MICRO FINANCE SKILLS PROJECT

1

• MICRO FINANCE SKILLS PROJECT
• TRANSFORMING MICRO FINANCE
• Richard Plant
• General Secretary BANKSETA

2
BANKSETA Mission
To support and give effect to legislation by
establishing an education, training and
development framework to enable stakeholders to
advance the national and global position of the
banking sector.
3
The need for the MFSP
Why a micro finance skills project?

• Enhance skills professionalism
• Lack of business knowledge inhibits growth in the
  sector
• Consumer protection and education
• Development of SMME entrepreneurs

4
Micro Finance Skills Project
- Overview -

• MFSP was set up in 2002
• Micro finance sector provides services to small,
  medium micro enterprises, and individuals
• Bridges the gap between the traditional banking
  sector and the emerging market
• Three year, three phase project funded by the
  National Skills Fund
• Unique approach targets service providers
  their clients
• Recognizes the critical role that MFIs are
  playing in providing access to finance to the
  larger South African population

5
Enterprise Zone Overview of the project
6
The projects objectives

• To implement skills development initiatives for
• 1200 learners in micro-finance institutions over
  a three-year cycle between 2002 and 2004
• 1200 SMME borrower enterprises by 2004
• 6000 individual borrowers/consumers
• To build capacity of
• Education and Service providers within all
  provinces to deliver skills development
  initiatives.

7
Principles of the project

• Governance management
• BANKSETA
• Project Steering Committee (PSC)
• BANKSETA, Banking Council ,Organized Labour, MLA,
  MEA, MFRC
• Project Management
• SDS Consortium
• Guiding principles
• Ensuring buy-in of stakeholders
• Incorporating and supporting SMME and BEE
  contractors, and
• Strong focus on thorough research in all phases
  of the project

8
Research Development Phase Feb 2002 Feb 2003
9
Delivery Targets
10
Accessing MFIs
11
Accessing SMME Individual Borrowers
Intermediaries
Pamphlets
12
(No Transcript)
13
Achievement for the Pilot Phase
Exceeded target by 38.5
14
Delivery Phases 2 3
MFI
SMME Borrowers
Individual Borrowers
15
Enterprise Zone SMME Training
16
Overall phase 2 MFI Training
Total 1423
Exceeded target by 356
17
Overall Phase 2 SMME Training
Exceeded target by 22
Including numbers achieved by Ithala
18
Overall Phase 2 Individual borrower training
Total 2650
Exceeded target by 20
19
Delivery Phase 3 to date
20
MFI modules
1. Conduct a market analysis 2. Develop repayment
policies procedures 3. Manage loan
portfolios 4. Develop advanced client service
skills 5. Market your product 6. Process a loan
(2 days) 7. Collect administer loans 8. Help
clients understand their rights and
responsibilities 9. Build relationships with
clients 10. Basic business principles
21
Training sessions
22
SMME modules

• How do you know if your business idea will work?
• What resources do you need to start your
  business?
• What do you need to know about loans?
• What do you need to know about financial
  management to run your business?
• How can you budget your finances effectively?
• How do you draw up a business plan?

23
Training sessions
24
Individual borrower modules

• You and your accounts
• You and your budget
• You and your debt
• You and your loan 1
• You and your loan 2
• You and your savings
• You and your rights

25
(No Transcript)
26
MFI -Lessons learned

• There were no existing training interventions
  direct to MFIs therefore investment in training
  was a new culture in the industry
• Methods of communication needed to be more
  targeted to MFIs
• One-on- one meetings
• Telephone promotion
• The project could not rely on existing industry
  associations to access learners MFIs had to be
  targeted directly
• To access learners business owners needed to
  have
• Confidence that the SETA and the training would
  benefit their business
• Proof of tangible benefits word of mouth became
  critical
• Consultative Forums became contact sessions with
  active dialogue MFIs with real interest in the
  project attended.

27
MFI - Lessons continued

• Training for MFIs had to exclude the 1st, 15th,
  25th, 30th and 31st of the month, and Fridays
• Recognized that MFIs have different training
  needs and the industry is not necessarily
  homogeneous the curriculum needed to be
  impactful and target different size MFIs and
  staff levels front, back office and managers
• MFIs needed support to select and register
  learners
• We had to innovate creative means to assess
  learners.

