BNP PARIBAS, COMMITTED TO MICROFINANCE : 25 years of funding and services to Microfinance Institutions

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1 BNP PARIBAS, COMMITTED TO MICROFINANCE : 25 years of funding and services to Microfinance Institutions Supported by the Indian microfinance institution Ujjivan, these women are part of a joint liabilities group of borrowers. The bank for a changing world

2 Supporting microfinance: Translating a responsible commitment into action Microfinance is a powerful tool for accelerating financial inclusion As part of its Corporate Social Responsibility (CSR) approach, BNP Paribas has become a privileged partner of many microfinance institutions (MFIs). In 2015, more than 250,000 (1) people excluded from the traditional banking system were able to implement their projects and improve their standard of living thanks to the Group s funding. (1) The annual number of beneficiaries of microcredit of the supported MFIs (in proportion to BNP Paribas funding). Microfinance is at the heart of the social and solidarity economy Microfinance is one of the most striking examples of the ability of the social economy to attract investment which can provide sustainable solutions to social problems. Microfinance grants access to financial services (credit, savings, insurance, money transfers, etc.) to disadvantaged populations. Particularly active in developing countries where it originally emerged, microfinance is now growing worldwide. More and more micro-entrepreneurs can now start or develop a productive activity thanks to MFIs. Social and Solidarity Economy Social Entrepreneurship Microfinance

3 More than 25 years of financial inclusion A fast growing activity A strategic activity to promote ambitious and socially-responsible commitments, microfinance has grown dynamically at BNP Paribas since 2012, illustrated in particular by an increase in outstandings by more than 36% in st Microfinance partnership in Guinea Partnership with ADIE The extent of the support provided to MFIs today, as well as the international dimension given to this activity, have made the Group one of the major players in this sector in Europe: in its four domestic markets: France, Belgium, Italy and Luxembourg u through partnerships with leading MFIs in the rest of the world: Brazil, China, Colombia, India, Indonesia, Ivory Coast, Morocco, Poland, Senegal, The United States, Tunisia, United Kingdom, Vietnam, etc. u through the funding of approximately thirty MFIs Creation of the Microfinance department 2007 Elaboration of a credit policy 2018 Beginning of relation with the Moroccan MFI Al Amana 2012 Integration of the microfinance department into the CSR function 2015 Renewed social performance objectives 350,000: This is the target that BNP Paribas has set for itself in terms of the number of beneficiaries of micro-credits by Target: 350,000 beneficiaries Funding MFIs in 17 countries

4 Financial support to suit all the needs of MFIs MFIs that fund their microcredits mainly through borrowing, need partners to develop and sustain their activities. BNP Paribas provides them with diversified and custom-tailored support, in local currencies in order to prevent foreignexchange risk. The Group s financial support to microfinance BNP Paribas provides loans amounting from 0.5 to 10 million to MFIs and mobilises the full range of available options to meet their needs: Direct funding: 82% of the portfolio Nearly half of the loans are granted in domestic markets. In emerging countries, in addition to loans to MFIs, the Bank also operates through the fund RIF II, which invests in 36 MFIs in countries where BNP Paribas does not operate. The Group may also participate in the capital of MFIs and/or make grants. Indirect funding: 18% of the portfolio The Bank offers its employees and customers solidarity savings funds, partially invested in MFIs. Indirect funding The different types of funding from BNP Paribas to microfinance 18% 2% 4% 55% 21% Direct funding Domestic markets Rest of the world Employees and customers savings Grants and other Capital Investments BNP Paribas, a keystone for a model based on socially-responsible and economic objectives Thanks to MFIs, people excluded from the traditional banking system can avoid loan sharks. BNP Paribas also provides MFIs with the fairest financing conditions on the market.

5 Solidarity savings solutions designed and developed for MFIs BNP Paribas Investment Partners, the asset management subsidiary of BNP Paribas, has recently reached the milestone of one billion euros in outstandings on its comprehensive, solidarity-based savings programme. Thanks to these products, individual customers, employees and institutional investors can give purpose to their savings. Part of the amounts deposited, depending on the investment product, is committed to financing companies with high social impact, including MFIs: In France, the solidarity funds of BNP Paribas Investment Partners directly support the activity of the two major players in microfinance: ADIE and Initiative France. These funds have contributed to the funding of more than 13,821 micro-entrepreneurs in On average 60% of micro-companies supported by these MFIs are still in business three years after their creation. The solidarity funds of BNP Paribas Investment Partners cannot directly invest abroad in MFIs due to regulations. Nevertheless they contributed to the development of microfinance through the funding of European networks, which are active in emerging countries: OXUS (through ACTED), SIDI or the ResponsAbility Global Microfinance fund.

