement of • Improve the quality and availability of many complementary types of financial information on microfinance providers. intermediaries and distribution systems, each A sound financial system for the poor serving a distinct market segment. While requires accurate and comparable infor- microfinance institutions have played a cru- mation on financial institutions’ perform- cial role in demonstrating that the poor make ance. Regulators, auditors, domestic and excellent clients, the vast majority of MFIs international lenders and investors, and operate as non-government organizations indeed poor clients need this information in (NGOs) and are hindered from achieving order to make sound decisions. Transparency massive outreach by their small size, high involves developing accurate information at cost structures, and other constraints. If various stages of the information chain, from microfinance is to be significantly scaled up, the initial production of data by the financial the NGO model needs to be complemented institutions themselves to external audits and by other institutional approaches. There is an credit ratings, to supervision. urgent need to explore alternative models. In particular, the microfinance community • Enhance the policy and regulatory frame- needs to tap into the existing large-scale work. As formal financial systems begin to delivery systems and infrastructures of insti- integrate finance for poor people, policy and tutions such as commercial and state-owned legal frameworks will need to adapt. banks, credit unions and other cooperatives, Experience shows that the government can postal saving banks, and even retail chains. play a positive role in microfinance as an enabler and facilitator, but not as a direct • Reach poor and unserved clients and ensure service provider. Unfortunately, governments a positive impact on their lives. Much of can sometimes hinder sustainable financial microfinance to date has focused on credit services for the poor through inappropriate (loans) and in particular on microenterprise laws and policies (e.g., interest rate ceilings) credit. However, not all poor people are or market distortions, such as those brought entrepreneurs, and their financial needs vary about by government-directed subsidized widely with their circumstances. In addition lending to specific target groups. to taking advantage of business opportuni- 10 CGAP Annual Report 2003 ABOUT CGAP • Improve donor effectiveness. At an esti- foundations. It is chaired by Nemat Talaat mated expenditure rate of at least $500 mil- Shafik, Vice President for the Infrastructure lion per year, development agencies remain Network at the World Bank. the most important external (non-domestic) source of funding for financial services for Executive Committee (Excom). The Executive the poor. All 28 member donor agencies of Committee functions as CGAP’s executive gov- CGAP have agreed to joint guidelines of erning body. The Executive Committee supports good practices. However, they confront the Operational Team with strategic guidance numerous constraints, both internal and and approves CGAP’s annual budget and work- external, to applying these prac- tices consistently. As a result, donor funding is not always effec- tive. Donors can contribute to greater impact by: CGAP - Ensuring appropriate, Consultative Group of specialized technical Member Donors oversight of their projects CGAP - Identifying and work- Investment CGAP Committee ing in their area of Executive comparative advantage Committee - Taking more risks on promising, but not yet proven, institutions and mechanisms - Adjusting their country-level program- ming to support global or multi-country CGAP initiatives on training, common reporting Operational standards, and the application of technol- Team ogy to financial services. GOVERNANCE STRUCTURE CGAP is housed at the World Bank but operates as an independent entity. It has its own governance structure, consisting of the End Clients Consultative Group of member donors, the Executive Committee, the Investment Committee, and through fiscal year 2003, Donor Financial Service Staff Providers the Policy Advisory Group. Consultative Group of Member Donors (CG). The CG constitutes the membership Governments & Industry Support and governance body of CGAP. The CG is Supervisors Providers composed of representatives of 28 bilateral and multilateral development agencies and CGAP Annual Report 2003 11 ABOUT CGAP Box 2. CGAP Consultative Group of Member Donors (July 1, 2003) BILATERAL MEMBERS Australia Kieran Donaghue Belgium Philippe Gerard, Charles Bois d’Enghien Canada Jean-Claude Lorin, Jonathan Rothschild, Doris Wong Denmark Niels Richter, Jorn Olesen, Jesper Ravn Hansen Finland Tuukka Castren France Anne Clerc, Martha Stein-Sochas, Jean Bruschi Germany Roland Siller, Martin Hagen, Ulrike Haupt, Dirk Steinwand Italy Sebastiano Salvatori, Daniele Di Ceglie Japan Kiyo Oi, Teruhisa Oi, Kazunori Hosoya, Miwa Miyata Luxembourg Georges Heinen, Arsene Jacoby, Thierry Lippert Netherlands Johan de Waard, Coen van Beuningen Norway Hege Gulli3 Sweden Camilla Bengtsson Switzerland Hansruedi Pfeiffer United Kingdom David J.N. Stanton2 United States Kate McKee MULTILATERAL MEMBERS African Development Bank (AfDB) Mohamed Mah’moud, Abdirahman Beileh, Ross Croulet Asian Development Bank (AsDB) Jan van Heeswijk, Nimal Fernando3 European Bank for Reconstruction Elizabeth Wallace and Development (EBRD) European Commission (EC) Odoardo Como, Xavier Mommens, Andreas Schwartz Inter-American Development Bank (IDB) Alvaro Ramirez International Bank for Reconstruction Nemat Talaat Shafik,1 Carlos Cuevas,3 William F. Steel and Development (World Bank) International Fund for Agricultural Henri Dommel Development (IFAD) International Labour Organization (ILO) Bernd Balkenhol, Craig Churchill United Nations Development Program Peter Kooi, John Tucker (UNDP) United Nations Capital Development Fund (UNCDF) FOUNDATIONS Argidius Foundation Jim Shetler, Charles Shaw Ford Foundation Frank DeGiovanni3 1 Chair, Consultative Group 2 Chair, Excom 3 Member, Excom (See page 13 for a list of constituencies.) 12 CGAP Annual Report 2003 ABOUT CGAP plan. One of its key roles is to work with the The Policy Advisory Group (PAG). The Policy Consultative Group to carry out the CGAP III Advisory Group was made up of eight distin- strategy. guished microfinance practitioners and experts. The PAG supported and advised the CG and the In April 2003, the Executive Committee was CGAP Operational Team on the strategy and restructured to include leading microfinance agenda of CGAP, contributing their on-the- practitioners and representatives of member ground knowledge, experience, and valuable donors, thus becoming a governing council of practitioner insights. Their contributions were stakeholders rather than shareholders. The new most notably felt in developing poverty indica- Excom is comprised of nine members: four are tors for microfinance institutions and donors; elected by the CG constituencies which they rep- building the microfinance sector in postwar resent; one is appointed by the World Bank; and Afghanistan; testing CGAP technical tools aimed the remaining four are microfinance industry at improving MFIs’ efficiency; and developing leaders representing different perspectives in the profiles of microfinance networks. Pilar Ramirez, sector. Camilla Bengtsson from the Swedish president of Centro de Fomento a Iniciativas International Development Agency (Sida) served Economicas in Bolivia, served as Chair of the as chair of the Executive Committee in fiscal year PAG for fiscal year 2003. In April 2003, the PAG 2003. David Stanton of the UK Department for was integrated into the Executive Committee in International Development (DFID) was elected a move aimed at strengthening the role of micro- to chair the new Executive Committee beginning finance practitioners in developing countries in July 1, 2003, the start date of both the new fiscal the governing council of CGAP. year and CGAP III. Box 3. Executive Committee of the Consultative Group (Elected April 2003) Members David J.N. Stanton, Chair (UK), AfDB, Belgium, European Commission, France, Luxembourg, The Netherlands, United Kingdom Fazle Hasan Abed (BRAC), Microfinance Industry Brian Branch (WOCCU), Microfinance Industry Carlos Cuevas (World Bank), World Bank Frank DeGiovanni (Ford Foundation), IFAD, ILO, UNDP, UNCDF, Argidius Foundation, Ford Foundation Nimal Fernando (AsDB), ADB, Australia, Canada, IDB, Japan, United States Hege Gulli (Norway), Denmark, EBRD, Finland, Germany, Italy, Norway, Sweden, Switzerland Carlos C. Labarthe (Financiera Compartamos), Microfinance Industry Marilou van Golstein (Triodos Bank), Microfinance Industry Elizabeth Littlefield, CGAP CEO, ex officio Former Excom Bernd Balkenhol Camilla Bengtsson Nimal Fernando Jean-Claude Lorin Frank DeGiovanni David J.N. Stanton Johan De Waard CGAP Annual Report 2003 13 ABOUT CGAP Investment Committee. CGAP has a small invest- effectively as possible. The Investment Committee ment fund that provides grants to promising insti- consists of senior World Bank Group staff with tutions and initiatives. Acting on behalf of the expertise in the areas of financial sector develop- Consultative Group of member donors, the ment, banking and capital markets, rural develop- Investment Committee is the fiduciary oversight ment, social protection, and legal frameworks. body for that fund. The Investment Committee reviews investment proposals and ensures that CGAP Operational Team. The CGAP Team is CGAP’s investments support the strategic priori- the operational arm of CGAP and implements ties set by the Consultative Group and leverage the strategy endorsed by the Consultative Group. CGAP’s comparative advantage and resources as The Operational Team is headed by Director and Box 4. CGAP Policy Advisory Group (Fiscal Year 2003) Members Pilar Ramirez, Chair, Centro de Fomento a Iniciativas Económicas (FIE), Bolivia Fouad Abdelmoumni, Association Al Amana pour la Promotion des Microenterprises, Morocco Fazle Hassan Abed, Bangladesh Rural Advancement Committee (BRAC), Bangladesh Shafiqual Haque Choudhury, Association for Social Advancement (ASA), Bangladesh David Gibbons, CASHPOR, Inc., Malaysia Carlos C. Labarthe, Financiera Compartamos, Mexico Alex A. Silva, Profund Internacional, Costa Rica John de Wit, Small Enterprise Foundation, South Africa Former Members Muhammad Yunus (former Chair), Grameen Bank, Bangladesh Kimanthi Mutua (former Chair), K-REP Bank, Kenya Kamardy Arief, formerly with Bank Rakyat Indonesia Nancy Barry, Women’s World Banking, New York Ela Bhatt, Self-Employed Women’s Association (SEWA), India Renée Chao-Beroff, Centre International de Développement et de Recherche (CIDR), France Martin Connell, Calmeadow Foundation, Canada Rosalind Copisarow, formerly with Fundusz Mikro Vijayalakshmi Das, Friends of Women’s World Banking (FWWB), India Klaas Kuiper, Agency for Business Development Maria Nowak, Association pour le Droit à l’Initiative Economique (ADIE), France Maria Otero, ACCIÓN International, Washington, D.C. Alpha Ouédraogo, Centre d’Innovations Financières, Burkina Faso Nabil El Shami, Alexandria Business Association, Egypt Sizwe Tati, Khula Finance Enterprise Limited, South Africa Lawrence Yanovitch, Foundation for International Community Assistance (FINCA), Washington, D.C. Kerfalla Yansane, Banque Centrale de la République de Guinée, Guinea 14 CGAP Annual Report 2003 ABOUT CGAP Box 5. CGAP Investment Committee (July 2003) Jean-François Rischard, Chair, Vice President for Europe, World Bank Assaad Jabre, Alternate Chair, Vice President of Operations, International Finance Corporation Elizabeth Adu, Chief Counsel, Africa Practice Group, Legal Division, World Bank Lynn Bennett, Advisor, Social Development Department, World Bank Carlos Cuevas, Lead Financial Economist, Financial Sector Department, World Bank Claudia Morgenstern, Senior Advisor, International Finance Corporation Lynne D. Sherburne-Benz, Country Program Coordinator, Southeast Asia and Mongolia Group, World Bank Antony Thompson, Lead Financial Sector Specialist, Africa Financial Sector, World Bank Table 1. CGAP Member Donor Budget Commitments, Fiscal Years 2002-2004* (in US $) FY2002 FY2003 FY2004 World Bank 7,125,000 6,725,000 6,325,000 African Development Bank 100,000 100,000 Australia 668,689 338,300 Argidius Foundation 100,000 100,000 100,000 Asian Development Bank 250,000 250,000 Belgium 219,125 295,464 354,349 Canada 323,576 318,188 382,702 Denmark 360,317 423,986 423,986 European Commission 500,000 Ford Foundation 200,000 200,000 200,000 Finland 250,579 293,328 France 133,980 162,383 337,830 Germany 354,880 241,780 284,150 IFAD 300,000 Italy 462,332 584,175 Japan 300,000 300,000 300,000 Luxembourg 310,641 409,780 Netherlands 406,224 401,277 400,000 Norway 334,934 401,983 409,908 Sweden 281,653 380,928 Switzerland 399,975 399,973 400,000 United Kingdom 400,000 399,972 400,000 United States 800,000 Total 12,631,326 12,451,513 12,543,508 * Includes contributions and pledges to CGAP’s core budget in the year they were designated. Italics - pledged but not received. CGAP Annual Report 2003 15 ABOUT CGAP Chief Executive Officer Elizabeth Littlefield (see increase the transparency of the poverty lev- page 17 for the organizational chart, and Annex 2 els of microfinance clients and to assess the for staff biographies.) The Operational Team con- impact of microfinance on the poor. sists of five technical and three functional sub- teams. The Operational Team is based in • The Industry Team promotes transparency Washington, D.C., with an office in Paris, France, of financial information on microfinance that focuses on donor support. providers and the exchange of knowledge within the microfinance industry. • The Financial Institutions Team supports microfinance providers through training, • The Policy Team focuses on improving the appraisals, and technical services. The team policy and regulatory environment for also explores alternative means of delivering microfinance by increasing awareness among financial services to the poor, primarily government policymakers, developing new through action research on different models, information on policy and regulatory issues, and funds innovative solutions and programs. and providing country-specific consultations. • The End-Client Team seeks to deepen the • The Donor Team exists to improve donor outreach of microfinance through a wider practices in microfinance. It builds donor range of financial services to poorer clients. staff skills and provides tailored services to a The team also develops technical tools to broad range of donor agencies. Yemeni farmer ploughing field with camel near village of Yarim on the Sana’s-Taiz © 2002 World Bank Photo Library/Bill Lyons 16 CGAP Annual Report 2003 ABOUT CGAP Figure 1. CGAP Staff Organizational Chart CGAP Annual Report 2003 17 ABOUT CGAP • The Communications and Publications caused by a $400,000 reduction in the World Team disseminates microfinance knowledge Bank’s contribution—part of CGAP’s strategy to to a wide variety of audiences. It produces and reduce its financial dependence on the World disseminates CGAP’s key publications and Bank—and the fact that three donors did not messages via paper and electronic media. pledge for fiscal year 2003. However, the decrease in fiscal year 2003 donor commitments • The Budget Team manages the accounting was offset by first-time pledges from two multi- of CGAP’s trust funds, produces grant lateral institutions, the African Development reports, and develops the CGAP budget. It Bank and IFAD, and increased contributions tracks expenditures and income against pro- from other donors. jections, and processes financial transactions. DONOR COMMITMENTS TO CGAP PARTNERSHIPS CGAP activities are funded from contributions All of CGAP’s work is done in close consultation from its member donors. Donor support and partnership with a wide range of stakehold- remained steady in fiscal year 2003 with contri- ers in the microfinance industry, including butions and pledges to the core fund totaling microfinance practitioners, networks, member $12,545,648. This represented a decrease of donors, government policy makers, private serv- $85,678 from fiscal year 2002. This decrease was ice providers, and other key stakeholders. ■ Table 2. CGAP Partnerships (as of October 2003) 2CS, Sénégal Agricultural and Rural Development for ACCIÓN Catanduanes (ARDC), The Philippines ACCIÓN Gateway Fund Agrocapital, Bolivia ACCIÓN Latin America Bridge Fund Ahantaman Rural Bank, Ltd., Ghana Acclaim Africa, Ltd., Uganda AISFD-CI, Côte d’Ivoire ACEP, Sénégal Al Amana, Morocco ACME, Haiti ALAFIA, Bénin ACNABIN, Bangladesh Al Majmoua, Lebanon Activists for Social Alternatives (ASA), India Alterfin ADMIC, México Alter Modus, Yugoslavia ADOPEM, Dominican Republic Alternative Credit Technologies, USA AFCAP, Eastern/Southern Africa Amhara Credit and Saving Institution (ACSI), AFMIN, Côte d’Ivoire Ethiopia Africa International Financial Holdings, LLC ANIP/MF, Niger African Rural and Agricultural Credit Association APIDEC, Burkina Faso (AFRACA) APIFM, Madagascar Africap, Sénégal APIM, Mali Aga Khan Foundation, USA APIMFT, Togo Agencia para el Desarrollo y Recursos APMAS, India Asistenciales (ADRA Perú), Perú Apoyo Integral S.A. de C.V., El Salvador 18 CGAP Annual Report 2003 ABOUT CGAP Table 2. CGAP Partnerships (as of October 2003) Appui au Développement Autonome (ADA), BosVita, Bosnia-Herzegovina Luxembourg BRAC, Bangladesh AQUADEV, Burkina Faso BRI-International Visitors Program, Indonesia Arabian Microfinance Network BTFF, Kyrgyzstan AREGAK, Armenia Buusaa Gonofaa MFI, Ethiopia Argidius Foundation, The Netherlands Cabinet Remix, Sénégal Asian Institute of Management CAF, Globl ASSIST, India Caisse d’Epargne et des Chèques Postaux Asociación Cristiana de Jóvenes de Nicaragua (CECP), Côte d’Ivoire (YMCA), Nicaragua Caja Los Andes, Bolivia Asociación de Consultores para el Desarrollo de la Calificadora de Riesgos WOCCU, Guatemala Pequeña, Mediana y Microempresa, Calvert Foundation, USA Nicaragua Cambodia Community Building, Cambodia Asociación Mexicana de Uniones de Crédito del Cambodia Rural Economic Development Initiatives Sector Social, México for Transformation (CREDIT), Cambodia Asociación PILARH (Proyectos e Iniciativas CAPAF, Francophone Africa Locales para el Autodesarrollo Regional de CARD Bank, Inc., The Philippines Honduras), Honduraas CARE, USA Association d’Entraide Professionnelle (AEP), CASHPOR, Malaysia Lebanon Catholic Relief Service, Guatemala Association of Ethiopian Microfinance Institutions, Catholic Relief Services, Head Office Ethiopia Cebu People’s Multi-purpose Cooperative, Association Marocaine Solidarité sans Frontières The Philippines (AMSSF), Morocco CEAPE-MA, Brazil Association pour la Promotion des Groupements CEAPE-PB, Brazil Agricoles, Togo CEAPE-PE, Brazil Awash Abitew (ADCSI), Ethiopia CEAPE-SE, Brazil Bai Tushum Financial Foundation, Kyrgyzstan CECAMO-ASETECO, México Banco da Familia (Associacao Brasileira para o Centenary Rural Development Bank, Uganda Desenvolvimento da Familia), Brazil Center for Microfinance, Nepal Banco do Nordeste, Brazil (Central) Bank of The Philippines BancoSol, Bolivia (Central) Bank of Tanzania Bankakademie, Germany (Central) Bank of Uganda Bank Dagang Bali, Indonesia (Central) Bank of Zambia Bankers Realm, Kenya Centre for Self-Help Development, Nepal Banking with the Poor Network (BWTP), Australia