Building on new Modelsfor poverty reductionMicrofinance MiS peer-to-peer Social BuSineSS

ACTEDMicrofinance and

Social Business Initiatives

content

Introduction New Models for Poverty Reduction

OXUS Group Microfinance Institutions

ACTED Platforms Incubators

Octopus Software

Convergences 2015 Think-Do Tank

SAMN Network

Babyloan Peer-to-Peer

ACTED Microfinance and Social Business InitiativesEditors: Michaël Knaute, Jon Sallé, adrien tomarchioPictures and design: raphaël de Bengy, William daniels, Gwenn dubourthoumieu, anne Saunier-françois, acted, oXuSACTED / OXUS (paris) october 2010

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BUIlDIng On nEw MODElS fOr POvErTy rEDUCTIOn

In this regard, over the past years, microfinance and livelihoods projects have proved to be a crucial component of our intervention strategies. Microfinance contributes to provide fair means to the most vulnerable people so that they can participate in the economic development, in the countries and contexts where these are virtually inaccessible. The linkages between microfinance and our livelihoods and development projects have also proven to be very efficient.

This strategic focus has led us to build, support and improve various microfinance, livelihoods and social business initiatives in the past 5 years within an open-minded and pragmatic framework that led to several converging initiatives. These new models, presented in this brochure, are supported by all ACTED’s relief, development and microfinance teams worldwide.

The South Asia Microfinance Network (SAMN), ACTED’s regional platforms, the OXUS Microfinance Group, the peer-to-peer micro-lending website Babyloan, the Octopus software and the Convergences 2015 Think-Do Tank have been so far successful, impacting and cross-fertilizing initiatives, paving the ground for a pragmatic and significant approach for poverty reduction. Our teams constantly link their projects and the beneficiaries to these initiatives and are trying every day to identify and promote new ways for poverty reduction.

Created in the field in 1993 and relying today on a team of more than 3,500 people in 33 countries, ACTED has progressively become one of the main European actors in the

field of international relief and development. Every year, ACTED works with over 3 million beneficiaries, through more than 200 projects and programs, in various contexts.

ACTED’s mission is to support vulnerable populations worldwide and to accompany them in building a better future. Our programs, in Africa, Asia, the Middle East, Central America and the Caribbean seek to cover the multiple aspects of humanitarian and development challenges through a multidisciplinary approach which is both global and local, and adapted to each context.

ACTED’s vision is that adapting to local situations, finding out needs and demand, keeping a bottom-up approach, identifying what is working and what is not, taking responsibility for our actions, promoting collective solidarity and individual responsibility, creating partnerships are key conditions to ensure the sustainability of our interventions and breaking the poverty cycle.

We also believe that poor people need sustainable livelihoods in order to get out of poverty.

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Microfinance institutions in low-income countries

The oXus group

created by acted in 2005, the oXuS Group is acted’s private specialized actor devoted to microfinance.

OXUS’ mission is to fight poverty through the provision of microfinance services to the working poor.

OXUS aims at empowering disadvantaged people by integrating a commercial approach into a broad human development framework.

Therefore, it plans to lead in the provision of financial services to the working poor through a worldwide network of 15 MFIs in 4 sub-regions by 2015.

acted Microfinance

Since its inception, OXUShas granted 102,000 loans amounting USD 52.5 million.

In 2015, OXUSwill provide USD 130 million to over 400,000 clients.

Projected portfolio per sub-region in 2015

Humanitariandisaster

emergency anddevelopment

developmentand Microfinance

Projected portfolio per sub-region in 2015

Asia

Sub-Saharan Africa

Middle East & North Africa

Latin America & the Caribbean

ACTed-oXus ConTinuuM

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and Social Business initiatives

wHo we ARe

the oXuS Group is structured around a holding created in 2007. it is now made of 5 Mfis and a consulting company.

ouR ACTiViTies

Mid 2010, the oXuS Group serves nearly 18,000 active customers, totalizing an outstanding portfolio of more than uSd 10 million.

