SPECIAL REPORT: Positioning MFIs to Access Climate Finance – An Interview with Kwashie Agbitor of Accion

A seat next to Kwashie Agbitor (pictured below) was one of the most highly sought-after spots at SAM 2023 in Togo in October. Mr Agbitor has 20 years of experience in Africa and Asia, improving branch oper­ations, credit appraisals, risk management, methodology auditing, prod­uct development, client protection and social performance management.

At SAM 2023, Mr Agbitor moderated a discussion titled “Climate funds, an opportunity for financial in­stitutions to scale up sustainable and inclusive financing.” The panelists rep­resented the Tunisian microfinance insti­tution (MFI) Enda Tamweel, the Belgian im­pact investment firm Incofin, the Ken­yan microlender Juhudi Kilimo and the French impact investor Solidarité Inter­nationale pour le Développement et l’Investissement (SIDI).

Bob Summers: How can financial services providers (FSPs) work with climate funds to expand their green lending portfolios?
Kwashie Agbitor: There are numerous opportunities for financial institutions to build their green portfolios with climate funds. Financial institutions can leverage equity, debt and quasi-equity sources of funding from various types of organiza­tions. Climate funds can be used to devel­op and deploy financial services that support the adoption of green products/solutions and help people recover from climate-re­lated shocks. Given their nature, most climate funders also pro­vide technical support/assistance in addition to funding.

BS: What factors influence whether a climate fund would invest in a particular MFI?
KA: Firstly, the MFI and the investor must

MICROCAPITAL BRIEF: JuST Institute Preview of Training on Delivering Climate, Biodiversity & Inclusive Finance to Smallholder Farmers Available Online December 12, 2023

The France-based NGO Just Sustainability Transitions (JuST) Institute is holding an online session December 12 to educate potential participants about a mentoring and training program for financial services providers (FSPs) looking to orient their work toward “climate adaptation and biodiversity conservation.” The program, which is for loan officers and managers employed by microfinance institutions (MFIs), takes place online over a period of four to six months. Participation can be part of an MFI becoming certified for

MICROFINANCE PAPER WRAP UP: “Women Agents for Financial Inclusion: Exploring the Benefits, Constraints and Potential Solutions,” by Emilio Hernandez et al, Published by CGAP

Based on data collected from projects in India, Ghana and Pakistan that aim to improve financial inclusion for rural women, the authors examine the interplay between gender dynamics and the employment of women as agents supplying in cash-in and cash-out (CICO) services. This includes the impact these agents can have on communities, the challenges faced by women in becoming and succeeding as agents, and possible solutions to these challenges.

While training to become CICO agents,

SPECIAL REPORT: Partner with Agents for Impact, and We’ll Drive Impact Together!

This article is sponsored by Agents for Impact (AFI). We invite you to learn more about the firm via LinkedIn.

Andrij Fetsun, Founder & CEO at AFI:
AFI celebrated five years in bus­iness in October this year, and my team has attained several impact­ful goals during this challenging time. This would not have been possible without the im­mense support of our clients: the Ger­man impact-driven microfinance fund Invest in Visions, which has accumu­lated a volume of around EUR 1 billion with a major focus on micro­finance; HANSA­INVEST, which is based in Hamburg; and the crowdfunding platform Lendahand. Among the services we provide these clients is to perform plausibility checks of their funds’ ESG reports.

As the founder of AFI, I would like to highlight the culture we have built with our dedicated team that has come to­gether during these five years from dif­ferent parts of the world. I believe that corporate culture is crucial for every com­pany, especially for startups. Initially, we had trouble attracting Agents since we were not a well-established name in the industry or able to pay high salaries from the outset. Therefore, I focused on what truly makes for a great workplace

SPECIAL REPORT: Leveraging Carbon Credits to Insure MSMEs in Climate-vulnerable Nations #SAM2023

What a pleasure it was to interview Diana Chepng’eno (pictured below) at SAM 2023 in Togo last month! She is such a warm and energetic person – and deeply engaged in the critical work of climate adaptation and miti­gation across Africa and the Middle East.

During SAM 2023, Ms Chepng’eno spoke at the opening plenary ses­sion “Making Africa’s Future Sustainable – Climate, Socio-economic Develop­ment and Inclusive Finance” as well as a breakout session titled “Helping Financial Institutions Deal with Cli­mate Change – Assessing Risks and Strengthening Institutional Resili­ence.”

