highlights report - ifc

IFC ADVISORY SERVICES | ACCESS TO FINANCE

2009H I G H L I G H T S R E P O R T

IN PARTNERSHIP WITH OUR DONORS

2121 Pennsylvania Avenue, NW

Washington, DC 20433, USA

www.ifc.org

OCT 2009

IFC’s Advisory Services have become a substantial part of IFC's business and a critical tool for extending our reach and

expanding our impact. Access to Finance (A2F) is one of five advisory services business lines that correspond to IFC’s

operational strategy.

Support for IFC’s advisory services is strong and includes partners and donor governments, multilateral institutions, and

private donors such as foundations.

Access to Finance appreciates our donors and partners that include:

African Development Fund, Australia, Austria, Bank of Israel, Belgium, Canada, Denmark, European Union, Finland, France,

Gates Foundation, Greece, Inter-American Development Bank, Ireland, Islamic Development Bank, Kuwait, Japan, Italy,

Luxembourg, Netherlands, Norway, New Zealand, OMIDYAR Network Fund, INC., Spain, Sweden, Switzerland, United

Kingdom, United States, and Visa International

Trade FinanceMakiko Toyoda | [email protected] Rogers LeBaron | [email protected] Sylla | [email protected]

REGIONAL OFFICES

IFC Advisory Services in AfricaBernard Chidzero – General ManagerRubin Japhta – Acting Regional Business Line Leader and PBGI Regional Representative | [email protected]

IFC Advisory Services in Europe and Central AsiaTania Lozansky – General ManagerPatrick Luternauer – Regional Business Line Leader | [email protected] Behrndt – Regional Business Line Leader | [email protected]

IFC Advisory Services in East Asia and the PacificRussell Muir, Regional Manager, Advisory Services | [email protected] Gamser, Region-al Business Line Leader | [email protected]

IFC Advisory Services in ChinaJosephine Bassinette, Acting Head of Advisory Services China & MongoliaJinchang Lai – A2F AS Program Manager | [email protected]/cpdf or www.ifc.org/pepchina

IFC Advisory Services in IndonesiaBrigit Helms – Head of Advisory Services Indonesia | [email protected] Thomas Moyes – A2F AS Program Manager | [email protected]/pensa

IFC Advisory Services in the MekongTrang Nguyen – Head of Advisory Services Mekong | [email protected] Biallas – A2F AS Program Manager | [email protected]

IFC Advisory Services in the PacificAlan Moody – Head of Advisory Services PacificRob Simms – A2F AS Program Manager | [email protected]/peppacific

IFC Advisory Services in the PhilippinesWilliam Beloe – Head of Advisory Services PhilippinesLuc Vaillancourt – A2F AS Program Manager | [email protected]/eastasia

IFC Advisory Services in Latin America and the CaribbeanLuke Haggarty – General ManagerGreta Bull – Regional Business Line Leader | [email protected]/lac/ta

IFC Advisory Services in the Middle East and North AfricaJesper Kjaer – General ManagerJim Gohary – Regional Business Line Leader | [email protected]/mena

IFC Advisory Services in South AsiaAnil Sinha – Senior Regional Manager, Advisory ServicesJennifer Isern – Regional Business Line Leader | [email protected]

GLOBAL FINANCIAL MARKETS – FIELD SECTOR MANAGERS

AfricaBanda, Dolika | [email protected]

Central and Eastern EuropeTimothy Krause | [email protected]

East Asia and the PacificSerge Devieux | [email protected]

Latin America and the CaribbeanGiriraj Jadeja | [email protected]

Middle East and North AfricaKhawaja Aftab Ahmed | [email protected]

South AsiaJun Zhang | [email protected]

Southern Europe and Central AsiaEdward Strawderman | [email protected]

CreditsProject LeaderLeila Search

Editing Assistance

Vandan Mathur

Design/ProductionAichin Lim Jones

PrintingMasterPrint, Inc.

PhotographyKamilla Azizova, EBRD, Rich Field, Teresa Ha, IFC, Getty Images, Aichin Lim Jones, Aga Khan, Antoine Courcelle-Labrousse, Microcred, Photodisc, Ted Pollett, Bradford L. Roberts, World Bank.

We would like to acknowledge the contibutions provided by the A2F Regional Offices and Product Specialists in producing the Report.

ACCESS To FINANCE HIGHLIGHTS REPoRT 2009 37

a

FOREWORD 2

OVERVIEW 4

BUILDING FINANCIAL INSTITUTIONS 6SME Banking 6Microfi nance 7Housing & Property Finance 7Leasing 8Sustainable Energy Finance 8Insurance 9Trade Finance 9

IMPROVING FINANCIAL INFRASTRUCTURE 10Credit Bureaus 10Securities Markets 12Collateral Registries & Secured Lending 12Payment & Remittances Systems 13

RESPONDING TO THE CRISIS 14The Impact of the Crisis on Emerging Markets 14Weathering the Crisis—A2F Role 15New A2F Crisis Response Programs 15Early A2F Achievements in Record Delivery Time 17Scaling-up A2F Financial Infrastructure Programs 17

PORTFOLIO TRENDS 18A2F Portfolio in FY09 18A2F Spending in FY09 18IDA and Confl ict Affected and Fragile Countries, and MSME Focus 19

MEASURING RESULTS—MONITORING AND EVALUATION 20Monitoring Results 21Evaluating Impact 21

CASE STUDIES—HIGHLIGHTS 22Building Institutions, Increasing SME Financing—Bangladesh 22Developing Leasing in Azerbaijan & Central Asia 23Scaling Up Microfi nance Through Transformation in Colombia 23Initiatives in Agrifi nance 24IFC Leasing Program Helps Rwandan Coffee Farmers 25Secured Transactions—Measurable Impact in China 26Crisis Response Advisory Work in Europe and Central Asia 26Industrial Bank Firm on Sustainable Finance During Rough Times 27Developing Credit Information Sharing in Egypt—iScore 28Banking on Women in Business—Tanzania’s Exim Bank 29Helping Ukraine Create A Sustainable Agri-Insurance System 30IFC Helps Revive the Mortgage Market in the Maldives 31IFC Bolsters Bank of Saint Lucia with Funding and Advice 31Recent Bond Issue in Tanzania Highlights Progress in Developing Local Capital Markets 32M-Banking in Cambodia 33

SHARING KNOWLEDGE 34Microscope Index 34Financial Infrastructure Report 34World Bank-IFC Remittance Prices Database 35Benchmarking Best Practices in SME Banking 35SME Banking Knowledge Guide 35Leasing Guidelines for Emerging Economies 35

ACCESS TO FINANCE CONTACTS 36Business Line Leaders 36Secretariat 36Donor Relations 36Product Specialists 36Regional Offi ces 37Global Financial Markets—Field Sector Managers 37

TABLE OF CONTENTS

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2008 has been challenging and rewarding as IFC focused on helping clients cope with the economic crisis. We moved quickly with funding and programs aimed at eliminating further deterioration of fi nancial institutions. We are working with banks across the globe to advise them on ways to expand lending to micro, small, and medium enterprises. Our programs are assisting fi nancial institutions prioritize actions, steering them through the crisis, and protecting their customers and business. Clients are receiving assistance on risk and portfolio management and loan servicing, and in parallel, our ongoing Financial infrastructure programs have been quickly scaled up to strengthen both fi nancial stability and access to fi nance through more effi cient payment systems, remittance and domestic money transfer services, credit reporting systems, and secured transactions frameworks.

our efforts are aimed at stabilizing and stimulating fi nancial activity to help minimize the impact of the crisis on economic growth and job creation in emerging markets. In FY09, iFc access to fi nance (a2F) advisory had 298 projects and programs in 72 countries —141 projects in iDa countries and 58 in fragile and confl ict-affected countries. these projects represent $54.5 million in expenses, with about 36 percent of expenditures in iDa countries and 14 percent in fragile and confl ict-affected countries.

We have supported a number of new initiatives this year such as creating effi cient microfi nance credit reporting systems globally, indexing the business environment for microfi nance, and addressing the need for fi nancial services beyond lending.

our services are delivered on the ground through regional offi ces with more than 130 dedicated staff. We also coordinate our work with the World Bank to deliver policy advice and joint interventions. this report highlights our work over the last year in iFc’s a2F advisory services.

Development impact and results are fundamental to our mission and the success of a2F advisory services. More than half of the services are directly linked to iFc invest-ments and over 70 percent serve micro, small, and medium enterprises (MsMes). Key

� iFc’s sMe Banking clients have generated $41.3 billion in fi nancing and helped improve access to fi nance for 486,550 small and medium enterprises.

� iFc’s Microfi nance clients have provided $4.5 billion in fi nancing to about 5 million micro enterprises.

� iFc’s leasing clients provided 18,211 leases to micro, small and medium enterprises worth $1.7 billion.

� iFc’s Housing fi nance clients fi nanced 57,734 homeowners with more than $3.1 billion in mortgage loans.

FOREWORD

fi gures of the reach of our a2F advisory services:

access to Finance HigHligHts RepoRt 2009 3

� iFc has assisted its trade Finance clients originate over $1.5 billion trade in 33 countries through advisory services.

� iFc has helped create or improve credit bureaus in 13 countries over the last 5 years. in 2008 these credit bureaus received 38.9 million inquiries and helped generate about $19 billion in new financing.

Our donors have a critical role in supporting and part-nering on our projects. government, institutional, and multilateral donors contribute to our program as a whole, and to specific projects around the world. We thank them for their continued assistance and commitment to our mission to alleviate poverty and improve people’s lives.

peer steinaccess to Finance | Business line leader

georgina Bakeraccess to Finance | Deputy Business line leader

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More than 3 billion people in developing countries have little or no access to fi nancial services. IFC’s Access to Finance business line helps increase the availability and affordability of fi nancial services, focusing particularly on micro, small, and medium enterprises. In FY09, we had 298 projects and programs in 72 countries—141 projects were in IDA countries and 58 in fragile and confl ict-affected countries.

iFc delivers advice on access to fi nance mainly through our regional offi ces, with more than 130 dedicated staff members. We also coordinate these services with the World Bank to deliver policy advice and joint interventions. iFc’s access to Finance advisory services focus on three key areas:

Building bank and nonbank fi nancial institutions, with emphasis on banks that serve small and medium enterprises or provide microfi nance, housing fi nance, leasing, trade fi nance, insurance, and sustainable-energy fi nance.

Improving fi nancial infrastructure, such as credit bureaus, securities markets, collateral registries, payment systems, and remittances.

Improving the legal and regulatory framework to help develop and improve the enabling environment for increasing access to fi nance.

as part of our crisis response, we help our partner fi nancial institutions through improved risk management in the areas of governance, asset-liability and liquidity man-agement, capital adequacy, and credit risk. Our loan portfolio monitoring and workout activities help our clients avoid further capital depletion in the fi nancial sector and reduce the risk of a long-lasting credit crunch. iFc is also developing new products such as mobile banking, index-based weather insurance for farmers, and agrifi nance.