Centre International de Développement et de Banque Nationale de Développement Agricole, Recherche (CIDR), France Mali CEP Fund, Vietnam BASIX, India CERISE Network, France BCEAO (West African Central Bank), West Africa CFTS (Cashpor), India Beehive, South Africa Charity Humanitarian Center “Abkhazeti,” Perú Besa Foundation, Albania China Microfinance Training Center, China BIO Cities Alliance, USA Blue Orchard, Luxembourg Citigroup Foundation International, Global Bolivian Superintendency of Banks, Bolivia CGAP Annual Report 2003 19 ABOUT CGAP Table 2. CGAP Partnerships (as of October 2003) CMAC Huancayo, Perú EDA Rural Systems, South Asia CMAC Santa S.A., Perú EDPYME Confianza, Perú CMAC TACNA S.A., Perú EDPYME Crear Tacna, Perú CMM Bogotá, Colombia EDPYME Nueva Visión, Perú CMM Medellin, Colombia EDPYME Edyficar, Perú CNEP Bank, Algeria EMerge, USA COBIS, USA El Mohassil, Egypt Community Action for Rural Development (CARD), Ennatien Moulthan Tchonnebat, Cambodia India ESPOIR (Fundacion para el Desarrollo Integral), Compartamos, México Ecuador Conservation Coffee Program with Conservation Etimos, Italy International, México Facet B.V., The Netherlands Cooperativa de Ahorro y Crédito Jardin Azuayo FAO Microbanker, Italy (COAC JA), Ecuador FATEN, Palestine Cooperative Housing Foundation, Romania Faulu Uganda Limited, Uganda Cordaid, The Netherlands FECECAM, Bénin CRECER, Bolivia Féderation des Caisses Populaires du Burkina CrediFundes, Panama (FCPB), Burkina Faso Credit Development Forum (CDF), Bangladesh Femme Développement Enterprise en Afrique Creditosud, Global (FDEA), Sénégal CRISIL, India FENECOAC (Guatemalan Credit Union CSBF, Madagascar Federation), Guatemala CUBIS, UK Fern Computer, Ireland CUMIS Plus, Trinidad FIE S.A., Bolivia CYSD, India FIG, Global Development Alternatives Inc., USA FINCA International, USA DAI/FINNET, Haiti FinComun, México Danida, Denmark FINDESA, Nicaragua Danish Refugee Council/Micro Development Fund, FinMark, South Africa Serbia and Montenegro Fineline Systems & Management, Ltd., Kenya Day, Berry, and Howard Foundation, USA Fin Rural, Bolivia DEG, Germany Fitch Bolivia, Bolivia Deloitte & Touche - ILA Africa, South Africa FMM Bucaramanga, Colombia Deutsche Bank, Germany FMM Popayan, Colombia Development Bank of South Africa FMO, The Netherlands Développement International Desjardins, Canada FNMF, France D-FRIF (Fundación Diaconia), Bolivia Fondation Zakoura, Morocco DIS, Morocco FONDEP, Morocco District Central Cooperative Bank, Ltd. (DCCB), Fondesa, Dominican Republic India Fondo de Desarrolla Local (FDL), Nicaragua Doen Foundation, The Netherlands Fondo Financiero Privado para el Fomento a Doveriye, Russia Iniciativas Económicas S.A. (FIE), Bolivia Ebony Consulting International, South Africa FORA, Russia Ecumenical Church Loan Fund International Ford Foundation, USA (ECLOF), Switzerland 20 CGAP Annual Report 2003 ABOUT CGAP Table 2. CGAP Partnerships (as of October 2003) Foundation for Development Cooperation, Australia International Training Solutions, South Africa Freedom from Hunger, USA IPC/Frontier Finance Friends of Women’s World Banking, India IRIS, University of Maryland, USA Fundación WWB-Colombia, Colombia Jamaican Cooperative Credit Union League, Jamaica Fundación Adelante, Honduras Kadale Consultants, Ltd., Malawi Fundación Dominicana de Desarrollo (FDD), KAFO-JIGINEW, Mali Dominican Republic KASHF Foundation, Pakistan Fundación Génesis, El Salvador Katalysis Partnership, USA Fundación Mundial de la Mujer Bucaramanga, Kazakhstan Community Loan Fund (KCLF), Colombia Kazakhstan FUNDAPRO, Bolivia Kraban Support Foundation, Ghana Funding for the Poor Cooperative, China Kredits, USA FUNED, Honduras K-Rep Advisory Services Limited, Kenya Gasha MFI, Ethiopia Kyrgyz Agricultural Finance Corporation, Kyrgyzstan General Union of Voluntary Societies (GUVS), Jordan LA-CIF, Canada Global Alliance, India Lafayette Participations, Horus Banque et Finance, Grameen Foundation, USA France Grameen Koota, India Lift Above Poverty Organization, Nigeria Grameen Trust, Bangladesh Local Enterprise Assistance Program, Liberia GRAPAD, Benin Loan Performer, Uganda Groupe de recherche et d’echange technologique M & N Associates Limited, Zambia (GRET), France MAFF, Albania Hattha Kakselar, Ltd., Cambodia Masawe Ernst & Young, Tanzania Heifer Project International, China M-CRIL, India HIVOS, The Netherlands Meklit MFI, Ethiopia Horus, France Mennonite Economic Development Associates Horizonti, Macedonia (MEDA), USA IASC, India Mercy Corps, Indonesia ICMIF, UK Metemamen MFI, Ethiopia Indian Institute of Management-Ahmedabad, India Mibanco, Panamá Indian Institute of Management-Bangalore, India MicroBanking Bulletin, USA Interchurch Organization for Development Microcredit Summit, Global Cooperation (ICCO), The Netherlands Microfin, USA International Justice Mission, India Microfinance Academy, Cameroon International Monetary Fund, USA Microfinance Centre for Eastern Europe and New International Network of Alternative Financial Independent States, Poland Institutions (INAFI), Global MicroFinance Group, Pakistan Internationale Micro Investitionen AG/ Microfinance Information eXchange (MIX), USA Internationale Projekt Consult (IMI/IPC), Germany MicroFinance Network, Global INDNET, India Microfinanza, Italy Indonesia Central Bank, Indonesia MicroFund for Women, Jordan Institute for Motivating Self-Employment, India MicroRate, USA Institute of Development Studies, UK MicroSave-Africa, Kenya Institute of Rural Management, India Microvest, USA International Capital Corporation, South Africa CGAP Annual Report 2003 21 ABOUT CGAP Table 2. CGAP Partnerships (as of October 2003) Millennium Consulting Group, Malawi PARTNER, Bosnia-Herzegovina Misión Alianza, Perú Partneri Shqiptar ne Mikrokredit (PSHM), Albania Moldova Microfinance Alliance, Moldova PDBF, Bangladesh Naropa University, USA Peace MFI, Ethiopia National Association of Business Women, People’s Reconstruction Movement, India Tajikistan Perbarindo, Indonesia National Rural Support Program, Pakistan Philippine Network for Helping the Hardcore Poor, Nav Gharat Jagriti, India Inc., The Phillipines Netherlands Organization for International PHILNET, The Philippines Development Cooperation (NOVIB), The PKSF, Bangladesh Netherlands PlaNet Finance, France Network, Ltd., Uganda Positive Investment Initiative, Switzerland Nirdhan Utthan Bank Limited, Nepal Postna Banka Slovenijie, Slovenia Norwegian Agency for Development Cooperation Pradan, India (NORAD), Norway PriceWaterhouseCoopers, Inc., South Africa Norwegian Ministry of Foreign Affairs, Norway PRIDE Formation, Guinea Nsoatreman Rural Bank, Ghana Pride Management Services, Kenya Nyesigiso, Mali PRIDE Tanzania, Tanzania Office des Postes et Télécommunications, Benin Prism Research, Bosnia-Herzegovina Oikocredit, The Netherlands Prisma, Nicaragua The OPEC Fund, Austria Prisma, Perú Open Society Institute, USA PRIZMA, Bosnia-Herzegovina Open Source Institute, USA Profund, Costa Rica Opportunity International, Global Pro Mujer, Bolivia Opportunity International Microcredit Fund Pro Mujer, USA Opportunity Microcredit Romania, Romania Prodem, Bolivia Opportunity Microfinance India, Ltd. (OMI), India Project Dungganon (NWTF), The Philippines Organización de Desarrollo Empresarial PROMUC, India Femenino, Honduras Pt. Ukabima, Indonesia Organizational Development Consulting, Ltd., Punla sa Tao Foundation, The Philippines Uganda RaboBank, The Netherlands PACEF, Cameroon Rashtrya Seva Samithi, India Pacific Credit Rating, Perú REDCAMIF, Central America PACT, Myanmar, Nepal Red Cross, Switzerland PADME (Association pour la Promotion et l’Appui au Développement des Microenterprises), Reserve Bank of India, India Bénin Results, USA Paglaum Multi-purpose Cooperative, The RFF, Albania Philippines Rockdale Foundation, USA Pakistan Microfinance Network Rural Finance Corporation, Moldova Pakistan Poverty Alleviation Fund, Pakistan Rural Finance Facility, South Africa Pally Bikash Kendra (PBK), Bangladesh Rural Reconstruction Centre (RCC), Bangladesh Panamanian Superintendency of Banks, Panamá Russian Women Microfinance Network 2, Russia Parliament of Turkey, Planning and Budget Sa-Dhan, India Committee SAF2000, Costa Rica 22 CGAP Annual Report 2003 ABOUT CGAP Table 2. CGAP Partnerships (as of October 2003) Santa Fe de Guanajuato, México TSPI Development Corporation, The Philippines Sarona Global Investment Fund Uganda Public Accountant Association, Uganda Save the Children International, USA Microfinance Donor Group, Uganda SEEDS, Sri Lanka UMUCS, México SEF, South Africa Union des Mutuelles du Partenariat pour la SEEP (Small Enterprise Education & Promotion), Mobilisation de l’Epargne et le Crédit au Global Sénégal (UM-PAMECAS), Sénégal Self-Employed Women’s Association (SEWA), US General Accounting Office, USA India Unitus, USA SENABEL, Middle East/North Africa University of Natal, South Africa Serviamus Foundation, The Philippines Universal Postal Union (UPU) SHARE, India University of Bath, UK Shorebank Advisory Services (ShoreCap), USA University of Pretoria, South Africa Sidama MFI, Ethiopia University of Sussex, UK SIDI, Guatemala UPAP, Pakistan Sinapi Aba Trust, Ghana VimoSEWA, India SKDRDP, India Visión S.A. de Finanzas E.C.A., Paraguay Small Enterprise Development Journal, UK Vital Finance Bénin, Bénin Small Enterprise Foundation, South Africa Vulindlela, South Africa Small Farmer Cooperatives, Ltd., Nepal Washington University in Saint Louis, USA Small Industries Development Bank of India Weidemann and Associates, USA (SIDBI), India Wisdom MFI, Ethiopia SNEHA, India Women’s World Banking International, USA Soft Corporación, Guatemala Women’s World Banking Global Network for Software Strategies, Kenya Banking Innovation (WWB-GNBI) South Africa Post Office, Postbank, South Africa World Council of Credit Unions (WOCCU), USA South Asia Research Society (SARS), India World Council of Credit Unions/Freedom from Spandana, India Hunger, Ecuador Specialized Financial and Promotional Institutions World Relief International, USA (SFPI), Ethiopia World Savings Bank Institute (WSBI), Global State Bank of Pakistan World Vision International, USA Swabi Women Welfare Society (SWWS), Pakistan XacBank, Mongolia Swayamkrushi Women’s Development Mutually Zakoura Foundation, Morocco Aided Cooperative Thrift (SWC), India Zambuko Trust Ltd, Zimbabwe Swedish International Development Cooperation Agency (Sida), Sweden Swiss Agency for Development and Cooperation, Switzerland Tanzania Postal Bank, Tanzania Taytay Sa Kauswagan, Inc., The Philippines Temir Bank, Kazakhstan Tenemos, UK Thaneakea Phum, Cambodia Triodos, The Netherlands CGAP Annual Report 2003 23 Customers in line at bank window, Bolivia © World Bank Photo Library STRENGTHENING A DIVERSITY OF FINANCIAL INSTITUTIONS SERVING THE POOR tions as diverse as postal savings banks, state agri- B uilding financial systems for the poor requires the deployment of a wider range cultural and development banks, rural banks, of institutional models in order to credit unions, and commercial banks. However, achieve the scale and sustainability that will the study also indicates that the vast majority of make a durable impact on poverty. There is an these institutions provide only one type of finan- urgent need both to strengthen and expand the cial service, are not well adapted to the needs of outreach of effective microfinance NGOs, and the poor, and continue to require substantial lev- to develop new delivery channels. In fiscal year els of operating subsidy. In addition, the study 2003, CGAP undertook several initiatives to shows that relatively little microfinance pene- develop new distribution channels and signifi- trates down to the poorest 25 percent of any cantly scale up the provision of financial services country’s population. to poor people. Foreign Investment in Microfinance. As part INDUSTRY STOCKTAKING of its efforts to assess the supply and demand gap A first step in this strategy is to take stock of who in microfinance, CGAP conducted a study on currently receives financial services from which foreign capital in microfinance programs. types of institutions, which segments of the poor Preliminary data show that the share of foreign remain unserved or underserved, and where commercial sources in the global microfinance opportunities exist for expansion and diversifica- portfolio is small, relative to domestic savings tion. Stocktaking is critical at this juncture and loans and international donors’ funds, but is because information on financial services for the growing rapidly. Foreign investment in microfi- poor is not available on a global, regional, or nance from socially responsible investors is even a national scale. In fiscal year 2003, CGAP expected to double between 2003 and 2004. carried out a number of research initiatives that collectively will help the industry better under- Regional Review of Microfinance. In collabo- stand its current position and likely trends. ration with the Open Society Institute and USAID, CGAP commissioned the regional Global Stocktaking Survey. To better understand Microfinance Centre (headquartered in Warsaw, what types of institutions are currently serving Poland) to conduct the first comprehensive the poor, CGAP conducted the first global study study of microfinance in Central and Eastern of financial service providers to low-income pop- Europe and the New Independent States. In ulations from primary sources in nearly 150 addition to statistical data on outreach and insti- countries. Preliminary findings indicate that tutional performance, the study provided more than 600 million people with low incomes insights into the relative success of organization- currently receive financial services from a variety al models, poverty outreach, access to funding, of institutions—not only MFIs but also institu- and the legal and regulatory environments. CGAP Annual Report 2003 25 STRENGTHENING A DIVERSITY OF FINANCIAL INSTITUTIONS SERVING THE POOR Among the more striking findings was that the of financial services to poor people by develop- client outreach of NGOs and microfinance ing or strengthening different types of institu- banks is dwarfed by that of credit unions and tions, especially those with large-scale infrastruc- cooperatives. tures. A combination of microfinance expertise and the extensive branch networks of larger institutions could potentially reach hundreds of “A combination of microfinance expertise and the thousands of poor clients, especially in rural extensive branch networks of large institutions areas where vast numbers of the poor remain could potentially reach hundreds of thousands of unserved. Over the last year, CGAP has started poor clients, especially in rural areas where vast to work with a wide variety of such financial and numbers of the poor remain unserved.” non-financial institutions to experiment with models that show promise for massive outreach. Networks Initiatives. Microfinance regional This engagement has ranged from providing and international networks play a significant role strategic advice to actually committing CGAP’s in strengthening the microfinance sector, own technical expertise and funding. launching new institutions, developing stan- dards, wholesaling funds, and providing techni- cal assistance. However, it is often difficult to differentiate among networks because the term encompasses organizations with as many differ- ences as similarities. In October 2002, CGAP and the SEEP Network organized a workshop of network organizations to discuss the role of net- works in promoting financial services for the poor. As a follow up to the workshop, CGAP worked with 33 regional and global networks— representing 1,466 microfinance institutions— to develop a profile of key dimensions of their operations. CGAP is also developing a format for appraising the performance of international networks that can be used by donors, other fun- ders, and the networks themselves. Parallel to this, CGAP is also collaborating with SEEP and GTZ to develop guidelines for sup- porting national microfinance associations as part of a donor and practitioner working group. This collaboration builds on CGAP’s ongoing grant to SEEP to strengthen national networks by improv- ing their technical assistance capabilities, and their standard-setting and reporting roles. SCALING UP Much of CGAP’s work over the next few years Women displaying vegetables to sell in street market, will focus on expanding the breadth and depth Kyrgyzstan © World Bank Photo Library 26 CGAP Annual Report 2003 STRENGTHENING A DIVERSITY OF FINANCIAL INSTITUTIONS SERVING THE POOR Banking Services for Factory Workers. In fiscal Development to improve the payments mecha- year 2003, CGAP partnered with Global nisms of its social grants. The objective is to uti- Alliance, a non-governmental organization con- lize the department’s vast network of 8,000 pay cerned with improving conditions for workers in points to deliver financial services to its 6.5 mil- the garment industry in India. In collaboration lion poor clients, who are currently not served by with ICICI Bank, the largest private bank in banks. Mapping all of the pay points, post offices, India, Global Alliance and CGAP are seeking to and bank branches in South Africa is near com- develop contractual saving services—among other pletion. Market research and testing of new finan- financial services—for garment workers with the cial products have already begun. support and participation of the factories that employ them. Self-Help Groups Study. CGAP’s interest in financial models that can offer widespread cover- Africa International Financial Holdings, LLC age to poorer people has prompted a detailed (AIFH). Africa International Financial Holdings research project on self-help groups (SHG) in is a joint venture of investors seeking to acquire India. Currently more than 12 million people in majority stakes in formerly state-owned banks rural India receive financial services from SHGs with large branch networks in sub-Saharan Africa. linked to formal banking structures. This com- CGAP has partnered with AIFH to design and pares with less than a million people accessing oversee implementation of a wide range of finan- services from more conventional MFIs. There are cial products for low-income clients throughout many SHG models, promoted by a variety of these networks. Should AIFH succeed in acquir- actors, with different structures and different ways ing suitable banks, this partnership offers CGAP of linking to the formal financial system. CGAP’s a rare opportunity to demonstrate that, with the research, which focuses on case studies of different right institution and management, financial serv- SHG models, seeks to gain a better understanding ices for the poor can be made available on a large- of the sustainability and quality of the financial scale, commercial basis. services being delivered, and the impact and FinMark Trust (South Africa). FinMark Trust is added value of intermediation through SHGs. an organization funded by DFID that seeks to The first case study was completed in fiscal year expand the poor’s access to financial services in 2003. Leading microfinance institutions in India, southern Africa. In partnership with FinMark including NABARD (National Bank for Trust, CGAP is providing advisory services Agriculture and Rural Development), are advising to South Africa’s Department of Social CGAP on this ongoing research. ■ Box 6. Africa International