Standard Chartered Bank

Workshop A: Building Transparent Pricing Into The Global Microfinance Industry

Commercial financial markets often have regulations on transparent pricing, or truth-in-lending, but this is a rarity in microfinance. Determining the true price of microfinance products is almost never done and generally yields quite surprising results – True rates are often two to three times higher than quoted rates. With such a significant lack of transparency, there is no known “market price”. This means consumers cannot make informed decisions, managers have trouble setting the price of their products, and investors often don’t know the price of the products they are indirectly funding until they see the rates show up in the headlines of a journalist expose article. Find out about how the microfinance industry is beginning to correct this market imperfection to enable better growth and sustainability.

Attend the workshop and examine the following points:

• How and why has transparent pricing emerged over the past 40 years in developed countries? What benefits does transparency offer?
• Exploring the reasons why microfinance has been trapped into practicing non-transparent pricing
• Understanding the implications that non-transparency is having on the reputation of the industry as well as on individual institutions
• Understanding the mechanics of calculating Annual Percentage Rates, Effective Interest Rates, and knowing the difference between the two
• Understanding the current efforts underway to quickly shift the global microfinance industry to pricing transparency

About Your Facilitator

Chuck Waterfield
CEO & Founder
MicroFinance Transparency

Chuck Waterfield has 25 years experience in microfinance, with a mixture of practical field experience (six years starting MFIs in both Haiti and Bolivia) and experience leading network strategy development (serving as microenterprise director for both MEDA and for CARE International). He developed Microfin, the most popular financial planning software in the microfinance industry and teaches business planning courses around the world, with more than 3,000 microfinance professionals having been trained in his courses. His current work as an independent consultant includes clients across the industry.

Currently on faculty of Columbia University School of International and Public Affairs, he was formerly on the faculty of the Boulder Microfinance Training Program for ten years and Southern New Hampshire University’s Microenterprise Development Institute for eight years. In addition to Microfin, he has a broad range of products and publications including the SEEP FRAME Tool, the CARE Credit and Savings Sourcebook, and CGAP Handbook on Management Information Systems. In 2008, he founded MicroFinance Transparency and works part-time in the institution as he continues his other responsibilities.

Workshop B: Financing Strategies For MFIs: The Essential Checklist For Successful Investor Relationship Management

The boom in microfinance has attracted a steady stream of institutional investors over the past ten years leading to increased financing opportunities for microfinance institutions. This workshop guides microfinance institutions as they begin the process of forming relationships with the investor community. You’ll review the process that investors consider when investing in microfinance institutions, throughout the session you’ll go through each step from the origination of a transaction and initial due diligence to financial terms negotiations. Each participant will leave the workshop with a sophisticated checklist of the elements necessary to successfully attract financing from MIVs worldwide.

Learning more about investors: a profile of the microfinance investment market

• Identifying the different types of investors (commercial, subsidized, public, private) and understanding how MIVs are structured (distribution network, individual investors)
• Examining the microfinance debt market today: Landscape of microfinance debt per country and region – evaluating how different types of MFIs and MIVs can access and offer different volumes and structures of debt
• What returns (social and financial) do investors expect? How do investors expect to be able to track and measure the social returns on their investments? How should MFIs structure their businesses and reporting structure to give clarity?

Starting a relationship with an investor: due diligence process and credit origination

• Examining the different steps of credit risk assessment: desk review, credit risk, social responsibility
• What is the loan origination process? Examining funding needs assessment, brokerage, deal negotiation, deal origination

Cultivating the investor – investee relationship: transparency and relationship returns

• What is a fruitful relationship from the investor’s point of view? Transparency rules / communication, monthly monitoring

What return or additional support services can microfinance institutions expect from investors?

• Evaluating the benefits of brokerage services : Gaining exposure to different MIVs, fast and transparent process, accessing benchmarking data (Syminvest)

Each attendee will be encouraged to submit their challenges ahead of the workshop so that the session can be tailored to your specific requirements.

About Your Facilitators

Rajitha Vinnakota
Investment Analyst Asia
Symbiotics

Rajitha Vinnakota is Symbiotics’ Investment Analyst for South and East Asia and is in charge of the investment unit in Singapore after working as a consultant for the Research team. Prior to joining Symbiotics, Rajitha was a High Yield Research Associate at Wachovia Capital Markets. She also worked as an Analyst in Wachovia’s Institutional Investor Management group. Rajitha also taught English in the Dominican Republic. She holds an MBA from INSEAD; an MSc in Economic History from the London School of Economics and a BA in Public Policy from Duke University.

Jérôme Savelli
Regional Manager
Symbiotics

Jérôme Savelli is regional manager for Europe, Africa and Asia. Before joining Symbiotics in 2006, he worked for Deloitte & Touche as junior auditor in the financial institutions department and as regional risk project manager for Société Générale Investment Banking in Hong Kong, China. He subsequently worked for three years as director of Initiative Development-Ghana, a microfinance NGO delivering credit, savings and training services to urban poor in Accra, Ghana. Jérôme holds a degree in Business Administration from the ESSEC Business School, Paris.