EXPANDING ACCESS TO FINANCE

OVERVIEW


Measuring Impact on the End Users

Creating and Improving Financial Infrastructure

Credit Bureaus, Payment Systems, Securities Markets, and Collateral Registries

Legal and Regulatory Framework

Close Collaboration with World Bank/IBRD BBANKABANK

LEASINGCOMPANY

MarketInfrastructure

Expanding A2F In The Interest Of End Users

Working with Financial Institutions

Retail/SME Banks, Micro�nance, Housing, Leasing, Insurance

Comprehensive, Long-term Institution Building Programs

Synergies between Investment and Advisory Services

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BUILDINGFINANCIALINSTITUTIONS

IFC’s Access to Finance advisory works with fi nancial institutions and regulators to strengthen the fi nancial sector, and deepen fi nancial intermediation and out-reach to increase access to fi nancial services. It helps build bank and nonbank fi nancial institutions with emphasis on banks that serve SMEs or provide micro-fi nance, housing fi nance, leasing, trade fi nance, and sustainable energy fi nance.

SME BANKINGIFC has played a critical role globally over the past decade in increasing access to

fi nancing for sMes through its investment and advisory services that build the capacity of banks to better serve the sMe market. strengthening banks and helping them move from the corporate segment down market has the greatest impact in numbers and volume in providing access to fi nancial services to the underserved. iFc’s advisory services focus on strengthening banks’ small business or middle market servicing capacities. through an established approach these cover operating effi ciency, asset quality, increasing revenues, as well as governance, strategy, products and services, and risk management. iFc’s interven-tions highlight the importance of looking at a comprehensive bank offering for sMes, providing them with the right mix of asset and liability products that include loans as well as deposits and other transactional products.

in 2009, sMe banking advisory services comprised 60 projects totaling $90 million. the program has developed a holistic assessment framework, the sMe Bank-ing cHecK toolkit, which allows iFc to conduct a comprehensive assessment of fi nancial institutions’ performance in more than 100 competencies and identifi es potential areas of improvement for iFc portfolio banks. iFc’s newly launched sMe Banking Benchmarking Web survey allows banks to benchmark themselves against the sMe banking practices of their peers. in response to the fi nancial crisis and in collaboration with the Risk Manage-ment advisory program, a Risk assessment Framework was developed and introduced in europe and central asia and in latin america and the caribbean. Knowledge manage-ment continues to be an area of focus for iFc’s sMe Banking practice. several workshops have been held on the importance and best practices in sMe deposit mobilization, portfo-lio monitoring, and nonperforming loans.

in response to the crisis, it is critical that iFc’s sMe banking activities re-emphasize the importance of sMe banking as there is a danger that clients will retreat to “safer” havens as they perceive greater risk in sMes. iFc continues to reinforce the importance of sMe banking versus lending.

our work with individual fi nancial institutions is complimented by our fi nancial infrastructure work, which seeks to improve the enabling environment for sMe lend-ing through better credit bureaus covering sMes, and collateral registries for moveable collateral, including receivables.


MICROFINANCEiFc has achieved industry leadership in microfi nance

since its fi rst investment in 1995. it has effectively sup-ported the fi nancing and capacity building of several dozen microfi nance institutions (MFis), including small business banks, nonbank fi nancial institutions (nBFis) and non-governmental organizations (ngos). Further, iFc has played a catalytic role in developing specialized microfi nance banks, fostered the creation of international microfi nance network banks, and developed collective investment vehicles leading to the effective mobilization of private capital in the domestic and international capital markets.

as one of the top two global investors, iFc’s microfi -nance portfolio at June 2009 included: more than Us$1.3 billion committed investments in over 140 MFis, and more than $70 million in advisory services for 45 percent of the MFis.

Microfi nance advisory services fl agship initiatives for FY10 include: signifi cantly expanding deposit mobilization in the microfi nance industry; enhancing risk management frameworks for portfolio clients; supporting technological innovations in microfi nance; and developing microfi nance credit reporting.

HOUSING & PROPERTY FINANCEaffordable housing is a key to improving people’s lives.

IFC continues to invest more and expand our advisory services in housing fi nance, while developing innovative fi nancial products, despite the challenges imposed by the fi nancial crisis. For example, in ghana, we made a new investment in a mono-line fi nancial institution that focus-es on the middle income segment of the population. In addition, we worked with both our portfolio clients and the housing market in general to deliver risk management products and advice through workshops and seminars, with the primary goal of fi nding ways to keep borrowers in their home.

in Mexico and albania, we expanded our successful training to middle-tier mortgage fi nance institutions to reach lenders who serve clients in markets at the bottom of the pyramid. Using our global mortgage toolkit as the source for industry best practices, we continue to help lenders improve their operations so they can lower costs and thereby become more effective vehicles for meeting client needs. We continue to provide support and advice to regulators and fi nancial institutions around building sus-tainable markets to provide affordable mortgage fi nance to consumers.

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LEASINGleasing continues to play a major role in iFc’s a2F ad-

visory services. in FY09, it has become even more impor-tant because of iFc’s increased focus on iDa countries, and frontier, fragile, and confl ict-affected markets. leas-ing is critical in markets that usually have weak business environments and small entrepreneurs that do not have a signifi cant asset base. By leveraging on little or no down payments, small businesses can obtain access to equipment through leasing and increase productivity and profi ts.

iFc is bringing more value to clients by leveraging our regulatory improvement activities with institution-building and new product development. in Middle east and north africa, iFc continues to strengthen operations in the West Bank and gaza, afghanistan, and Yemen. in sub-saharan africa, iFc is expanding to other frontier, fragile, and con-fl ict-affected countries. in Rwanda, the focus is on bank capacity to facilitate increased sMe outreach. programs have also been introduced in the Democratic Republic of congo, Mali, senegal, liberia, and sierra leone.

at a broader level, iFc is implementing projects aimed to support the climate change agenda and help address the food crisis. For example, in east asia, iFc is working with Japan to develop models that will facili-tate energy effi ciency, Renewable energy, and cleaner production fi nance.

SUSTAINABLE ENERGY FINANCEsustainability and climate change mitigation fi nance

help drive iFc’s climate change mitigation strategy by supporting fi nancial institutions with projects in clean pro-duction, energy effi ciency, and renewable energy. advisory services complement iFc’s investments in this area with capacity building and knowledge management initiatives. these include market analyses and training in pipeline development for iFc’s regional partners, and an online learning program that helps clients identify new investment opportunities and comply with environmental require-ments. in 2008, iFc increasingly focused on a2F advisory services offerings that complemented its investments in energy effi ciency fi nance, in Russia and china, with new initiatives planned in other regions.


INSURANCEInsurance advisory services provide support for the

development of new and existing insurance companies. activities include preparing feasibility studies, product development, and risk management. iFc’s a2F advisory services in the insurance sector span a wide range of activi-ties, from working with regulators and governmental agen-cies (cambodia and Russia) to improving market segments and niches (agro-insurance in Ukraine and indonesia), and hands-on training and development of required skills and resources (mortality tables in africa). this is in line with the sector’s broad range of activities to promote insurance as a personal risk management tool and to contribute to as many fi elds as possible. iFc, jointly with the World Bank, is putting resources into developing index-based weather insurance with the support of the european Union (eU). this will have a signifi cant development impact on food security initiatives and help local farmers and businesses who depend on agricultural output.

TRADE FINANCEiFc’s $3 billion global trade Finance program (gtFp)

offers confi rming banks partial or full guarantees covering payment risk on banks in the emerging markets for trade related transactions. iFc’s trade advisory program is an integral component of gtFp, and is designed to help lo-cal banks build their capacity in the areas of trade fi nance operations. iFc provides local fi nancial institutions with training and support in order to: upgrade skills in structur-ing basic and complex trade fi nance transactions; improve trade fi nance risk mitigation techniques; upgrade the oper-ational and technical skills of the trade fi nance back offi ce; and transfer current international best practices in trade fi nance to local markets.

On a selective basis, IFC places experienced trade fi nance bankers with issuing banks to help them develop trade fi nance skills. in addition, iFc has developed the trade Finance certifi cation program via e-learning in close collaboration with the International Chamber of commerce (icc). it also organizes sMe exporters/importers workshops around the world. this advisory services initiative is supported by IFC and various donor countries. since June 2006, more than 1,400 participants from more than 50 countries have benefi ted from the 68 training and advisory services programs.

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IMPROVINGFINANCIALINFRASTRUCTURE

Financial Infrastructure—broadly defi ned—comprises the underlying foundation for a country’s fi nancial system, including all institutions, information, technolo-gies and rules and standards that enable fi nancial intermediation.

poor fi nancial infrastructure in many developing countries poses a considerable con-straint upon fi nancial institutions to signifi cantly expand their offering of fi nancial services —credit, savings, and payment services—to underserved segments of the population and the economy. it further creates risks for the fi nancial system as a whole, as poor payment and settlement systems may exacerbate fi nancial crises, while the absence of credit bureaus in conjunction with strong credit growth may lead to one. Key elements of the fi nancial infrastructure that every developed market can rely on—credit bureaus, enforcement of collateral and functioning payment and remittance systems—often do not exist or are less advanced in developing markets. properly functioning collateral laws and registries enable lending to sMes, while credit bureaus are vital to enabling the expansion of credit markets to retail and sMe segments in a safe and responsible manner. likewise, payment systems are critical for the effective functioning of fi nancial systems and the economy for the avail-ability and affordability of basic fi nancial services, like remittances and domestic money transfer services. an effi cient, and reliable payment system reduces the cost of exchanging goods and services, expands access to fi nance, and enhances the overall stability of the fi nancial sector.

iFc’s a2F advisory services work focuses on expanding access to fi nancial services by creating and improving fi nancial infrastructure.

CREDIT BUREAUScredit bureaus help consumers and small businesses obtain fi nancing. they offer

timely, credible, and objective information on borrowers, allowing fi nancial institutions to reduce loan processing time and costs by 25 percent or more and cut default rates by 40 to 80 percent. these savings can mean lower interest rates, making credit more affordable and available to those in need. credit bureaus are also critical to avoid over-indebtedness and support responsible lending practices.

since 2001, iFc has become an international leader in credit bureau development, providing support in over 50 countries. Recent successes include Morocco, egypt, and nigeria. iFc has just launched a credit bureau initiative in the english-speaking caribbean (soon to include Haiti).