6 Trained microfinance specialists and committed volunteers BNP Paribas supports the development of MFIs through professionnals trained in their specificities. The Group also offers the expertise of its volunteers for technical assistance missions. Proactive and well-trained professionals at the service of MFIs Experts in Group CSR work in close collaboration with local BNP Paribas teams to support and monitor the MFIs: The first exchanges with MFIs are made jointly, in order to combine global microfinance issues with the problems specific to each country; Ten years ago, we created out of nothing the professional framework necessary to grant credit in microfinance. This allowed us to define the eligibility criteria both in financial and social terms. The Group CSR team analyses their needs and offers them appropriate services; It continuously relies on the other services of the Bank, such as Risk Management. A specific credit policy, including social performance assessments, has also been developed in close collaboration with this team. Jean-Philippe Gourdon Senior Credit Officer, Risk- I2S Department, BNP Paribas

7 Technical assistance provided by BNP Paribas volunteers Since 2007, BNP Paribas employees and retirees have been providing their skills on a voluntary basis to microfinance operators. Thanks to the Group s coordinating efforts, nearly 30 missions in support of MFIs and 180 in support of micro-entrepreneurs were performed in 18 countries in In europe and North Africa,volunteers provided guidance for the founders of micro-businesses and supplied technical expertise. In 2015, this system benefited Adie in France, MicroStart in Belgium, PerMicro in Italy and Taysir in Tunisia. In the rest of the world (Philippines, Haiti, etc.), technical support missions were undertaken to help NGOs and MFI networks. Alice Mignon, BNP Paribas CIB Global Markets One-month mission in Kyrgyzstan to support OXUS (MFI network created by Acted) I have implemented the Risk Management tools adapted for Oxus using best practices. This mission allowed me to understand the operational difficulties that face MFIs and was a great human adventure.

8 Europe, BNP Paribas has created strategic partnerships In developed countries, the main challenge for MFIs is to actively support their clients while maintaining a sound financial basis. As a partner to the main European institutions and a co-founder of new MFIs, BNP Paribas contributes to this process France: 25 years of commitment to ADIE ADIE : as a non-profit organisation and microfinance pioneer in Europe, Adie helps the unemployed and those without access to traditional bank loans to start their own businesses. The Group, its partner since 1993, provides support using all available tools: loans, employee savings, quasi-equity, donations, volunteering, etc. Adie has financed more than 160,000 people since 1989, providing them with support before, during and after the launch of their business. Through its action, 225 jobs are created each week and 84% of beneficiaries are sustainably reintegrated professionally. SUCCESS STORY Jamal, 34, with no diplomas, launched himself into washing cars: Thanks to ADIE, I ve been developing my environmentallyfriendly car wash business for two years at Saint-Denis, France

9 Italy: PerMicro, the first MFI in Italy PerMicro: the MFI receives substantial support from BNL, BNP Paribas retail bank in Italy, which is its main shareholder and banker since The Bank also helps with daily life: not only does it host 5 of the 14 PerMicro selling points in its bank branches, but it also refers clients to the MFI (more than 20% of the institution s clients). The effectiveness of PerMicro s actions are shown by the 1,014 jobs it helped create in SUCCESS STORY Thanks to PerMicro, Monica from Italy and Pedro from Venezuela, launched El Caminante, a food truck dedicated to gluten-free dishes from their two countries. Belgium and Luxembourg: decisive contribution from the Group to support the creation of MFIs In 2010, MicroStart was launched on the initiative, among others, of BNP Paribas Fortis (more than 58% of capital). It is now the market leader in microcredit, with nearly 2,700 active clients. In 2016, BGL BNP Paribas (83% of the capital), ADA (1), ADIE and the EIF (2) created Microlux, the first MFI in Luxembourg and the Greater Region, in order to finance micro-companies and social enterprises. In Europe, BNP Paribas also supports MFIs in the UK and Poland. (1) Appui au Développement Autonome (Support for Autonomous Development) (2) European Investment Fund

10 Africa, BNP Paribas promotes economic development BNP Paribas relies on the networks of its African subsidiaries to promote financial inclusion: BMCI in Morocco, UBCI in Tunisia, BICIS in Senegal and BICICI in Ivory Coast. They support the most socially successful MFIs in each country. Morocco and Tunisia: the Group concentrates its loans on the most active and innovative MFIs Supported by BMCI in the growth of its activities for more than 12 years, Al Amana has become the largest MFI in Morocco, with 207 million in loans, more than 328,200 active clients, 507 fixed sales points and 86 mobile units in BNP Paribas decided to support it because: it is at the forefront in terms of the evaluation of its social performance, it constantly improves its offer: for example by providing, throughout the duration of the loan, assistance in micro-insurance, family support in the event of the beneficiary s death, as well as partial support of the borrower s medical costs.

