FINANCIAL SYSTEMS DEVELOPMENT SERVICES AG PRESENTATION OF FIDES www.fidesgroup.org 1
Table of content 1. FIDES mission and competences... 3 2. Fields of activity... 3 3. Main programs developed by FIDES... 5 4. New Programs in the making... 7 5. FIDES Organigram... 8 6. FIDES Partners... 11 www.fidesgroup.org 2
1. FIDES mission and competences Mission: FIDES aims to contribute with reliable and sustainable solutions to the key issue of facilitating economic development by creating access to financial services for micro-entrepreneurs who are excluded from the formal banking system. Sound microfinance institution building is the core competence of FIDES. In many developing and transition countries financial institutions targeting farmers and small entrepreneurs have failed. Only a few have succeeded in providing reliable services to rural and urban poor on a larger scale. Development banks and lending programs set up within the framework of projects created with heavy donor involvement have not been able to reach their target. Meanwhile, new microfinance initiatives have emerged and shown that microfinance institutions can be sustainable and at the same time reach a considerable number of borrowers and savers. Microfinance banks have proven to be a successful vehicle, but mainly for urban clients. FIDES has been innovative in developing approaches reaching beside urban also rural areas. Most of them imply technical and organizational innovations that allow transaction cost and risk reduction. Sustainable institution building concepts lead to excellent repayment rates, outreach to under-serviced market segments and significant growth capacity. Such institutions have had a considerable impact on income-generating activities and job creation. 2. Fields of activity Creation of new microfinance institutions The core competence and key activity of FIDES is the greenfield creation of microfinance institutions in rural areas and in secondary towns. When targeting rural areas, adjustments to local conditions are necessarily stronger than in urban contexts, requiring innovative approaches that are based on international best practice in microfinance but also take into account a wide range of specific environments. www.fidesgroup.org 3
During the last ten years, FIDES has been involved in the creation of microfinance institutions ranging from classical microfinance banks to SCA Networks and Islamic financial institutions. None of these institutions failed. As a general rule, FIDES develops the concept of the institution and confirms its feasibility through a pilot testing phase which verifies the hypotheses on markets, products, clients and organizational settings. In a subsequent stage, joint investment is sought, often with institutional and private investors, in order to allow institution building and the expansion of activities on a larger scale. Expertise On micro-level, FIDES carries out feasibility studies and/or evaluations for donor agencies and investors, develops strategies for microfinance institutions, and supports the introduction of technical and organizational innovations. On meso- and macro-level, FIDES has provided expertise for the development and implementation of countrywide sector strategies and has been involved in the creation of conducive legal and regulatory frameworks for microfinance, especially in Eastern Europe and Africa. Training FIDES considers that human resources development is the key issue for further expansion of microfinance institutions. It has organised a large number of training seminars and sessions in partner countries and provides significant support to building local training capacity. FIDES is the technical input provider for a Master of Science degree in Microfinance, a one year postgraduate training program organized by the University of Montpellier, France. Research and development Research is an important component of FIDES activity, and its purpose is to enable FIDES to innovate in its institution-building programs. Strong partnerships with universities and research centres have been developed. www.fidesgroup.org 4
3. Main programs developed by FIDES FIDES is involved in some of the most important rural microfinance systems in Eastern Europe and in leading initiatives in Africa. Some examples of successful greenfield creations of microfinance institutions by FIDES are: - ALBANIA Initiated as a World Bank project, the village-based institutions and their banking apex today represent one of the biggest microfinance systems in Eastern Europe, with more than 200 outlets covering most of the country. Targeted beneficiaries are farmers and small entrepreneurs who started their business after the dismantling of collective farms in 1992. - IVORY COAST FIDES has been involved in the creation of Savings and Credit Associations (SCAs) for women in the Northern Savannah Region. In June 1998, all SCAs assembled into a federation (FAFEC) under the provisions of the Mutual Financial Organisations Act. Since the beginning of the political crisis and military conflict, the FAFEC is the only financial institution that is still active in the North of the country. - MOLDOVA 500 outlets provide loans and other financial services to now nearly 100 000 clients. It is the biggest newly created microfinance institution in Eastern Europe and has been awarded the title of Best World Bank Project in Eastern Europe. With a Raiffeisen-type organisation, the system is composed of village-based SCAs and an apex bank in the form of a joint-stock company. www.fidesgroup.org 5
- MALI A network of regional private microfinance institutions has been created in the North of the country and is now expanding. These microfinance institutions provide a wide range of banking and microfinance services and are capitalised jointly by local entrepreneurs and institutional investors. Lending resources are provided by commercial refinancing. A significant effort has been made to train staff and governing bodies in an environment where no banks existed before. We are now creating Mali-Nord Finance, a holding to become the majority stackeholder in the regional microfinance institutions. MNF will provide support services (training, control) to the network in order to improve its financial performance, and manage the refinancing for the network. - NAMIBIA The Ohangwena Pilot Program is aimed at implementing and testing the feasibility of FIDES technology in the very specific Namibian context, marked by numerous failures of other microfinance initiatives. It targets the needs of the rural population from the North of Namibia, which is excluded from access to the formal banking system. Despite operating on a limited scale, the Program has succeeded in building a sustainable regional microfinance institution. It is now the most important microfinance initiative in Namibia and will be further developed into a microfinance bank in 2008. All the programs developed with FIDES participation have the following common characteristics: Repayment rate close to 100%; Strong client outreach capacity; Financial sustainability as a main objective after an initial growth stage; Reliable institution-building strategy, based on an appropriate legal framework; Clear governance structure; Strong links with the commercial banking sector. www.fidesgroup.org 6