Depending on specifi c country contexts and needs, interventions in credit reporting include: legal and regu-latory support to develop an enabling environment for credit information sharing (in collaboration with the World Bank); outreach and awareness-raising on the benefi ts of credit information sharing; advisory support for the devel-opment of new credit information sharing systems with emphasis on sMe credit reporting; and supporting the de-velopment of value-added services in markets with more mature credit information sharing systems.

as the current crisis evolves and liquidity margins are squeezed, the program is moving towards support-ing the development of more inclusive credit reporting systems (for sMes and microfi nance), building capacity for prudential supervisors to better utilize credit information

BOX 1. GLOBAL EMERGING MARKETS LOCAL CURRENCY BOND PROGRAM (GEMLOC)

The GEMLOC Program was launched in April 2008 by the World Bank Group to help develop local currency bond markets so they can attract more local and global insti-tutional investors. The programs will help build and strengthen local currency debt mar-kets in developing countries. GEMLOC has three separate but complementary parts: a private investment manager, Pimco, that develops and manages investment strategies to promote institutional investment in emerging market local currency bonds; a new private-sector led global index that tracks emerging market local currency bonds and serves as a new benchmark for the asset class, developed by IFC in cooperation with the leading index provider, Markit; and advisory services provided by the World Bank to strengthen local bond markets in emerging economies to help enhance their investability and attract new investments. (www.Gemloc.Org)

data, and supporting the promotion of fi nancial educa-tion and literacy on credit and credit reporting, targeting supervisors, regulators, lenders and indirectly end-users or borrowers. iFc’s global credit Bureau program has been funded by australia, italy, luxembourg, norway, new Zealand, the netherlands, switzerland, Visa international, and more recently by omidyar network Fund, inc.

BOX 2. EFFICIENT SECURITIES MARKET INSTITUTION DEVELOPMENT PROGRAM (ESMID)

The ESMID Program is a three-year, $5-million program funded by the Swedish Development Agency (SIDA) to help build securities markets in Africa (Kenya, Nigeria, Rwanda, Tanzania, and Uganda) and to help fi nance housing and infrastructure devel-opment. ESMID combines advisory services to help build the enabling environment for local non-government bond markets – strengthening the legal and regulatory framework, improving market infrastructure, and building the capacity of market participants—with support for replicable “demonstration” transactions, thereby expanding access to long-term, local currency funding in key sectors of the economy. (www.Ifc.Org/esmid)

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BOX 3. The G8 Global Remittances Work-ing Group created by the G8 Heads of State at their summit in Hokkaido in 2008, and chaired by the World Bank vice president for fi nancial and private sector development, is a multi-year platform created to facilitate the fl ow of remit-tances by providing guidance and policy options to the global community. The efforts of the work-ing group were successful in securing the commit-ment of the G8 Heads of State “to achieve […] the objective of a reduction of the global average costs of transferring remittances from the present 10 percent to 5 percent in 5 years through enhanced information, transparency, competition and coop-eration with partners, generating a signifi cant net increase in income for migrants and their families in the developing world” (L’ Aquila G8 Communi-qué 2009). For issues related to payments system infrastructure and access to fi nance, the G8 Global Remittances Working Group will leverage on the Private-Public Partnership on Remittances, a World Bank-coordinated forum for discussion between multilaterals, the regulators and the industry in the fi eld of remittances.

The World Bank-IFC Remittance Prices Worldwide Database was launched in Septem-ber 2008 and provides data on the cost of send-ing and receiving remittances for 134 “country corridors” worldwide. In 2009, the total number of corridors surveyed has increased to 165, including several south-south corridors representing more than 60 percent of total remittances to developing countries. The Remittance Prices Worldwide Data-base also expanded its coverage to include data on the cost of sending remittances to rural areas in the receiving countries. In the context of the G8 Global Remittances Working Group, the Remittance Prices Worldwide Database provides for a reference for monitoring the progress on the 5x5 objective.1 http://www.Remittanceprices.Org

1. The 5x5 objective aims at reducing the cost of send-ing remittances from 10 percent to 5 percent in fi ve years.

SECURITIES MARKETSproperly functioning securities markets are an integral

part of the fi nancial framework and play a vital role in facilitating access to fi nance in developing countries. this is especially true today, since bank lending in many coun-tries is severely constrained as a result of the global fi nan-cial crisis. IFC provides advisory services to help develop securities markets, including bond, securitization, and equity markets. in addition to providing long-term capital for priority growth sectors such as housing, infrastructure, and sMe fi nance, deeper and broader securities markets also help to expand the range of investment opportunities available to pension funds, life insurance companies, and other social safety-net investors in developing countries.

the iFc/World Bank securities Markets group has two main programs—the global emerging Markets local currency Bond (geMloc) program (see Box 1) and the effi cient securities Market institutional Develop-ment (esMiD) program (see Box 2)—under which most of its advisory services and knowledge management prod-ucts are designed and implemented. the geMloc and esMiD programs are highly complementary as they focus on government and non-government local currency bond market development, respectively. geMloc is current-ly providing advisory services in egypt and nigeria and expanding into a wider range of countries in other regions. it recently held two high-level “peer group” meet-ings among emerging market countries to discuss key bond market issues. esMiD is currently piloting two programs to develop domestic corporate bond markets in east africa and nigeria and will soon be expanding to other regions.

COLLATERAL REGISTRIES & SECURED LENDING

In emerging markets, many companies, especially sMes, cannot access credit due to inadequate collateral frameworks. IFC provides advisory services to support the development of a well-functioning secured lending framework through a delivery model that focuses on har-monizing laws, building electronic registries, streamlining registration processes, and eliminating unnecessary paperwork. iFc’s advice is provided jointly with the World Bank—through investment climate advisory services—to foster the use of movable assets such as equip-ment, vehicles, accounts receivable, inventory, and others as collateral in exchange for loans. as of today, advisory services have been provided in 10 countries and a


number of learning events have been organized. Meanwhile, demand in this area is increasing: six new projects are in the pipeline for FY10/11, particularly in africa and iDa countries. in addition to the key accomplishments illustrat-ed in china (see case study), other key accomplishments in-clude: the passage of secured transactions laws and regula-tions in Vietnam, lao pDR, afghanistan, and Rwanda; and the creation of leasing/collateral registries in Yemen. the secured transactions portfolio includes ongoing proj-ects in Vietnam, lao pDR, indonesia, nepal, countries belonging to oHaDa, ghana, Rwanda, Yemen, and afghanistan, with a strong pipeline of projects in Uganda, Bangladesh, Jordan, azerbaijan, Kazakhstan, and the Dominican Republic.

PAYMENT & REMITTANCES SYSTEMS

effi cient, secure, and reliable payments and securities settlement systems reduce the cost of exchanging goods and services and enhance the overall stability of the fi nan-cial sector. they also help promote economic growth. a well-functioning payment system is crucial infrastructure for enabling safe and cost effective remittance services.

the World Bank group has been active in over 100 coun-tries supporting regional, multi-, or single-country initia-tives, and providing technical advice on a broad range of topics. in 2009, the World Bank group was assigned the responsibility of chairing and coordinating the g8 global Remittances Working group. it also received endorse-ment by the g8 for implementing the (5x5) cost reduction objective. During 2009, the payment systems Devel-opment group further improved the World Bank-iFc Remittance prices Worldwide database by including new country corridors and coverage of rural areas (see Box 3).

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THE IMPACT OF THE CRISIS ON EMERGING MARKETSthe global fi nancial crisis that started in late 2008 culminated in a recession of unprec-

edented magnitude since the end of World War ii. the global slowdown has signifi cantly impacted fi nancial institutions and real sector companies in a variety of ways— lack of liquidity, declining demand for goods and services, and declining asset quality. the crisis and its aftermath pose major challenges for the world’s economies, including emerging markets, and require coordinated action to address liquidity constraints, and capital and asset quality issues faced by fi nancial and real sector entities to ensure sustained economic recovery.

emerging economies are facing a severe reduction of global demand for their exports, asset prices have plummeted, remittances have decreased, investments have dried-up, employment is under threat, and internal consumption has decreased. enterprises in all industry sectors and all size segments are facing diffi culties. as a result, defaults have increased across all banking loan segments— consumer and housing, micro, small, and medium enterprises (MsMes), corporate, and project fi nance. Data show that iFc MsMe bank-ing clients have experienced strong growth in the past two years, but that nonperforming loan percentage could increase to a minimum of 10 percent globally by the end of 2009. the combined effect of stagnating portfolios, increased defaults due to aggressive loan portfolio growth and economic slowdowns, is likely to feed back into the fi nancial sector leading to further fi nancial sector losses, even in regions where initial liquidity issues were appropriately managed in the early stages of the crisis.

in this context, iFc’s strategic objective is to play an active role to stabilize and stimu-late fi nancial activity, minimizing the impact of the crisis on economic growth and job creation in emerging markets. iFc’s crisis response is comprehensive. it addresses liquid-ity, solvency, and risk mitigation challenges through a combination of investment and advisory services. investment initiatives targeted at the fi nancial sector include a Microfi nance enhancement Facility, Bank capitalization Fund, infrastructure crisis Facility, global trade liquidity program, an expanded global trade Finance program, and the Debt and asset Recovery program. advisory initiatives cover Financial infrastructure, Risk Manage-ment, and loan portfolio Monitoring and Workouts programs.

RESPONDING TO THE CRISIS


WEATHERING THE CRISIS—A2F ROLE

the a2F crisis response targets both fi nancial institu-tions and the broader fi nancial infrastructure. it addresses short-term immediate needs, as well as more medium- and longer-term systemic market support. the objectives of a2F advisory support are to: � help fi nancial institutions assess and quantify risks and internal weaknesses that threaten their sustainability in the context of the crisis;

� propose plans that can be acted on immediately, includ-ing medium-term capacity-building and organizational strengthening plans to mitigate the impact of the crisis;

� create impact on the broader fi nancial sector beyond IFC direct client portfolio, through dissemination and awareness-raising of best practices; and

� ensure that the crisis does not end access to fi nancing for the poor and underserved populations/areas.

as an emergency response to the crisis, a2F imme-diately shifted the focus of its relevant existing advisory programs in sMe banking, microfi nance, housing, and leasing to assist fi nancial institutions in prioritizing actions, steering them through the crisis, and protecting their clients and business in the respective market segments. In particular, existing a2F advisory projects address demand from fi nancial sector clients for assistance with risk and portfolio management and loan servicing. In parallel, the ongoing Financial Infrastructure programs were quickly scaled up to strengthen both fi nancial stability and access to fi nance through better payment systems, remittance regimes, credit reporting systems, and secured transactions frameworks. a2F programs also have an increased focus on fi nancial inclusion and responsible lending practices.

to ensure a timely response to the crisis and adequate resources, iFc a2F is building on its regional capac-ity as delivery channels, redeploying existing specialists’ resources and seeking additional funding and resources for the new programs.

