December 2008 - January 2009 PlaNet Finance Newsletter
Due to their efforts in fully opening their economies to trade, developing countries have ex-
tensively suffered the economic burden of the combined current financial crisis with the late
recession periods, mostly exposing the liability of their agricultural sector. Further than the
difficulties faced by populations (in particular in rural areas) in meeting the increase on raw
material and food prices, the main concern in addressing the issue is the lack of sustainable
wealth creation and insufficient income generated.
As mentioned in Katja’s article, the majority of poor people lives in rural areas and is highly
dependant on agricultural activities. In that way, pro-poor growth should favour the develop-
ment of rural activities, as well as higher productivity and income for rural populations.
Cheikh Ahmadou Diop
Within this framework, microfinance appears as an important development tool bringing finan- Microfinance Expert
cial services to the rural populations, whose activities are considered more risky and less pro-
fitable. Such characteristics highlight the need to adapt the provision of services such as sa- Rural Microfinance Project
vings, credit, microinsurance, money transfers and financial transactions via mobile phones.
PlaNet Finance Sénégal
In addition to promoting the creation of Income Generating Activities, supporting the develop-
ment of affordable and sustainable financial services contributes to strengthening rural popu-
lations. The advancement of “pro-poor” financial services should particularly boost investment
in the agricultural sector, but also be defined by inclusive policy-making (involving lassors,
local actors etc…)
PlaNet Finance’s resolution for 2009 is to support the evolution of rural microfinance and ena-
ble microentrepreneurs to generate sustainable enterprises via the reinforcement of exchange
plate-forms. In particular, experts will advocate for greater exchange opportunities, capitalisa-
tion and diffusion of best practices.
PlaNet Finance team wishes you a happy new year.
Microentrepreneur of the Month
Liu Qinghe, China, Gansu region.
Winner of “ International Microfinance Awards ” in the “ Women ” category and client of TWRDA (Tong Wei Rural
After graduating from primary school, Ms Liu attended vocational training, becoming familiar with
the use of sewing machines and textile manufacture. In the year 2000, she participated in the
“Women and Development” programme held by TWRDA microfinance programme. She not only
became the director of a loan centre for the program, but also through this new responsibility came
to recognize her own value.
At this point it was evident that Ms Liu’s own life situation was much better than before, but she
couldn’t help noticing the large number of young women who were out of work once the busy plant-
ing and harvesting seasons were over, for they didn’t have any skills to offer besides farming. The
“Women and Development” programme experience made her realize that she could help other
women reach their potential. Therefore, with TWRDA’s support, she set up some sewing machines
and taught classes of women how to cut and make up garments. Between 2002 and 2007, she ran
garment sewing and cutting trainings for 1,300 young farmer women and paid special attention to
22 young women who either were ultra-poor, or who had a disabled member of the family. These
days Liu Qinghe encourages her “graduates” to start their own small businesses, using her inte-
grated model of fabric purchasing, manufacturing, training and sales as a viable model for growth.
TWRDA is a PlaNet Finance partner for its microfinance and renewable energies program.
Article of the Month
Supporting small farmers in developing countries: an answer to the food crisis?
What can be the role of microfinance services?
These days the current international titutions to offer their services cost (GTZ) pointed out success stories
financial crisis attracts far more of the effectively in rural areas. Small-scale about cooperation with local partners
public and media attention than issues farmers’ income is subject to seasonal and organisations in rural areas such
that are just as important such as the fluctuation. They often do not have as savings and credit cooperatives.
food crisis or climate change. The hig- land titles to collateralise their loans These partners enhance the local sa-
hly dramatic food insecurity in the and transaction costs are high due to a vings- and investment cycles and
world today has become more urgent lack of infrastructure and lower popu- some of them even offer a wider pro-
than ever: the number of starving peo- lation density. Furthermore agriculture duct range to their clients including
ple has increased by 50 million to a activities do not lead to quick returns professional marketing of agricultural
total of 900 million people between so rural microfinance institutions can- products. The latter is of special impor-
2006 and 2007. not count on rapid repayments – as an tance as small-scale farmers often face
essential characteristic of microfinance major difficulties in storage and distri-
Microfinance experts gathered during a lending technology. bution of their products rather than
panel discussion at the French embas- producing them. This is one reason
sy in Berlin on November 13th, 2008 Technical Innovations seem promi- why poverty in rural areas did not de-
to discuss the role small-scale farmers sing to offer accessible and fairly crease while food prices increased
could play in improving food security priced saving services to the rural considerably in the last year.
and the challenges of offering adapted poor.