4. New Programs in the making - ALGERIA Self-employment through the creation of small enterprises is the main way to create income for the new generation. The banking system seems to have no appropriate technologies and is not incline to service small private entrepreneurs. The Government of Algeria understood the challenge and signed a bilateral agreement with Germany for the creation of a microfinance institution. A detailed market study has been achieved and FIDES is now looking for a bank partner to start a pilot program. In this country commercial SME-microfinance is absent up to now and has at the same time a huge potential. Hundreds of thousands of potential clients could be served with technologies that have been implemented successfully elsewhere. - SENEGAL and GHANA: In these two countries FIDES is supported by KfW and IFC and is preparing the creation of commercial microfinance institutions. The institutions will cover at present underserved client segments in medium size towns and rural areas with reliable financial services. Since in both countries national and international migration plays an important economic role, beside credit and savings services payment systems based on modern technology will be established. Start of activities is scheduled in 2008. Other opportunities for FIDES exist at present in Asia (Indonesia) and in Eastern Europe. Their implementation will depend mainly on the availability of financial resources for the equity. www.fidesgroup.org 7
5. FIDES Organigram Financial Systems Development Services AG today includes 22 direct staff members holding a Swiss working contract (local staff in foreign countries not included). The team covers all fields of competence necessary for greenfield creation of microfinance institutions. Staff turnover is low, at all time less than 5% per year. Board of directors Président: Gérard Ducarroz External auditor: Fiduciaire Regis SA Directors: Konrad Ellsässer Markus Schär Strategy Advisor & business planning: Peter Beez Assistant: Claire Seitz Accounting: Sub-contracted Backstopping MIFSSA program: Thi Hanh Cao Management Information System: Rodica Levitchi Research & Development: Nanci Lee, Aïssata Barry, Sabrina Beeler FIELD STAFF More than 10 years experience Michel Arnoult Evry Cabiotis Philippe Couteau Bernd Krueckeberg Anne Camara-Hofer More than 5 years experience Léocadie Yverneau R. Ag Mohamed Ali Ródica Levitchi Holger Bergmann Hamidine Bako Najib Bounouane Up to 5 years experience Amza Tahirou Jc Duchier Cécile Duchet Since 2007, in order to reinforce the team for the new activities, staff size has progressively been increased from 12 to 22 and will continue to grow during 2008. www.fidesgroup.org 8
As a joint stock company under Swiss law Financial Systems Development Services AG has : An Administrative Board. The President of the Board is Mr. Gérard Ducarroz, former President of the Chamber of Commerce of the Canton of Fribourg. An external auditor, Regis SA, a Swiss audit company certifying the annual accounts. Some Faces behind FIDES: Konrad Ellsässer is the founder and Director of FIDES. He has been working in the field of microfinance even before it has become a widely discussed focus subject. He is a former researcher and has worked in the creation of microfinance institutions for the last twenty years. He has also been intensively involved in the development of legal and regulatory frameworks for microfinance in Eastern Europe when after the fall of communism regulations for banking in market conditions had to be developed. He has also worked as a university teacher in microfinance (Development of a Master of Science in Montpellier) and as expert for organisations like the World Bank, IFAD, CGAP, and the main European bilateral donor organisations. Markus Schär is Co-Director and chief of staff of FIDES. He is a business- economist and has been working for 10 years in the field of organizational development with leading financial institutions (Investment Banking and Wealth Management) in Switzerland and Asia (Hong Kong/Singapore). Between 2004 and 2006, he was living and working in New York, where he was engaged as a management consultant for the United Nations Development Program (UNDP). Markus Schär was born in Kota Kinabalu, Sabah, Malaysia and grew up in Cameroon and Switzerland. He is highly tuned into cross-cultural communication and management concerns. www.fidesgroup.org 9
Thi Hanh CAO is the Africa coordinator of FIDES. She has been working for more than 10 years in the field of microfinance. She has successfully managed several microfinance institutions in Africa and in Eastern Europe. Before joining FIDES, she worked in Afghanistan supporting 5 new MFI in their development and expansion. Her key tasks involve the technical backstopping of four FIDES programs, insuring the sharing of technologies, experiences and information, revising work plans and providing technical support on a day to day basis. Michel Arnoult is agro-economist and partner of FIDES. He is at present leading the creation of a microfinance institution in Mali. This innovative institution is integrating Islamic banking principles and modern banking technologies. Michel Arnoult is typical for the major part of the FIDES staff members. He is living with his family for some years in a country, creating step by step an institution that is tailor made to the local conditions and has thus a strong growth potential. Before Mali, he has been leading for FIDES the greenfield creation of an institution in Moldova. Philippe Couteau is leading the creation of a microfinance institution in Algeria. Philippe has nearly twenty years of experience in financial services, of which ten in microfinance and two in microinsurance. His first six years of professional experience in world-class financial institutions brought him solid expertise in various fields of the bank management: risk management, bank transactions organization, procedures writing, team management and audit. During his long and varied experience in microfinance, in field positions as well as research and development positions, he built a sound expertise in numerous areas: creation and development of new MFIs, MIS, audit and regulations, product design as well as training and development. www.fidesgroup.org 10
6. FIDES Partners Institutional partners : Private partners www.fidesgroup.org 11
FIDES - Financial Systems Development Services AG Rte de la Fonderie 2 1700 Fribourg - Switzerland ph head office +41 26 422 34 40 fax head office +41 26 422 34 42 www.fidesgroup.org 12