Financial Holdings, LLC CGAP’s partnership with Africa International Financial Holdings, LLC (AIFH), is a good illustration of an initia- tive aimed at achieving massive scale by leveraging existing banking infrastructure. AIFH is a multi-investor fund whose objective is to purchase and restructure seven to nine government-owned banks being auctioned in sub-Saharan Africa. The aim is to retain the large, mainly rural branch networks, turn the banks around, and develop retail banking services for the poor as a core business. This initiative is a unique opportunity to demonstrate that committed management and appropriate technical inputs can result in financial services for the poor on a large scale and commercial basis. CGAP serves as the technical partner that will help AIFH along with local partners develop microfinance products and train local staff to provide these services. CGAP Annual Report 2003 27 Sorghum harvest, Burkino Faso © World Bank Photo Library/Ray Witlin BROADENING AND DEEPENING FINANCIAL SERVICES FOR THE POOR appraising the poverty focus of MFIs. CGAP A n important part of CGAP’s work is centered on improving how well the has now developed the Poverty Assessment Tool microfinance industry understands its (for collecting rigorous statistical data on relative clients and how it can provide more efficient poverty levels of clients) because it believes that services for them. The industry already knows there is an urgent need for tools that provide that not all poor people are microentrepreneurs. meaningful information on absolute poverty lev- The needs of the farmer and the rural poor are els without imposing undue administrative bur- quite different from those of urban petty traders dens on the practitioners employing the tools. or artisans, and financial products which may To this end, CGAP also funded four practition- work very well for the better-off poor may not be er networks (ACCIÓN, Freedom from Hunger, suitable for the truly destitute. CGAP seeks to FINCA, and Opportunity International) to both broaden and deepen the provision of finan- develop their own assessment tools. These would cial services to poor people through a wider benchmark against a common CGAP format range of products. In addition, CGAP seeks to linked to national poverty lines and an absolute ensure that these services have a demonstrable, poverty line of a daily income of $1 or less. beneficial impact on clients’ lives. In 2003, CGAP continued to focus on deepening “In 2003, CGAP…particularly concentrated on outreach, delivery mechanisms, and impact. identifying working models and innovations in CGAP particularly concentrated on identifying rural and agricultural microfinance, where criti- working models and innovations in rural and cal challenges exist in reaching the very poor…” agricultural microfinance, where critical chal- lenges exist in reaching the very poor in geograph- West Africa Poverty Study. CGAP and ically remote areas, and in developing sustainable BCEAO (the West African Central Bank) joint- institutional models that can serve them. ly examined the depth of outreach of microfi- TRANSPARENCY IN nance providers in Sénégal, and completed the DEPTH OF OUTREACH study in fiscal year 2003. Six institutions Network Tools for Poverty Assessment. (including credit unions, multi-sectoral NGOs, Increasing industry focus on the depth of out- and conventional MFIs) were selected for the reach, as well as the US government’s mandate study. Interviews were conducted with almost for poverty measurement tools, has led to strong 1500 new clients, old clients, and comparison interest in developing simple, low-cost tools that groups, as well as with managers and staff. determine microfinance client poverty levels. Analysis of the survey results indicates that depth CGAP has long been a strong advocate of greater of outreach is closely associated with the region transparency in the microfinance industry. In or client group that defines the project area the past, it published the Poverty Audit for rather than any inherent institutional structure. CGAP Annual Report 2003 29 BROADENING AND DEEPENING FINANCIAL SERVICES FOR THE POOR This would seem to suggest, contrary to conven- Two valuable findings of this research were: tional wisdom, that a much wider range of • A supportive enabling environment for financial providers (rather than just NGO- rural finance is particularly important, MFIs) could serve the financial needs of much including improved access to risk-manage- poorer populations if they were to make such ment techniques. operational choices. • For the majority of small farmers, the pri- AGRICULTURAL MICROFINANCE mary source of credit is not banks or even RESEARCH MFIs, but other actors along the spectrum of Agricultural finance is a major area where many agricultural production, including input sup- donors struggle to be effective and where addi- pliers (e.g., sellers of seeds or fertilizer), tional knowledge and information sharing are traders, or processors. urgently needed. The risks associated with crop CGAP is working closely with the World Bank’s and livestock financing pose particular chal- Commodity Risk Management Group to devel- lenges. With support from the International op innovative ways for microlending institutions Fund for Agricultural Development (IFAD), serving small farmers to manage risk more effec- CGAP conducted a brief assessment of nearly 80 tively. CGAP staff presented and discussed a agricultural microfinance providers during fiscal paper at the USAID Rural Finance Conference year 2003 to identify effective approaches to in June 2003 on how donors can add value to agricultural finance. Of these, fewer than 30 trader and processor credit arrangements. were found to be worthy of further attention. Case studies of representative examples from this ENCOURAGING INNOVATION shortlist are currently in production. CGAP is IN RURAL AREAS also preparing an Occasional Paper on agricul- The Rural Pro-Poor Innovation Challenge tural microfinance based on the findings from Program (RPPIC) is a partnership between this research. IFAD and CGAP to support rural microfinance Box 7. Trader and Processor Credit For most small farmers, the primary source of credit is not banks, or even microfinance institutions, but input suppliers, traders, or processing firms. Four out of every five rice mills in India offer advance payments to farmers to cover the costs of inputs (e.g., seeds, fertilizer). Almost a third of the rural population of El Salvador receives credit from non-financial providers, such as wholesalers, processors, and retailers. While rural lending can be a serious challenge for microfinance institutions, traders and processors know their clients and local product market relationships, which is an advantage in determining whether or not to lend to a farmer. Yet trader and processor credit is limited in scope and does not meet the broader financial needs of poor rural households. CGAP is working together with donors and financial institutions to develop models for extending similar credit arrangements to poorer farmers and their households on better terms, while avoiding market distortion. CGAP and the Ford Foundation have also teamed up to fund and learn from innovative donor and MFI linkages to traders and processors. 30 CGAP Annual Report 2003 BROADENING AND DEEPENING FINANCIAL SERVICES FOR THE POOR programs that provide financial services to very to be replicated in Colombia through the poor people. The program provides awards of Colombian Coffee Federation. $50,000 to small, less well-known microfinance • Small Farmer Cooperatives, Ltd. (Nepal). institutions that are reaching rural or hard-to- SFC is a system of innovative cooperatives with reach populations through particularly innova- a range of savings, insurance, and credit prod- tive products or methodologies. More than 300 ucts designed to fit agricultural activities. applications were received for the latest round of RPPIC funds will be used to establish a trust funding. Below is a selection of the winners of fund at the Small Farmers Development Bank the RPPIC awards during fiscal year 2003: to support the replication of small farmer cooperatives in remote areas of Nepal. • International Justice Mission (India). IJM works to reverse the exploitation of bonded labor. RPPIC funds will allow IJM to obtain the legal release of individual vic- “Many of the Millennium Development Goals, tims and prevent occurrences of bonded especially improved nutrition, literacy, health, labor by offering microfinance and microen- and education, are also poor families’ goals.” terprise opportunities, through local finance institutions, to formerly bonded laborers and those at risk. • Bai Tushum Financial Foundation (Kyrgyzstan). Bai Tushum targets rural busi- • PRISMA (Peru). PRISMA is a microcredit nesses, among disadvantaged segments of the NGO that uses community banks and soli- population, that are engaged in agriculture or darity groups and is developing a “Risk service industries. RPPIC funds will be used Management Rural Credit Pilot Program for to develop a new product for disadvantaged Small Farmers.” RPPIC funds will be used as women working in the dairy industry. The seed capital for a contingency fund for pro- award will provide loans to individual ducers’ associations. women to purchase milk cows and to groups of women to buy equipment necessary for • Asociación PILARH (Proyectos e dairy operations. Iniciativas Locales para el Autodesarrollo Regional de Honduras). This institution • Kyrgyz Agricultural Finance Corporation offers loans and social services to small, fam- (Kyrgyzstan). KAFC has an extensive branch ily-owned businesses, primarily in agricul- network that will be used, with RPPIC sup- ture. All clients must live below the poverty port, to offer a new product—microsavings. line and rely on the business as their princi- KAFC also plans to work with NGOs to reach pal source of income. RPPIC funds will go a greater number of poor people and to edu- towards extending access to land for the very cate the poor about the benefits of savings. poorest families. • MAFF (Albania). MAFF provides financial • Conservation Coffee Program with services to people living in remote highland Conservation International (Mexico). areas, who have limited access to formal This program offers credit services, business financial institutions, by targeting isolated programs, and sustainable agricultural edu- villages and adapting services to their needs. cation to small-scale coffee farmers, all of The RPPIC award will be used to expand whom live below the poverty line. RRPIC MAFF’s geographic outreach and to support funds will allow the program, Eterno-Verde, the provision of more diversified products. CGAP Annual Report 2003 31 BROADENING AND DEEPENING FINANCIAL SERVICES FOR THE POOR • Moldova Microfinance Alliance (Moldova). The MMA operates in small, rural villages, establishing and supporting savings and credit associa- tions (SCAs). RPPIC funds will be used to extend these associations to three new locations and to install cash machines in the 20 best performing SCAs, linked to their partner commercial bank. • Association pour la Promotion des Groupements Agricoles (Togo). APGA targets groups of women with low incomes. RPPIC funds will be used to support the weekly credit pro- grams that help expand and diversify clients’ activities. IMPACT ON END CLIENTS CGAP seeks to keep the microfinance industry focused on the “double bottom line”: the financial sustainability neces- sary to scale up, and the beneficial impact on clients’ lives that is the moti- vation for creating microfinance institu- tions. Below are CGAP’s activities in fis- cal year 2003 that focused on the impact on microfinance on the lives of the poor. Link between Microfinance and the Millennium Development Goals. Donor agencies and national governments have committed to the Millennium Development Goals (MDGs), especially to reducing absolute poverty by half by 2015. Donors have mobilized their resources to target poverty, hunger, literacy, health, a cleaner environment, women’s empowerment, and global partnerships. However, for many agencies the link between microfinance and the MDGs is not always clear, resulting in uncertainty as to how microfinance fits into their devel- Egyptian women with newborns waiting for neonatal care opment agenda or aid modalities. © World Bank Photo Library/Ray Witlin 32 CGAP Annual Report 2003 BROADENING AND DEEPENING FINANCIAL SERVICES FOR THE POOR In 2003, CGAP examined current research that work best for them. The indicators have been specifically documented the impact of microfi- designed so as not to impose high costs or nance on different aspects of poverty identified as administrative burdens on the organizations col- MDG priorities. Presented in Focus Note No. 24, lecting the data. While this may mean sacrificing Is Microfinance an Effective Strategy to Reach the the rigor of large-scale sample surveys, the data Millennium Development Goals? this evidence indi- from such methods would still be useful in help- cates that microfinance can enable the poor to ing institutions improve their performance. attain many of the Millennium Development Goals on their own, in a self-directed way. While Impact Assessment Center. The Impact microfinance alone is not a panacea, it does Assessment Center on the Microfinance Gateway increase poor people’s economic self-determina- is a joint venture of CGAP and the Imp-Act pro- tion. Many of the Millennium Development gram, an initiative funded by the Ford Goals, especially improved nutrition, literacy, Foundation. The resource center provides evi- health, and education, are also poor families’ goals. dence of the impact of financial services on the Poor families are increasingly able to pursue these poor, specifically as they relate to the Millennium goals as their household incomes increase and they Development Goals. It also provides information use the financial services opening to them. on impact-assessment tools and, in particular, attempts by different financial institutions to Developing Impact Indicators for Assessing develop cost-effective methodologies to assess Social Performance of Financial Institutions. impact and help them better meet client needs CGAP has worked with key stakeholders to and improve institutional performance. The cen- encourage microfinance institutions to report on ter contains a comprehensive set of research stud- the poverty levels of their clients and on the ies and documents on MFI impacts. ■ impact of their services on clients’ lives. CGAP has proposed that this information be reported in a format that corresponds to five different dimensions of the MDGs: • The proportion of clients living below poverty or in absolute poverty • Improvements in economic conditions of clients • Increases in school attendance and literacy • Improved access to health care services • Progress toward women’s empowerment CGAP is providing small amounts of funding to several microfinance networks to test simple indicators that they may use to report outreach and impact. It is expected that different institu- tions in different regions will determine, accord- ing to their specific contexts, which indicators CGAP Annual Report 2003 33 Bank customer using ATM facilities, Mozambique © 2002 World Bank Photo Library/Eric Miller BUILDING FINANCIAL TRANSPARENCY • Build the local capacity to collect, analyze, T ransparency is essential if the microfi- nance industry is to reach scale. and report MFI financial information. Investors, donors, and most impor- In fiscal year 2003, CGAP consolidated its vari- tantly, poor depositors, will only place their ous transparency activities into three main serv- funds where they can reliably assess risk and ices: the Microfinance Information eXchange return on the basis of standardized, comparable (MIX), the Rating Fund, and the Information information. Transparency is also essential for Technology Initiative. supervisors to assess the safety of the financial system, which in turn gives additional confi- dence to investors. In addition, institutions that “Investors, donors, and, most importantly, poor provide financial services need clear, standard- depositors will only place their funds where they ized information to help them determine where can reliably assess risk and return on the basis of they stand in relation to their peers. MFI man- standardized, comparable information.” agers who can benchmark their performance against other MFIs are better able to improve THE MICROFINANCE their performance. INFORMATION EXCHANGE (MIX) In June 2002, CGAP spun off two of its major Promoting transparency involves developing initiatives into the Microfinance Information accurate information through the various phases eXchange (MIX), a new non-profit organization of information gathering, from the initial pro- governed and funded by CGAP. The two initia- duction of data by financial institutions them- tives integrated into the MIX are the MIX selves, to external audits and credit ratings, and Market, which was further developed over the to supervision by regulatory authorities. past two years from UNCTAD’s original Virtual Unfortunately, microfinance faces challenges in Microfinance Market; and the MicroBanking each of these areas. More often than not, MFI Bulletin, which has been sponsored by CGAP information systems are costly to develop and do since 1998. not provide reliable, standardized information. At the same time, auditors, rating agencies, and Launched in October 2002, the MIX Market is a supervisory authorities do not have sufficient web-based information service linking microfi- expertise to accurately assess risk in this high- nance institutions, donors, and investors. On the volume, small-transaction business. demand side, the MIX Market provides in-depth information on MFIs’ performance, including CGAP provides a wide range of services aimed at financial statements, and ratings and assessment increasing financial transparency: reports from external evaluators. On the supply • Build information infrastructure in the side, the MIX Market offers information on microfinance industry donor and investing funding and the terms and • Standardize the data that institutions use to conditions under which they may be available. As conduct financial analysis and report finan- of June 2003, 154 microfinance institutions, 36 cial performance funders, and 56 raters and networks had posted CGAP Annual Report 2003 35 BUILDING FINANCIAL TRANSPARENCY Women’s group meeting, Pakistan © 1994 World Bank Photo Library/Curt Carnemark their information on the MIX Market site. More microfinance industry, once a suitable working than 1,500 users regularly visit the site. model has been developed. The MIX is now a fully independent, non-profit organization, The MicroBanking Bulletin collects financial and staffed by an executive director and five financial portfolio information that is voluntarily provid- analysts, with CGAP providing oversight, strate- ed by microfinance institutions, organizes it by gic guidance, and technical support. peer group, and disseminates the findings to microfinance institutions all over the world. The IDB-CGAP RATING FUND MicroBanking Bulletin is published twice a year CGAP and the Inter-American Development and is widely recognized as the premier bench- Bank (IDB) launched the Rating Fund in 2001 to marking service in the microfinance