Sustainability Against All Odds. Essma Ben Hamida Co-Founder & Co-Director Enda Inter-Arabe, Tunisia

Transcription

1 Sustainability Against All Odds Essma Ben Hamida Co-Founder & Co-Director Enda Inter-Arabe, Tunisia

2 باش نكب ر كيفاش (*) مشروعي (*) Hasna: How am I going to develop my small business?

3 Historical Background 1990 Enda inter-arabe, NGO set up in Tunisia with a general development & environment agenda 1995 Micro-credit programme launched in urban areas directed mainly to women 2001 Microfinance becomes sole activity 2003 Operational & financial sustainability reached

4 Initial Handicaps Initial loan capital only $ Early funds sent in small amounts (donors unfamiliar with micro-credit) No formal training, no consultants with experience in best practice MF (learning from errors) No local governance to support the team No other MFIs in the country to learn from or exchange with

5 Non-conducive Environment for BP Microfinance 1999 Law on micro credit not in line with best practices (but does not apply to enda, as an international NGO) No support to best practice microfinance No official recognition (Central Bank, Ministry of Finance) No collaboration, no understanding from banks Unhealthy competition No exchange, no interaction with other MFIs in the country

6 2003: Sustainability Reached active clients 84% women US$ 2.4 million outstanding portfolio 10 branches in 16 sub-districts Staff of 85 82% of loans = < TND 500 ($380) 2.74% of loans = > TND 1000 ($760) Average balance/client as % GNP/capita = 10% deep outreach to the poor (16.5% for MENA region)

7 Programme Development in US$ December 1995 December 1999 December 2003 Outstanding Portfolio million Value of amount disbursed million Capital loan (donated) million Active Clients # of loans disbursed cumulative Staff Branches

8 Profitability MENA (MBB2002) All MFIs (MBB2002) Operational self-sufficiency 87% 121% 91.30% % Financial self-sufficiency 82% 110% 82.70% 92.50% Adjusted return on Assets -8% 3% -3.80% -2.70% Adjusted return on Equity -9% 3% -4% -6.10% Yield on Portfolio 43% 44.08% 34.8% 36.6%

9 Loan Portfolio Quality Portfolio at risk EOP one day late Portfolio at risk EOP 30 days late Portfolio in arrears EOP one day late Portfolio in arrears EOP >30 days Repayment on time EOP principal balance per client Average first loan size Retention rate Loan loss rate ,74% 1.43% 0.28% 0.22% 82.34% % 0.48% 2003 (end-nov) 1.36% 1.10% 0.55% 0.36% 95.74% % 0.53%

10 Efficiency (June) MENA (MBB20 02) All MFIs (MBB2002) Staff efficiency 28% 21% 25.3% 14.8% Operational efficiency 50% 35% 37.8% 27.4% Administrative cost per active loan (TND) % 113.4% # active clients per loan officer (individual & groups) # active clients per staff member

11 Opportunities: Motivated Staff Motivated by vision and enda pioneering role Trained to best practice microfinance - consultants from region + exchange visits - training = 10-12% of enda budget Competitive salaries & Performance-based incentive system

12 Opportunities: Diversified Products Individual «fardi» Seasonal «forsa» Investment «istithmar» Basic loans Group «majmouâa» Parallel loans Express «solfa»

13 Governance: Devoted to Enda Mission Summer 2003, Council established Mix of professionals with broad experience, motivated by microfinance and devoted to Enda vision

14 The Strategy: AC by 2008 Seek exemption in order to access bank loans Convince authorities to change the law to allow NGOs to follow best practices encourage exchange and healthy competition look for flexible investors capable of understanding current environment

15 The Strategy: AC by 2008 Market estimate (Tunisia) = microenterprises self-employed in the informal sector (1997) Today Enda capable of paying commercial rate to access loan capital (need for $18 million) to reach BUT it is denied access to bank loans: Path towards commercialisation blocked by regulations

16 The Strategy: AC by 2008 Seek exemption in order to access bank loans Convince authorities to change the law to allow NGOs to follow best practices encourage exchange and healthy competition look for flexible investors capable of understanding current environment

17 Projections Portfolio & Active Clients active clients portfolio TND p 2005 p 2006 p 2007 p 2008 p

18 نطلق بقرض صغير... (*) جوانحي ونطير (*) Thanks to micro-credit, I can take off and fly with my own wings!

19 Enda : Happy Clients, Happy Team