NEW A2F CRISIS RESPONSE PROGRAMS

a2F’s new advisory programs support the fi nancial sector and help partner fi nancial institutions objectively assess risk and identify immediate actions to mitigate the effects of the fi nancial crisis and limit the credit-crunch period that will follow the crisis. new a2F programs include Risk Management advisory and loan portfolio Monitoring and Workouts/nonperforming loan Man-agement. these programs help emerging market fi nancial institutions by improving risk management and internal control practices, and improving portfolio monitoring and nonperforming loan management practices.

activities target all types of fi nancial institutions and portfolios, with specifi c techniques and tools adapted to each segment—retail/consumer, MsMe, housing, and corporates. to achieve broader public benefi ts beyond IFC clients, initiatives are carried out at two levels, across regions:

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� at the institutional level, building capacity of fi nancial institutions to monitor their portfolios and manage their nonperforming loans and overall risk management;

� at the sector-level, raising awareness of best practices in risk and nonperforming loan management and work-ing with the World Bank on distressed asset resolution initiatives.

Risk Management Advisory includes capital adequa-cy, liquidity, asset-liability management, and operational, market, and credit risk. It covers overall risk frameworks, policies, and governance in relation to business strategy and operating environment, as well as risk measurement, reporting, and control frameworks. in the short-term, iFc is focusing on assessing vulnerabilities and gaps, liquid-ity, and capital enhancement, in coordination with invest-ment activity, including the Bank capitalization Fund. it is helping clients identify and prioritize issues in addition to disseminating best practices to the broader market. the program strengthens risk management capacity at fi nan-cial institutions. in response to the fi nancial crisis and in collaboration with the Risk Management advisory pro-gram, a Risk assessment Framework was developed and introduced in europe and central asia and in latin america and the caribbean.

Loan Portfolio Monitoring and Workouts/Non-performing Loan Management for consumer, sMe, and corporate lending. the program develops and institutionalizes iFc global knowledge in loan portfolio

monitoring and workout to optimize country and client-level implementation work carried out by the regional iFc advisory services facilities. the program is designed to establish IFC as a center of excellence and knowledge management in loan portfolio monitoring and workout, while providing best practice expert advice to complement advisory services implementation across IFC regions and facilities. the support encompasses a mix of sector level and institution-building activities, with a strong knowledge management and dissemination component embedded in the program design.

along its core components, the program builds local private sector capacity with international and local part-ners, and develops advisory services packages that are easily scalable and maximize impact of interventions. the program expects to have a strong developmental impact by helping to develop a sustainable fi nancial sector through a better credit culture, and complementing a2F advisory effort to mitigate the impact of the crisis on MsMes and individuals by ensuring that the crisis does not lead to a complete lack of access to fi nancing.


EARLY A2F ACHIEVEMENTS IN RECORD DELIVERY TIME

as part of iFc’s global knowledge management agen-da, risk and nonperforming loan management programs have already delivered a set of diagnostic/capacity building tools in risk and nonperforming loan management (Risk assessment Framework, Risk Management training cur-riculum for financial institutions, Deep Dive Banking npl Diagnostic tool, global Best practices in portfolio Moni-toring & npl Management, options & Best practices in npl sales, Best practices in MFi collections) comple-mented by a set of sector or region-specific tools devel-oped by regional iFc a2F teams.

During the first months of crisis response activities, a2F launched a sustained dissemination effort across re-gions, resulting in 30 risk management/nonperforming loan banking sector workshops and conferences organized across 28 countries and covering all iFc regions. Regional a2F teams also initiated a wide institution-building effort through direct engagement with nine client banks in gaza and West Bank, guyana, peru, Russia, and st. lucia, con-ducting risk management and nonperforming loan diag-nostics. the pipeline includes work with further 19 client banks across 11 countries throughout europe and central asia, Middle east and north africa, sub-saharan africa, and latin america and the caribbean.

at the policy level, a2F partnered with the World Bank on sector-level distressed asset resolution initiatives in 10 countries throughout europe and central asia, and Middle east and north africa. a2F also established a joint iFc-World Bank-iMF Distressed asset Resolution and insol-vency thematic group with 72 investment and advisory members. the group works to catalyze the development of a distressed asset market through a combination of investments and advisory services, both on an institution-specific micro level as well as on the market infrastruc-ture macro level. as part of its distressed assets-related activities and standard- setting work, a2F also complet-ed a White paper and guidelines on global practices in Responsible and ethical collections. this effort is closely coordinated with the ongoing responsible finance work led by the World Bank.

a2F increasingly leverages regional expertise and streamlines institution building work with financial institu-tions to develop and institutionalize global knowledge.

SCALING-UP A2F FINANCIAL INFRASTRUCTURE PROGRAMS

the Financial infrastructure group, a joint World Bank/iFc team, has accelerated its activities to strengthen underlying enabling financial infrastructure in response to the crisis. the group’s activities center on the follow-ing financial infrastructure areas: payment and securities settlement systems, remittances, credit information shar-ing systems, collateral registries and secured transactions frameworks.

the Financial infrastructure group aims to enable financial inclusion and responsible lending practices, by promoting credit reporting for microfinance and sMes, building collateral registries and secured transactions frameworks and supporting reforms to global payment and remittance systems in the world’s poorest countries. the total number of engagements in developing credit bureaus and collateral registries increased from 51 to 66 between FY08 and FY09. payment systems reforms were underway in over 50 countries in FY09. the group’s efforts on developing microfinance and sMe credit reporting systems currently covers 20 countries. In FY09 iFc supported credit bureaus were launched in egypt, Morocco and nigeria.

the group also supports development of enabling legal and regulatory frameworks, with recent successes including the passage of secured transactions laws and regulations in Vietnam, lao pDR, Yemen, afghanistan and Rwanda, and the official gazetting of credit bureau regulation in Kenya.

in the July 2009 l’aquila summit of the g8, Heads of state pledged to reduce costs of remittance transfers by 5 percent in five years, an achievement largely enabled by the critical efforts of the g8 global Remittances Working group, led by the World Bank, as part of the Financial infrastructure group’s efforts to develop international standards covering key financial infrastructure areas. the World Bank is currently leading the effort to develop inter-national standards in the area of credit reporting.

In FY10 our focus includes developing capacity for prudential supervision and regulation through the use of credit information data; applying joint assessment and reform approaches to developing financial infrastructure; developing targeted financial literacy programs; contin-ued ramp up of current programs and activities in iDa countries; and a host of knowledge management activities.

18

A2F advisory services is the largest of IFC’s business lines. In FY09, IFC A2F advisory had 298 projects and programs in 72 countries—141 projects in IDA coun-tries and 58 in fragile and confl ict-affected countries. These projects represent $54.5 million in expenses, with about 36 percent of expenditures in IDA countries and 14 percent in fragile and confl ict-affected countries.

A2F PORTFOLIO IN FY09

PORTFOLIO TRENDS

SME Banking 22%

Leasing 7%

Special Initiatives 7%

Financial Infrastructure 14%

Other 4%

Housing Finance 11%

Trade Finance 1%

Insurance-GIIF 0%

Securities Markets 2%(GEMLOC and ESMID)

Sustainable Energy Finance 10%

A2F SPENDING IN FY09

SME Banking 19%

Leasing 7%

Special Initiatives 5%

Financial Infrastructure 8%Other 1%

Housing Finance 13%

Trade Finance 2%

Insurance-GIIF 0%

Securities Markets 2%(GEMLOC and ESMID)

Sustainable Energy Finance 25%


IDA AND CONFLICT-AFFECTED AND FRAGILE COUNTRIES, AND MSME FOCUS

iFc’s a2F advisory services has a strong emphasis in implementing projects and programs in iDa coun-tries. about half of iFc’s a2F advisory services proj-ects were in iDa countries over the last fi scal year, while spending reached 36 percent of all a2F projects and pro-grams. these programs are expected to grow further over the next three years as the iDa focus continues to grow. projects and programs in confl ict-affected and fragile countries will also remain a key focus for a2F, particularly in africa and Mena regions.

iFc’s committed portfolio in fi nancial institutions that serve MsMes have grown dramatically over the last fi ve years—by 281 percent—with a committed portfolio of almost $7 billion in FY09 alone. at the same time, over 70 percent of a2F advisory services focus on MsMe clients.

as of December 2008, iFc’s fi nancial institution clients that received a2F advisory services held about 5.5 million MsMe loans worth over $45 billion in countries such as afghanistan, Bangladesh, nicaragua, pakistan, Rwanda, tajikistan, and tanzania.

over the last year, fi nancial institutions that received a2F advisory services reported an increase of 18 percent in number of MsMe loans outstanding, while volume increased by 15 percent.

20

Measuring results is at the core of every A2F advisory services project cycle and is critical to ensuring overall A2F strategic goals are achieved. Through results based management, IFC’s combined investment and advisory services offering has continued to deliver strong results. Key fi gures of the reach of our A2F advisory services are:

MEASURING RESULTS— MONITORING AND EVALUATIONS

� iFc’s sMe Banking clients have generated $41.3 billion in fi nancing and helped improve access to fi nance for 486,550 small and medium enterprises.

� iFc’s Microfi nance clients have provided $4.5 billion in fi nancing to about 5 million micro enterprises.

� iFc’s leasing clients provided 18,211 leases to micro, small and medium enterprises worth $1.7 billion.

� iFc’s Housing fi nance clients fi nanced 57,734 homeowners with more than $3.1 billion in mortgage loans.

� iFc’s trade Finance clients have originated over $1.5 billion in trade for 64 issuing banks in 33 countries.

� iFc has helped create or improve credit bureaus in 13 countries over the last fi ve years. in 2008, these credit bureaus received 38.9 million inquiries and helped generate about $19 billion in new fi nancing.

MONITORING RESULTSa2F projects are monitored regularly throughout implementation. each project must

specify a2F indicators that refl ect the objectives of the project, with baselines established, and targets expected to be achieved. During the life of any given project, actual results are monitored against stated objectives and their respective indicators. Once a project is completed, the development effectiveness of the project is assessed, with project ratings supported by actual results achieved, as well as the effi ciency (“bang for the buck”) in achieving such results. lessons learned are ultimately harnessed at project completion, so that new projects in similar product areas or markets may benefi t from improved design.


EVALUATING IMPACTevaluations play a complementary role to a2F proj-

ect level monitoring, which are limited to demonstrating outcomes at the institutional level, rather than broader impacts at the market, sector and/or end-benefi ciary levels. through rigorous evaluation methods and tools, such as the use of control groups and in-depth assess-ments through before and after analyses, impact evalua-tions provide a more robust assessment of the impact of a2F advisory services work. given the level of resources required to effectively manage impact evaluations, a selec-tive approach is used to determine programs and projects

EVALUATION OF GLOBAL TRADE FINANCE PROGRAM

in 2009, iFc’s global trade Finance program (gtFp) decided to conduct an external evaluation2 to assess the interim results of its three years of trade advisory services operations. the evaluation fi rm sent out the survey ques-tionnaire to all participants who have attended iFc’s trade fi nance training programs in the past three years. overall, the evaluation concluded that the gtFp trade advisory services is well structured and delivers products that are valued by issuing banks. � Quality of the training sessions was unanimously rated very high by all participants and appears to have im-proved technical skills and career opportunities.

