MDF - Micro Development Fund

Panelists from eminent institutions and funders like: KfW, EBRD, IFC and Responsibility on the one side and representatives of micro-finance organizations, i.e. "practitioners" (as Agroinvest working in Serbia and Montenegro and the Micro Credit Company in Kyrgyzstan) on the other side, tried to perceive the possibilities for overcoming the crisis from their own perspectives.

It was concluded that funds for financing micro-credit have been reduced since the inception of crisis, the customers' demand for working capital increased opposite to fix assets investments. The amounts and terms of microcredit also reduced. Investors are primarily afraid of clients' over-indebtedness and overregulation.

General conclusions are that although the deterioration of portfolio quality happened (PAR almost doubled); disbursements of loans decreased for around 10%; the planned transformation of the institutions postponed and management plans were adjusted, the overall result is that financial indicators are significantly better and that microfinance sector showed greater resistance to crisis in relation to other segments of the financial sector.

Interesting and specially created workshop for microfinance actors in Serbia, named the "Challenges and opportunities of access to financial resources for micro-entrepreneurs in Serbia" drawn the attention of the majority of the participants from Serbia and wider from Balkan region. MDF had invited a large number of representatives of state institutions, micro-finance banks, micro-credit institutions and other international organizations to the workshop. Among the panelists were representatives from Serbia (Milena Gojkovic - Director of MDF and Milan Lalovic - Vice President of the Chamber of Commerce of Serbia), who explained the situation with the micro-lending in Serbia carried out by non-banking institutions, from its beginnings to the present, generally and on the example of MDF. They highlighted the benefits of micro-lending for clients and community and pointed out the reasons for the existence of special micro-lending entities - non-banks, due to the fact that banks are not willing to focus on the "marginalized", i.e. vulnerable target groups, mainly poorer populations, such as (unemployed, Refugees and Displaced persons, rural population, the Roma, etc.). Then the representatives of European and international institutions (Philippe Guichandut - Director of the European Microfinance Network - EMN and Timothy Lyman - CGAP within the World Bank with the help of facilitator Severin Deboos - from the International Labor Organization), presented experience and regulation of different microfinance models in different EU countries. As a starting document that gave the initial impulse to the EU governments to find the appropriate regulatory framework was indicated the "European initiative for the development of micro-lending in support of growth and employment". Taking into account the economic context related to micro-enterprises in EU which are over 90% of all enterprises, and social picture of the EU population in terms of poverty and the risk of poverty - with a notes to differences among countries, and financial context in the sense of financial exclusion of some specific groups within EU population, micro-lending has been recognized as an excellent instrument for the establishment and development of micro-enterprises by marginalized persons in order to start or develop individual business activities. The result is self-employment, creating new jobs and generating income, accordingly. It is considered as equally important granting non-financial services for clients in order to support business sustainability and development (education through trainings, business counseling, mentoring..). CGAP representative gave the examples of regulations in the Balkans (Bosnia and Croatia) and in Russia in terms of the forms of institutions that are allowed to operate in micro-lending emphasizing the importance of Governments' roles in setting a framework for financial and social inclusion of the population.

Among several interesting and useful workshops can be extracted the workshop related to the Campaign for the clients protection running by Center for Financial Inclusion at Accion International. Robin Ratckliffe - Campaign Director explained the reasons for its initiation, as well as the ultimate goal, i.e., vision of the campaign, which is to achieve that microfinance sector become recognized, acknowledged and branded as" pro-consumer" and clients' oriented industry. The campaign is based on six principles of the Client Protection, including: Avoidance of over-indebtedness; Transparent pricing; Appropriate collections practices; Ethical staff behavior; Mechanisms for redress of grievances; Privacy of client data.

Benefits that may be expected are clients' loyalty and therefore the achievement of solid, i.e., well-managed portfolio. The Campaign implies "guided" self-assessment of microfinance institution on the protection of customers through the website, which includes the procedure and finally results with certificate. All about the Campaign and the protection of clients you will find at

www.campaignforclientprotection.org

Also interesting workshop related to the Standards for Social Performance. Micol Pistelli coordinates the reporting on social results at Mix Market. Mix led the process of creating and establishment of common SP standards of reporting. The aim is to collect such data from microfinance institutions and their publication at MixMarket, which will, as well as reporting on financial results, make available and be awarded with independent and objective analyses by experts from Mix, as well as with comparisons with Peer organizations considering SP results. SP standards or indicators that should be reported are related primarily to the intention of the institution and include the Mission and the basic Social objectives, as the Governance. Following are Strategies and Systems for the Mission and objectives realization, including (Range of Products and Services - financial & non-financial; Training of staff on social performance; Staff performance appraisal and incentives; Market research on clients; Measuring client retention). Required reporting includes Policies and Compliance on the issue of Social Responsibility towards customers and to employees, as well as the price of services to clients. Also important is the achievement of the SP objectives established especially on the issue of outreach to target groups. So, it is necessary to specify the geographic outreach, i.e. which clients and to what extent in different regions was reached, as the women outreach. Optional can be reported on the results with respect to different categories of poor clients, or clients who managed to get out the poverty using microloans. On this topic you can find more at

www.themix.org/standards/social-performance

Regarding the above noted and the large number of other workshops you can get information and find presentations directly at the Conference site www.mfc.org.pl/conference2009