Bob Summers: What are you working on with the V20 group of climate-vulnerable nations (which now comprises 68 low- and middle-income countries)?
Diana Chepng’eno: Sitting within the UN Environment Programme Finance Initia­tive, under the Princi­ples for Sustainable Insurance, we are ramping up a Sustain­able Insurance Facility. We launched the facility in 2022 to advocate for the import­ance of insurance for micro-, small and medium-sized enterprises (MSMEs) in V20 countries as a significant driver for miti­gating climate change risks. MSMEs, for example, comprise about 75 percent of the total GDP of the V20. Therefore, if we can support these MSMEs by fa­cili­tating access to much-needed insurance, so that they may become more climate resilient, then these entire countries can be climate-resilient.

BS: What mechanisms does the facility use?
DC: The work is all based on partnerships. Insurers are critical, of course. We also need firms that

SPECIAL REPORT: European Microfinance Week 2023 Opens With Action Group Meetings, Including Investors Sharing Strategies for Measuring Social Performance #EMW2023

e-MFP logoThe first day of European Microfinance Week 2023 began this morning with meetings of several of the European Microfinance Platform’s (e-MFP’s) Action Groups. At the Investors Action Group session, Cécile Lapenu of CERISE discussed the recent increase in demand for accountability regarding claims of positive client impact. What really makes an investor an impact investor? How can we measure impact in a way that is convincing and also efficient?

The recently published 60 Decibels Microfinance Index 2023 addresses some of these questions. The study, which is based on a survey of 32,000 microfinance clients in 32 countries, indicates that access to financial and non-financial services other than credit leads to deeper impact. Regarding credit services, group lending is associated with

MICROCAPITAL BRIEF: Online Today in Spanish, November 22 in French – JuST Institute Announcing Mentoring Program for MFIs Embracing Biodiversity, Climate Adaptation

The France-based NGO Just Sustainability Transitions (JuST) Institute is launching a mentoring and training program for financial services providers (FSPs) looking to orient their work toward “climate adaptation and biodiversity conservation.” The program, which is for loan officers and their managers, takes place online over a period of four to six months. Participation can be part of an MFI becoming certified for

SPECIAL REPORT: Inclusivity in Capital Markets Demands Sustainability Reporting

Sustainability reporting entails assessing, dis­closing and managing an organization’s environmental, social and governance (ESG) impacts. This prac­tice communi­cates to investors, custo­mers, employ­ees and regulators that the organization is com­mit­ted to sustainability. The dis­closure element, in particular, con­veys values, strategies, risks, oppor­tunities, account­ability and trans­par­ency.

The significance of sustain­ability re­port­ing within capital markets is increasing steadily, as more investors

SPECIAL REPORT: e-MFP Launches the Green Map, a Pioneering Resource to Address an Information Gap in Green Inclusive Finance

e-MFP logoAs the inclusive finance sector increasingly understands the crucial role it can have in supporting the most vulnerable populations – who are dis­pro­portionately affected by the consequences of climate change – the Euro­pean Microfinance Platform (e-MFP) is delighted to announce the launch of the Green Map, a project implemented by the e-MFP Green Inclusive and Climate Smart Finance Action Group (GICSF-AG) and supported by the Government of the Grand-Duchy of Luxembourg. The Green Map was officially launched on Thursday, September 28 at an in-person and live-streamed event entitled “Addressing Climate Change via an Open Resource for Green Inclusive Finance Projects & Practices.”

What’s this all for? The Green Map project aims to

SPECIAL REPORT: Fortune Credit of Kenya, Fundación Génesis Empresarial of Guatemala, Yikri of Burkina Faso Are Finalists for European Microfinance Award 2023 on Inclusive Finance for Food Security & Nutrition

e-MFP logoFrom the European Microfinance Platform (e-MFP): On September 19 and September 20, 2023, the Selection Committee for the European Microfinance Award (EMA) 2023 on “Inclusive Finance for Food Security & Nutrition” selected the three finalists that will go on to compete for the prize of EUR 100,000 (USD 105,000): Fortune Credit Limited from Kenya, Fundación Génesis Empresarial from Guatemala and Yikri from Burkina Faso.

