THE ROLE OF WHOLESALE LENDERS TO MFI’S CHALLENGES & OPPORTUNTIES By Mrs. Anne Wanjiku Mutahi

1. THE ROLE OF WHOLESALE LENDERS TO MFI’S CHALLENGES & OPPORTUNTIES By Mrs. Anne Wanjiku Mutahi JITEGEMEE TRUST LTD

2. Objective of The Presentation: • Define an apex wholesale lender • Describe the products and services they offer • Highlight challenges and opportunties • Discuss areas of partnership JITEGEMEE TRUST LTD

3. APEX INSTITUTION C-GAP DEFINIITON: • Apex are organizations that expand the supply ofresources to MFI’s (apex institutions in micro finance by Fred Levy) • Apex’s can offer financing and technical services DIFFERENT VARIATIONS: • Banks – e.g. Bank Rakyat in Indonesia (only financing) - e.g. Small Industries Development Bank – India (technical assistance and financing) • Regulated Non Bank Institutions –Rwanda, Ethiopia, South Africa. JITEGEMEE TRUST LTD

4. Why do Apex organizations exist? • Non – regulatory framework or self regulation – scares commercial financiers • Undeveloped MFI’s • Stringent Banking Act –No financial access for MFI • Scarce donor or grant status funding • Apex’s have a ‘soft focus’ perspective and may provide technical support & financing as a package JITEGEMEE TRUST LTD

5. Characteristics of Good Apex Institutions • Mission - Long-term commitment to developing of sustainable microfinance providers • Governance - Political independence and decision-making autonomy • Management – • High quality management: microfinance expertise, managerial and financial skills, integrity, • Use of clear selection criteria to fund MFIs • Loans tailored to MFI cash flows and needs • MFIs monitored via a few well-defined, enforcedperformance targets JITEGEMEE TRUST LTD

6. A GOOD APEX ……………… • Sustainable ……… and profitable… • Predictable source of funding • Low overhead costs • Equitable interest rate offered to MFI’s • Lending policies are local and relevant to the market • Apex can verify it’s impact and outreach • Apex can enforce legal contracts JITEGEMEE TRUST LTD

7. Apex Target Market • Legally registered entity (ngo’s trusts, sacco’s co.) • Proven Delivery mechanism to low income individuals • Minimum level of client base ( 1000 clients) • Sustainable Operations &Capable Management • Not able to access funding from formal system JITEGEMEE TRUST LTD

8. Funding APEX loans, guarantees, technical services Microfinance Institutions How does an Apex Organisation operate? Repayment Repayment JITEGEMEE TRUST LTD

9. The place of monitoring…. • APEX’S do not have access to your transactions • Pre and post disbursal monitoring critical to success • Frequent visits and instant reaction to new events vital • Strictly adhere to set conditions JITEGEMEE TRUST LTD

10. Challenges we face…………. • Management & governance • Lack of accountability due to Ownership • Poor financial management & reporting • Poor monitoring techniques • Reaching remote MFI’s • Measuring impact of capacity support JITEGEMEE TRUST LTD

11. Our Products & Services • 2 – 4 year Loans in local currency • Working capital loans for one year • Dairy Cow Financing • Joint Ventures • Equity Investments • Capacity Building JITEGEMEE TRUST LTD

12. Loan features • Pricing - extremely competitive ( 6% p.a. + 3%.p.a. + 2% commitment fee ) • Moratorium – 3 – 6 months • Collateral – debenture over loan book and assets* • * other assets may be considered as supplementary JITEGEMEE TRUST LTD

13. Loan conditions • Minimum 1000 clients • Clear pro development agenda • 3 years audited accounts • Good internal reporting system • Stable & reliable management • Outreach and impact strategy JITEGEMEE TRUST LTD

14. Services • Advice : • Links to capacity support • Links with other saccos or MFI’s through exchange program JITEGEMEE TRUST LTD

15. JTL HISTORY • Incorporated in 1996 as a program of the Government of Kenya & the Royal Netherlands Embassy • Initially in the ASAL areas • Lending through one selected intermediary • In the process of transformation JITEGEMEE TRUST LTD

16. Core Values • Transformation - We believe that low income individuals can transform their lives • Empowerment – development & empowering our employees • Integrity - Performing our duties with personal and professional integrity; • Quality and best practices - Continuously observing best practices when providing quality products and services; • Long term responsive partner – We strive to be a responsive partner to reliable micro finance institutions; • Innovative - We support innovative micro financing structures. JITEGEMEE TRUST LTD

17. Organization Structure 9 Board members JITEGEMEE TRUST LTD

18. JTL Client List • Total loan portfolio: @ kshs 450 million only • Type of clients: banks, Large, medium & small MFI’s • Loan range: minimum Kshs 5 million to Kshs 100 million only JITEGEMEE TRUST LTD

19. Looking Ahead……… Effects of Micro Finance Bill on Apex Organizations The direct effect of the MFI Bill will be:- • Regulation for APEX organisations • Increased investment in Apex’s • Accountability and uniform reporting standards • More Apex’s in the market JITEGEMEE TRUST LTD

20. Local Apex Organisations • Jitegemee Trust Ltd. • MESPT • Oiko Credit • Gatsby Trust • NOVIB • STROMME JITEGEMEE TRUST LTD

21. How can you reach us? JITEGEMEE TRUST LTD ROSHANMAER PLACE, FIRST FLOOR LENANA ROAD, NAIROBI JITEGEMEE TRUST LTD

22. YOU ARE WELCOME !! Thank You! JITEGEMEE TRUST LTD