UK impact report 2012

Hamida is a widow who lives in Tanzania and cares for four children. As a Muslim she was concerned that she might not be permitted to join a scheme promoted by the local church. That was six years ago. She was welcomed into the local group and since then, the fruit and vegetable business she started has expanded.

Savings schemes• Significant expansion across all savings programmes with

membership increasing nearly 4-fold to 40,451 by the end of 2012.

• Bolivia project now registered formally under Bolivian law, enabling it to develop its ROSCA (Rotating Savings and Credit Association) model and reach more people.

• Foundations laid for new expansion to the Diocese of Nakuru in Kenya, following in the footsteps of the successful replication in the Diocese of Embu.

In these schemes, group members regularly save to build up a central fund from which individuals can then borrow. The group agrees a repayment schedule and level of interest to be paid back into the fund. Donations cover the cost of establishing new groups, training, mentoring and monitoring. Funds are also used to upgrade the largest groups to “village banks” which widens their reach and accessibility.

Business training• Completion of successful 3 year national pilot in Burundi,

reaching 13,584 women through our Mothers’ Union literacy and financial literacy partnership.

• Our Kenya project leaders spoke at international conferences in Nairobi and Arusha to share their recognised expertise on savings-led microfinance.

• Vocational training in Peru is helping clients with product development and diversification (jewellery making, handicrafts etc).

Our commitment to holistic development leads us to go beyond simply the provision of transactions. Business training is something all our local teams engage in with groups and individuals. Serving marginalised communities also means that financial literacy training is often provided, either informally or as a structured part of our work. The training is at a very practical level, appropriate for many small businesses that wish to move from meeting daily needs to something more robust.

How we used your donations overseas

Loan schemes• New branch opened in northern Uganda, serving post-

conflict communities. 3,000 clients trained and 927 starter-loans made since the branch opened in early 2012.

• New product for rural Tanzania: individual loans for long-standing clients to help them graduate towards the formal financial sector.

Loans of £991,991 were in circulation across our 4 credit-led programmes. In these schemes, clients form groups and take out small loans usually repayable within six months. The groups provide encouragement, accountability and co-guarantors (i.e. the group agrees to repay the loan if the individual defaults). Savings and training are usually required prior to a first loan. A monthly interest rate helps cover our partners’ operational costs which include the training programmes for members.

Building sustainability• A new village bank established in Gakui, Kenya; now

members can save and transact 6 days a week instead of just once a month.

• Risk assessments in Tanzania led to a reduction of cash-handling by loan officers. Our partner is considering introducing cashless mobile microfinance in 2013

• Formal partnership for skills and technology exchange established between our partner in the Philippines and George Mason University in the USA. We are helping to build the local financial fabric in many communities. This takes years of investment in money and technical expertise, management and leadership development. Many programmes have expanded to offer new services such as farming co-operatives, insurance and mobile money transfers. It is the generosity of Five Talents’ supporters that has achieved this. Donations are increasingly being directed to frontier work such as new rural branches.

Her first loan was 50,000 Tsh (about £20) and her latest was 1m Tsh (about £400). Hamida has been able to pay for her children’s education and complete a building which she now rents out. She also employs her nephew who sends some money back to his rural family and is saving for his own plot of land.

Hamida Mtumbuka

What matters to us These values flow from Five Talents’ Christian foundation:

Clients• Client needs are at the centre of all our work, for example our emphasis on

training and with women well represented on local committees and boards.• We will be honest and transparent with clients, supporters and staff.

Local partners• We aim for each microfinance programme to be sustainable in terms of its

operational expenses and qualified staffing.• Women, children and men are empowered for better lives, being alert to fraud,

coercion or undue influence in the group methodology.• Staff are trained in and equipped to prioritise social impact, working alongside

any clients that are in difficulty.

Supporters• We will make the best use of donations by “investing” in the rotating loan

funds, or by building the necessary framework for the programmes to succeed.• We provide regular feedback on progress and performance and are responsive

to requests and enquiries.

microfinance for the marginalised

microfinance for the marginalised is how we now sum up the work of Five Talents.

microfinance which enables people to save, invest, and insure in groups - often for the first time - with practical training and oversight from local teams.

marginalised because our Christian values draw us to reach the unreached, bearing risks and costs in doing so, with client needs at the centre of our work.

Our work is creating jobs and transforming lives. Thank you for supporting us.

Message from Tom Sanderson, UK Director

Substantial growth in 2012This year we have served 68,462 direct beneficiaries - nearly double the number we reached in 2011. A great achievement which would not have been possible without your support. Thank you.

StructureFive Talents operates a partnership model. In each country our local partner has their own management board and local professional staff. They are independently registered and linked with the local Anglican church.

A UK and a USA office share the oversight responsibility across the partner programmes. Their role is to raise funds, monitor progress and provide technical assistance. A joint Five Talents International board sets vision and strategy and ensures standards and values across the whole Five Talents family.

* The UK figures are for the financial year ending 31st December 2012. The USA income figure relates to the financial year to 30th June 2012 and is converted at £1 = $1.6.

68,462

410,772

£79

98%

£1,649,579

£758,010

direct beneficiaries

indirect beneficiaries

average loan

repayment rate

loan portfolio

savings portfolio

UK income 2012: £510,822 UK expenditure 2012: £522,547

50% individuals 23% trusts & foundations 16% churches and other sources of income 11% companies

53% direct grants to overseas partners for loan capital and capacity building20% programme management & technical assistance23% fundraising4% governance

£718,493 =£1,229,315*£510,822 +USA INCOME TOTAL INCOMEUK INCOME

* see the stats for each country online...