industry, offer partial financing for ratings and assessments enabling institutions to compare their own per- by pre-qualified agencies to microfinance institu- formance against others in the field. In fiscal year tions. The Rating Fund has three main objectives: 2003, the MicroBanking Bulletin published • Improving the performance of MFIs issues dedicated to the challenges of savings and • Strengthening pre-qualified rating and assess- harmonization of financial terms. ment agencies at the local and international levels The MIX illustrates CGAP’s strategy of incubat- • Attracting commercial funding to microfi- ing a new initiative that provides a public good nance by improving the quality and quantity and handing it off to other partners in the of information on MFIs 36 CGAP Annual Report 2003 BUILDING FINANCIAL TRANSPARENCY In FY 2003, the Rating Fund approved ratings for choosing a software package, and an online for more than 100 microfinance institutions in IS library with links to key documents and web 36 countries. Of these ratings, roughly 90 sites. In addition, CGAP recently established a percent involved first-time disclosures of finan- small fund that microfinance institutions can tap cial performance. Perhaps most importantly, to have qualified consultants analyze and assess MFIs reported significantly greater donor and their MIS needs. investor interest since undergoing their initial ratings. Fourteen pre-qualified agencies partici- IT Innovation Series. In fiscal year 2003, CGAP pate in the Rating Fund, including commercial launched an initiative to evaluate the potential of rating organizations, such as Standard & Poor’s new information technologies to improve the out- and Fitch. reach and efficiency of microfinance. As a first step, CGAP conducted a series of case studies on In May 2003, the IDB, the European Union, several technologies that are being applied to ADA (Appui au Développement Autonome, an microfinance, including smart cards, personal NGO in Luxembourg) and CGAP organized the digital assistants, credit scoring, biometrics, auto- Rating Fund Feedback Forum in Brussels, mated teller machines, and interactive voice Belgium. The Forum brought together more response. ■ than 80 participants from microfinance institu- tions, donors, investors, and rating agencies and resulted in several improvements for how the Rating Fund is conducted and administered. INFORMATION TECHNOLOGY (IT) New technologies have the power to improve the delivery of financial services and offer significant opportunities for microfinance institutions to reach more clients. However, MFIs’ experience with information technology innovations has been limited and has yielded mixed results. To address this increasingly important aspect of microfinance, CGAP focused its attention on two key IT areas in fiscal year 2003. Information Systems Services Resource Center. Information systems (IS) include all the systems of an institution that are used to gener- ate the information that guides management in its decisions and actions. CGAP offers a web- based service with information on IS issues to guide MFI managers in selecting IS software that best suits their organization’s needs. The site has an evaluation section with detailed, independent reviews of commercially available software, a Man ploughing rice paddy, The Philippines help-desk section with step-by-step suggestions © World Bank Photo Library/Edwin Huffman CGAP Annual Report 2003 37 Customer and bank teller, India © 1993 World Bank Photo Library/ Curt Carnemark ENHANCING THE POLICY AND REGULATORY FRAMEWORK M ore and more governments are rec- risks. On one hand, there is the risk that over- ognizing that their proper role in regulation will stifle innovation and growth. On microfinance is not to provide serv- the other hand, there is real risk that financial ices directly, but to facilitate the creation of an authorities can be forced to license large num- environment in which the private sector (both bers of small institutions that they cannot super- profit and non-profit) can carry out retail micro- vise adequately. The core of CGAP’s policy work finance. The most basic policy requirement is in 2003 was to produce and disseminate a set of that the government not impose interest rate consensus guidelines, Guiding Principles on caps which prevent a provider of microcredit Regulation and Supervision of Microfinance from recovering its actual costs. In many coun- Institutions (see box). tries, this was the only critical policy issue in the early days of microfinance. “As the microfinance industry matures in a coun- try, it cannot reach full potential unless it can As the microfinance industry matures in a coun- move into a licensed environment where it can try, it cannot reach its full potential unless it can provide other services beyond credit only, where move into a licensed environment where it can its growth can be funded by public deposits, and provide other services beyond credit only, where where the safety of those deposits is protected by its growth can be funded by public deposits, and government regulation and supervision.” where the safety of those deposits is protected by government regulation and supervision. There are at least 50 countries where new arrangements These Consensus Guidelines were endorsed by for regulation and supervision of microfinance CGAP’s member donors in 2003. They have are being discussed or implemented. been circulated widely and presented at several international gatherings of central bankers and As a multi-donor consortium housed within the bank supervisors. The guidelines are already hav- World Bank, CGAP has a unique role to play in ing measurable impact on the process of regula- helping foster a policy environment that pro- tory revision in a number of countries. motes the development of pro-poor financial services. CGAP’s activities in this area focus on COUNTRY-SPECIFIC ENGAGEMENTS developing consensus guidelines, providing CGAP provides policy advice to a number of country-specific consultation, and developing a countries, often at the request of member donors. new database on microfinance policy and regula- In fiscal year 2003, CGAP staff provided policy tory regimes. inputs and reviewed drafts of microfinance legis- CONSENSUS GUIDELINES lation for a number of countries, including Government regulation and supervision are not Afghanistan, Azerbaijan, Guinea, Kyrgyzstan, only complex topics but also present significant Laos, Nicaragua, Pakistan, Panama, Serbia, South CGAP Annual Report 2003 39 ENHANCING THE POLICY AND REGULATORY FRAMEWORK Africa, Tajikistan, Uzbekistan, and Zambia. has been assembled and is being tested by sever- CGAP worked with the World Bank and the al dozen potential users, whose feedback so far African Development Bank to help the govern- has been strongly encouraging. ■ ment of Sierra Leone to redesign its support for microfinance. In addition, CGAP continued its longstanding collaboration with the BCEAO, the West African Central Bank, including organizing and accompanying a study tour for high-level officials. CGAP and leading donors in West Africa are also working with the BCEAO on a new project to strengthen supervision of leading microfinance institutions in the region. NEW DATABASE ON WORLD-WIDE POLICY FRAMEWORKS In 2003, CGAP began a partnership with the IRIS Center at the University of Maryland to develop a global internet-based database on indi- vidual countries’ regulation and supervision of Couple selling bananas in market, Guatemala microfinance. A pilot database of 25 countries © World Bank Photo Library Box 8. Standards on Regulation and Supervision The issue of when and how to regulate microfinance has become increasingly important as microfinance institutions have matured and begun moving more into collecting savings. Yet because some of the issues presented are new, there is not yet a significant body of experiences with such regulation from which to learn. Country circumstances vary. Not surprisingly, some questions are controversial. At the same time, most of the experts working in this area agree on a broad range of basic principles. After an extensive process of consultation with dozens of experts, donors, microfinance practitioners, and central bankers from all around the world, CGAP developed a set of guiding principles that can be fairly labeled a consensus document. Even while recognizing variations in local circumstances, the document is able to identify a series of strong recommendations. • Do not subject credit-only institutions to prudential licensing and supervision. • Set minimum capital low enough so that some strong MFIs can qualify, but high enough so that the supervising agency is not overwhelmed by more tiny institutions than it can effectively supervise. • Before deciding on regulatory reforms, pay close attention to issues of likely effectiveness and cost of supervision. • Donors that encourage governments to take on supervision of new types of institutions should be will- ing to help finance start-up costs. • Do not expect supervision to be effective in protecting the soundness of any financial institution if the supervising entity also has a controlling interest in the institution being supervised. 40 CGAP Annual Report 2003 INCA staff with computer in Amazon region, Vila da Canoas, Brazil © World Bank Photo Library /Julio Pantoja IMPROVING DONOR EFFECTIVENESS AID EFFECTIVENESS INITIATIVE: W ith an estimated expenditure rate of at least $500 million per year, devel- DONOR PEER REVIEWS opment agencies remain the most A major focus of CGAP’s aid effectiveness initia- important external source of funding for financial tive was the Donor Peer Reviews and follow up services for the poor. All of CGAP’s 28 member with the agencies already reviewed. The Donor donor agencies have agreed on common guidelines Peer Reviews were launched in 2002, when the of good microfinance practices. However, many UK Department for International Development donors face a number of constraints, both internal (DFID) and CGAP combined efforts to tackle and external, in applying these practices on a sys- aid effectiveness, using microfinance as a test temic and consistent basis across their agencies. As case. The initiative, when completed in calendar a result, donor funding for microfinance has some- year 2004, will coordinate peer reviews of 17 times been ineffective, narrowly targeted to a few multilateral and bilateral agencies. countries and institutions, or poorly structured. Donors can have greater impact by: “With an estimated expenditure rate of at least • Ensuring appropriate, specialized technical US $500 million per year, development agencies oversight of their projects remain the most important external source of • Identifying and working in their area of com- funding for financial services for the poor.” parative advantage • Taking more risks on promising but not yet Each agency review is conducted by a team com- proven institutions and mechanisms prised of two senior-level technical staff members from donor agencies involved in microfinance • Adjusting their country-level programming and two CGAP staff members. The reviews con- to support global or multi-country initiatives on training, common reporting standards, centrate on the institutional policies, practices, and the application of technology to finan- processes, and systems of each donor agency. The cial services objective is to help donor agencies identify the success factors and constraints to effectiveness in As a multi-donor consortium, CGAP holds a their microfinance policies and operations, and to unique comparative advantage in working with make concrete recommendations for improve- donor agencies to improve their support for ments. In addition to the five-day visit to the microfinance. Its work with member donors is headquarters of each participating agency, three aimed at enhancing the effectiveness of their field visits are included in the initiative. microfinance operations by improving practices, building staff skills, and providing advisory and Nine peer reviews and two field visits were com- other services targeted to donor needs. In fiscal pleted in fiscal year 2003. Many of the 14 agencies year 2003, CGAP’s donor services focused on reviewed in fiscal years 2002 and 2003 have taken the Aid Effectiveness Initiative, harmonization concrete steps to improve the way they work. of donor operations at the country level, adviso- CGAP staff actively support the reform efforts by ry services, and support to non-specialist staff. advising on implementation plans, conducting CGAP Annual Report 2003 43 IMPROVING DONOR EFFECTIVENESS follow-up visits, and offering joint projects on targets and streamlining reporting. Moreover, it portfolio reviews, donor reporting, and training. plays a sector-building role, advising on policy and playing an interim monitoring role for non- bank microfinance institutions. The goal of “Donor coordination at the country level is a MISFA is to help build a high-performing and critical component of aid effectiveness . . . transparent financial sector that meets the needs CGAP pioneered a model for donor coordination of the majority of the population in Afghanistan. in Afghanistan, creating an all-donor facility to CGAP has worked with donors, government help build the financial sector, with the World ministries, and NGOs to ensure that microfi- Bank—the Microfinance Investment and Support nance support is channeled through MISFA. Facility in Afghanistan.” The Ministry of Rural Rehabilitation and Development (MRRD), where MISFA is housed during its start-up phase, is actively pro- COUNTRY-LEVEL DONOR moting this coordination. It is convincing other HARMONIZATION ministries to channel their activities through Donor coordination at the country level is a crit- MISFA rather than create separate and poten- ical component of aid effectiveness and an area tially conflicting microcredit schemes. In June where CGAP has had significant engagement in 2003, during a CGAP/World Bank microfi- the last year. A major area of focus was Central nance mission, MISFA convened a sector-wide Asia, where CGAP played a significant role in meeting where MFIs and a number of donors supporting internal World Bank and wider formed working groups on credit bureaus, regu- donor-coordination efforts in microfinance in a lation and supervision of MF, and the public number of countries in the region. CGAP pio- image of microfinance. neered a model for donor coordination in Afghanistan, creating an all-donor sector-build- CGAP also worked closely with key donors such ing facility with the World Bank—the as USAID, DFID, ILO, and the World Bank to Microfinance Investment and Support Facility ensure close donor cooperation in microfinance. in Afghanistan (MISFA). In addition, CGAP and leading donors in West Africa are collaborating with the West African MISFA converts diverse donor funding and Central Bank (BCEAO) to strengthen the super- requirements into good practice funding and vision of MFIs in the region and implement reg- technical assistance, by setting clear performance ulatory reforms. Box 9. The All-Donor Microfinance Investment and Support Facility in Afghanistan The all-donor Microfinance Investment and Support Facility for Afghanistan (MISFA) is a ground-breaking example of donor harmonization. The MISFA will pool all donor resources for microfinance in post-con- flict Afghanistan through one central, professionally-staffed facility to ensure that good practices and high performance standards are built in from the start. Funding thus far includes CGAP, the World Bank, USAID, CIDA, DFID, and Sida. The facility will support capacity building as well as capitalization to meet pent-up client demand for credit and other financial services. MISFA involves leading microfinance NGOs, such as BRAC, Mercy Corps, and FINCA. 44 CGAP Annual Report 2003 IMPROVING DONOR EFFECTIVENESS ADVISORY SERVICES • Capital Fund for Employment for the Poor At their request, CGAP provides advisory servic- (CEP), Vietnam es to donor agencies to design better microfi- • Funding the Poor Cooperative (FPC), nance policies and programs. These services China include the Appraisal and Monitoring Service, • Fonkoze/MEDA, Haiti portfolio reviews, and information support. Portfolio Reviews. As an outgrowth of the Appraisal and Monitoring Service. Each year, Donor Peer Review process, the World Bank and CGAP member donors provide hundreds of mil- the United Nations Development Programme lions of dollars for microfinance. However, limited asked CGAP to lead independent evaluations of technical capacity or limited engagement in micro- their microfinance portfolios. These evaluations finance make it difficult for many agencies to iden- consist of comprehensive desk reviews of all tify appropriate institutions to fund. At the same identifiable microfinance projects or compo- time, microfinance organizations must often man- age complex and time-consuming relationships with multiple donors that often involve different reporting information, formats, and time periods. To reduce the transaction costs of both groups— donors and microfinance organizations—CGAP launched the Appraisal and Monitoring Service in 2001. This service sets up joint appraisals of microfinance institutions by interested donors, then organizes a consortium approach to funding by setting common performance, reporting, and monitoring requirements. In Fiscal Year 2003, CGAP conducted joint donor appraisals of the Opportunity International Network with Oikocredit, and Friends of Women’s World Banking-India with the Small Industry Development Bank of India. In addition, appraisal/funding discussions are underway for the following institutions, which have been shortlisted for donor consideration: • Femmes Développement et Entreprise en Afrique (FDEA), Sénégal • Amhara Credit and Savings Institution (ACSI), Ethiopia • Activists for Social Alternatives, India • Swayam Krishi Sangam (SKS), India • Safe Save, Bangladesh Vendor with morning tea in Kabul Central Market, Afghanistan • ARCDI Vision Bank, The Philippines © 2003 Doug Pearce/CGAP CGAP Annual Report 2003 45 IMPROVING DONOR EFFECTIVENESS Women building a house, Zimbabwe © World Bank Photo Library/Curt Carnemark nents, with on-the-ground studies of approxi- finance issues; short PowerPoint presentations; mately a dozen projects for each institution. case studies highlighting successful donor inter- They will produce a report card on the two agen- ventions in microfinance; and links to donor poli- cies’ projects, grading financial performance and cy papers, a consultants database, and other micro- compliance with accepted principles of sound finance resources. There is also a training module practice. The evaluations will analyze in depth that donor agency staff can use to deliver the the agency processes and systems that affect proj- online materials to their colleagues. ect quality, and will produce concrete recom- mendations for agency management. The SUPPORT FOR NON-MICROFINANCE reports of both evaluations will be published. SPECIALISTS Given its strategic location within the World Information Support. CGAP launched its online Bank, the significant size of the World Bank donor resource center in fiscal year 2003, the Group’s funding for microfinance, and the DIRECT (www.cgap.org/direct). The DIRECT is opportunity for drawing lessons learned for targeted at the staff and management of donor other donor agencies, CGAP has a unique agencies, especially non-microfinance staff. Both opportunity to work with the World Bank and topics and presentation of materials are tailored to the IFC to promote good microfinance prac- donor staff for whom microfinance is only a small tices. CGAP provides strategic advice and assis- portion of their project portfolios. The DIRECT tance to the World Bank on broad policy issues, contains a library of brief notes on specific micro- as well as specific country-level projects. 