MicroBanker

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Presentation
The Purpose of this presentation is to present an
overview Of the Apex Fund Implementation Strategy
May 25th, 2005
Almost ten years after its liberation from white
minority rule, our country still faces many
challenges. Many of our people are unemployed.
Many of our people continue to live in
poverty.. President Thabo Mbeki, State of the
Nation Address February, 2004.
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Contents

• DEFINITIONS
• Samaf Overview
• Economic Apex
• Poverty Distribution by Province
• Samaf target by Household Income
• Apex Rationale
• Samaf Pilot Project Plan
• Samaf Partner Organization Profile to date
• Samaf Partner Organizations by Province
• SAMAF Operational Model
• Re engineering current MCO / FSC to Partner
  Organizations
• PO capacity
• Levels of Capacity Building
• Implementation preparedness
• Financial Co-Operative Pilots
• Emerging Picture
• Capacity Building Philosophy
• APEX PROVINCIAL ROLL_OUT PLAN

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DEFINITIONS

• Financial Services Co-operatives
• Partner Organization
• Retail Finance Institution
• Micro Credit Outlet
• Savings mobilization
• Institutional capacity building
• MICROFINANCE/ MICROCREDIT

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SAMAF Overview
MISSION
To provide professional and customised services
to developmental micro finance institutions
, Through institutional capacity building,
on-lending microcredit funds and savings
mobilisation support for broadening and
deepening access to financial services to the
poor in order to facilitate their participation
in productive economic activities and smoothing
their financial troughs for better livelihoods.
VISION
To be a leader in developmental Microfinance
outreach and best practice in South Africa.
SAMAF strives to attain its vision through Being
an effective mobiliser of capital for
developmental microfinance Bringing innovative
development products and services to
market Forging valuable development partnerships
between business, government and the community
and Developing human capital in the
micro-economic sphere through supporting
appropriate capacity building.
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Landscape Poverty Distribution
Source van de Ruit, J. May, and B. Roberts
(2001),
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Landscape Average Household income per month
Samaf target
Source Futurefact Marketscape 2002
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APEX RATIONALE

• WHY THE APEX
• Market failure to reach the poor and unemployed
  with appropriate financial services- OUTREACH
  ACCESS
• Ten year review of Khula by the Government and
  Khula regarding the Microfinance sector and
  current model-IMPACT
• Repeated inputs about gap by Developmental
  Microfinance Sector , cost of capital and
  migration of services to the not-so-poor.-SUSTAIN
  ABILITY VS POVERTY ALLEVIATION
• Challenges of Institutional and client
  capacity, as well as poverty focused
  microfinance.- CAPACITY

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SAMAF Pilot Project Plan

• Phase I (Jan December 2005) Short Term
• Registration Principal
• Board Selection and Management Appointments-Princi
  pal
• Operational, H/Resources, Budgetary systems- Done
• MCO/RFI/FSC capacity funding-Selection done
• Loan disbursements by June 2005
• Phase II (Jan December 2006) Medium Term
• Deepening and widening of the APEX model
  outreach with emphasis on monitoring and
  evaluation
• Detailed study of financial support systems
  dictated by unfolding micro-finance models
• Recommendations towards emerging financial
  institution,
• Phase III (2007 and beyond) Long Term
• Consolidate all data, experiences and research
  and recommendations into model

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RFI Pilots (4)

• Assumptions
• They know what they are doing, Apex wants to
  support their current outreach projections and
  monitor impact of Apex interventions.
• Apex will study poverty targeting tools used by
  WDB and SEF as well as group formation
  methodologies used. Apex will identify poverty
  alleviation pilots using same. Apex will
  facilitate Beehive aspirations within Apex
  framework. Clear co-operation MOUs will have to
  be signed.
• Apex will have a Poverty targeting expert on
  board, whether in-house or on contract.

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MCO Pilots (16)

• Khula has 16 MCOs that have been inducted into
  the Apex See provincial spread
• MCOs operational expenses as per Khula system
  have been budgeted for by Apex as notice to
  ensure integration by June 2005.
• Apex Application package already given to MCOs as
  initial assessment information.
• See Apex Operational Model , regarding
  accreditation process for selection as PO,
  Capacity building and on-lending funding
• Apex advocates rationalization of MCO location to
  achieve outreach. MCOs in one locality were
  encouraged to open a dialogue among themselves,
  especially where one is weaker ( in outreach)
  than the other.
• MCO capacity building assessments started in
  March
• Assumption Consolidation to be explored as some
  may not qualify as stand-alone Apex partners.

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Central Co-Operative Pilots

• Institutional Capacity Building Assessment for
• Saccol-MIS and human resource capacity
• Ficosa-All round ICB
• Safobs-All round ICB
• Dtsacco-All round capacity
• Independent Village banks- Financial management
  of savings , governance and microcredit
  management.

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New APEX POs (15)

• Hluma Africa-E.London
• Tsosologo-Pta Youth Co-op
• OPI Church Women-Daveyton
• Silverlining Domestics RFi- Mpumalanga
• Masisizane Womens Co-op,Ivory Park
• Ten others that are being assessed

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SAMAF Market Portfolio Slide 1
i) POs Per Type
ii) POs Per Location
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SAMAF Market Portfolio Slide 2
POs Per Type Per Location
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Apex in the Provinces to date .