� product range of iFc offerings in trade advisory servic-es is very comprehensive and covers all potential needs issuing banks could have in the trade fi nance domain.

� geographical allocation of resources is both relatively well diversifi ed (52 countries in 5 regions) and the vast majority of training efforts have been oriented to iDa countries, which is indicative of a strategy to channel resources to where they are needed most.

� Within the countries reached, an impressive number of banks (367 banks) and participants (1,425) have been reached. However, all participants are from trade fi nance department of each issuing bank, and it is argued that trade fi nance products need to be understood outside of the trade fi nance department within a bank as well, notably to cor-porate account offi cers and credit analysts. a higher focus on “train the trainers program” for trade fi nance champions within each bank may be recommended going forward.

� Budget of advisory services operations is small whereas the demand of trade fi nance training from gtFp issu-ing banks is very high, indicating lack of institutional recognition of the importance of trade and the need for supporting training.

iFc’s trade advisory services has delivered 68 train-ing programs since its launch in 2006. it has trained 1,425 people from 367 banks in 52 countries. among those training participants, 57 banks have joined iFc’s global trade Finance program (gtFp), and $487 million in new trade lines has been facilitated by IFC—$1.8 billion of trade has been generated by training participating banks through gtFp as of June 30, 2009.

2. Results are preliminary, based on Evaluation of the Global Trade

Finance Program, August 2009 (fi nal draft, pending publication).

that are evaluated. For instance, large, multi-year, or multi-country programs with multiple clients, as well as innova-tive products within a market with replication potential in other markets—would be considered as strong candidates for in-depth evaluation.

Over the last year, evaluations were underway across major a2F product areas. evaluations that were under-taken in 2009 include the following programs: global trade Finance program (gtFp); effi cient securities Markets institutions Development (esMiD) program; lac Micro, small & Medium enterprise (MsMe) program; china energy effi ciency program (cHUee); and Housing Finance programs in Russia and pakistan.

22

This section highlights just a few of the ways in which IFC, its partners, and clients are working together to increase access to fi nancial services by underserved groups in developing countries.

BUILDING INSTITUTIONS, INCREASING SME FINANCING—BANGLADESH

sMes contribute nearly 85 percent of Bangladesh’s gDp. However, their growth con-tinues to be hampered by the challenge they face in accessing fi nancing from formal lend-ing institutions. the banking industry has long been ignoring this sector. in 2005, eastern Bank ltd., a local commercial bank in Bangladesh, recognized the potential within the untapped market of small businesses and solicited assistance from IFC to develop a system to cater to the specifi c needs of sMes. the then-managing director (Mr. Mahmud sattar) of the Bank said,

“I believe we are catalyzing a change in mindsets amongst banks, by highlight-

ing the untapped potential of the SME markets. Not only is SME fi nancing impor-

tant for economic growth, but also it represents a huge opportunity for local banks.”

iFc assessed the existing capacity of the bank and developed a strategy for a sMe-spe-cifi c department. iFc worked with eastern Bank to set up an sMe department, develop new products, and train staff in sMe fi nancing.

eBl also took its own initiative in developing an information technology (it) system to run sMe operations, and invested in specifi c hardware and software. By 2009, eBl has tripled its value of outstanding sMe loans (from about Us$16.7 million in 2006 to nearly Us$54 million in March 2009) and added around 2,700 sMe clients (from 300 in 2006 to 3,000 in March 2009) to its portfolio. eBl has introduced seven sMe loan prod-ucts, opened 18 sMe branches, and employed 119 sMe staff with dedicated services for women borrowers. its sMe loan portfolio is now 10 percent of the total portfolio. eastern Bank continues to invest in research and development of new products and training of its staff to ensure the growth of its sMe portfolio. the bank has set an aggressive target to increase its sMe loan portfolio to Us$85 million by the end of 2010 (20 percent of its total loan portfolio). iFc is working with the bank to achieve this goal.

CASE STUDIES

HIGHLIGHTS


DEVELOPING LEASING IN AZERBAIJAN & CENTRAL ASIA

iFc, in partnership with seco, has laid the ground for leasing development in central asia since 2002. pre-decessor projects helped create a transparent and viable legal and tax environment for leasing in the region. they also revealed the need for more targeted advisory services to build overall institutional capacity, and in particular to continue securing a favorable legislative environment for leasing. to respond to this market need, iFc created the azerbaijan-central asia leasing Facility advisory services project (acalF).

the overall goal of acalF was to expand the leasing environment for sMes through a signifi cant advisory services program that would strengthen and build leasing capacity in four countries: azerbaijan, the Kyrgyz Republic, tajikistan, and Uzbekistan.

acalF signifi cantly contributed to the institutional capacity development and increased investment attrac-tiveness of its clients. It also played a substantial role in further legislative improvements related to leasing, in build-ing overall market institutional capacity through training and other client consultations, and in raising public aware-ness about leasing markets.

“Bang for Buck” impact: each Us$1 spent by acalF has generated: � Us$60 of new leasing deals by participating fi nancial institutions (pFis);

� Us$8 of annual economic benefi ts to pFis from infor-mation technology upgrades (once completed);

� Us$62 of foreign investments into pFis; � Us$14 of iFc investments into pFis; and � Us$118 of growth in the overall leasing market.

the project also helped governments draft and adopt eight laws to facilitate leasing, including contribution into the new tax codes in the Kyrgyz Republic and Uzbekistan. the project developed 65 training modules, training 740 people in areas such as risk management, human resource management, fi nancial analysis, and monitoring of leases. the project training modules were on leasing basics, credit analysis in leasing, and microleasing.

SCALING UP MICROFINANCE THROUGH TRANSFORMATION IN COLOMBIA

the colombian microfi nance industry has seen impres-sive growth for longer than a decade but still only reaches a small percentage of its potential market. One way to increase access to fi nance for the poor that has proven successful in many cases around the world is through the transformation of nongovernmental microfi nance pro-viders into regulated deposit-taking fi nancial institutions. these transformations have successfully taken place in Bolivia, Kyrgyzstan, peru, tajikistan, Uganda, Kenya, among other countries.

In Colombia, IFC is supporting the transformation of Fundacion Mundo Mujer popayan (FMM popayan) into a regulated, deposit-taking institution. FMM popayan has been operating for 24 years as a non-profi t ngo devot-ed to provide microcredit to local micro entrepreneurs. With a loan portfolio of over $175 million and more than 200,000 clients, FMM popayan has been classifi ed as one of the most successful and effi cient microfi nance institu-tion in latin america. iFc has supported the expansion of the portfolio of FMM through a Us$6 million senior loan and is willing to take an equity stake in the super-vised entity, once it is established. In spite of its success, it became apparent for FMM popayan’s management that in order to be sustainable and competitive it needed to become a regulated fi nancial institution.

24

given the complexity of transformation processes, FMM popayan requested iFc’s advisory services to sup-port such effort. iFc designed an advisory services prod-uct to support the institution in strategic and operational planning, credit risk management, and preparation of terms of reference for future consultancies related to the transformation. the project lasted from november 2008 to July 2009. after a successful completion, FMM popayan requested that iFc remain involved in the trans-formation process through an advisory services project. the components of the second project include improving risk management systems; revising credit policies and pro-cedures and reinforcing training capacity mainly in credit issues; improving the fi nance and treasury area of the insti-tution; and designing and implementing savings products.

iFc believes that ngos that transform themselves into regulated microfi nance institutions will play a key role in scaling up microfi nance and increasing access to fi nance at the bottom of the pyramid. supporting the transforma-tion of non-profi t organizations into for-profi t fi nancial intermediaries is one of the ways iFc supports microfi -nance globally.

INITIATIVES IN AGRIFINANCElack of access to fi nance has been considered one of

the key impediments for farmers to adopt better technolo-gies and improve the effi ciency of their production. iFc has initiated a number of projects to improve farmers’ access to fi nance, with some notable examples including the africa region.

iFc’s new africa agricultural Finance project (aaFp) supports local fi nancial institutions to improve their agri-cultural lending capabilities and also working with agricul-tural supply chain organizations to improve fi nancing to these supply chains.

More specifi cally, the aaFp program will help fi nan-cial institutions establish and/or further develop their agri lending activities. the amount and nature of this advisory would be tailored extensively to the needs and strategy of each participating client fi nancial institution. the program will initially target banks, microfi nance institutions, and leasing companies that have presence or are interested in expanding to rural areas. Financial institutions selected for this program will be offered a combination of iFc invest-ment and advisory services with the objective of having a strong and immediate impact on the fl ow of agriculture fi nancing.

ethiopia’s economy is heavily based on agriculture, which accounts for almost 50% of gDp, 60 percent of exports, and 80 percent of employment; however, farm-ers and sMes have limited access to fi nance. Unfortu-nately, the current statistics demonstrate that local fi nancial sector’s exposure to agriculture is less than 5-7 percent of their outstanding portfolio, despite the size of the industry and the demand. IFC intends to support the agriculture sector in ethiopia by increasing access to fi nance through warehouse receipts (WHR)-based fi nancing and assist the move toward a more effi cient and transparent agricultural marketing system for both domestic and export markets. this program is built on iFc’s experience with WHR in Indonesia.


IFC LEASING PROGRAM HELPS RWANDAN COFFEE FARMERS

the humble bicycle is helping boost the income and better the lives of 1,200 coffee farmers in Rwanda, thanks in part to iFc’s leasing program in the country.

coffee is a major source of export income in Rwanda, a country that is still recovering from genocide and the resulting turmoil of the 1990s. Most of the country’s 10 million people work in the agriculture industry or toil at their own small farms to survive. IFC, in partnership with a local subsidiary of an international nongovernmental or-ganization, is expanding a program that allows local coffee farmers to lease durable, eight-gear bicycles with a specially fi tted shelf to haul heavy loads.

a program to lease custom-made bicycles to coffee farmers was initiated by the U.s. agency for international Development (UsaiD) and spread, a civil society orga-nization. it has made a dramatic impact on an industry that still relies on strength, sweat, and stamina. IFC has teamed up with Vision Finance, the fi nancial arm of World Vision international, to help expand and commercial-ize the program in Rwanda, allowing local coffee farmers to lease bicycles that can carry about four times as much as the strongest farmers can move on their backs. this enables farmers to bring their harvest to distant washing stations much faster, meaning the beans will be fresher and obtain a higher price at market.

issac Murenzi, a married father of four children, is a coffee farmer from Rwanda’s southern gitarama province. He knows the hard work involved in hauling heavy bags of freshly picked coffee beans—some weighing up to 50 kilograms.

“The coffee bike has changed my life,” Murenzi said. “It

allows us farmers to transport our coffee on the same day,

improving the quality of coffee we deliver. This in turn has

helped increase our earnings, since we have been able to meet

the demands of the market both in quality and quantity.”

some 1,200 farmers are now using the bicycles, which they purchase for about $140 through a lease-to-own program that was designed largely by iFc. payments are made over the course of a year, ensuring that the cost does not bite deeply into the farmers’ monthly income.

iFc has had much success in developing leasing pro-grams in Russia, Ukraine, and central asia, and is excited about bringing these models to africa.