46 CGAP Annual Report 2003 IMPROVING DONOR EFFECTIVENESS Since last year, CGAP’s advisory inputs to World In 2003, CGAP collaborated with the Financial Bank staff have been significantly bolstered by a Sector and Rural Development Departments of microfinance specialist hired to serve as a liaison the World Bank and published the first of a between CGAP and the Bank. Anne Ritchie potential series of Operational Notes. These worked at CGAP for one year before transferring would be brief notes on rural microfinance good to the World Bank’s Financial Sector Department practices and emerging models and offer lessons to continue that role. Much of this mainstream- learned and operational guidelines specifically ing work has focused on providing technical and targeted to project managers. The first note, policy inputs, organizing workshops, and devel- written jointly by the Social Protection Unit and oping operational guidelines for non-specialist CGAP, is Microfinance and Social Funds: staff working on multi-sectoral projects that have Guidelines for Microfinance in Poverty-Focused, a microfinance component. Multi-sectoral Projects. Forthcoming notes may feature rural finance, minimum reporting Examples of CGAP’s technical and advisory requirements, and a decision tree for microfi- services to the World Bank in fiscal year 2003 nance in projects. include inputs to a global study of social funds and microfinance; a workshop on “Designing CGAP staff also co-authored the rural finance Microfinance Components of Poverty-Focused models for the World Bank Agricultural Investment Projects,” inputs on project designs in Sierra Sourcebook, which outlines good practice models Leone, Afghanistan, and China; and reviews of and practical guidelines for World Bank project microfinance sector studies in Central Asia, Fiji, managers and specialists. ■ and Papua New Guinea. Woman receiving loan payment in Mahaisthan, Bangladesh @ 2002 World Bank Photo Library/Shehzad Noorani CGAP Annual Report 2003 47 Hawallah in Kabul, Afghanistan © 2003, Douglas Pearce (CGAP) TRAINING was launched in 1998. Based in Nairobi, Kenya, T he microfinance industry’s rapid growth and constant evolution is generating an AFCAP was a regional initiative to promote train- equally dynamic body of knowledge. ing and technical assistance for MFIs in eastern and An important aspect of CGAP’s work is to train southern Africa by working with associates in 12 key stakeholders so that their understanding of countries. AFCAP wound down in 2003, follow- the industry and their professional skills keep pace ing an evaluation which determined that AFCAP with the policy, technical, and operational issues had achieved some of the original objectives, name- facing the microfinance sector. CGAP’s training ly, developing other capacity-building initiatives in activities encompass both on-going training for the region and raising awareness of best practices. the staffs of donor agencies and microfinance The decision not to extend AFCAP was based on institutions, as well as customized workshops for the project evaluation, which found that AFCAP’s specific audiences, such as policy makers, central mission of building a market for capacity-building bankers, regulators, raters, and auditors. services faced too many challenges from subsidized programs and too little capacity among its associ- TRAINING FOR MFI MANAGERS ates to warrant continuing. CGAP’s global program for microfinance man- agers develops local institutional capacity by pro- Global “Training of Trainers.” In 2002, viding training and technical services to MFIs. To CGAP adopted a new strategy to broaden access date, CGAP has developed eight different week- to the “Skills for Microfinance Managers” pro- long courses on best practices in financial and gram. CGAP is seeking new delivery channels operational management for MFIs: interest rates, for its courses by leveraging the experience and delinquency management, financial analysis, lessons of the past five years to serve markets accounting for MFIs, operational risk manage- where the need for microfinance training ment, business planning, information systems, remains unmet. To this end, CGAP has begun and new product development. The course mate- discussions with donors, MFI networks, and rials have been extensively tested and revised, and large MFIs to gauge their interest in participat- contain trainers notes, handouts, case studies, and ing in “training of trainers” courses (ToTs), so additional reading for the participants, plus visual they can deliver the courses on their own to net- aids for the trainers. The courses have been trans- work members and other regional MFIs. lated into 9 languages and have been offered more than 300 times to nearly 7,000 people in 45 Through this initiative, called the Global ToT countries. The courses are delivered by 28 local program, CGAP benefits from the knowledge training partners in Africa, Asia, and Eastern and infrastructure of long-time partners, which Europe, and are rated highly by participants. (The have experience delivering CGAP courses, to ratings average 4.4 on a scale of 1 to 5.) provide the ToTs in new markets. In the past fis- cal year, CGAP has worked with institutions in African Capacity Building Program (AFCAP). A Indonesia, India, Nepal, and the Middle East to joint initiative of CGAP and the UK Department deliver five ToTs, and course materials have been for International Development (DFID), AFCAP translated into Bahasa Indonesia and Arabic. CGAP Annual Report 2003 49 TRAINING MICROFINANCE IN MBA PROGRAMS Bank, and a “training-of-trainers” course taught “Microfinance in MBA Programs” is a joint ven- jointly with the United Nations Capital ture between CGAP and the Open Society Development Fund (UNCDF). Institute of the Soros Foundation. The objective of the program is to stimulate a new generation Few donor staff are engaged in just microfi- of leaders in microfinance by developing a nance—that is, microfinance is only a small por- microfinance curriculum in graduate manage- tion of their overall responsibilities. In fiscal year ment programs at leading universities in devel- 2003, CGAP and UNCDF/SUM developed oping countries. Four principal objectives guide and offered a new course for non-specialist staff. the program: The course is taught from the viewpoint of proj- ect task managers and explores other options • Vesting managers with the technical skills beyond microfinance. Nine similar workshops necessary to manage sound microfinance are planned over the next three years. In addi- institutions tion, CGAP’s new online donor resource center, • Preparing visionary leaders for the future the DIRECT, offers training modules that • Educating a new generation of young entre- enable donor agency staff to deliver the online preneurs who seek career paths that combine materials to other colleagues. The ToT is intend- practicality with social idealism ed to help donor staff enhance their own train- ing skills. It is complemented by a training tool • Capturing the interest of individuals whose kit consisting of a PowerPoint slide presentation, eventual employment with banks and gov- accompanying speakers’ notes, and handouts. ern-ments could bring large banks, retailers, and other diverse institutions into the field OTHER TRAINING The Microfinance Training Program at Boulder Microfinance in MBA Programs was based on is held every summer at Naropa University in enthusiastic feedback from global practitioners, Boulder, Colorado. CGAP staff teach at this policy makers, networks, donors, universities, highly acclaimed training program, which focus- and graduate students. A meeting of the five ini- es on design, policy, and management issues tial universities from Africa and Asia was held in faced by donors and microfinance practitioners. Pretoria, South Africa, in May 2003. The pro- gram will begin in 2004 with these five partici- In addition, CGAP seeks opportunities to work pating universities and will gradually expand to through other organizations to educate their Latin America, Central and Eastern Europe, and constituencies about microfinance issues. In the Middle East. Managed initially by CGAP, fiscal year 2003, CGAP provided training on the program was spun off by the fourth quarter basic microfinance principles as part of the of 2003 to a new, non-profit institute of micro- training organized at the International Monetary finance training. Fund Institute for central bankers from French- speaking countries. CGAP also presented several TRAINING FOR DONOR STAFF briefings on microfinance regulation and super- CGAP provides on-going training and technical vision to officials from the US Treasury assistance to its member donors. Courses tai- Department. ■ lored for donors are offered several times a year, in different regions and on different subjects. In fiscal year 2003, CGAP offered a course on “Appraising an MFI” at the Asian Development 50 CGAP Annual Report 2003 Boats at Thai floating market, Thailand © Getty/John Wang COMMUNICATIONS AND PUBLICATIONS Stakeholders throughout the industry contribute C GAP is a recognized authority and pri- mary resource and information center thought pieces, post publications, publicize con- for the microfinance industry. Its ferences and training courses, announce job objective is to increase awareness and deepen openings, and debate current issues. understanding of critical issues affecting the The Microfinance Gateway underwent an inde- growth of microfinance. CGAP’s main informa- pendent evaluation in fiscal year 2003. The eval- tion channels are the CGAP web site, the uation made a number of recommendations for Microfinance Gateway, and its publications. improving the Gateway that have already been CGAP WEB SITE implemented, including migrating the web site CGAP’s corporate web site (www.cgap.org) pro- to a commercial host facility, hiring an in-house vides a comprehensive overview of its mission, web project manager, and creating a CD-ROM history, strategic priorities, activities, and prod- version of the site (to distribute in markets with ucts. During 2003, the web site was redesigned limited internet access). from the ground up. The site navigation was substantially improved and the content was “According to an independent evaluation of updated. The new site has links to both the the Microfinance Gateway, conducted in 2003, Microfinance Gateway and the MIX. the Gateway is one of CGAP’s most popular MICROFINANCE GATEWAY services.” The Microfinance Gateway (www.microfinance- gateway.org) is a public forum for the entire The main features of the Gateway include: microfinance industry, and is one of CGAP’s most popular services. The web-based nature of Resource Centers. The Gateway has six resource the Gateway has made access to information and centers devoted to specific microfinance topics: resources possible to an ever-increasing interna- impact assessment, micro-insurance, information tional audience. Launched in 2000, the Gateway systems, audits, client targeting, and donor sup- has become the most comprehensive, up-to-date port. In fiscal year 2003, CGAP launched the source of microfinance information on the DIRECT, a new online resource center for Internet, with more than 40,000 visits per donors. The DIRECT provides donors with month and over 600,000 site hits. online access to tailored materials such as briefing notes, PowerPoint presentations, case studies, and The Gateway functions as an information plat- short training modules. form for the industry as a whole, serving a diverse array of actors that includes microfinance Library. The Gateway features a library with practitioners, donors, investors, networks, aca- more than 2,500 online documents on all demics, consultants, and private service aspects of microfinance, together with reviews providers. As such, the Gateway strives to pres- and summaries of articles, books, and technical ent different perspectives and viewpoints. handbooks and tools. CGAP Annual Report 2003 53 COMMUNICATIONS AND PUBLICATIONS Discussion Groups. These are open forums for All CGAP publications can be downloaded direct- e-mail exchanges on specific topics (including ly from the CGAP website, and almost all are information systems and audits). They provide available in print. A number of publications has links to other archives, as well as to some of the been translated into other languages (notably most current and active e-discussion groups in French and Spanish, with some in Arabic and microfinance and related fields. Russian). A renewed effort to translate substantial- ly more documents, and reach more of CGAP’s Gateway “Highlights.” The Highlights are audiences, is underway for the next fiscal year. short presentations on current topics, such as micro-finance in China and Islamic banking, as New publications released in fiscal year 2003 well as summaries of newly published articles, were: books, and recent public seminars (see below). • Occasional Paper No. 7: Scoring: The Next Breakthrough in Microcredit? (January 2003) CGAP PUBLICATIONS • Focus Note No. 24: Is Microfinance an CGAP produces a variety of publications that Effective Strategy to Reach the Millennium cover new research, best practices, innovative Development Goals? (January 2003) ideas in microfinance, and technical handbooks. CGAP publications are intended for diverse • Microfinance Consensus Guidelines: audiences—microfinance experts, microfinance Guiding Principles on Regulation and institutions, donors, consultants, and govern- Supervision of Microfinance (forthcoming ment regulators, as well as the general public. August 2003) Five series form the core of CGAP publications: • Donor Brief No. 12: Regulation and Focus Notes, Occasional Papers, Microfinance Supervision of Microfinance Consensus Guidelines, Donor Briefs, and Technical Tools. CGAP also produces audience- • Donor Brief No. 11: Microfinance Means specific series, such as a variety of case studies, Financial Services for the Poor donor peer reviews, regional reviews, reports on • Donor Brief No. 10: Credit Components information technology and software, and infor- • Donor Brief No. 9: Microfinance and the mational notes on microfinance and rural Millennium Development Goals finance with the World Bank. Box 10. Selected Gateway Highlights from Fiscal Year 2003 • Savings Operations for Very Small or Remote • Information Technology and Microfinance Depositors • Shelter Finance for the Poor • Credit Bureaus—Experiences of Linking Credit • How to Get Out of Donor Dependency Bureaus with Microfinance • Microcredit Summit Papers and Pathways Out of • Microfinance in West Africa Today Poverty • Loan Size as a Measure of Client Poverty Level • Mobilizing Savings: Lessons from Credit Unions • Microbanking and the Asia-Pacific Economic • The 50 Percent Solution: Recent U.S. Cooperation (APEC) Microfinance Legislation • Survey of Funding Needs for MFIs 54 CGAP Annual Report 2003 COMMUNICATIONS AND PUBLICATIONS • Donor Brief No. 8: Why Donors Need to • No. 5: Building a Reliable MFI Funding Understand Product Development Base: Donor Flexibility Shows Results for BASIX in India • Donor Brief No. 7: Microfinance Transparency and Reporting to Donors • No 4: Knowing When to Stop: The Case of UNDP Bangladesh • Donor Brief No. 6: Making Sense of Microcredit Interest Rates • No 3: From Skepticism to Success: The World Bank and Banco do Nordeste in Brazil • Donor Brief No. 5: Apex Institutions in Microfinance • No. 2: Building a Microfinance Industry: USAID’s PRET/FINNET in Haiti • Microfinance and Rural Finance Operational Note: Microfinance and Social • No. 1: Success in Rural Savings: How GTZ Funds: Guidelines for Microfinance in Poverty- and BAAC Expanded Savings Services in Focused, Multi-sectoral Projects (forthcoming Thailand August 2003) Other • Regional Study: The State of Microfinance in • CGAP Phase III Strategy Central and Eastern Europe and the New • CGAP Microfinance Publications, 2003 Independent States (May 2003) • The Microfinance Gateway CD ■ Donor Good Practice Case Studies • No. 6: Avoiding Apex Pitfalls: Local Initiatives Departments of Bosnia and Herzegovina Box 11. Core CGAP Publications Focus Notes provide overviews of current topics and trends in microfinance, intended for the broadest possible range of professionals working in microfinance. Occasional Papers are in-depth, analytical treatments of microfinance topics. Consensus Guidelines are documents developed in cooperation with other microfinance organizations to establish agreed standards in microfinance. Guidelines are published in final form only after consen- sus has been reached among industry stakeholders. Donor Briefs are two-page publications that summarize major issues relevant to donors with a list of concrete recommendations. Technical Tools are handbooks intended to provide practitioners and donors with specific technical skills in microfinance. Their objective is to improve MFI and donor capacity while sparing individual organiza- tions the expense and burden of developing such technical aids. CGAP pilot tests the tools for one to two years before publishing. Case Studies are brief reports that explore a particular innovation, mechanism, or good practice. CGAP Annual Report 2003 55 Women working, Kenya © The Word Bank Photo Library/Curt Carnemark. CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS UPDATED PRESENTATION year 2002 ($13.3 million). Total core funds F iscal year 2003 marks a change in how contributed decreased from fiscal year 2002 by CGAP presents its financial information. less than $0.2 million, despite the phased scale- The new presentation, together with these back in World Bank contributions ($0.4 mil- accompanying notes, is intended to give the read- lion per year), and four donors providing no er a fuller and more detailed understanding of annual pledges for fiscal year 2003. First-time pledges were received from two multilateral CGAP’s financial position and its activities. entities, the African Development Bank and CGAP is a trust-funded joint venture of its 28 IFAD, in fiscal year 2003. member donors. It is housed in the World Bank, • Grant Commitments. CGAP’s work programs and has no independent legal status of its own. continued apace and are reflected in part in the The World Bank, on behalf of other member financial outlays. New net commitments for donors, has legal, financial, and administrative grants and initiatives were $9.8 million, oversight of CGAP. In accordance with its man- around $1 million lower than in fiscal year date, CGAP’s grants, projects, and most of its 2002. Of this, $10.2 million was approved by activities span more than one fiscal year. CGAP the Investment Committee as grants and ini- follows the World Bank’s fiscal year, which starts tiatives. The bulk of these commitments were on July 1 and ends on June 30. devoted to six new initiatives (described in note 4), in particular the Microfinance in MBA In years past, CGAP reported on its