• North West Province 5
• Eastern Cape 9
• Free State 2
• Gauteng 5
• KZN 8
• Limpopo 6
• Mpumalanga 7
• Western Cape 2
• Northen Cape 1

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SAMAF Operational Model
Receive Application
Review PO Application
Preliminary appraisal
Field Visit and inspection
Partnerships for ICB
Declined
Approved
Loan Recovery
Capacity Building Intervention
Fully accepted/ approval
Loan agreement concluded
Outreach
Default
Orientation course
Funds disbursed
Monitor and evaluate
Repay
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Re-engineering an MCO/ FSC for sustainability and
Outreach
SAMAF will provide capacity support on a target
plan (customer outreach) only On-lending capital
provided to support growth but repayment history
is important
Change
Financing
Introduce new simplified Key performance
indicators Simplify Monthly reporting Re-establish
policies
Management (policies, Strategy and Key
performance Indicators
Change
Change
Change
Products
Market
Business Model
Grow market with new products Feedback to SAMAF
with regards 2 product development

• Implemented 2 SAMAF products
• Poverty Alleviation (bc)
• MED (b)

Change
Replace internal systems Standarise all business
processes Re-train people
Capacities of People, process systems
Mergers Acquire (MCO)
Costs (fixed variable)
Change
Relook cost structures to achieve appropriate
cost to income ratio, and Cost per client
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Partner Organisation Capability
PO Capability Maturity
SAMAF CAPACITY BUILDING IMPACT
SAMAF Capacity Building interventions aims to
have a Partner Organisation on a capability
maturity level where the Partner Organisation can
disburse retail finance products to its
membership base within an acceptable level of
risk and sustainability to SAMAF. This means
that Capacity is addressed on all five
dimensions of the Partner Organisation
Management Planning Control
Infrastructure
Processes
Products
People
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Levels of Capacity Building
Poverty Alleviation Micro- enterprise Developmen
t
Capacity Building Loans
OPERATIONAL DELIVERY CB
PO Operations
Capacity Building Grants
INTERMEDIATE CAPACITY BUILDING FOR PO GOVERNANCE
PO Board Management
PO Employees Stakeholders Customers
BASIC CAPACITY BUILDING INTERVENTIONS BASIC
INFRASTRUCTURE
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Co-Operative Pilots

• Limpopo Province
• Mathabathe, Legwareng Village,Sikhukhune
• Bakenburgh, Mokopane
• Mpumalanga
• Matlerekeng Village, Moutse West
• Masibelela Village, Umtfombo Wempilo
• Fernie FSC, Gert Sibande District
• NWest
• Motswedi, Bakgatla Bakgafela Tribal Office
• Disaneng, Mafikeng

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Co-Operative Pilots

• Free State
• Poelong, Ratanang Complex,Mphatlalatsane Village
• Makwane FSC, Qwaqwa
• E.Cape
• Mt. Ayliff,Erf 188 Hlanekela Str, Behind Main Rd
• Mqanduli, Municipality Bldng,
• Pearston,25 Voortrekker Str.

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Co-Operative Pilots (see profiles)

• KZN
• Ingwavuma, Bambanani T-Junction, Ingwavuma
  Village
• KwaMachi, Ezingolweni, Harding
• Sizathina, Highflats, Ixopo Village,Next to
  Senzokuhle General Dealer

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Emerging Picture

• MCOs (ex Khula) (16)
• On Lending R 9 mil
• Provincial Spread 6
• of Members 16 000
• of Groups Unknown
• Profile Urban/Peri-Urban
• Avg loan R500/customer
• Pilot Size 16

• FSCs (DoA) (61)
• Total Savings R5.7 mil
• Provincial Spread 8
• of Members 35 000
• of Groups 61
• Profile Rural
• Avg savings R162/customer
• Pilot Size 15

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Portfolio Institutional Capacity
SAMAF Pilot Portfolios Customer Segmentation
SAMAF Portfolios Geographical Segmentation
Migration during Pilot phase to one Partner
Organisation Model
MCOs
RFIs
FSCs
New
16 existing 10 existing 4 existing 10 new
(Spread in four provinces)
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APEX ROLL-OUT PLAN

• April/ May launch in NorthWest Province-National
  provincial launch (Motswedi Village.)
• June- Gauteng (need to be close to NW manage
  launch impact)
• July- Limpopo Mpumalanga
• August- Eastern Cape Free State
• September- KZN Northern Cape
• October- Western Cape UN Year of Microcredit ?

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HOW

• Introduction of Apex programme pilots to
  Provincial Government with communities.
• Joint discussions regarding provincial new sites
  and profile (Apex/Province)
• Assessment of partnerships involved and
  evaluation of contributions if any ( Ledas/Seda)
• Discussion around Provincial launch and impact
• LAUNCH
• Post launch monitoring evaluation co-operation

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Thank You