The products provided by OXUS MFIs aim at enabling the group to reach profitability without compromising our identity through diversifying our portfolio at the closest of our clients’ needs. Currently, the range of OXUS services includes the following products:

group Credits •OXUS participates in the creation of groups of micro entrepreneurs who do not possess traditional collaterals but who however become accountable for each other. Collective responsibility within the group enables its member to subscribe to microcredits in order to develop their activities.

individual Credits•OXUS individual loans target micro entrepreneurs, whose activities offer certain guarantees. OXUS is developing its activities in urban areas, where micro economic activities need greater financing. However, OXUS remains strongly attached to its development missions, with a sustained presence in areas poorly deserved by adequate financial services.

other products and services•A large array of added-value products is currently being developed. On the one hand, savings, remittances and micro-insurance will complete our offer. On the other hand, the development of mobile banking services will increase our geographic outreach.

oXus MFis KeY indiCAToRs as of June 30th 2010

Active Clients

OXUS Tajikistan 7,977

OXUS Afghanistan 7,651

OXUS Kyrgyzstan 2,142

Total 17,770

outstanding Portfolio (usd)

OXUS Tajikistan 6,301,533

OXUS Afghanistan 2,850,359

OXUS Kyrgyzstan 1,110,883

Total 10,627,775

Its main specificities and strengths are:

A strong relationship with OXUS Group’s main •shareholder, ACTED, enabling the group to enter post-emergency and low-income countries as first mover and to reduce its implementation costs;An international, innovative and diversified •investment strategy focusing on greenfield microfinance institutions and limiting monetary risks and regional crisis impacts;The experience of a group of over 500 people •worldwide, having worked successfully in highly complex contexts for the past 5 years with the support of a management and technical assistance team of 15 professionals in Paris.

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MMMic

Microfina PLATFORMS

regional platforms to support new poverty reduction initiatives

responding to emergencies Whatever the nature of a crisis, acted intervenes to provide initial assistance, such as food, water, hygiene or shelter.

the food security imperative a community mobilization effort is systematically put in place in order to define together the priority needs and the means to provide for.

Health at the heart of development no long-term development is conceivable without a satisfactory sanitary environment and hygiene education.

access to education, diversifying the range of life choices access to education is a necessary milestone in individuals’ development and in the economic and social enhancement of countries worldwide.

Supporting local economic initiatives acted contributes to recovery efforts likely to lead to sustainable activities with long-term economic and fair prospects.

Microfinance as an extension of acted’s humanitarian actions funding micro-entrepreneurs’ projects will increase synergies by enabling the development of targeted, innovative and inclusive solutions.

advocacy, institutional support, regional dialogue through the promotion of local governance, acted strives to develop ownership, democratic principles, transparency and accountability.

cultural promotion acted aims at raising communities’ consciousness of their cultural heritage to help them build upon it and consolidate their development efforts.

ACTed PlATFoRMs

acted supports over 3 million people in 33 countries throughout the world. nearly 3000 staff is working on 275 programs, with specific support provided by teams in 3 regional centers in africa, asia and the Middle-east. this strong field presence is at the origin of acted’s capacity to incubate a large array of initiatives close to the needs of its beneficiaries.

ACTed builds its interventions on 8 main pillars

acted Microfinance

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Microfinance and social business initiatives having emerged from ACTed’s grass-roots programs

sAMn•The South Asia Microfinance Network (SAMN) is an initiative launched mid-2008 by a number of South Asian and European microfinance stakeholders to promote economic development. It is among the first initiatives of its kind, aiming at enhancing the quality and outreach of microfinance in the region. It originated from a need expressed by ACTED’s Delhi regional center.

octopus•The Octopus project was launched in 2005 to solve the issue of the lack of effective and affordable MIS for OXUS microfinance institutions. The software was

developed at the closest of our MFIs’ needs by a team of developers located in Kyrgyzstan and supported in Paris. Octopus is now one of the cheapest and most user-friendly MIS for microfinance, available and adapted to all fast growing MFIs in the world.