contributions Programs initiative, which was jointly and pledges from donors, its actual cash expenses, approved at $2.7 million each by CGAP and and its total commitments. Beginning this fiscal Soros. In these six activities, CGAP leveraged several times this amount from other donors. year, a new format was adopted to better reflect the As of June 2003, CGAP had 68 grants and ini- operating realities of CGAP. The new format tiatives in progress, for a total of $34.7 million; shows, among other things, the amount of and 67 of these were judged to be on track to approved commitments, the amount of approved meet desired objectives and established per- commitments not yet disbursed, and the level of formance thresholds.1 operating reserves available for ongoing operations and future commitments. CGAP financial state- • Operating expenses. At $5.4 million, versus ments are unaudited and are presented as a $4.1 million in fiscal year 2002, this year’s Statement of Revenue and Expenses, Balance operating expenses reflected the shift away Sheets, and a Statement of Cash Flows, together from direct CGAP grants to MFIs and toward with notes to the (unaudited) financial statements. more initiatives and consortium grants with 1 Of the 68 grants and initiatives in progress, 43 were KEY HIGHLIGHTS approved by CGAP’s Investment Committee. The remaining • Donor Contributions. At $13 million, donor 25 are activities that relate to the Appraisal and Monitoring contributions to CGAP remained strong, Services, research projects, publications, donor mainstream- albeit with a slight decline compared to fiscal ing, poverty outreach, and commercialization. CGAP Annual Report 2003 57 CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS outside partners and experts. The operating were $18.3 million.) These reserves, which fund expenses also reflect modest increases in CGAP on-going CGAP activities and operations, also staffing to support the more staff-intensive cushion the effect of delays in donor contribu- work in CGAP III. tions and will allow an orderly wind-down of CGAP’s financial position is healthy. At the end CGAP activities for 12–18 months if and when of fiscal year 2003, CGAP’s operating reserves members and donors decide to discontinue stood at $16.6 million. (In fiscal year 2002, they CGAP’s operations in their present form. Consolidated (Unaudited) Financial Statements Fiscal Years Ending June 30, 2003, and June 30, 2002 STATEMENT OF REVENUES AND EXPENSES NOTES* 2003 2002 REVENUES Contributions from Donors—Core Fund 1 11,099,530 12,020,685 Contributions from Donors—Designated - 675,000 Pledges from Donors—Core Fund 1 1,351,983 610,641 Pledges from Donors—Designated 589,548 - Subtotal—Donor Contributions Pledged and Received 13,041,061 13,306,326 Net Interest Income 2 536,257 685,567 Total Revenues (A) 13,577,318 13,991,893 EXPENSES Grants/Initiatives Committed 3 9,809,040 10,868,230 Staff Salaries and Benefits 4 2,615,903 2,156,207 Office and Occupancy Costs 4 884,395 931,599 Travel 4 333,970 245,650 Publications, Translations, and Websites 4 1,396,560 600,950 CG and ExCom Meetings 4 207,599 196,964 Total Expenses (B) 15,247,467 14,999,600 Excess of Expenses over Revenues for the Year (B)-(A) (1,670,149) (1,007,707) Operating Reserves at Beginning of the Fiscal Year 18,263,492 19,271,199 Operating Reserves at the End of the Fiscal Year 5 16,593,343 18,263,492 BALANCE SHEETS (as of June 30, 2003, and 2002) NOTES* 2003 2002 ASSETS Bank Balances on Hand 6 15,666,712 18,254,128 Bank Balances Relating to Undisbursed Grants/Initiatives, and Publications, Translations, and Websites 6 18,063,934 17,066,905 Donor Contributions Receivable 7 1,941,531 610,641 Total Assets 35,672,177 35,931,674 LIABILITIES Undisbursed Portion of Grants/Initiatives, Publications, Translations, and Websites 8 18,063,934 17,066,905 Contributions Received in Advance 8 1,014,900 601,277 Total Liabilities 19,078,834 17,668,182 OPERATING RESERVES 7 16,593,343 18,263,492 Total Liabilities and Net Assets 35,672,177 35,931,674 * See notes to Consolidated (Unaudited) Financial Statements, p.59. 58 CGAP Annual Report 2003 CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS NOTES TO CONSOLIDATED income is recorded when received and payments (UNAUDITED) FINANCIAL to consultants are recorded when they are paid). STATEMENTS—Fiscal Years Ending June 30, 2003, and June 30, 2002 CGAP grants and initiatives are expensed in the fiscal year they are approved, and the related ACCOUNTING POLICIES funds are set aside for disbursement in that fiscal These (unaudited) financial statements are pre- year and/or in later fiscal years depending on the pared in accordance with the accounting policies life of the grant or activity. and conventions set out below which closely accord with generally accepted standards of accounting. The Statement of Cash Flows presents a summa- ry of how CGAP’s cash funds are being used, These (unaudited) financial statements are pre- including the disbursements of approved CGAP pared on a historical cost basis, and denominat- grants and activities, as well as operating expens- ed in United States dollars. es (see Notes 1, 3, and 4 below). These (unaudited) financial statements are pre- 1. REVENUES pared on the accrual basis (except that investment Donor contributions, pledges, and net interest Consolidated (Unaudited) Financial Statements Fiscal Years Ending June 30, 2003, and June 30, 2002 STATEMENT OF CASH FLOWS NOTES* 2003 2002 INFLOWS Donor Contributions Received 1 11,055,918 13,582,028 Net Interest Income 2 536,257 685,567 Total Inflows 11,592,175 14,267,595 OUTFLOWS Cash Spent against Previous Year Commitments 3 6,114,382 3,402,968 Grant Disbursements 5,541,270 2,833,587 Local/International Trainers and Consultants 454,557 444,220 Travel 118,555 125,161 Cash Spent against Current Year Commitments 3 1,529,930 1,296,129 Grant Disbursements 1,529,930 1,296,129 OPERATING EXPENSES 4 5,538,249 4,473,704 Staff Salaries and Benefits 2,615,903 2,156,207 Office and Occupancy Costs 884,395 931,599 Local/International Trainers and Consultants 591,152 483,647 Travel 566,405 402,241 Publications, Translations, and Websites 672,795 303,045 CG and ExCom Meetings 207,599 196,964 Net Increase/Decrease in Undisbursed Grants/Initiatives, Publications, Translations, and Websites 997,029 940,661 Total Outflows 4,179,590 10,113,461 NET INCREASE (DECREASE) IN CASH (2,587,416) 4,154,133 Bank Balances on Hand at Beginning of Fiscal Year 18,254,128 14,099,995 Bank Balances on Hand at End of Fiscal Year 6 15,666,712 18,254,128 CGAP Annual Report 2003 59 CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS income comprise CGAP’s revenues. Donor contri- Annex 4, Section I, sets out the details of the butions and pledges are classified as unrestricted approved commitments for grants, initiatives, (core), or as limited to a specific purpose (designat- publications, translations, and websites. In fiscal ed). Amounts of donor contributions and pledges year 2003, the Investment Committee approved to CGAP’s core funds can also be found in Table $10.2 million in new commitments with cofi- 1, CGAP Member Donor Commitments, Fiscal nancing of $16 million2 from 10 different Years 2002–2004. donors. The major portion of the approved com- mitments for fiscal year 2003 was devoted to the In the Statement of Revenues and Expenses following six new initiatives and large grants to (which is presented on an accrual basis), donor networks: contributions and pledges include only those amounts that were designated for fiscal years • Soros/CGAP Microfinance in MBA 2002 and 2003. The Statement of Cash Programs Initiative: $2.7 million each from Flows/Inflows/Donor Contributions Received CGAP and Soros shows all donor cash contributions (core and • Africa International Financial Holdings non-core) received during that fiscal year regard- Technical Assistance: CGAP $1.5 million less of the fiscal year to which they relate. plus $130 million equity from financial investors at second closing, and an expected In the event that CGAP is discontinued, any total leveraged funds of $150 million funds remaining after outstanding commitments • Microfinance Investment and Support Facility are fulfilled will be returned to the donors on a in Afghanistan: CGAP $1.0 million plus $5 pro-rata basis, based on the cumulative amounts million from the government of Japan and the paid-in by each donor.. Afghanistan Reconstruction Trust Fund 2. NET INTEREST INCOME • Opportunity International Network: CGAP Net interest income comprises interest received in $1.0 million plus $3.63 million leveraged the fiscal year on cash balances held, less trust-fund funds from Oikocredit, USAID/Development administration fees levied by the World Bank. Credit Authority, and private donations • Friends of Women’s World Banking, India: 3. GRANTS AND INITIATIVES $1.0 million from CGAP plus $2.9 million This expense category relates to CGAP’s work leveraged funds from the Swiss Agency for programs via grants to microfinance institutions, Development and Cooperation, SIDBI, and and MFI networks, as well as initiatives, like local commercial banks technical assistance grants for IS development, capacity building through training, and other • CIDR East Africa Initiative: CGAP $0.8 projects that are managed or co-managed by million plus $1.6 million leveraged funds CGAP staff. Project-related commitments for from the French Ministry of Foreign Affairs, consultants and travel come out of this category. European Union, and CIDR Approved commitments that are not fully dis- The disbursements of grants against these bursed when they are closed are returned to the approved commitments (shown separately for original trust fund from where the commitments were derived. Commitment amounts are then 2 Excluding Africa International Financial Holding adjusted to reflect the net commitment amount. Technical Assistance leveraged amount. 60 CGAP Annual Report 2003 CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS commitments made in the current fiscal year an operating reserve is maintained. These and those made in past fiscal years) are shown in reserves smooth the planning and execution of the Statement of Cash Flows. ongoing CGAP operations and grant activities and cushion the effect of delays in donor contri- 4. OPERATING EXPENSES butions. In addition, reserves are intended to Operating expenses include staff salaries; bene- allow for an orderly wind-down of CGAP activ- fits and overhead; local/international trainers ities for 12–18 months if and when members and consultants; operational travel; publications, and donors decide to discontinue CGAP’s oper- translations and websites; as well as travel and ations in their present form. other expenses associated with the Consultative Group (CG) and Executive Committee 6. BANK BALANCES (ExCom) meetings. Bank balances on hand represent CGAP’s available cash balances. In fiscal year 2003, this amount Details of Operating Expenses are shown in the was $15,666,712. Bank balances representing Statement of Cash Flows, as follows: approved commitments which are in the process • Staff Salaries and Benefits include salaries of being disbursed and hence not available for new and benefits of direct-hire CGAP staff. commitments were $18,063,934 in fiscal year 03. • Local and International Trainers and 7. DONOR CONTRIBUTIONS Consultants include costs of local and inter- RECEIVABLE national consultants and trainers as well as in- Donor Contributions Receivable relates to house consultants and research assistants. amounts pledged by donors during a fiscal year but not yet received by the end of that fiscal year. • Travel includes airfare, subsistence, and hotel For fiscal year 2003, it relates to contributions costs incurred by staff and consultants in receivable from AfDB, ADB, IFAD, Japan, identifying, appraising, and monitoring Norway, and France. For fiscal year 2002, it CGAP projects. relates to contributions by Luxembourg and Japan intended for fiscal year 2002 and only • Office and Occupancy Costs include space, received in fiscal year 2003. equipment, communications, supplies, and other overhead expenses. 8. LIABILITIES The undisbursed portion of Grants/Initiatives, • Publications, Translations, and Websites Publications, Translations, and Websites repre- include publishing, printing, translating, sents funding commitments approved but where editing, website expenses, costs of publica- disbursements are in progress and are to be made tions manager and communications officer, or continued beyond the current fiscal year and Microfinance Gateway costs. (Annex 4, Sections I and II). Contributions CG and Excom Meetings include travel, facili- Received in Advance is contributions intended ties, food services, and other expenses connected by donors to be used for future fiscal years. with the CG and ExCom meetings. Australia’s contribution for 2004–2006 was received in fiscal year 2003, while the Ford 5. OPERATING RESERVES Foundation and the Netherlands contributions Reserves are funds available for ongoing opera- for 2003 were received in fiscal year 2002. ■ tions and future commitments. Given that CGAP is not a self-standing, permanent entity, CGAP Annual Report 2003 61 ANNEX 1 CGAP CONSULTATIVE GROUP MEMBER DONORS MULTILATERAL MEMBER DONORS African Development Bank European Bank for United Nations Capital (AfDB) Reconstruction Development Fund Rue Joseph Anoma and Development (EBRD) Special Unit for Microfinance 01 BP 1387 Abidjan 01 One Exchange Square (UNCDF/SUM) Côte D’Ivoire London, EC2A 2JN Two UN Plaza, 26th Floor United Kingdom New York, NY 10017 AMINA United States Rue Joseph Anoma Inter-American 01 BP 1387 Abidjan 01 Development Bank (IDB) United Nations Development Côte D’Ivoire 1300 New York Ave., NW Programme (UNDP) Washington, DC 20577 MicroStart Asian Development Bank United States One United Nations Plaza (AsDB) Room UH-8th Floor 6 ADB Avenue International Fund New York, NY 10017 P.O. Box 789 for Agricultural United States Mandaluyong City Development (IFAD) The Philippines Via del Serafico, 107 The World Bank 00142 Rome 1818 H Street, NW European Commission (EC) Italy Room F 11-K 188 EuropeAid Washington, DC 20433 Economic Cooperation International Labour Office United States AIDCO/C/2 (ILO) Loi 41-8/74 4, route des Morillons Rue de la Loi 200 CH 1211 Geneva 22 1049 Brussels Switzerland Belgium BILATERAL MEMBER DONORS Australia Denmark Ministère des Affaires Etrangères Australian Agency for Royal Danish Ministry of Foreign Direction générale de la International Affairs coopération internationale et du Development (AusAID) 2 Asiatisk Plads développement GPO Box 887 DK-1448 Copenhagen K 20, rue Monsieur Canberra ACT 2601 Denmark 75700 Paris 07 SP Australia France Finland Belgium Ministry of Foreign Affairs Germany Belgian Administration for P.O. Box 176 Kreditanstalt für Wiederaufbau Development (Katajanokanlaituri 3) (KfW) Cooperation 00161 Helsinki Financial Sector Department Rue de Bréderode 6 Finland Palmengartenstr. 5-9 1000 Brussels 60325 Frankfurt am Main France Belgium Germany Agence Française de Canada Développement (AFD) Federal Ministry for Economic Canadian International 5, rue Roland Barthes Cooperation and Development Development Agency (CIDA) 75598 Paris Cedex 12 (BMZ) 200 Promenade du Portage France Dept. 410 Hull, Québec Friedrich-Ebert-Allee 40 Canada K1A OG4 53113 Bonn Germany 62 CGAP Annual Report 2003 CGAP CONSULTATIVE GROUP MEMBER DONORS BILATERAL MEMBER DONORS continued Die Deutsche Gesellschaft für Ministry of Finance Norwegian Ministry of Foreign Technische Zusammenarbeit International Bureau Affairs (GTZ, Society for Technical Development Institution Division 7, juni plassen/ Victoria Terrasse Cooperation) c/o Office of the Executive P.O. Box 8114 DEP Banking Services and Financial Director for Japan 0032 Oslo Systems Development The World Bank Norway Postfach 5180 1818 H Street, NW Sweden Dag Hammersjold Weg 1-5 MC 12-315 Swedish International 65726 Eschborn Washington, DC 20433 Development Germany United States Cooperation Agency (Sida) Italy Luxembourg INEC Department Ministry of Foreign Affairs Ministère des Finances Sveavagen 20 Directorate General for 3, rue de la Congrégation S-105 25 Stockholm, Development 2931 Luxembourg Sweden Cooperation (DGCS) Luxembourg Switzerland Pizza della Farnesina, 1 Ministère des Affaires Etrangères Swiss Agency for Development 00194 Rome Direction de la Coopération au and Cooperation Italy Développement Freiburgstrasse 130 Japan 6, rue de la Congrégation CH-3003 Berne Japan Bank for International 2931 Luxembourg Switzerland Cooperation (JBIC) Luxembourg United Kingdom c/o Office of the Executive Department for International The Netherlands Director for Japan Development (DFID) Ministry of Foreign Affairs The World Bank 94 Victoria Street Bezuidenboutseweg 67 1818 H Street, NW London SW1E 5JL P.O. Box 20061 MC 12-315 United Kingdom The Hague 2500 EB Washington, DC 20433 The Netherlands United States United States Norway US Agency for International Ministry of Foreign Affairs Development (USAID) Norwegian Agency for c/o Office of the Executive 1300 Pennsylvania Ave., NW Development Director for Japan Mail Stop 20523-211 Cooperation (NORAD) The World Bank Washington, DC 20523 Ruselokkveien 26 1818 H Street, NW United States P.B. 8034 Dep. MC 12-315 0030 Oslo Washington, DC 20433 Norway United States FOUNDATION MEMBER DONORS The Ford Foundation Argidius Foundation 320 East 43rd Street Matorca Inc. New York, NY 10017 Suite 200 United States 586 Argus Road Oakville, Ontario L6J3J3 Canada CGAP Annual Report 2003 63 ANNEX 2 CGAP STAFF BIOGRAPHIES (Staff as of July 1, 2003) Elizabeth Littlefield, Director. Ms. Littlefield is Robert P. Christen, Senior Adviser. Mr. Christen chief executive officer of CGAP and a director of the joined CGAP in 1998. He works on issues related to World Bank. She joined CGAP in late 1999 from the commercialization and regulation and supervision. investment bank, JP Morgan, where she was the He is also the Director of the Microfinance Training Managing Director in charge of financing in Central, Program (at Naropa University in Boulder, Eastern, and Southern Europe, Central Asia, the Colorado) and is the Chair of the editorial board of Middle East, and Africa. Her responsibilities involved The MicroBanking Bulletin, an industry publication oversight of financing (public, private, structured, devoted to financial sustainability and benchmark- and derivative) to governments, corporations, and ing. Before joining CGAP, Mr. Christen advised banks, and related advisory work, in areas such as commercial banks interested in microfinance, cen- debt management and credit ratings. Prior to this tral banks and bank superintendencies interested in position, Ms. Littlefield held positions at JP Morgan the regulatory framework for microfinance, and as a Vice President and head debt trader for external donors interested in performance standards. Mr. and local debt in Africa, Eastern Europe, and Asia, Christen also worked for ACCIÓN International. and as a Director in Corporate Finance in JP Mr. Christen is the author of several publications Morgan’s Paris office, among others. Parallel to her related to sustainable microfinance. He received a career in investment banking, Ms. Littlefield spent master’s degree from The Ohio State University. 