The choice of topic for the EMA2023 comes at a

MICROCAPITAL BRIEF: Non-performing Loan (NPL) Ratios Up Among Microfinance Providers in Bangladesh

Bangladesh Bank, the country’s central bank, recently reported that the volume of non-performing loans (NPLs) in the domestic microcredit industry rose from BDT 45 billion (USD 412 million) in the fiscal year ending March 2021 (FY21) to

MICROFINANCE PAPER WRAP-UP: “Climate Risk and Financial Inclusion: A Regulatory Perspective on Risks and Opportunities;” by Peter Knaack, Peter Zetterli

This paper analyzes how climate change may impact the stability of financial systems and – particularly – access to financial services for groups that often have difficulty with such access, including micro- and small enterprises (MSEs) as well as low-income households and those in rural areas. The authors emphasize three challenges:

SPECIAL REPORT: An Interview with Christoph Pausch of e-MFP on European Microfinance Week, Luxembourg & Online, November 2023

e-MFP logoMicroCapital: What can we expect from EMW2023, happening in-person November 15-17 in Luxembourg and online?
Christoph Pausch: EMW2022, back in-person after two years, showed us that there is no substitute for getting the opinion leaders and decision-makers in the inclusive finance sector together in-person, ensuring they have the time and space to debate, make new connections, and of course give presentations and discuss the various challenges and innovations under­way around the world.

After the success of the hy­brid EMW2022, which gathered 570 attend­ees (including over 200 who joined us online) from 48 countries, we are delighted to return to the beautiful Abbaye de Neumunster in Luxem­bourg for another hybrid event, which will once again offer an excep­tion­al networking and knowledge-sharing experi­ence with the top ex­perts in the financial inclusion sector. And the programme is designed to be as conducive as possible to those joining us online from different time zones. Plus, sessions will be re­corded for “catch-up” after.

MC: What choices of sessions can attendees expect?
CP: As always, EMW sessions have been put forward largely by our members – so they address the sector’s current “hot topics” – and we organise them across several thematic streams. We received an enor­mous response to our call for proposals that went out early in the sum­mer, giving us great scope for a fascinating, diverse program across different streams. In addition to our usual annual topic areas – digiti­sation, social performance, funding/investment – this year there also will be streams on refugee finance, agri-finance, a particular emphasis on

MICROFINANCE PAPER WRAP-UP: “Land Titling and Microcredit in Cambodia: Examining the Reality of Hernando de Soto’s ‘Three Steps to Heaven,’” by Milford Bateman

In this paper, Dr Bateman examines the Cambodian microcredit industry and argues against prior claims that increases in land titling lead to access to credit that enables poor landowners to increase their incomes. The results are based on

SPECIAL REPORT: Let’s Channel Climate Finance to Those on the Climate Front

Climate finance is hot, and right­fully so. The threat is real, and the needs are towering. The good news is that there are investible solutions out there. As with any new field, the development of climate finance has been accompanied by a range of standards, taxon­omies and met­rics. For climate mitigation, a clear consensus seems to be emerging on emissions reductions as the preferred metric to be tracked by investors, however the jury is still out on the ideal standards for tracking the impact of climate adaptation, and it is only starting to deliberate on resilience projects.

This difference in the pace of development of climate mitigation and adaptation standards has led to an unintended consequence: that the story of climate finance today is the story of climate mitigation. Less than 10 percent of all climate finance today goes to adaptation and resilience. This happens not because mitigation is more important than adaptation, but because the impact of mitigation projects is easier to track than that of adaptation projects. Simply put: what gets measured, gets managed.

The problem with too narrow of a focus on climate mitigation is that it does not take into account the fact that climate change is a challenge of livelihoods and social justice as much as it is an environmental chal­lenge, especially for low-income populations and other vulnerable com­muni­ties in the global South. Because climate change is not gender neu­tral, applying a gender (or JEDI for Justice, Equity, Diversity) approach to investments can

MICROFINANCE PAPER WRAP-UP: “Driving Digital Financial Services in Africa Through Merchant Acceptance of Digital Payments,” published by Alliance for Financial Inclusion (AFI)

This paper examines the growth and challenges of digital payment adoption by retailers in Africa, including “contactless payment (QR codes, tap to pay) [and] buy-now-pay-later” services. The authors note four main prerequisites for merchant adoption:

MICROFINANCE PAPER WRAP-UP: “Establishing a Financial Services Ombudsman in Mongolia: Experiences and Lessons from Armenia, Australia and Singapore,” by Massimiliano Gangi et al

This paper explores the potential of introducing an independent ombudsman system to address complaints by consumers against financial services providers (FSPs) in Mongolia by exploring existing dispute resolution systems in Armenia, Australia and Singapore.

Among the similarities of these three systems are:

MICROFINANCE EVENT: Global SME Finance Forum; September 12-14, 2023; Mumbai, India

The ninth iteration of this event will explore financial services providers’ delivery of digital services to small and medium-sized enterprises (SMEs), leveraging samples from India and abroad. The forum will cover topics – particularly “ecosystems” – relating to digital finance, international