Sébastien Duquet of PlaNet Finance
stressed the fact that the access to « Is microfinance the key to develop-
these services is as important as the ment?» asked the host of the evening,
costs for the services for the clients. Mr. Ralf Südhoff of WFP(UN World
Access to microfinance Mobile banking – microfinance services Food Programme). « Can it eradicate
carried out with a mobile phone – can poverty for good?» Worku Tsega of
services can provide re- offer reasonably priced and convenient Wisdom Ethiopia – a microfinance ins-
levant contribution to services even to clients in remote rural titution (MFI) – stressed: Poverty is a
food security in the lon- areas. Mobile banking offers accounts complex issue and microfinance servi-
linked to telephone providers which ces cannot replace public social securi-
ger run. makes transactions simple and ensures ty schemes, health systems or infras-
the safe deposit of savings. While only tructure. Nor can microfinance replace
one billion people around the globe humanitarian assistance in crisis situa-
have access to financial services, three tions but it can be helpful – if wisely
billion own a mobile phone. This calls applied – in order to cope with crises
Many of the poor, suffering from for an innovative approach to banking in a better way and maybe - in the
the food crisis, are small-scale far- to be taken into account for the future. longer run – even prevent these crises
mers. from happening. Due to the sustainabi-
Microinsurance is needed to pro- lity of the services, large donors such
Small-scale farmers seem to be the tect small-scale farmers from busi- as the European Union support microfi-
appropriate target group for microfi- ness related risks. nance programmes, stated the tempo-
nance products in order to alleviate
rary director of the EU commission in
food insecurity. 75% of the poor popu- Michael Anthony of Allianz explained
Germany, Mrs. Dietlind Jering.
lation in developing countries live in successes of micro insurances. Espe-
rural areas and 2/3 of them work in cially big insurers are capable of diver-
the agricultural sector. Furthermore sifying the risks and therefore can of-
they are all the more vulnerable while fer adequate coverage. For example Katja KIRCHSTEIN
generating their income, e.g. because index-based insurance, like weather- PlaNet Finance Deutschland e.V :
of crop failure due to increased floods based crop or livestock insurance, is
and draughts – worsening in the re- offered to small farmers in rural areas. firstname.lastname@example.org
cent years because of climate change. The index can for example be based on
Microfinance services in the form of rainfall data in the region over the past
savings, micro credits or micro insu- 30 years.
rances can help them to overcome
acute losses of income due to natural However, these insurances can be
disasters or to diversify sources of ineffective and too costly in marginal http://www.ruralfinance.org/
income by developing new business farming areas and in areas where wea-
activities. Microfinance can thus contri- ther trends are highly unpredictable. http://www.ifpri.org/themes/microfina
bute to the smoothening of consump- nce/microfinance.htm
tion and therefore ensure food security
to an extent. http://www.inafiinternational.org/publi
Additional services are needed so cations.html
Offering microfinance services in that poor farmers can actually be-
remote areas is a challenging mis- nefit from their activities.
Wolfgang Bücker of Deutsche Gesell-
It is very difficult for microfinance ins- schaft für Technische Zusammenarbeit
Microfinance and banana pro- New rural finance products in Madagascar
duction in Belize. PlaNet Finance teams and Pohl Consulting have completed a 16 month programme
aimed at developing new financing techniques in rural Madagascar.
In December, PlaNet Finance
completed a project aimed at This programme is centered on integrated rural development, which aims at going
accompanying banana producers from a subsistence economy to a market economy. The global objective is to in-
in the south of Belize. crease investments in rural areas in the goal of reaching economic growth and to
start reducing poverty. Activities are concentrated on five zones of intervention
Indeed, microentrepreneurs have (Vakinankaratra/Amoron’i, Mania, Menabe, Boeny, Diana, Atsinanana).
to face various difficulties such as
the lack of access to financing Financial products developed are the microleasing, mixed credit (intended for cou-
and insufficient training to deve- ples), the « Grenier Communautaire Villageois » (allowing the storage of products
lop their activities. and obtaining credit), the «Crédit Global Garanti» (allowing to finance combined
needs). Moreover, two insurance products, one death/disability insurance product,
PlaNet Finance has reinforced a one crop index insuranse product, were proposed to MFIs and to insurance compa-
local financial intermediary nies.