“IFC is a pioneer in introducing Leasing Programs to

post-confl ict countries like Rwanda,” said Thierry Tanoh,

IFC Director for Sub-Saharan Africa. He noted that leas-

ing helps businesses grow by giving them the chance to

introduce vehicles or equipment that would otherwise be

too expensive to buy. This ultimately benefi ts the econo-

my by boosting employment and increasing the tax base.

iFc is also developing specifi c leasing models in cameroon, the Democratic Republic of congo, ghana, Madagascar, senegal, and tanzania—all countries where legal frameworks for leasing are either rudimentary or non-existent.

26

SECURED TRANSACTIONS—MEASURABLE IMPACT IN CHINA

in March 2007, china’s national people’s congress passed the historic property law which, among other things, adopted a number of important principles of modern secured transactions laws recommended by the people’s Bank of china (pBoc) and the iFc. as a result, according to the Doing Business 20083 report, china’s collateral law index score, which measures the degree to which secured transactions laws facilitate lending, has increased from 0 to 6. in october 2007, with support from iFc, the pBoc credit information center created a national online registry for pledges of receivables, the fi rst of this kind for china. as of January 2009, the credit information center has reported an impressive impact: � over 75,000 registrations representing loans with a value estimated at over Us$570 billion. More than 100,000 searches have been performed in the regis-try. of the Us$570 billion in fi nancing, approximately Us$240 billion corresponds to sMe fi nancing.

� For each dollar spent by the project, Us$425,373 was generated as fi nancing to fi rms, and out of that, Us$179,000 corresponded to new fi nancing to sMes per dollar spent.

� the number of sMes that have benefi ted by being able to access credit is around 11,500.

� the percent of moveable based lending in china went from 12 percent pre-reform and prior to the creation of the receivables registry, to 20 percent after its creation.

� the factoring industry was introduced in china and the value of domestic factoring has reached a volume of Us$ 21 billion.

� around 3,000 people have participated in workshops, trainings, and awareness raising events.

� among the registry’s 5,000 users are banks, guarantee companies, law fi rms, fi nance companies, and pawn shops. the user experience with the registration system has been overwhelmingly positive.

CRISIS RESPONSE ADVISORY WORK IN EUROPE AND CENTRAL ASIA

iFc’s a2F program in europe and central asia (eca) has developed a comprehensive crisis Response advisory program. through this program, the iFc catalyzes devel-opment of a distressed asset market through investments and advisory services on the micro (institutional) and macro (market infrastructure) levels. these efforts are providing companies with crisis management support.

Banks need help to better manage the crisis, namely by focusing on the real quality of their portfolio, while real sector companies, especially sMes, require access to much-needed funding.

at iFc’s 13 public awareness seminars throughout eca, participants discussed loan resolution, real estate portfolio concerns, and interest and liquidity risk manage-ment. the seminars, jointly organized with local partners, attracted more than 400 participants from 130 banks.

“The problem of nonperforming loans has be-

come part of our daily life. We welcome IFC’s initia-

tive to help us deal with the most important issue for

the Georgian banking sector,” stated Irakli Giorgobiani

of Georgia’s TBC bank, who attended an IFC seminar.3. Doing Business. http://www.doingbusiness.org


iFc has also developed crisis-related management tools for fi nancial institutions, including diagnostic tools, a mortgage borrower’s information guide, and an asset-liability Management manual with reporting software. these and other tools developed are now in widespread use across Russia and Ukraine, and are being distributed across eca.

in addition, a joint team of advisory staff across busi-ness lines and the World Bank analyzed the current legal environment and mobilized a working group with key stakeholders for legal reform in Ukraine, advising neigh-boring countries on insolvency legislation.

INDUSTRIAL BANK FIRM ON SUSTAINABLE FINANCE DURING ROUGH TIMES

senior management at industrial Bank continues to provide loans to support sustainable energy projects even during the current global fi nancial crisis. typical projects include energy effi ciency, renewable energy, and cleaner production in the industrial, commercial, and residential sectors.

From July 2008 to the end of June 2009, Industrial Bank disbursed 29 new loans under the china Utility-based energy effi ciency Finance program (cHUee) to chinese borrowers. the projects supported by those loans (total disbursement about 1.3 billion RMB or Us$200 mil-lion) will lead to emissions reductions of more than 8.36 million tons of CO2 per annum.

Mr. chen Dekang, the vice president of industrial Bank, told iFc:

“During bad times, it is even more important for com-

panies to fi nd ways to cut operating costs, which means

there are even more reasons for the effi ciency improve-

ment in the use of energy and other valuable resources.”

also during this period, industrial Bank offi cially became an equator principle bank. in addition, in the last year the Bank created two designated divisions – the sustainable Finance center and the sustainable Finance compliance Unit. the former is in charge of business development while the latter assures compliance of the bank’s business conduct with principles such as equator principle.

cHUee supports marketing, development, and equip-ment fi nancing services to energy users in the commercial, industrial, institutional, and multi-family residential sectors to implement energy effi ciency projects in china. cHUee brings together fi nancial institutions, utility companies, and suppliers of energy effi cient equipment to create a new fi nancing model for the promotion of energy effi ciency.

through cHUee, iFc has worked with two local banks since 2007 to fi nance projects involving energy effi ciency and emission reduction. in just under 30 months, the two partner banks have disbursed more than $471 million in 107 loans to projects leading to an annual emission reduction of more than 14.5 million tons of CO2.

28

DEVELOPING CREDIT INFORMATION SHARING IN EGYPT—iSCORE

in 2005, the World Bank and iFc developed a country assistance strategy for egypt, and based on recommenda-tions, the central Bank of egypt (cBe) requested World Bank assistance to strengthen egypt’s credit reporting environment.

the World Bank’s assistance resulted in the passage of amendments to the Banking law of egypt in June 2005. the amendments, among other things, allowed the sharing of credit information with nonbank fi nancial institutions and authorized the cBe to license and regulate private credit bureaus.

in august 2005, iscore (previously estealam), egypt’s fi rst credit bureau, was formally incorporated with equal participation through private and public egyptian Banks, in addition to the social Fund for Development. iscore was granted a preliminary license by the cBe in september 2005 pending the completion of its operating systems and business plan.

in late 2005, iFc was asked to provide technical assistance to help develop iscore. over the course of the next year, IFC concluded a technical assessment of the initial market of iscore’s customers, and made recommen-dations to iscore’s fi rst set of customer banks addressing necessary technological and informational improvements. in addition, iFc advised iscore on developing its business plan. Most critically, iFc helped iscore through a long and sensitive procurement process to choose a technical part-ner: Dun & Bradstreet (D&B). iscore signed a contract with D&B in september 2006 to begin the process of developing the bureau. D&B was responsible for developing the tech-nical infrastructure for iscore and implementing the credit bureau system/database, providing management consul-tancy on the business operations side of the bureau, and providing training to iscore staff and member banks.

subsequently, iFc was retained by iscore in a second phase of the project, to provide support in the imple-mentation phase of the bureau. this included several responsibilities, such as overseeing vendor implementation, reviewing in excess of 30 technical and process manuals, helping iscore develop operational rules and strategies, assisting in the drafting of the bureau’s code of conduct and

subscriber agreements, managing the user acceptance test-ing process, and fi nal verifi cation of properly functioning vendor installed systems. iFc also reviewed vendor train-ing materials and oversaw training by the vendor of 33 service subscribers on using the iscore portal and trouble-shooting. the training was delivered to knowledge cham-pions at subscriber institutions who then disseminated the information to various other users.

close to three years after iFc’s initial engagement with iscore, the bureau was commercially launched in July 2008. With support from IFC and the systems vendor, iscore’s data center was vastly expanded to include 9 million data records, a 13-fold increase from the baseline of 0.9 million facilities initially held by the cBe’s public credit Registry. the data pertains to almost 4.8 million sMe and consumer borrowers. iscore currently services the credit information needs of 55 institutional subscrib-ers, which includes 41 banks, 8 mortgage fi nance compa-nies, 4 leasing companies, the egyptian social Fund for Development (sFD), and one retailer. all banking insti-tutions and sFD have completed the credit data migra-tion process to iscore. Mortgage fi nance companies have submitted approximately 65 percent of their data records, and the 4 leasing companies 35 percent of their data.

as of December 2008, iscore has issued over 1 million credit reports, signed up 55 subscribers, and im-proved its scores on Doing Business Indicators4 related to credit information. In doing so, the bureau has already

4. Doing Business. http://www.doingbusiness.org


enabled an estimated $1 billion in fi nancing. on the indica-tor’s overall ranking of 183 countries, egypt advanced 85 places to rank 71 in 2010 from 156 in 2007. the private Bureau Coverage, an index of adult population coverage, increased from 0 percent in 2007, to 8.2 percent in the 2010 Doing Business report. likewise, on the Depth of credit information index, egypt’s score increased from 2 of 6 in 2007, to 6 of 6 in 2010.

BANKING ON WOMEN IN BUSINESS —TANZANIA’S EXIM BANK

exim is tanzania’s seventh-largest bank by asset size. the bank traditionally focused on serving corporate clients but faced with an increasingly competitive banking sector, exim wanted to expand to underserved locations and markets. Women in business represent a growing but still underserved market, with only about 8 percent of women-owned businesses having access to bank fi nance. exim started looking in this direction for potential new business opportunities, but had no previous experience in serving small and medium entrepreneurs, and specifi cally, women entrepreneurs.

exim bank partnered with iFc in 2007. iFc pro-vided a Us$5 million credit line for lending to women entrepreneurs and specialized advisory services to sup-port the design and roll-out of its Women entrepreneurs Finance (WeF) program.

IFC provided access to international knowledge and expertise in the women’s market through the global Bank-

ing alliance for women and worked with exim bank to review and improve its delivery of fi nancial services to busi-nesswomen. WeF includes both training for women entre-preneurs to make them more bankable, as well as training for bank staff on gender-sensitive customer service.

From 2007-2009, exim’s WeF program made great achievements. � portfolio increased—UsD $6.2 million was disbursed to over 110 women entrepreneurs.

� savings accounts opened more than tripled. � new savings and loan products were devised to encour-age women to save.

� a new partnership with micro-insurer sero lease created a platform to reach out to microfi nance clients with good credit histories.

� Risk reduction—a 0 percent default rate in the Women’s sMe portfolio relative to overall non-performing loans of 2.43 percent.

� training—Financial management and “How to Become Bankable” training delivered to 528 women entrepreneurs.

� Reputation enhancement—First fi nancial institution to offer a WeF program for women running mid-sized businesses in tanzania.