1989–90 on secondment to microfinance institutions in West and Central Africa. During this period, she Carmencita B. Clay, Budget Officer. Ms. Clay also provided consultant services to the microenter- joined CGAP in 1995. She handles all budget issues, prise sector in Pakistan. Ms. Littlefield served on the administers CGAP’s trust funds, and works with Board of Trustees of Women’s World Banking from member donors on funding commitments to CGAP. 1992–94 and on its Executive Committee as Before joining CGAP, Ms Clay worked at Treasurer from 1994–99. Ms. Littlefield is a graduate USAID/Philippines, the Asian Development Bank, of Brown University and the Fondation Nationale des and various departments in the World Bank. Ms. Sciences Politiques in Paris. She also completed a Clay received a bachelor’s degree in commerce year-long finance training program at JP Morgan. (accounting major) from The Philippines College of Ms. Littlefield speaks fluent French. Commerce. Leslie Barcus, CGAP/Soros MBA. Ms. Barcus Tamara Cook, Microfinance Analyst. Ms. Cook joined CGAP in May 2001 to support CGAP’s joined CGAP in 1996. As a member of the financial capacity-building initiatives. Ms. Barcus originally institutions Team, she monitors CGAP investments, served as the Capacity Building Product Manager for conducts institutional appraisals, and coordinates the MFI Training Program. Since mid-2002, she has CGAP’s network initiative. In addition, she con- worked on the development of the Microfinance in tributes to research for CGAP publications and pro- MBA Programs initiative, a joint venture of CGAP grams and works with the management team on cor- and the Open Society Institute of the Soros porate priorities. Beginning in fiscal year 2004, she Foundation to integrate the study of microfinance will be working more on CGAP’s scaling-up and management into the curricula of top MBA and grad- diversification strategy. Ms. Cook graduated from uate management programs around the world. Prior George Washington University, where she studied to joining CGAP, Ms. Barcus was the Director of international development and business administra- Lending at ACCIÓN New York, an associate micro- tion. She has attended numerous training programs in finance institution of ACCIÓN USA and ACCIÓN microfinance and is proficient in French. International. Ms. Barcus speaks French and has worked in training, corporate banking, and econom- Tiphaine Crenn, Microfinance Analyst. Ms. ic development consulting. She holds a master’s Crenn joined CGAP in 1998. She works on the degree in international development from The financial institutions team as a coordinator for the American University in Washington, DC. CGAP capacity-building program. She also works 64 CGAP Annual Report 2003 CGAP STAFF BIOGRAPHIES on the CGAP web site and the Microfinance Ms. Folan was a manager in the development and Gateway. Before joining CGAP, Ms. Crenn worked communications department of FINCA Inter- as a translator and bilingual lexicographer. She has a national, where she handled corporate communica- master’s degree in translation from the University of tions, speechwriting, and fundraising. Ms. Folan has Ottawa, Canada. also served as membership director for the Supreme Court Historical Society. She received a bachelor’s Gauri Rani Deshpande, Microfinance Analyst. Ms degree from the College of William and Mary and is Despande joined CGAP in 2003. As a member of the proficient in French. end-client team, she contributes to CGAP research on diverse financial products and services and manages Evelyne Fraigneau, Director’s Assistant. Ms. the CGAP-IFAD Rural Pro-Poor Innovation Fraigneau joined CGAP in 1999. She provides assis- Challenge grant. Her professional experience includes tance to the Director, handles information requests, consulting assignments at the UN, training and small and plans meetings for CGAP and its stakeholders. business consulting in West Africa, and business man- Before joining CGAP, Ms. Fraigneau worked in the agement in India and the US. Ms. Deshpande World Bank’s Africa Region and at the French mis- obtained an MBA and a master’s degree in interna- sion to the United Nations office in Geneva, tional affairs from Columbia University. She is fluent Switzerland. She studied translation at St. Bénigne in English, French, and Marathi, and is proficient in Institute in Dijon, France, and Georgetown Spanish and Hindi. University. She speaks French and English fluently. Marc Douglas, Microfinance Gateway Content Natasa Goronja, Microfinance Analyst. Ms. Manager. Mr. Douglas joined CGAP in June 2003. Goronja joined CGAP in 2001. Originally a mem- A member of the microfinance industry team, he ber of the microfinance industry team, she trans- manages day-to-day operations of the Microfinance ferred to the donor team in early 2002. Before join- Gateway. Mr. Douglas has 10 years of experience with ing CGAP, Ms. Goronja worked in the microfinance micro and medium-sized enterprises as a manager, sector in Bosnia as a loan officer, microfinance train- consultant, trainer, and communications specialist for er, consultant, and policy adviser. She manages Deloitte Touche Tohmatsu Emerging Markets, information dissemination, primarily through the Association for Enterprise Opportunity, Technoserve, Internet, for the donor team, and is actively engaged and the US Peace Corps. Mr. Douglas holds a mas- in the delivery of donor training. She is completing ter’s degree from the Johns Hopkins University a master’s degree in European studies in a joint pro- School of Advanced International Studies. He is flu- gram of the University of Bologna, University of ent in Spanish and proficient in Portuguese, French, Sarajevo, and London School of Economics. A Russian, and Guarani. native of Bosnia and Herzegovina, Ms. Goronja speaks fluent Serbo-Croatian, Italian, and French, as Eric Duflos, Microfinance Specialist. Mr. Duflos well as some Russian. joined the donor team in January 2003 after seven years in Laos, where he worked with the UN and the Syed M. Hashemi, Senior Microfinance Specialist. World Bank to set up the first microfinance institu- Dr. Hashemi joined CGAP in 1999. As the leader of tions and establish a conducive policy framework. He the end-client team, his work involves promoting a has also worked in Cambodia, Indonesia, Bangladesh, greater poverty focus in microfinance, increasing the Vietnam, Haiti, Madagascar, Chad, and the United depth of outreach of the financial sector, assessing States on SME and microfinance development. He social performance of financial institutions, under- holds a master’s degree in management from the Lyon standing the range of financial needs of poor house- EM and a master’s degree in economics and interna- holds, and identifying and disseminating good prac- tional relations from the Johns Hopkins University tices in the development of flexible financial services. School of Advanced International Studies. A French Before joining CGAP, Dr. Hashemi directed the national, he speaks French and English fluently, and Program for Research on Poverty Alleviation at the some German and Lao. Grameen Trust. He taught development studies at Jahangirnagar University in Bangladesh for 12 years. Anne Folan, Communications Officer. Ms Folan He has conducted research on microcredit, NGOs, joined CGAP in April 2003. She is responsible for and gender subordination in rural Bangladesh. Dr. designing, implementing, and managing CGAP’s Hashemi holds a PhD in economics from the communications strategies. Before joining CGAP, University of California at Riverside. CGAP Annual Report 2003 65 ANNEX 2 Brigit Helms, Lead Microfinance Specialist. Dr. CGAP, Ms. Isern was the Regional Technical Adviser Helms joined CGAP in 1996. She manages the donor for economic development in West and Central team, which assists CGAP member donors to improve Africa with CARE International, where she aid effectiveness in microfinance. Dr. Helms has also designed, trained, managed and evaluated microfi- worked in microfinance capacity building at CGAP, nance institutions. In addition, she worked for and taught at the Microfinance Training Program in USAID in Costa Rica and Senegal, the United Boulder, Colorado, and other seminars. Dr. Helms Nations Development Programme in New York, helped define and implement CGAP initiatives on and AT&T’s international division. She speaks flu- depth of outreach, and led the development of the ent French and is proficient in Spanish. Ms. Isern’s draft CGAP Poverty Measurement Tool. She regularly regional experience includes Africa, North and contributes to CGAP’s handbooks and publications, South America, Eastern Europe, Asia, and the including the Product Costing Tool, Appraisal Middle East. She received her master’s degree from Format, Focus Notes, Donor Briefs, and Donor Good Princeton University, and she is a CFA Practice Case Studies. Prior to joining CGAP, Dr. Charterholder. Helms worked in the Latin America and the Caribbean Division of IFAD, where she supervised Gautam Ivatury, Microfinance Analyst. Mr. Ivatury projects with significant microenterprise and microfi- joined CGAP in June 2003. He was most recently nance components. She has also worked as a desk offi- Vice President of finance and adminstration at SKS cer for Central America at the US Department of Microfinance, based in Hyderabad, India. Mr. Ivatury Commerce. Dr. Helms has extensive private- and pub- helped raised nearly US$ 6 million in financing, and lic-sector consulting experience worldwide. She holds contributed to SKS’s growth from 8,000 to 20,000 a PhD from Stanford University in development and clients. Prior to SKS, Mr. Ivatury was an investment agricultural economics, speaks fluent Spanish, and is analyst at the International Finance Corporation, co- proficient in French and Italian. founded a startup education technology venture, and worked as an investment banker at Donaldson, Lufkin Kristin Hunter, Publications Manager. Ms. Hunter & Jenrette (now Credit Suisse First Boston). He holds joined CGAP in December 2002. She manages pro- an master’s degree. and a batchelor’s degree. in interna- duction of all CGAP publications in print and elec- tional affairs from Johns Hopkins University, and is tronic media, including the web site. She also oversees proficient in French and Hindi. distribution of CGAP publications. Ms. Hunter worked for most of the 1990s as program officer and Alexia Latortue, Microfinance Specialist. Ms. managing editor for East European Studies at the Latortue joined CGAP in 2002. She workd on the Woodrow Wilson International Center for Scholars in donor team and manages the Donor Peer Reviews. Washington, DC. As a free-lance managing editor, she Prior to joining CGAP, Ms. Latortue worked as a has experience with structural editing of full-length development specialist with Development books and research papers, managing publications for Alternatives, Inc. (DAI). In Haiti, she served as man- international projects and academic groups, and edit- ager of technical services on two USAID-funded ing medical journal articles. She holds a bachelor’s microfinance projects working with NGOs, credit degree in English and history from Duke University unions, and commercial banks from 1998 to late and has done post-graduate work in East European 2001. She launched initiatives on standards, external history at George Washington University. She is profi- audits, micro-insurance and knowledge management, cient in German and reads French. and oversaw training activities. She has also worked with the Small Business Development Center in Boca Jennifer Isern, Lead Microfinance Specialist. Ms. Raton, Florida, and as a research analyst for the Isern joined CGAP in 1996. She brings 15 years of Sterling International Group, among other private experience in development, including more than sector posts. She received a master’s degree in develop- five years living in West Africa managing institu- ment economics from the Fletcher School of Law and tions. She leads the financial institutions team and is Diplomacy at Tufts University. She is fluent in primarily responsible for Francophone Africa and French, Haitian Creole, and German, and has rudi- China, although she works globally. Her work mentary Spanish. focuses on institutional strengthening through investments, training and technical assistance; new Sarah Manapol-Brown, Budget Assistant. Ms. institutional models such as bank-MFI linkages; and Manapol-Brown joined CGAP in May 2000. She international and national networks. Before joining works closely with Carmencita Clay on budget 66 CGAP Annual Report 2003 CGAP STAFF BIOGRAPHIES issues, donor administration agreements/grant program. He has also worked as a consultant with agreements, consultant contracts, and overall DFID, EBRD, and the World Bank. Mr. Pearce administration of the CGAP office. Prior to joining received a master’s degree in agricultural economics CGAP, Ms. Manapol-Brown worked for the World from Wye College at the University of London. He Bank, in the Private Sector Development, Corporate is fluent in Spanish. Restructuring and Governance unit. Xavier Reille, Senior Microfinance Specialist. Mr. Patricia Mwangi, Microfinance Specialist. Ms. Reille joined CGAP in 1999. He is the leader of the Mwangi joined CGAP in 1999. She works on the microfinance industry team and is responsible for the capacity-building initiative, the financial statements East Asia region. Mr. Reille also manages the disclosure guidelines, and the audit program, and Microfinance Gateway and is Managing Director of monitors investments. She is on the microfinance the Microfinance Information Exchange. Before join- industry team and is responsible for the eastern and ing CGAP, he worked with Catholic Relief Services southern Africa regions. Prior to joining CGAP, Ms (CRS), where he was the regional microfinance advis- Mwangi worked as an external auditor and manage- er for Southeast Asia. During his three-year assign- ment consultant with Price Waterhouse, Kenya. She ment with CRS, he set up a major investment compa- performed statutory audits for commercial entities ny for rural banks in Indonesia and developed a rating and nonprofit organizations. She has six years of man- methodology for these banks. Prior to CRS, he was agement consulting, managing projects, conducting Operations Director at Société d’Investissement et de institutional performance assessments, and providing Développement International (SIDI), where he played financial management training and training design. a role in the creation of Profund (an equity fund for She worked mostly in East Africa with microfinance microfinance institutions in South America) and the institutions, public and private sector organizations; development of Centenary Bank (a commercial bank as well as in Zimbabwe, India, and the Philippines. in Uganda). Mr. Reille has a master’s degree in inter- She received her master’s degree in administration national finance from the University of Paris. He is from the Australian Catholic University and is a CPA. fluent in French, Spanish, and English, and speaks Bahasa Indonesia. Michael Owens, Web Manager. Ms. Owens joined CGAP in 2003. As a member of the communication Anne Ritchie, Senior Financial Sector Specialist. team, Ms. Owens manages all of CGAP’s online Ms. Ritchie joined CGAP in 2002. She was jointly products and services, including cgap.org and recruited by CGAP and the Financial Sector microfinancegateway.org. Ms. Owens has over eight Executive Vice Presidency (FSE) of the World Bank years of experience managing web sites and web- to work with those sectors of the Bank that do not based applications. Her previous projects include have microfinance expertise or capacity, yet conduct managing the development of online banking and microfinance operations. She will transfer from brokerage software and designing educational sites CGAP to the Bank in November 2003 to continue for the US Treasury Department, the National the work begun during her tenure at CGAP. Ms. Institutes of Health, and the Public Broadcasting Ritchie has been active in the field of microfinance Service. Ms. Owens is a graduate of Johns Hopkins for almost 25 years, and spent 20 of those years liv- University and has a master’s degree in English from ing and working in Africa, South Asia, and the the University of Virginia. Caribbean. Prior to joining CGAP, she provided technical assistance in microfinance at the Doug Pearce, Senior Microfinance Specialist. Mr. International Finance Corporation. In addition to Pearce joined CGAP in 2001. He is on the end- her work in microfinance, Ms. Ritchie has managed client team and has been leading CGAP’s rural several private-sector businesses, including import- microfinance and Afghanistan initiatives. He is also ing and wholesaling Moroccan artisan crafts in responsible for the region of Central and Eastern Great Britain. She is a graduate of Brandeis Europe and the New Independent States. Prior to University and speaks French. joining CGAP, he was a principal economist in the Markets, Finance, and Enterprise Group of the Richard Rosenberg, Senior Adviser. Mr. Natural Resources Institute in the UK. In Bosnia Rosenberg joined CGAP in 1995. He has con- Herzegovina, as sector coordinator for CARE, he set tributed to CGAP’s tools and publications, includ- up and managed both a microfinance institution ing the External Audit Handbook; Appraisal (‘Mikrofin’) and a business development services Format; Occasional Papers on interest rates, delin- CGAP Annual Report 2003 67 ANNEX 2 quency measurement, and regulation; CGAP’s Veena Jayadeva. Ms. Jayadeva joined CGAP in financial statement disclosure guidelines; and policy November 2002. She conducted research for guidelines on microfinance regulation. He is a core CGAP’s global microfinance stocktaking initiative faculty member of the Microfinance Training and provides support on a wide range of other proj- Program in Boulder, Colorado, and also assists with ects. Prior to joining CGAP, she was a research assis- other donor training. Before joining CGAP, Mr. tant at the International Monetary Fund and served Rosenberg was deputy director of USAID’s Center internships at the White House and the United for Economic Growth, which provided most of its Nations. She has a bachelor’s and master’s degree in Washington, DC-based expertise in private-sector international studies from Johns Hopkins and agricultural development. He also spent nine University. Ms. Jayadeva is fluent in English, Italian, years in Latin America, managing portfolios totaling and Kannada. $600 million in export and investment promotion, privatization, pension reform, and development Aditi Lall. Ms. Lall joined CGAP in November finance (especially microfinance). Prior to USAID, 2002. As a member of the microfinance industry Mr. Rosenberg practiced antitrust and contract law team, Ms. Lall administers the CGAP/IDB Ratings with Boodell Sears in Chicago, and private invest- and Assessment Fund and helps manage other ment management with the principal owner of the industry-team projects. Before CGAP, Ms. Lall Parker Pen Company in Washington. He holds a worked with WDC, an IBM affiliate in India, as a doctorate of law degree from Harvard University. project manager for e-business implementation Mr. Rosenberg is fluent in English and Spanish. projects. She has an MBA and is currently complet- ing a master’s degree in international commerce and Ousa Sananikone, Senior Private Sector public policy from George Mason University. Ms. Development Specialist. Ms. Sananikone joined Lall is fluent in English