28
SMME Borrowers - Lessons learned

• Difficult to access the correct level of SMME and
  matching training materials to the SMME level
• There is an Informal approach to learning
  e.g. arriving late etc
• Word of mouth leading to big numbers at some
  workshops difficulty in predicting numbers
• Some learners refuse to give their identity
  numbers
• Individual follow up required rather than
  organizational follow up more time consuming
• Its better to reach SMMEs through NGOs, Advice
  Centres, and Consumer Affairs offices the
  market is extremely fragmented.

29
Individual Borrowers - Lessons learned

• The best way to reach communities would be
  through community based organizations such as
  Provincial Advice Centres
• Intermediaries were identified and trained on how
  to deliver the material
• Support and quality assurance structures were set
  up and monitored
• The project needed to incentivise intermediaries
  to reach more borrowers in communities An
  Intermediary incentive strategy for Individual
  and SMME borrowers was introduced
• Intermediaries compete against each other in all
  provinces

30
Accomplishments

• MICRO FINANCE INDUSTRY
• The number of people who have accessed training
  for the first time in their lives
• The project introduced a training and staff
  development culture
• The industry players have began to collaborate on
  issues of common interest
• Now there are service providers who know the
  industry and have focused on the best possible
  ways to deliver training to the industry
• Industry training needs have been exposed and
  appropriate training material developed, which
  can be used beyond 2004
• There are trained assessors and quality assurance
  measures
• The above are indications of a professional and
  sustainable learning culture.

31
MFI Training Statistics to date- Demographic
Breakdown -
32
Accomplishments

• SMME INDIVIDUAL BORROWERS
• Capacity of Consumer Affairs Offices, NGOs and
  Advice Centres has been built through train the
  trainer programmes
• Project has built partnerships with ITHALA
  SACCOL
• Appropriate training material
• Regional reach
• Quality assurance support
• Response received has revealed the real need for
  this type of training in communities.

33
SMME Borrower Statistics to date- Demographic
Breakdown -
34
Individual Borrower Statistics to date-
Demographic Breakdown -
35
Certification Ceremony
36
Interest from other parties

• During the research phase we consulted with
  micro finance institutions, donors and industry
  stakeholders in Uganda and Kenya
• Micro Finance Outreach Plan in Uganda, a Uganda
  government initiative, have visited the project,
  to learn how to roll out simultaneous training to
  MFIs, SMME and Individual Borrowers
• Consumer Desks have commended the training
  material highly and have expressed a strong
  desire to use the material developed by the
  project beyond 2004.

37
Contracts

• A total of 71 contracts awarded
• 54 Contracts awarded to HDI Organisations - 76.1
  of total allocations
• 17 Contracts awarded to non-HDI Organisations -
  22.5 of total allocations
• 8 Contracts awarded to non-SMME Organisations -
  11.3 of total allocations
• 63 Contracts awarded to SMME Organisations -
  88.7 of total allocations

38
Service Provider Support Centre

• Comprehensive support provided
• Monthly meetings, presentations and minutes
• Orientation of new providers
• Support and assistance with project plans and
  budgets
• Coaching of assessors and moderators
• Venue database and checklist
• Accreditation support through all phases
• Quality assurance and feedback
• Training tips
• Training of 52 assessors
• Training of trainers in new methodology and the
  training modules

39
Business Networking Sessions
40
Initial thoughts changes..

• Nation-wide incubator
• Shared services
• Call Centre
• We assumed that people would know what they
  needed
• Research results showed that we had to change our
  approach
• Business Development Support became Business
  Networking Sessions

41
Our approach changed

• BNS
• One-on-one interactions
• Networks
• Coaching

• BDS
• Shared services
• Call Centre

• SMME know what they need
• Sophisticated
• Access to internet

Assumptions

• Secondary research was inconclusive
• Market is fragmented
• Differing life cycles of businesses
• Low uptake by learners

• High cost infrastructure

• Low cost infrastructure
• Planned targets

Infrastructure
Progress

• On track but very limited

• No go

42
Number of beneficiaries participating
43
Finance
44
Finance cont
 
45
Summary of Finances
 
46
In conclusion

• The project has been highly successful
• High quality training material developed
• Delivery to all stakeholders has been achieved
• Industry buy in has exceeded expectation
• Intermediary and partnership strategy has paid
  off
• Project Management has delivered to targets, in
  time and under budget
• Media exposure for the project has been very
  good
• The procurement strategy to select and empower
  SMME HDI providers was difficult but has paid
  huge dividends
• Most important the objectives of the skills
  development act have been achieved for the micro
  finance industry and its customers.