11 Taysir is a new MFI in Tunisia, launched in UBCI has supported it since its inception through funding as well as through a stake in its equity. The Bank also participates in the development of its strategy by serving on its Board of Directors. UBCI also coordinates around fifteen volunteers who accompany micro-borrowers. The institution is particularly innovative in its mobile banking tools and its sector-based approach in the areas of milk and honey production, as well as recycling. Senegal and Ivory Coast: BNP Paribas supports MFIs operating as networks: BICIS finances Microcred Sénégal: with more than 170,000 savers and more than 42,000 borrowers throughout the country, this MFI is a major player in microcredit in Senegal and a member of the international network Microcred. BICICI finances Advans Côte d Ivoire: third-largest MFI in the country, with more than 8,000 micro-borrowers in 2015, it is one of the youngest of the eight MFIs in the Advans network. SUCCESS STORY Ini Palé, an Ivorian mother of four, employs four people full time in her cereals business: I always recommend Advans services to people I know. We don t need to have savings to receive a loan.

12 Asia, significant resources to facilitate women empowerment The ambition of BNP Paribas in this area: helping women by working with recognised MFIs. India: Supporting 15 MFIs 41% of the world s micro-borrowers are in India, 99% of whom are women. In 2015 through the financing of Indian MFIs, BNP Paribas provided funding to over 180,000 micro-entrepreneurs, who are organized in joint-liabilities groups. Through these groups, the women borrowing together provide solidarity to one another. SUCCESS STORY Thanks to microcredits, Lalita has been the owner of a small grocery store in Ahemdabad for 10 years. Her income has improved the lives of her entire family. Grameen Koota: BNP Paribas was the first foreign bank to finance this institution, allowing the MFI to obtain support from other foreign banks. The MFI made loans to about 850,000 women in rural areas in They also benefited from services such as access to low-cost medical services and financial education programmes. Fusion: Financed by BNP Paribas, the MFI has 400,000 low-income customers: 82% belong to disadvantaged castes and 77% live in rural areas or in shanty towns around New Delhi.

13 Indonesia, Vietnam...: in each country, the Group finances at least one MFI with a national coverage Komida: This Indonesian MFI is a member of the Grameen international network. In order to measure the social impact of the loans that the Group grants, BNP Paribas assisted students in the (IM)PROVE association to undertake a study of the institution s clients. Beyond the economic impact, the study highlights the benefits of microcredit for all family members, as illustrated by the fact that the children go to school on average three years longer than their mother s generation. CEP: BNP Paribas is the first international foreign bank to support this institution with funding in local currency. With 264,660 customers, CEP is the largest MFI in Vietnam. It offers savings products and works to promote access to housing. In 2015 CEP has provided and built 80 houses to its poorest clients. In Asia, the Group also supports MFIs in China. SUCCESS STORY Dede: I joined Komida to take out a loan, because it is really simple. Before, I worked as a farm worker for $3 per day. But today, with my own business, I earn $13 to $20 per day.

14 Americas, the winning combination for BNP Paribas: financial inclusion and education Improving the quality of life of the poorest citizens by providing not only financial support but also training. BNP Paribas supports this global vision of microfinance by funding MFIs in South America and in the United States. Colombia, Brazil: MFIs at the forefront of education and the protection against over-indebtedness SUCCESS STORY Nubia grows fruit and vegetables: I ve been happy to work with Contactar for 11 years. Thanks to them, my family s life has improved and my business has prospered. Contactar : In Colombia, BNP Paribas has designed an innovative solution to finance this MFI while protecting it from foreign exchange risk. Contactar supports more than 76,300 low-income clients. It owes its strong social performance in particular to its practical training programmes in financial education and in the agricultural sector. BNP Paribas was the first foreign bank to grant a loan to the Brazilian MFI Banco Da Família. In 2015, this institution accompanied more than 12,000 entrepreneurs while supporting education initiatives.

15 United States: the Group supports microfinance from East to West In New York, BNP Paribas has chosen to fund Grameen America Incorporation (GAI). Founded in 2008 by Muhammad Yunus, Nobel Peace Prize award in 2006, GAI is the only MFI in the United States to make individual loans to small groups made up of women only. Present in 11 cities, GAI improves the standard of living of more than 40,000 clients. It has helped more than 65% of them to create a credit history, essential to entering into the traditional banking system in the United States. In California, the MFI Accion New Mexico and Accion San Diego received support from Bank of the West, a subsidiary of BNP Paribas on the West Coast. The Bank also offers loans and technical assistance services. In collaboration with the nongovernmental organisation HOPE, more than 30,000 people have benefited from financial education training and homeownership programmes. SUCCESS STORY Damaris, a hairdresser, dreamed of creating a family restaurant. Today, with a third loan, she is better equipped to meet growing demand: Grameen is the only place I could get a loan and where I can regularly meet with other members of my community, who are also trying to expand their business.

16 Contact: To learn more Meet BNP Paribas: The CSR pages of the bnp paribas website The social entrepreneurship brochure The microfinance barometer Adie / Advans / Contactar / FTT / (IM)PROVE / Microcred / MicroStart / Mehdi Nédellec / PerMicro / Romain Joly