� networking and mentoring increased—In the process of establishing a Women’s club to facili-tate mentoring and networking opportunities among women entrepreneurs.

30

exim’s brand equity and image improved with the WeF program. WeF is playing an important role in the mobilization of savings and positioning the brand in the retail segment.

iFc experience shows that banking on women en-trepreneurs is a profi table business as women entrepre-neurs have excellent repayment rates, are good savers, and contribute positively to their community’s well-being.

HELPING UKRAINE CREATE A SUSTAINABLE AGRI-INSURANCE SYSTEM

in early 2008, iFc offi cially launched the agri-in-surance Development project to help Ukraine create a sustainable agricultural insurance system. Quality agri-insurance will help Ukrainian producers better manage their risks, stabilize their incomes, and increase their access to credit. good insurance protection helps producers, by reducing their risks related to natural disasters, to be more confi dent in fi nancial decisions, and adopt modern tech-nologies. this is especially relevant in the light of the world food crisis. Ukraine, already one of the major grain export-ers, is in a position to increase production and contribute signifi cantly to mitigating the crisis.

creating a sustainable agriculture insurance system requires an effective agri-insurance system. However, Ukraine’s agri-insurance sector is still in its infancy. the appropriate legislation and regulatory environment does not exist. insurance companies lack technical expertise and experience. insurance is data-driven, but data for actuarial calculations, proper assessment of risks, and the establish-ment of actuarially sound premium rates was not system-atically collected at the start of the project. the cost of insurance due to these shortcomings is too high.

to help Ukraine address these issues, the iFc Ukraine agri-insurance Development project works in a com-prehensive way with key stakeholders with funding from ciDa. the project helps Ukraine create a public-private partnership including government, the insurance industry, and producers, to achieve sustainability in agri-insurance. a comprehensive government agri-insurance strategy was developed with participation of all these parties and work is underway to consolidate these gains in new leg-islation. the project is also active over a wide range of issues such as: a separate license for agri-insurance, collect-ing and managing data, introducing standard products, and standardizing loss adjusting and underwriting procedures.

to improve agri-insurance, better insurance products are needed. the project works with insurance companies to introduce best practice and international standards in product development. this includes the active participa-tion of producers, fi rst to help them better understand various aspects of agri-insurance and then to take ac-tive part in forging an agri-insurance system that serves their interests, and developing new products that meet their needs. in spring 2009, the project implemented the producer education campaign for 603 agricultural enter-prises operating on nearly 1 million hectares of farmland.

the project has developed a new product for insuring winter wheat crops for the full growing season with the input from all major stakeholders involved. as a result, the new product takes into account and balances the interests of all parties. this is anticipated to increase insurance sales and consumer satisfaction. the new product is transparent, and the procedures understandable to farmers—a require-ment for building a new insurance culture based on trust. also, for the fi rst time in Ukraine, the project established a data depository for the actuarial calculation of rates for the new product for each of the 490 rayons in Ukraine and developed standard underwriting and loss adjustment procedures that will be used by insurance companies. this product development cycle will be repeated and systemati-cally integrated into a sustainable system.


IFC HELPS REVIVE THE MORTGAGE MARKET IN THE MALDIVES

Housing is in chronic shortage in the Maldives as the country is caught between the competing diffi culties of providing essential services to a widely dispersed popula-tion and coping with the task of an unmanageable conges-tion and untenable population density in the capital island, Male. the island hosts over 100,000 residents in an area covering 1.90 square kilometers. With limited or no access to long-term fi nance, the premier housing fi nance compa-ny, Housing Development Finance corporation, Maldives (HDFcM) had to stop lending operations.

iFc’s investment and advisory inputs in HDFcM is part of its ongoing initiative to support the development of the nascent fi nancial sector in the country and help local fi nancial institutions improve their operational ca-pacity and increase access to domestic and international funding. iFc has assisted in the privatization of the 100 percent government-owned HDFcM and is helping to transform it into a commercially viable private sector-led company that would play a key role in providing housing fi nance to the low- and middle- income households, there-by reducing the severe housing shortage in the country. IFC has an agreed equity investment of 18 percent of the company in addition to a loan commitment of Us$7.50 million. additionally, iFc has designed a performance-based program for advisory services for setting up and implementing systems and processes related to loan origination, risk management, and corporate governance. through its representative on the Board, iFc is able to contribute to good corporate governance of the HDFcM and help ensure that the operations are conducted in the best interest of all stakeholders.

HDFcM has restarted its lending operations follow-ing the infusion of equity and debt. Business volumes are expected to pick up substantially once certain legal is-sues pertaining to property rights are cleared by the gov-ernment with respect to the newly developed Hulumale island, which is three times the size of Male. Foreign institutional investors have also started showing interest in extending long term lines of credit to the company.

IFC BOLSTERS BANK OF SAINT LUCIA WITH FUNDING AND ADVICE

the Bank of saint lucia is the largest banking institu-tion on the caribbean island of st. lucia, enjoying a 40 percent market share. It offers a broad range of banking services, and recently expanded its focus on sMes.

a year ago, iFc approved a $20 million investment to support the Bank of saint lucia’s services for corporations as well as sMes. along with the investment, iFc advisory services helped the bank implement its sMe strategy. the bank now has a business unit fully dedicated to serving the needs of smaller businesses.

Just as the sMe banking project got underway, the Bank of saint lucia had to deal with the local effects of the global fi nancial crisis, which highlighted areas in the bank’s risk management that could be improved. iFc responded immediately by offering to conduct a risk assessment, the implementation of which helped the bank better understand its risk management capabilities and take steps to improve them. this major local bank is now better prepared to weather future fi nancial storms.

the project also received support from the cana-dian international Development agency, a donor partner for advisory services programs in the english-speaking Caribbean.

access to fi nancial services for sMes has been iden-tifi ed as a signifi cant obstacle to private sector growth in the Caribbean, and has become particularly acute as a result of the global fi nancial crisis. iFc’s strategy focuses on improving access to fi nance for MsMes through part-nerships with local fi nancial institutions.

32

RECENT BOND ISSUE IN TANZANIA HIGHLIGHTS PROGRESS IN DEVELOPING LOCAL CAPITAL MARKETS

local currency non-government bond markets in east africa are still small relative to those in east asia or latin america. in Kenya and tanzania, for example, only a hand-ful of bonds are listed on the local exchanges. secondary market trading in these issues is very limited, and histori-cally, the time required to obtain regulatory approvals and complete a bond issue was considered excessive. the iFc/World Bank esMiD program is working to address short-comings in the local bond market in east africa (Kenya, Rwanda, tanzania, and Uganda), including, among other things, strengthening the primary market framework and streamlining the approval process for new issues. there are now positive signs that some of the changes recom-mended by esMiD are beginning to take place.

earlier this year, alluminium africa limited (alaF limited), a well-established, tanzanian-based producer of fl at and long steel products and a company that has been operating in the east african region for many years, com-pleted a highly successful tZs 30 billion (approximately Us$25 million) offering of fi xed and fl oating rate notes that represents the fi rst-ever stand-alone issue by a non-fi nancial company in the domestic bond market. the issue, which was led by standard chartered, carried a fi nal maturity of seven years and was placed entirely with local institutional investors. since alaF generates a signifi cant portion of its earnings in tanzanian shillings, the issue allowed alaF to mitigate the currency risks which might otherwise have been associated with a foreign currency offering. alaF will use the proceeds of the issue to expand its local manufacturing capacity.

“Given the high quality of the issuer, the positioning

of its credit profi le and the deal structure, we were very

confi dent that this issue could obtain the relevant capital

market approvals without the need for third party credit en-

hancement and with just one local currency rating,” said

Ade Adebajo, Regional Head of Africa Capital Markets,

Origination and Coverage, at Standard Chartered in London.

“in the end, despite going through a rigorous process to ensure adequate and complete disclosures, we were very pleased with the [regulator’s] effi cient and prompt turn-around time on the approvals for this offering, which sug-gests that some of the bond market reforms proposed by esMiD are beginning to take root in tanzania.”

the esMiD program supports domestic non-gov-ernment bond market development and aims to increase access to long-term local currency fi nancing in key sec-tors, such as infrastructure, housing, and microfi nance/sMe lending. it also aims to increase the supply of investment products for institutional investors, such as local pension funds. the program combines enabling en-vironment advice—covering the regulatory framework, market infrastructure, market participants, and regional market integration, where appropriate—with support for replicable, “demonstration” transactions that help pave the way for other bond issues to come to market.

“By integrating enabling environment assistance

with transactions support, both the advisory team

and clients are able to gain a better understanding

of the specifi c challenges impeding market develop-

ment and can then incorporate this knowledge into

more informed and targeted policy assistance,” said

Clemente Del Valle, ESMID global program manager.

esMiD east africa, which has been operating for two years, represents one of two pilot programs esMiD operates. the other was more recently launched in nigeria. esMiD is planning to expand into other regions, such as latin america and south asia.


M-BANKING IN CAMBODIAtoday’s fi nancial market economy abounds with inno-

vations in both products and delivery channels that defy the traditional boundaries within which fi nancial markets operated. innovations in branchless banking, mobile bank-ing, and correspondent banking models, are all thriving today and promise to lead the way in defi ning the land-scape of fi nancial markets going forward. these innova-tions usher in new benefi ts through increased access points that make products and services more affordable and avail-able to all. IFC is working both globally and in a number of countries on mobile banking activities including Brazil, cambodia, india, indonesia, Mozambique, papua new guinea, and senegal.

In Cambodia, a country with a population of 14.5 million, the number of banked customers is extremely small. Based on research jointly conducted by iFc and australia and new Zealand Banking group (anZ), mobile phone subscribers have increased substan-tially to over 1.6 million as of March 2007 with around 1 million cell phone users currently unbanked. In addition, 80 percent of the population has access to a mobile phone and penetration is growing at 50 percent per year.

anZ has a growing footprint in asia and in 2007 investigated the opportunity to broaden its reach to customers. It partnered with IFC to conduct research on the market for mobile payments and banking for the unbanked in cambodia. anZ Bank set up a subsidiary, Wing in March 2008, to acquire and provide a techno-logical platform for mobile payment solutions in the coun-try. With advisory services from iFc, Wing has devel-oped a customer care center, a merchant network, and a strategy for technology uptake. iFc and Wing are also jointly conducting a fi nancial literacy campaign on mobile banking and facilitated a dialogue with the national Bank of cambodia (nBc) to ensure the central bank’s confi -dence amid insuffi cient governing laws and regulations.

M-Banking services were launched in late January 2009. Wing provides cash in/cash out, person-to-person payments with now over 598 cash express points. By using a 10-digit passcode, users can send money to non-Wing customers. after 8 months of operations Wing serves 33,175 clients, 68 percent of whom were previously unbanked.

Wing has now partnered with MFis as outlets for Wing express points for cash in /cash out and they are working on similar arrangements with MFis in 20 out of cambodia’s 24 provinces.