Bolivia Burundi Kenya Uganda Sudan & S. SudanEmpowers women in rural Tarija. Clients have received an average of just 2.5 years of education. The project reports all of its results by mobile phone. Savings-led, serving 195 clients at the end of 2012.

One of the very poorest countries in the world. Aiming to spread financial literacy and savings schemes through Mothers’ Union groups across the country. Massive expansion in 2012; now reaching 13,584 members (up from 3,590 at the end of 2011).

44 village savings groups in Thika region. Now replicated in neighbouring Embu diocese (22 groups). Has converted its largest savings groups into a type of village bank. Savings-led, serving 5,480 clients at the end of 2012 who have together accumulated savings of £355,840.

With three well-established and sustainable offices, Five Talents Uganda is now deliberately replicating in more excluded and challenged zones; bordering Rwanda in the south-west and South Sudan in the north. Credit-led, serving 6,062 clients at the end of 2012.

Financial literacy in partnership with the Mothers’ Union and building village banks uniting formerly warring communities in the border zones. Savings-led, serving 19,908 clients at the end of 2012, these are two of our fastest-growing programmes in a country still facing much instability.

Philippines Indonesia Tanzania Peru MyanmarNo longer needing Five Talents’ financial support, our partners in the Philippines still value the training resources and technical assistance we can provide to their mature micro entrepreneurs.

96% of the clients are Muslim. Offers two tiers of loans; Trust Loans for new clients starting at £33, and Small Business Loans up to £334. Credit-led, serving 5,044 clients at the end of 2012.

A women-only programme targeting excluded rural communities in the southern highlands. Credit-led but offers a popular voluntary savings product too. Serving 2,985 women at the end of 2012 with £181,968 outstanding in loans.

Serves both densely populated Lima South and Huancavelica, the poorest rural district of Peru. Credit-led, serving 2,507 clients at the end of 2012 with £456,825 outstanding in loans.

Building up existing savings groups as Myanmar emerges from years of isolation. Savings-led, serving 1,284 clients at the end of 2012.

Social impactSocial surveys are conducted each year to complement the financial data we collect and try to capture the real impact on people’s lives. In Tanzania, the 2012 survey showed that on average, clients support 5 dependants each, including two primary-school age children. 95% of clients surveyed said that their businesses have enabled them to pay school fees for their children and 81% said their businesses have enabled them to buy food for their families. In Uganda, the survey showed that 60% of the leadership roles in local groups are filled by women.

In Kenya, we began piloting the Grameen Bank’s Progress out of Poverty Index (PPI). This gives robust baseline data so we know exactly how far above or below the country’s national poverty line our clients are when they join a project, and we can track their progress out of poverty over time. We will share the results as more of our countries start to conduct and measure social impact.

Rural outreachBurundi, Sudan and S. Sudan together increased their participants by 356%. Our credit-led programmes also expanded their rural outreach with new branch offices opening in Mafinga (Tanzania, 100km from the Iringa office), Kisoro (south-west Uganda, bordering Rwanda and DRC) and Kitgum in the far north of Uganda, an area that had been neglected following over 20 years of conflict.

This expansion was possible because of our partnership with churches and the Mothers’ Union - who are often the only civic institutions in these rural areas of the world, otherwise unreached by financial services.

Village bankingWhen village savings schemes become too large, we provide funding and expertise to upgrade them to a type of village bank. Our first two village banks in Kenya got into their stride last year, in addition to the one previously opened in South Sudan.

A permanent building is open for 6 days-a-week and available to the whole community. Additional services include mobile money transfer and payroll services. The entity remains a locally owned savings association.

Council of referenceLord Griffiths of Fforestfach (Chair) Dr Maria Akrofi Annette Brooke MP Baroness Cox of QueensburyMajor General Tim Cross, CBE Philip N. Green Humphrey Norrington OBE Margaret Sentamu

Patron: The Archbishop of Canterbury

A registered charity in England and Wales No. 1113969 and a limited company in England and Wales No. 5641704

Contact4th Floor, Park House, 22 Park Street, Croydon CR0 1YE 0203 326 0426

info@fivetalents.org.uk

www.fivetalents.org.uk

@five_talents

Five Talents UK

TrusteesGraham Carr Chartered Accountant and

Microfinance consultant

Charles Eve Managing Director, Goldman Sachs International

David Fletcher Head of Analytics & Insight, MEC UK

Gwyneth Lee Former Senior Economic Advisor at DFID

Rev David Mace Former Regional Coordinator Africa & Latin America, BP

Andrew Maclay Director, Forensic Accountancy Services, BDO LLP

Grant Masom Independent Company Chairman

Shona Passfield Managing Director, Total Affinity Ltd

Neil Sandy Chief Operating Officer, Truestone Asset Management

Rt Revd Keith Sinclair Bishop of Birkenhead

CreditsPrinted with the generous support of Parragon BooksDesign & all photography by adamdickens.com

“I really like the way Five Talents transact their business with us. They come in a lovely way. They know your problems and swim with you.” Stephen Njuyarwo, car washing, on the road east of Kabale, Uganda “Thank you for appreciating our work. We are in this together and are praying for your fundraising efforts.” Esther Nakamatte, General Manager, Five Talents Uganda

“We like it when people laugh while learning because they are more likely to remember what we taught them.” Leaders of Seeds of Blessing programme in Bolivia

“In the short time I’ve been a volunteer for Five Talents, it is clear to me they are having a real impact in some of the most challenging parts of the world, providing both saving schemes and micro loans.” Mark Ouborg

“When I visited Kenya I saw first-hand what a real difference Five Talents made to the lives of ordinary people and their families.” Steve Ellis

sunrise, tanzania