Centre for Microfinance – University of Pretoria:

1. Centre for Microfinance – University of Pretoria: Reaction to a unique market Gerhard Coetzee and Chiara Chiumya

2. Outline • The problem • The challenges • The reaction • Resource mobilisation • Learning and adjustments

3. The problem • Market assessment as part of original proposal • Market training demand workshops with industry representatives • Course offerings and curriculum based on workshop outcomes • Thus research and training offerings in reaction to market challenges

4. Challenges – Development Finance • Understanding of clients • real market research • Expansion of products, expanded options • SMME finance – attacking the self employed market • Regulatory environment - heavy burden of “red tape” • Registry of security interests • Explicitly target productive uses of microfinance • Transformation of NGO MFIs • Business Development Services • Commercial banks – already in there, but more focus needed

5. Challenges – Asset accumulation • Savings and investment products • Targeted savings products • Smooth consumption, raise repayment, minimize risk • Are the banks making money, threat of cannibalization • Addressing negative real interest rates on savings instruments • Need for bundling lending and saving instruments. • Housing: embryonic township markets • Other investment products

6. Challenge – Rules and enforcement • National Credit Regulator – impact on the market? • Other rules and impact on access? • Harmonisation of policy and legislation? • Main challenge – enforcement?

7. Challenge – Information • Need for even better data and information • Better credit scoring and pricing models • Having better information on individuals, households and firms applying for / using credit for policy development • Training and capacity building • Major need, no recognition, not willing to pay • Short sighted – need to invest in most strategic asset • Consumer education • Need for improved outreach • Focus on lower income strata • Distinct lack of innovation • Use of CE as a monitoring tool • Pricing issues, competition, monitoring

8. Challenge – Management • Depth in Management • Numbers in Management • Understanding the market • Understanding reactions to the market • Understanding banking

9. Challenge - Market Profile

10. Reaction – Centre for Microfinance • “Creating Inclusive Financial Markets Against Poverty” • Integrated approach • Stakeholder involvement • Functional areas (products) • Education • Research • Dissemination • Support

11. Head of the School of Management Science Centre Advisory Board 4 Academics and 4 Industry Representatives Director: Gerhard Coetzee Assistant Director: Chiara Chiumya Adminsupport: Katherine Blaine Academic leader: Gerhard Coetzee Education Research Programmes organised according in focus areas with dedicated senior research leaders • Dissemination • African Microfinance Conference “Series” • Round Table • Research Publications • Invited and other conference papers Support to other Institutions Demand Analysis Assessment Development Evaluation and Monitoring MBA Electives M Course in Post Grad School for Rural & Ag Dev Certificate Programmes Executive Management Programme Masters and PhD in Entrepreneurship

12. Education • Certificate Programme in Microfinance • Certificate Programme for Microfinance Managers • MBA Electives • Masters Course in Post-Graduate School for Rural and Agricultural Development • Masters and PhD Course in Entrepreneurship • Executive management course • Project Based: • Swaziland Microfinance Sector Training (15) • BankSeta Unemployed (30)

13. Education: Certificates • Certificate Programme in Microfinance • Fundamentals of microfinance • Loan Officer • Market research for microfinance (MicroSave material) • Introduction to management in context • Certificate Programme for Microfinance Managers • Operational management • Financial management (using Microfin) • Strategic planning and budgeting • Strategic marketing

14. Research • Policy, Legislation and Regulation • National Credit Act Regulatory Impact Assessment study design (completed) • National Credit Act Regulatory Impact Assessment • Academic publication – Introduction to the National Credit Act (Juta) • Assessing the possible regulatory impact of the National Credit Act on microfinance institutions: A case study of a small to medium size consumer credit provider(completed) • The potential effect of the National Credit Act on the future of selected, specialised micro-lending institutions in South Africa • Comments on the Financial Cooperatives Bill (completed) • FAIS and FICA impact on Financial Cooperatives • Credit information sharing: Guidelines towards credit information market development in Africa (completed) • Member based financial services • Informal finance for middle and high income individuals in South Africa: A case study of high budget "stokvels" in Pretoria (completed) • Case study of Yebo multi-purpose cooperative • Rural Finance • Review of the Rural Finance Learning Centre of the FAO (completed) • Enhancing livelihood strategies of rural communities prone to climate risk in the Caprivi region of Namibia

15. Research (2) • Market integration / inclusion • Microfinance in rural and urban Africa: Reality, Context and Challenges • Inclusive financial sectors and market integration: Some evidence from Africa (completed) • Financial services and channels • Social protection cash transfers: Learning from microfinance delivery systems • The Mzansi account: A response to the access challenge of the financial sector charter in South Africa (completed) • Demand analysis of life insurance products in LSM 3-5 in Tembisa • Investing behavior and product needs for the poor: A case study based on Alexandra residents • Agricultural finance products for small-scale cane growers • Small-scale property entrepreneurs: A South African perspective (completed)

16. Dissemination • Publications • Roundtable • Website • Conferences • Attend and speak (several) • Organise / Support • 2007 African Microfinance Conference – Kampala • 2007 Conference on the measurement of impact of microfinance • 2005 African Microfinance Conference – Cape Town • 2003 African Microfinance Conference – Johannesburg

17. Support • Development Phase – culminating in Support Toolkit • Assessment • Context, Market demand, Human resources, Material • Development of curricula • Electives, Short courses • Course development and implementation • Provide material as input, Training of personnel • Course Quality Assessment • Monitoring and evaluation • Not sure whether we can continue with this…

18. Resource mobilisation • Human • Core permanent staff • Chiara Chiumya, Katherine Blaine, Jacob Nyambe • Part-time staff • Gerhard Coetzee • Teaching (6) • Research (4) plus the MBA, Masters and PhD students • Financial • Sponsorships • MFMI initial financing establishment (2004 – 2007) • SA Banking Sector Education and Training Authority (2007 – 2010) • Other private sector support (ABSA, MFSA, etc) • Income from courses • Income from research • Break-even approach

19. Lessons and adjustments • Clients not eager to pay for training – use learnership system in SA • MBA domain vs. electives – interest vs. uptake • Integration now easier in new home • Need adjustment for countries outside southern Africa • Need good permanent human resources • Takes time to set up the Centre • Learned what is core need in terms of resources and structure – base and incremental • In general, successful structuring and operation