34

Key to A2F advisory services outreach and development impact is our ability to generate and use knowledge in ways to benefi t our clients. Highlighted here are some new tools in Access to Finance.

MICROSCOPE INDEX

Global Microscope on the Microfi nance Business Environment

Microscope Index 2009 outlines the fi ndings of in-depth analysis of the microfi nance business environment in 55 countries. the index that underlies this report allows coun-tries and regions to be compared across three broad categories: regulatory framework, investment climate and institutional development. the study uses a methodology that has been employed for the last two years in a microfi nance report on latin america and the caribbean, and is being piloted for the fi rst time on a global basis.

conducted by the economist intelligence Unit (eiU), with support from from the Multilateral investment Fund, part of the inter-american Development Bank group, the corporación andina de Fomento, and iFc. http://www.ifc.org/microfi nance

FINANCIAL INFRASTRUCTURE REPORTFinancial Infrastructure: Building Access through Transparent and Stable Financial

Systems, a new report from the Financial infrastructure group, maps fi nancial intermedia-tion systems and the size of the fi nancial systems market. it provides an expanded data index for measuring fi nancial infrastructure and identifi es reforms. Financial institutions process payments, check potential borrowers’ past experiences with credit, and evaluate the suitability of proposed loan collateral. consumers pay bills, buy houses, remit earn-ings, and save for retirement. all of these formal fi nancial transactions rely on a founda-tion of institutions, information, technologies, and rules and standards—the infrastructure of fi nancial intermediation.

these underlying systems of fi nancial infrastructure are analyzed in the report, draw-ing on efforts of the World Bank group in payment and securities settlement systems, remittances, credit reporting, and secured transactions and collateral registries. the report makes recommendations for reform to make the system more effi cient and reliable, thereby reducing costs and increasing access to fi nancial services. http://www.worldbank.org/fi nancialinfrastructure

SHARING KNOWLEDGESHARING SHARING KNOWLEDGE KNOWLEDGE


WORLD BANK-IFC REMITTANCE PRICES DATABASE

the World Bank-iFc Remittance prices Worldwide Database was launched in september 2008 and provides data on the cost of sending and receiving remittances for 134 “country corridors” worldwide. in 2009, the to-tal number of corridors surveyed has increased to 165, including several south-south corridors representing more than 60 percent of total remittances to developing coun-tries. the Remittance prices Worldwide Database also expanded its coverage to include data on the cost of send-ing remittances to rural areas in the receiving countries. In the context of the g8 global Remittances Working group, the Remittance prices Worldwide Database provides for a reference for monitoring the progress on the 5x5 objective. http://www.remittanceprices.org

BENCHMARKING BEST PRACTICES IN SME BANKING

the global sMe Banking program launched the sMe Banking Benchmarking Web survey in 2008. the survey provides participating banks with the ability to benchmark themselves against the sMe banking practices of their peers. to date, 12 banks in emerging markets have partici-pated in the survey and have received a benchmarking re-port based on their answers that provides valuable insights into how their sMe banking practices compare to those of their peers in a number of relevant areas, including: � products and services that most effectively target sMes; � most commonly used delivery channels; � business model and organizational set-up; and � cross-selling, effi ciency, and performance ratios.

Our banking partners can use the benchmarking report and its recommendations to expand and improve their services to sMes.

Due to the strong demand from banks in Central and eastern europe, a Russian translation of the survey is also available.

SME BANKING KNOWLEDGE GUIDE

iFc global sMe Banking program developed a knowledge guide to disseminate information on best prac-tices to fi nancial institutions considering or currently en-gaged in banking to sMes. the sMe Banking Knowledge guide synthesizes iFc lessons learned and shares key suc-cess factors for profi table sMe banking operations. it is primarily a technical publication intended for bank direc-tors, managers, and staff in developing economies, who see the untapped opportunity in their local markets but still wonder about the optimal way to approach the sMe segment. It is also a useful tool for policymakers and other fi nancial sector actors who seek to better understand the essentials of sMe Finance.

the sMe Banking Knowledge guide draws wide-ly from existing research and literature as well as from numerous primary interviews with sMe banking experts and practitioners worldwide. the guide supports fi nan-cial institutions in making informed choices by sharing challenges, opportunities, and effective practices in sMe banking operational models from across the globe and through practical examples of sMe banking provided by a number of featured fi nancial institutions.

LEASING GUIDELINES FOR EMERGING ECONOMIES

iFc’s global leasing program developed leasing guidelines to share its lessons and experiences from 32 years of leasing market development activities. the guide-lines were originally produced in 2005 and have been up-dated to refl ect changes in the environment, and informa-tion and lessons learned since then.

the guidelines identify the key policy issues on leasing development, examining the approach of current and past projects. it is primarily written for the benefi t of policy-makers and is intended as a reference manual for other stakeholders, including lessors, lessees/sMes, investors, banks, international fi nancial institutions, development partners, and legal and accounting fi rms. they highlight which elements to look for locally, why experiences may be different among countries, and what—based on IFCs experiences—may be appropriate causes of action. the guidelines will help leasing development practitioners identify local characteristics, assess their potential impact, and thereby make informed development and implementa-tion decisions.

36

BUSINESS LINE LEADERS

peer stein, access to Finance Business line leader | [email protected] georgina Baker, Deputy Business line leader | [email protected]

SECRETARIAT

lory camba opem | [email protected] anushe Khan | [email protected] tan | [email protected]

DONOR RELATIONS

Max aitken | [email protected] Urkaly isaev | [email protected] leow | [email protected]

PRODUCT SPECIALISTS

Agriculture Financepanos Varangis | [email protected]

IFC ADVISORY SERVICES ACCESS TO FINANCECONTACTS

Collateral Registries/Secured Lendingalejandro alvarez de la Campa | [email protected]

Credit Bureaustony lythgoe | [email protected] sankaranarayan | [email protected]

Gender Access to FinanceZouera Youssoufou | [email protected]

Housing FinanceDouglas grayson | [email protected]

InsuranceHeinrich de Kock | [email protected] Martin Reto Buehler | [email protected]

Leasing & Non-Bank FinanceMinerva Kotei | [email protected] Davorka Rzehak | [email protected]

Micro FinanceMakanda Kioko | [email protected]

Nonperforming Loan Programpanos Varangis | [email protected] Rzehak | [email protected]

Payment Systems & Remit-tances Massimo cirasino | [email protected]

Risk Management Advisorylakshmi shyam-sunder | [email protected] teima | [email protected]

SME Bankingghada teima | [email protected] Securities Markets alison Harwood | [email protected]

Sustainable Energy FinanceMiles stump | [email protected] narayanan | [email protected]

IFC’s Advisory Services have become a substantial part of IFC's business and a critical tool for extending our reach and

expanding our impact. Access to Finance (A2F) is one of five advisory services business lines that correspond to IFC’s

operational strategy.

Support for IFC’s advisory services is strong and includes partners and donor governments, multilateral institutions, and

private donors such as foundations.

Access to Finance appreciates our donors and partners that include:

African Development Fund, Australia, Austria, Bank of Israel, Belgium, Canada, Denmark, European Union, Finland, France,

Gates Foundation, Greece, Inter-American Development Bank, Ireland, Islamic Development Bank, Kuwait, Japan, Italy,

Luxembourg, Netherlands, Norway, New Zealand, OMIDYAR Network Fund, INC., Spain, Sweden, Switzerland, United

Kingdom, United States, and Visa International

Trade FinanceMakiko Toyoda | [email protected] Rogers LeBaron | [email protected] Sylla | [email protected]

REGIONAL OFFICES

IFC Advisory Services in AfricaBernard Chidzero – General ManagerRubin Japhta – Acting Regional Business Line Leader and PBGI Regional Representative | [email protected]

IFC Advisory Services in Europe and Central AsiaTania Lozansky – General ManagerPatrick Luternauer – Regional Business Line Leader | [email protected] Behrndt – Regional Business Line Leader | [email protected]

IFC Advisory Services in East Asia and the PacificRussell Muir, Regional Manager, Advisory Services | [email protected] Gamser, Region-al Business Line Leader | [email protected]

IFC Advisory Services in ChinaJosephine Bassinette, Acting Head of Advisory Services China & MongoliaJinchang Lai – A2F AS Program Manager | [email protected]/cpdf or www.ifc.org/pepchina

IFC Advisory Services in IndonesiaBrigit Helms – Head of Advisory Services Indonesia | [email protected] Thomas Moyes – A2F AS Program Manager | [email protected]/pensa

IFC Advisory Services in the MekongTrang Nguyen – Head of Advisory Services Mekong | [email protected] Biallas – A2F AS Program Manager | [email protected]

IFC Advisory Services in the PacificAlan Moody – Head of Advisory Services PacificRob Simms – A2F AS Program Manager | [email protected]/peppacific

IFC Advisory Services in the PhilippinesWilliam Beloe – Head of Advisory Services PhilippinesLuc Vaillancourt – A2F AS Program Manager | [email protected]/eastasia

IFC Advisory Services in Latin America and the CaribbeanLuke Haggarty – General ManagerGreta Bull – Regional Business Line Leader | [email protected]/lac/ta

IFC Advisory Services in the Middle East and North AfricaJesper Kjaer – General ManagerJim Gohary – Regional Business Line Leader | [email protected]/mena

IFC Advisory Services in South AsiaAnil Sinha – Senior Regional Manager, Advisory ServicesJennifer Isern – Regional Business Line Leader | [email protected]

GLOBAL FINANCIAL MARKETS – FIELD SECTOR MANAGERS

AfricaBanda, Dolika | [email protected]

Central and Eastern EuropeTimothy Krause | [email protected]

East Asia and the PacificSerge Devieux | [email protected]

Latin America and the CaribbeanGiriraj Jadeja | [email protected]

Middle East and North AfricaKhawaja Aftab Ahmed | [email protected]

South AsiaJun Zhang | [email protected]

Southern Europe and Central AsiaEdward Strawderman | [email protected]

CreditsProject LeaderLeila Search

Editing Assistance

Vandan Mathur

Design/ProductionAichin Lim Jones

PrintingMasterPrint, Inc.

PhotographyKamilla Azizova, EBRD, Rich Field, Teresa Ha, IFC, Getty Images, Aichin Lim Jones, Aga Khan, Antoine Courcelle-Labrousse, Microcred, Photodisc, Ted Pollett, Bradford L. Roberts, World Bank.

We would like to acknowledge the contibutions provided by the A2F Regional Offices and Product Specialists in producing the Report.

ACCESS To FINANCE HIGHLIGHTS REPoRT 2009 37

a

IFC ADVISORY SERVICES | ACCESS TO FINANCE

2009H I G H L I G H T S R E P O R T

IN PARTNERSHIP WITH OUR DONORS

2121 Pennsylvania Avenue, NW

Washington, DC 20433, USA

www.ifc.org

OCT 2009

highlights report - ifc

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