(TTCU) in order to promote ac-
cess to financing and providing This programme ended with 6 regional workshops and a national workshop brin-
training for the workers in the ging together actors in finance, microfinance and agricultural sectors in Madagas-
banana sector in Belize. car.
PlaNet Finance was launched on
bid by the European commission
to settle this project. 2-
PlaNet Guarantee launches a 2-year micro insurance programme with FMO
Study on Nepalese small and On December 8th 2008, PlaNet Finance signed a 2-year Agreement with FMO,
the entrepreneurial development bank of the Netherlands, for the develop-
medium enterprises ment of innovative microinsurance products specially designed to protect MFIs
and microentrepreneurs in Latin America and Africa.
PlaNet Finance was selected by
the SEDF bank and the Interna- The strategy will be implemented through PlaNet Guarantee, PlaNet Finance’s
tional Finance Corporation to car- subsidiary dedicated to microinsurance.
ry out a study on the « SME/
SMI » sector in Nepal. The objec- The project aims at implementing funeral insurance, hospitalization plans and
tive of this project is to analyze crop insurance through different delivery channels. It will be carried out in 8
the financial services needs and countries: Argentina, Colombia, Guatemala, Peru, Côte d’Ivoire, Egypt, Mali,
demands of Nepalese « SME »
and Senegal. Foremost, the project will start in January 2009 with the reali-
The first phase of the study, that sation of market studies in order to draw conclusions on the microinsurance
was completed in December, was products adapted to each context.
aimed at segmenting and analy-
zing the « SME » sector. In the
second phase that will be put in
place in the semester of 2009,
Agenda - January— February 2009
our teams will be devoted to de-
veloping new products intended
for small and medium entrepri-
ses. Events in France organised by PlaNet Finance :
Youth in precarious situations in January 20: CFM training on the theme « Microfinance products ». More info:
The youth in precarious condi- February 2: PlaNet Finance/Ernst & Young breakfasts on the theme
tions project will end after 2 « Financing and support to Very Small Entreprises and microentreprises in the
years in activity. world and in France ». Information: email@example.com
This project was aimed at fighting February 3: CFM training session on the theme « Individual credit in microfi-
youth unemployment in a country nance ». Information firstname.lastname@example.org
where 40% of the population is
under the age of 25. This pro- Worldwide events:
gramme has set out to reinforce
the capacity of professional inser- January 21-23: International Conference on microfinance, Pondichery, India.
tion associations, the training and More info: http://www.pondiuni.edu.in/icomfi2009/
accompanying of young beneficia-
ries as well as the development of January 22-23: Microfinance as a Tool for Peacebuilding, Cali, Colombia.
a microcredit product. Thus, on More info: http://microfinance.alvaralice.org/?q=node/1&l=en
100 young people, 66 have either
found a job or an internship or January 26-27: Implementing the EU Microcredit Initiative - What can we
they have continued their studies. learn from developing and transforming countries?, Berlin, Germany. More
PlaNet Finance is an international organisation whose mission is to fight against poverty through the develop-
ment of microfinance.
As a microfinance expert, PlaNet Finance provides a diversified set of service to help increase access to
financial services for the poor :
PlaNet Finance Advisory Services, the technical assistance and consulting provider;
PlaNIS, the business unit specialised in microfinance fund advisory, structuration and management;
Planet Rating, the microfinance rating agency;
MicroCred, the microfinance investment company;
PlaNet Guarantee, the microinsurance specialist;
FinanCités, the venture capital company for microentrepreneurs in French deprived urban areas.
Microfit, Software solutions for microfinance institutions.
PlaNet University/ CFM, training center on microfinance
Based in Paris, PlaNet Finance is active in more than 60 countries with an international network of 40 offices.
In 2008, PlaNet Finance Advisory Services managed 101 programs with microfinance institutions (MFIs), reaching al-
most 9 million clients. Planet Rating conducted 96 rating missions, and MicroCred now runs 4 microfinance institu-
tions. PlaNet Guarantee has been able to provide microinsurance products to 140 000 microentrepreneurs. PlaNIS
set up the financing for 40 MFIs mainly on behalf of responsAbility funds /Credit Suisse and MicroFund for a total of
USD 80 million. In one year, FinanCités financed 21 microentreprises in France for a total of EUR 1 million.
PlaNet Finance gathers more than 550 staff.
You can download PlaNet Finance’s Annual Report on
For suggestions or comments, please contact: email@example.com
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