Zooming into MicroLead

  • December 17, 2015

  • New York, USA

In September 2011, in partnership with The MasterCard Foundation, UNCDF expanded its global MicroLead programme for another six years.

With this new funding, MicroLead provides grants on a competitive basis to microfinance institutions, commercial banks and financial cooperatives operating in sub-Saharan Africa pursuing a savings-led approach to expand financial inclusion in underserved markets. Four years later, MicroLead is present in Malawi, Rwanda, Uganda, Tanzania, Burundi, Cameroon, Liberia, Ghana, Burkina Faso and Benin. In addition, in 2012, MicroLead received funding from the multi-donor trust fund LIFT in Myanmar to bring southern-based market leaders to Myanmar. Three partners were awarded grants to start operations in Myanmar.

With 27 new products launched under the Africa programme, the financial service providers (FSPs) supported by MicroLead reached 390,398 new active voluntary depositors, of which 72% are women. Via these new products, the partner FSPs have mobilized more than USD 23.6 MM in deposits as of September 30th, 2015.

Partner FSP Highlights

NBS completed, three months ahead of schedule, the national roll out of the Pafupi savings product developed under MicroLead. At the end of the third quarter, NBS had opened 20,000 accounts valued at $214,241 with an average balance of $11 per account. In terms of gender, 35 percent of these new account holders are women. The agent network was expanded to include 142 agents of which 129 are active, quite remarkable results when compared with one year ago when the bank was still piloting in a limited geographic area with 43 active agents. In July 2015, Mercus Chigoga, the Head of PBB at NBS Bank, participated at the UNCDF Financing for Development side event held in Addis Ababa. He spoke about NBS’ experience establishing its own agent network and reaching the rural poor through its Pafupi Savings product.

CEC in Cameroun is currently piloting alternative delivery channels. In this pilot phase, the project is comparing POS devices with mobile application enabled phones to conduct branchless banking operations. Interestingly, the initial feedback from customers is positive and demonstrates the superiority of the phone-based solution over the POS. A pilot evaluation has been completed and the FSP is embarking on scaling up that channel by deploying close to 100 mobile phones to facilitate doorstep savings collection in rural areas.

In Uganda, Ugafode launched its institution-wide GroupSave product via a marketing event with MTN. MTN has added Ugafode to its mobile money financial services menu (along with nine other banks) meaning Ugafode customers can access their bank accounts directly through MTN.

In Rwanda, the Government has officially selected the core banking system vendor, which will allow World Council to computerize all Umerengue SACCO data. At this point in time, it appears that the Government will move forward on the consolidation of the 416 SACCOs at the district level, meaning there will be a total of 30 SACCOs (instead of 416) which will then become shareholders of a to-be-established cooperative bank. In terms of customers, during data cleanup, World Council has come to understand that a significant number of customers are actually informal groups, a majority of which are women. Because the current management information systems do not capture the individual composition of these groups, actual outreach and in particular female customers are underreported.

At Mwanga Community Bank (MCB) in Tanzania, much progress has been made with the savings group linkage effort as a result of MCB and CARE working hand-in-hand and co-hosting Mwanchi day road shows during which saving group members can speak to MCB and CARE staff and open accounts immediately. MCB has 584 groups linked through savings accounts. Out of those, 55 are using the new group credit product. Total volume of savings in the group accounts is 293 million TZSh or about $183,542.

In Ghana, MicroLead’s two FSP partners, Fidelity Bank and Sinapi Aba Savings and Loans (SASL), are working on extending their services via Smart Agents, in the case of Fidelity, and via mobile bankers, in the case of SASL. Fidelity’s project is specifically tied to reaching saving groups in the northern regions. With the limited number of smart agents in most remote areas, CARE, Fidelity’s technical service provider, is now engaging two additional FSPs for linkage, one of which is SASL. At the same time, Fidelity is expanding its partnerships on saving group linkages to include other INGOs in order to ensure overlap where saving groups are located and where Fidelity has smart agents.

In Liberia, the World Council project emerged earlier this year from a hibernation period imposed due to the Ebola crisis. World Council continues with its technical assistance activities to the four Regional Credit Unions (RCUs) which now operate out of eight branches and 15 points of service. A trend is emerging where saving group linkage into the RCUs has become an outreach strategy. With regard to the regulatory environment, the CBL Board of Governors passed a new Credit Union Regulation at their October 27, 2015 Board Meeting. In the MicroLead World Council project, World Council supported CBL in the drafting of these new regulations. Once adopted, the regulations will be enforced by CBL’s Microfinance and Financial Inclusion Unit.

In Burkina Faso, the partner FSPs, RCPB and Sofipe, have been active in saving group creation with 353 groups established. Sofipe is working on a MIS interface with Airtel while RCPB will use its proprietary platform for savings collection (instead of Airtel Money). Agent deployment strategies were developed for each FSP and the savings product features were designed during a joint workshop.

In Benin, the FSP CPEC, with support from TSP Alafia, began their susu collector project by surveying over 250 susu collectors and selecting IT consultants to work on a bridge between the CBS and the mobile phone based savings collection platform. Susu collector recruitment for the project began in the last quarter of 2015.

In Myanmar, the three FSPs, namely ASA, ACCU and BASIX/FIDES (Alliance) are actively working to achieve their outreach targets and establish themselves as market leaders. The three FSPs now have an outreach of over 38,000 clients. Myanmar was impacted by severe flooding and ACCU made an emergency response with a grant of $25,000 from UNCDF Myanmar. ACCU supported affected members to recover from the disaster which also helped gain further confidence in the cooperative movement for the clients. Myanmar Financial Diaries Workshop and Training under MicroLead were successfully conducted on 9 – 10 December. The tool and the insights were well promoted to the Myanmar financial inclusion industry as well as to the broader MicroLead community via a webinar. Lastly, a mid-term review was recently completed for MicroLead Myanmar which highlighted areas of focus for the second half of the project. The review listed a series of recommendations in terms of stronger communication, information sharing, and increased effort on creating a regulatory environment more conducive to savings mobilization.

Besides these very encouraging figures and innovative products, some MicroLead partners have struggled over the past year to meet their targets. Many of these performance issues are tied to challenges outside of the FSPs’ control, such as the Ebola outbreak in Liberia, political unrest in Burundi, timing for government contracting in Rwanda, fiscal devaluation in Ghana, and regulatory limitations in Myanmar. Slow performance factors in other cases pertain to partners’ internal challenges which more often than not revolve around IT and back-end issues.

Part of MicroLead’s support comes in knowledge sharing activities that enable partners to reflect on their experiences and lessons learned that can be of use to other financial service providers. As part of these activities, MicroLead will organize a learning event and exposure visit in the first quarter of 2016. Stay tuned on to hear about these events and learnings.