ACTed microfinance local programs•In 1997, ACTED initiated basic microcredit programs in Tajikistan. It was the consequence of the direct expression of some of its beneficiaries. Gradually, those initiatives were included into ACTED’s development programs and became more complex, leading to the creation in 2005 of a dedicated business entity, the OXUS Group.

inclusiveness and modernity lead ACTed towards entering microfinance and social business

Financial Profits Maximization

no recovery of capital

Repayment of invested capital

(self-sustainability)

social Profits Maximization

Social Business as the link between the humanitarian and the commercial spheres Yunus, Moingeon and Lehmann-Ortega,Long Range Planning, April 2010

and Social Business initiatives

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open Source Management information System for microfinance

Know your customer individuals and groups, customizable fields, historic

credit and savings

different interests rates and other parameters, flexible repayment schedules, customizable exotic products, current accounts, fixed-term deposit products, compulsory savings

accounting cash/accrual, multi-currency, export of transactions

reporting extensive (par, active loans, savings and other 30 reports), multi-currency

OXUS, the ACTED microfinance operator, with the support of the French IT-consulting company OCTO, started to develop Octopus Microfinance Suite in 2005. The idea was to provide a general purpose MIS suitable for all microfinance institutions. Open source was an obvious mode of distribution from this perspective.

Octopus is a free and open source software aimed at managing an MFI entire business, from customers, loans, savings and other products, to accrual accounting and reporting. It is multi-user, multi-currency, multi-branch and can adapt to any network topology, from totally centralized (high quality network) to totally decentralized (no network).

Octopus is known to be among the most user friendly and easy to use products in the market.

Octopus approach differs from others by it’s team know-how and experience in agile and lean methodologies, aimed at making MFIs using Octopus as autonomously as possible and at allowing them to improve the accessibility of poor families to financial services. More than an open source product, Octopus offers a process of continuous improvement, gathering the best practices from the field. Moreover, free software does not mean no assistance. Octopus and its partners offer win-win partnerships and solid contracts to MFIs: implementation, maintenance and technical support, training...

oCToPus

Management information Systems (MiS) are strategic tools to help fast growing microfinance institutions (Mfis) become more efficient and sustainable. However, most of them have to cope with relatively high software prices, poor it know-how and a complex adaptation to local context.

Main features:

acted Microfinance

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At the end of 2010, the project is run by a team of 1 coordinator, 6 developers and 2 trainers. The software is used by 15 MFIs with regular use of technical support and 20 others self-sufficient MFIs. Octopus is updated every month and is approximately downloaded 100 times a month. The online help forum and the wiki are seen about 500 times per month.

cashing in on those elements, the octopus community will continue growing in the future.

and this is only the beginning, as octopus plans to operate from 5 regional centers to enhance its outreach by 2015.

services & consulting software as a service

Trainings Hosting your information system

Implementation you just pay for what you need

Migration

Coaching

Custom developments

Support and maintenance

and Social Business initiatives

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a think-do tank against poverty

Convergences 2015

convergences 2015 aims at promoting an economy that would include a higher social impact. to achieve this objective, the project’s goal is to create synergies between the various economic, social and public players in order to alleviate world poverty. By bridging the gap between the wide scopes of the stakeholders, convergences 2015 calls on a large gathering to give birth to debates of ideas, innovative action plans and alternative offers.

Convergences 2015 identified 3 topics to study in priority to achieve these synergies and reach its goal: microfinance, social business and social economy.

To enable the emergence of an international exchange forum of network and conferences for these specific sectors’ professionals, Convergences 2015 has implemented a process by work groups along the year. The major focus is to work out in-depth considerations on the 3 issues. The forum is also an opportunity to introduce and broadcast the research studies produced by the work groups during the year.

convergences 2015’s mission is threefold:

think tank • think, debate and produce ideas

advocacy• promote these ideas and

considerations to political leaders and the general public

do-tank• promote the creation of bridges and projects around these topics.

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what is the project ofConvergences 2015 in 2011?

Convergences 2015 was initiated by ACTED three years ago. Today Convergences 2015 is becoming a permanent and independent organization, under the legal structure of an association. It is led by a steering committee composed of 40 members that are either experts or key figures in the fields of microfinance, social entrepreneurship and social economy. The committee intends to raise debates and synergies in order to build up thoughtful considerations on Convergences 2015’s matters.