and Hindi. CGAP in 2000. She is responsible for the day-to- day management of CGAP. Her work also includes Mariana Salazar. Ms. Salazar joined CGAP in June conducting appraisals of microfinance institutions 2003. She conducts research and provides adminis- and managing a number of investment projects. trative support on a wide range of CGAP projects. Before joining CGAP, Ms. Sananikone worked in Before joining CGAP, she served internships with the Small and Medium Enterprise (SME) the Open Society Institute’s Latin American Affairs Development Department of the World Bank, Program and the Carnegie Corporation’s Education where she managed a mix of SME and microfinance Division. Ms. Salazar has a batchelor’s degree from lending projects and economic sector work in Africa Ohio Weslyan University and is fluent in Spanish and Asia, focusing on SME development and com- and English. ■ petitiveness. She has contributed to a number of publications on the informal sector and the role of government in small enterprise development. Ms. Sananikone holds a master’s degree in international affairs from the School of Foreign Service at Georgetown University. She is fluent in Lao, Thai, French, and English. FY 2003 RESEARCH ASSISTANTS: João Pedro Wagner de Azevedo. From June–October 2003, Mr. Wagner de Azevedo worked with the end-client team on poverty assess- ments and case studies of agricultural microfinance best practices. He previously worked as an intern for the Inter-American Development Bank and the World Bank. Mr. Wagner de Azevedo is a Ph.D. candidate in economics at the University of Newcastle in the UK and holds a master’s degree in economics from the Universidade Federal Fluminense in Brazil. He is fluent in Portugese, Boy herding goats, Kenya Spanish, and English. © 1996 World Bank Photo Library/Curt Carnemark 68 CGAP Annual Report 2003 ANNEX 3 CGAP MICROFINANCE PUBLICATIONS FOCUS NOTES No 9 Anatomy of a Microfinance Deal: The No 24 Is Microfinance an Effective Strategy New Approach to Investing in Micro- for Achieving the Millinnium finance Institutions (August 1997) Development Goals? (January 2003) No 8 Introducing Savings in Microcredit No 23 A Multilateral Donor Triumphs over Institutions: When and How? Disbursement Pressure: The Story of (April 1997) Microfinance at Banco do Nordeste No 7 Effective Governance for Microfinance in Brazil (December 2001) Institutions (March 1997) No 22 Resource Guide for Microfinance No 6 The Challenge of Growth for Assessements (revised December 2002) Microfinance Institutions: The No 21 Linking Microfinance and Safety BancoSol Experience (March 1997) Net Programs to Include the Poorest: No 5 Financial Sustainability, Targeting the The Case of IGVGD in Bangladesh Poorest, and Income Impact: Are (May 2001) There Trade-offs for Microfinance No 20 Microfinance, Grants, and Non- Institutions? (December 1996) Financial Responses to Poverty No 4 OUT OF PRINT Reduction: Where Does Microcredit Fit? (May 2001) No 3 Missing Links: Financial Systems That Work for the Majority (October 1995) No 19 In-Country Donor Coordination (April 2001) No 2 Maximizing the Outreach of Microenterprise Finance: The No 18 Exploring Client Preferences in Emerging Lessons of Successful Microfinance: Some Observations Programs (October 1995) from SafeSave (September 2000) No 1 The Consultative Group to Assist the No 17 Microfinance and Risk Management: Poorest: A Microfinance Program A Client Perspective (May 2000) (revised, September 1998) No 16 Those Who Leave and Those Who Don’t Join: Insights from East African OCCASIONAL PAPERS Microfinance Institutions (May 2000) No 7 Scoring: The Next Breakthrough in Microfinance? No 15 Raising the Curtain on the “Micro- financial Services Era” (May 2000) No 6 Apex Institutions in Microfinance (January 2002) No 14 CGAP’s Pilot Microfinance Capacity- Building Initiative in Africa: What No 5 Commercialization and Mission have We learned? (February 1999) Drift: The Transformation of Microfinance in Latin America No 13 Savings Mobilization Strategies: (January 2001) Lessons from Four Experiences (August 1998) No 4 The Rush to Regulate: Legal No 12 Commerical Banks in Microfinance: Frameworks for Microfinance New Actors in the Microfinance (April 2000) World (July 1998) No 3 Measuring Microcredit Delinquency: No 11 How CGAP Member Donors Fund Ratios Can Be Harmful to Your Microfinance Institutions (July 1998) Health (June 1999) No 10 State-Owned Development Banks in No 2 Cost Allocation for Multi-Service Microfinance (August 1997) Microfinance Institutions (April 1998) No 1 Microcredit Interest Rates (revised December 2002) CGAP Annual Report 2003 69 ANNEX 3 DONOR BRIEFS Available on CGAP web site.) No 12 Regulation and Supervision of Financial Transparency: A Glossary of Terms Microfinance (May 2003) (reissued December 2002) No 11 Microfinance Means Financial Services for the Poor (March 2003) MICROFINANCE CONSENSUS No 10 Credit Components (February 2003) GUIDELINES No 9 Microfinance and the Millennium Guiding Principles on Regulation and Development Goals (December 2002) Supervision of Microfinance (forthcoming August 2003) No 8 Why Donors Need to Understand Product Development Definitions of Selected Financial Ratios, (November 2002) Terms, and Adjustments of Microfinance (forthcoming September 2003) No 7 Microfinance Transparency and Reporting to Donors (October 2002) Developing Deposit Services for the Poor: Preliminary Guidance for Donors (forthcom- No 6 Making Sense of Microcredit Interest ing Winter 2004) Rates (September 2002) Disclosure Guidelines for Financial No 5 Apex Institutions in Microfinance Reporting by Microfinance (forthcoming (July 2002) Winter 2004) No 4 Savings Are as Important as Credit: Deposit Services for the Poor (2002) CGAP PHASE III STRATEGY, No 3 Water, Water Everywhere, But Not a 2003–2008 (January 2003) Drop to Drink (2002) Other Publications about CGAP No 2 Microcredit: One of Many CGAP Annual Report, 2003 Intervention Strategies (2002) CGAP Microfinance Publications 2003 No 1 Microfinance Donor Projects: 12 (forthcoming October 2003) Questions about Sound Practice (2002) CGAP Publications, 2002 TECHNICAL TOOLS Helping to Build a Microfinance Industry No 6 CGAP Product Costing Tool, ver. 1.1 (2000) (draft version, March 2002, available Focus on Poverty: CGAP 2000 on CGAP web site; English only) Assessing the Relative Poverty of No 5 Microfinance Poverty Assessment Microfinance Clients: A CGAP Operational Tool (forthcoming Fall 2003) Tool (2000) Technical Tools 1-4 CD-ROM (2002) Focus on Transparency (2000) No 4 The CGAP Appraisal Format for Skills for Microfinance Managers—CGAP’s Microfinance Institutions (1999) Capacity-Building Program (2003) No 3 A Handbook for the External Audit Microfinance in World Bank Projects: of Microfinance Institutions (1998) Twelve Questions about Sound Practice No 2 Using Microfin 3.0—A Handbook for Operational Planning and RESEARCH AND BACKGROUND Financial Modeling (2001) DOCUMENTS No 1 Handbook for Management Donor Peer Review Synthesis Reports and Information Systems for Letters to Agency Heads Microfinance Institutions (1998) Policy Implications of the Donor Peer Reviews (January 2003) Microfinance Glossary: English-Spanish (reissue forthcoming Fall 2003. Available on Donor Peer Reviews Synthesis Report CGAP web site) (December 2002) Microfinance Glossary: English-French African Development Bank (AfDB) Peer (reissue forthcoming Fall 2003. Developed by Review Letter to Agency Head GRET and CIRAD with CGAP funding. 70 CGAP Annual Report 2003 CGAP MICROFINANCE PUBLICATIONS Asian Development Bank (AsDB) Peer Pro-Poor Innovation Case Studies Review Letter to Agency Head (forthcoming) Department for International Development Regional Reviews and Study Reports (DFID) Peer Review Letter to Agency Head The State of Microfinance in Central and International Fund for Agricultural Eastern Europe and the New Independent Development (IFAD) Peer Review Letter to States (May 2003) Agency Head Microfinance in Central America and Kreditanstalt für Wiederaufbau (KfW) Peer Mexico, 2001 Review Letter to Agency Head Financial Services Associations: The Story Norwegian Development Corporation So Far, 2001 (Norway) Peer Review Letter to Agency Notes from the Field: Dimensions and Head Dynamics of Competition in Bangladesh, Swedish International Development 2000 Corporation (Sida) Peer Review Letter to Agency Head CGAP Working Group Papers United Nations Development Programme Guidelines for Microfinance Impact (UNDP) and United Nations Capital Assessments: Discussion Paper for the Third CGAP Virtual Meeting Development Fund (UNCDF) Letter to Agency Head Toward Guidelines for Lower-Cost Impact Assessment Methodologies for Microfinance and Rural Microfinance Microenterprise Programs: A Discussion Operational Notes Paper for the Second CGAP Working Group No 1 Microfinance and Social Funds: Summary of the First Virtual Meeting on Guidelines for Microfinance in Microfinance Impact Assessment Poverty-Focused, Multi-sectoral Projects (forthcoming August 2003) How Microfinance Providers Target the Poor: A Compendium of Strategies Case Studies Reforming Agricultural Development Banks Donor Good Practice Case Studies Bank For Agriculture and Agricultural No 6 Avoiding Apex Pitfalls: Local Cooperatives (BAAC), Thailand 1999 Initiatives Departments of Bosnia Banco Caja Social (BCS), Columbia 1999 and Herzegovina (2003) Bank Rakyat Indonesia (BRI), Indonesia 1999 No 5 Building a Reliable MFI Funding Comparative Analysis of Savings Base: Donor Flexibility Shows Mobilization Strategies, 1999 Results for BASIX in India (2003) Federation of the Agricultural Savings and No 4 Knowing When to Stop: The Case of Credit Unions, Benin 1999 UNDP Bangladesh (2003) Rural Bank of Panabo (RBP), Phillippines No 3 From Skepticism to Success: The 1999 World Bank and Banco do Nordeste in Brazil (2003) Savings in the Context of Microfinance— State of Knowledge, 1999 No 2 Building a Microfinance Industry: USAID’s PRET/FINNET in Haiti Microsavings Compared to Other Sources (2003) of Funds, 1999 No 1 Success in Rural Savings: How GTZ The Case for Voluntary, Open Access and BAAC Expanded Savings Savings Facilities and Why Bangladesh’s Services in Thailand (2003) Largest MFIs Were Slow to React, 1999 ITT Innovations (forthcoming October 2003) Beyond Basic Credit and Savings: Developing New Financial Service Products Rural Microfinance Case Studies for the Poor, 1999 (forthcoming) Self-Reliant Village Banks, Mali 1999 ■ CGAP Annual Report 2003 71 ANNEX 4 CGAP COMMITMENTS, 1995-2003 (US $) Beginning Expenses thru Expenses Commitments Balance FY2002 FY2003 Balance I. A. New Commitments, Fiscal Year 2003 10,863,47311 4,270,443 2,913,695 3,594,078 8,626,144 Microfinance MBA 2,687,500 8,277 66,073 2,613,151 Africa Bank Holdings 1,500,000 526 1,499,474 Microfinance Framework for Afghanistan 1,000,000 1,000,000 Opportunity International 1,000,000 500,000 500,000 Friends of Womens World Banking 1,000,000 500,000 500,000 CIDR East Africa Initiative 836,000 279,930 556,070 Deepening Client Outreach 353,500 467,140 306,179 106,349 408,112 Rural Pro-Poor Innovation Challenge 300,000 1,156,563 747,000 709,563 - Donor Services—Europe Office 200,000 139,307 60,693 Agricultural Microfinance 200,000 38,135 161,865 Africa Regional Study 197,000 - 197,000 Microfinance Credit Line Review 180,034 13,985 166,049 Information Technology Projects for Microfinance 165,000 14,099 150,901 Donor Staff Training UNDP-CDF 160,000 781,740 200,000 476,740 265,000 Infrastructure and Microfinance 126,500 - 126,500 Network Analysis 100,000 6,873 93,127 Donor Information Resource Center 100,000 92,941 7,059 Self-Help Groups (SHG) Study 85,000 31,603 53,397 Donor Peer Reviews 81,319 200,000 99,044 182,275 - Ennatien Moulthan Tchonnebat (EMT) 75,000 75,000 - Microinsurance (Mali) 60,000 1,152 25,000 33,848 New Training Partnerships 50,000 2,891 47,109 Factory Workers in India 50,000 8,547 41,453 Linkages to Non-financial Institutions (S. Africa) 50,000 9,358 40,642 NABWT 50,000 50,000 - Grameen Koota 50,000 50,000 - Spandana 50,000 50,000 - AFCAP 42,690 1,475,000 1,417,690 100,000 - Product Costing Tool Testing 40,000 60,000 6,472 28,819 64,709 Information Systems Consumer Report 23,930 100,000 123,930 - Transfer/Remittance Payment 20,000 - - 20,000 Boulder Scholarship for Donors 20,000 30,000 3,951 30,559 15,490 Donor Services—World Bank/IFC 10,000 - 5,507 4,493 72 CGAP Annual Report 2003 CGAP COMMITMENTS, 1995-2003 Beginning Expenses thru Expenses Commitments Balance FY2002 FY2003 Balance I. B. Closed Out or Reduced Commitments in FY 2003 (720,463) 1,645,463 657,013 191,417 76,570 BRI International Visitors Program (275,000) 1,200,000 657,013 191,417 76,570 Others2 (445,463) 445,463 - Net Commitments, Fiscal Year 2003 10,143,010 I. C. Publications, Translations, and Websites 1,396,560 1,749,904 1,184,142 658,141 1,304,182 Microfinance Gateway 943,000 649,000 396,830 226,071 969,100 Publications and Translations 400,000 1,100,904 787,312 378,510 335,082 CGAP Website 53,560 - 53,560 - Total 11,539,570 7,665,810 4,754,849 4,443,636 10,006,895 II. Ongoing Grants and Expenses thru Expenses Initiatives, 1995–2002 Commitments FY2002 FY2003 Balance CAPAF 2,400,000 1,395,915 706,719 297,366 Microfinance Information eXchange (MIX 2,000,000 652,529 1,347,471 Guatemala Credit Union Rating Agency (WOCCU) 1,775,000 600,000 300,000 875,000 Appraisals and Technical Assistance 1,272,445 657,560 190,170 424,715 Rating Fund (Phase 1 and 2) 1,225,000 76,459 370,525 778,016 Nirdhan 1,100,000 515,854 200,000 384,146 Joint WOCCU/FFH Credit Union Downscaling (SCWE) 1,065,370 500,000 - 565,370 SEEP Network (Phase 1 and 2) 906,100 536,530 181,070 188,500 Pilot Capacity-Building Initiative in Africa 847,000 809,307 12,490 25,203 SEWA Insurance 775,000 - 320,842 454,158 Donor Mainstreaming 724,966 269,020 161,873 294,073 Microfinance Network (Phase 1, 2, and 3) 694,600 494,600 55,800 144,200 Kashf 600,000 200,000 200,000 200,000 External Audit Capacity Building 550,000 215,462 7,837 326,701 China Capacity-Building Initiative 440,000 141,581 55,028 243,391 Latin America Poverty Survey 325,000 6,378 3,150 315,472 New Course Development 300,000 182,555 41,274 76,170 Commercialization 244,531 52,856 6,478 185,197 Guidelines on Regulation and Supervision 226,009 52,028 74,087 99,894 Zakoura 220,000 110,000 - 110,000 CE/NIS Mapping 200,000 107,000 10,073 82,927 Promujer 180,160 60,160 - 120,000 CGAP Annual Report 2003 73 ANNEX 4 II. Ongoing Grants and Expenses thru Expenses Initiatives, 1995–2002 Commitments FY2002 FY2003 Balance Développement International Desjardins (Phase 2) 180,000 - 60,015 119,985 CGAP Donor Training 177,200 83,430 45,962 47,808 Capacity Building (Global) 150,000 125,500 74 24,426 Poverty Assessment Tools 100,000 21,600 17,792 60,608 Poverty Case Studies 100,000 2,526 6,927 90,547 Microinsurance Resource Center 65,000 65,000 Donor Briefs 50,000 - 13,886 36,114 Poverty Assessment—West Africa 50,000 - 2,844 47,156 Business Process Mapping 20,000 5,000 15,000 FORD-IDS Impact Study 20,000 7,576 - 12,424 Total 18,983,381 7,228,897 3,697,445 8,057,038 Total Undisbursed Portion of Grants/Initiatives and Publications, Translations, and Websites 18,063,934 Expenses thru Expenses III. Closed Commitments Commitments FY2002 FY2003 Balance ACCIÓN International Gateway Fund 2,500,000 2,500,000 - - Women’s World Banking Facility for Affiliate Capitalization, Phase 1 2,500,000 2,500,000 - - ACODEP 2,000,000 2,000,000 - - Compartamos 2,000,000 2,000,000 - - SHARE 2,000,000 2,000,000 - - Project Dungganon (NWTF) 1,600,000 1,600,000 - - MicroSave-Africa 1,400,000 800,000 600,000 - FINCA International 1,260,000 1,260,000 - - CARD 1,200,000 1,200,000 - - MicroBanking Bulletin (Phase 1 and 2) 947,645 946,468 1,178 - K-Rep Bank and Kwa Multipurpose Society 900,000 900,000 - - Women’s World Banking Facility for Affiliate Capitalization, Phase 2 750,000 500,000 250,000 - Pilot Capacity-Building Initiative in Asia 696,318 622,674 73,644 - ACCIÓN International (Phase 2) 500,000 300,000 200,000 - ACEP 500,000 500,000 - - Développement International Desjardins 500,000 500,000 - - Microfinance Centre 438,000 407,860 30,140 - Business Planning and Financial Modeling 323,559 309,359 14,200 - CASHPOR, Inc. 323,000 323,000 - - Audit Handbook 293,900 293,900 - - 74 CGAP Annual Report 2003 CGAP COMMITMENTS, 1995-2003 Expenses thru Expenses III. Closed Commitments Commitments FY2002 FY2003 Balance China Microfinance Forum and Policy Work 267,830 267,830 - - West Africa High Level Policy 256,300 256,300 - - Save the Children, Middle East Region 250,000 250,000 - - Ahantaman Rural Bank 225,000 225,000 - - Nsoatreman Rural Bank 225,000 225,000 - - Centenary Rural Bank 220,000 220,000 - - Poverty Assessment Tool with IFFRI 214,160 214,160 - - Product Manager 204,440 204,440 - - Vietnam Bank for the Poor 189,400 189,400 - - Apex Study 156,700 156,700 - - World Development Report Impact Study 113,800 113,800 - - West Africa Study of PARMEC Law 112,200 112,200 - - Katalysis 98,700 98,700 - - XAC 95,000 50,000 45,000 - Virtual Microfinance Market 94,827 65,420 29,407 - Tools Dissemination 84,600 84,600 - - Third Consultative Forum 77,970 77,970 - - SafeSave 70,600 21,600 49,000 - Evaluation of African MFIs by ADA 70,000 70,000 - - Prizma 65,000 40,000 25,000 - Microcredit Summit Meeting of Councils Scholarships 63,000 63,000 - - PRIDE Africa Evaluation 56,000 56,000 - - Support for Industry Conferences in Phase 1 53,100 53,100 - - Global Donor Portfolio Database 52,954 52,954 - - Aga Khan Rural Support Foundation 50,000 50,000 - - Credit and Development Forum 50,000 50,000 - - Doveriye 50,000 50,000 - - Foundation for Development Cooperation 50,000 50,000 - - Freedom from Hunger 50,000 50,000 - - INDNET 50,000 50,000 - - Kafo Jiginew 50,000 50,000 - - PHILNET 50,000 50,000 - - Rural Finance Facility 50,000 50,000 - - Zambuko Trust 50,000 50,000 - - Banco do Nordeste 49,020 49,020 - - Microfinance Revolution Publication 44,600 44,600 - - FECECAM 40,000 40,000 - - CGAP Annual Report 2003 75 ANNEX 4 Expenses thru Expenses III. Closed Commitments Commitments FY2002 FY2003 Balance Microfinance Video 35,000 35,000 - - Microfinance Ratings Paper 32,090 32,090 - - MicroSave Africa Evaluation 30,500 30,500 - - Housing Microfinance 30,000 5,200 24,800 - Capacity Building in Sri Lanka 25,950 25,950 - - Grameen Bank Securitization 25,700 25,700 - - DEVCAP 25,000 25,000 - - Field Presence Research 21,140 21,140 - - Mexico Microfinance Conference 20,000 20,000 - - Funding for the Poor Cooperative (Operations Manual) 19,235 19,235 - - Government Savings Bank 17,920 17,920 - - Centre for Self-Help Development 13,000 13,000 - - Credit Scoring Paper 13,000 13,000 - - Impact Assessment Methodologies Virtual Meeting 10,000 10,000 - - Conference on Regulation and Supervision 7,100 7,100 - - Total 26,908,258 25,565,889 1,342,369 - 1 This includes travel expenses within initiatives amounting to $333,970. 2 In cases where the committed amounts are not fully disbursed, balances are returned to the original trust fund when the projects/grants are closed. Commitments were reduced due to the closure of Banco do Nordeste do Brazil, Field Presence Research, Funding for the Poor Cooperative, China Microfinance Forum and Policy Work, Business Planning and Financial Modeling, and Poverty Assessment Tool with IFFRI. 76 CGAP Annual Report 2003 CONSULTATIVE GROUP TO ASSIST THE POOR c/o The World Bank 1818 H Street, N.W. Room Q4-400 Washington, D.C. 20433