More publications are on to come: the “Microfinance’s barometer” 2010 edition will be followed by a new issue. the second edition will evaluate the evolution of the sector. at the same time, a new study will be launched regarding social entrepreneurship in france. Both will be released before the 2011 forum.

what was the last edition in May 2010?

The third edition in May 2010 introduced Convergences 2015 as one of the major annual gathering for the microfinance and social entrepreneurship stakeholders in Paris. The last event brought together about 1,200 people attending various roundtables, led by a total of 80 experts during 2 days in Paris City hall. They tackled the current issues regarding microfinance, social business and social economy. At the same time, research studies have been launched that allowed the release of an innovative publication entitled “Microfinance’s barometer”; this paper is a 12-page document that provides a status report of the image of microfinance in France and of the action of French investors and operators in this field.

The essential innovation of Convergences 2015 forum lies in its ability to gather a wide field of actors. Last year, it established a partnership with the French leading national newspaper “Le Monde” – which dedicated a special edition in its economy supplement to the forum –, with the major public players (Agence Française de Développement, Caisse des Dépôts et Consignations, United Nations, European Union, etc.), with several large companies and important banks (Schneider, Danone, BNP Paribas, Crédit Coopératif, etc.), and with most of the stakeholders in the social field interested by these issues.

a regional microfinance network

acted Microfinance

south Asian Microfinance network

the South asian Microfinance network (SaMn) is a regional microfinance network of 6 national associations and 23 microfinance institutions serving, in 2010,2 million clients in afghanistan, Bangladesh, india, nepal, pakistan and Sri lanka. SaMn aims at enhancing the quality and outreach of microfinance in South asia.

South Asia with a population of above 1.6 billion is home to over one forth of the humanity. 1 billion do not use or are excluded from financial services. Therefore, the growth of microfinance promises to be one of the key tools in addressing the challenge of financial inclusion.

Nevertheless, South Asia together with East Asia and Pacific receives 12% of global microfinance investments, compared with 45% for Eastern Europe & Central Asia and 36% for Latin America and the Caribbean.

This is why mid-2008, ACTED has created SAMN, the only microfinance network in the region. Its mission is to enhance financial inclusion for low income population in the countries of South Asia. It envisions achieving this through strong partnership with microfinance stakeholders that deliver diversified and sustainable financial services to the low income population to build their financial and social capital.

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a regional microfinance network

and Social Business initiatives

C oor dinat ion

IndeA s s is tanc etec hnique

sAMn focuses on three main areas of action

Building capacitySAMN provides to 2nd Tier MFIs targeted and high quality technical cooperation, through its teams, partnerships and outsourced contracts with selected specialists.

facilitating financingSAMN works as an exchange platform for investors and microfinance institutions and facilitates financial flows towards viable and diverse investment options, thus reducing costs and risks.

creating regional space for microfinanceSAMN is a hub disseminating information, best practices and other microfinance related knowledge. It regularly organizes events aiming at gathering together a diverse range of local stakeholders.

india

Pakistan

Afghanistan

sri lanka

INVESTORS

MEMBERS

HOST

Bangladesh

credible, Gram utthan, Mahashakti, Sonata, Star, vfS

aSaSaH, cWcd, pak-oman, SafWco

Brac, afS, cfa, Madrac, oXuS afghanistan

agro Microfinance, BMi, lolc

BaStoB, Buro, idf, MSS, uddipan

PARTNERS

MFIs

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the first french peer to peer microcredit website

what is Babyloan?

created with the support of acted, Babyloan.org is the first french peer to peer microcredit website: on Babyloan, internet users can choose to lend to micro-entrepreneurs in developing countries starting from 20 euros.

How does Babyloan operate?Babyloan works in partnership with MFIs that grant microcredits around the world. Via this online loan system, Babyloan contributes to the low cost refinancing of MFIs, which in turn have to provide information on the beneficiaries (photographs and project storylines).

Launched in September 2008, Babyloan is an initiative by ABC Microfinance, in partnership with ACTED, the BRED and the Crédit Coopératif.

It enables the Internet user to:Choose the micro-entrepreneur he wants to •support,

Lend him / her a certain amount of money,•

Follow• up the reimbursement of the microcredit.

Babyloan offers a new kind of help, based on a loan rather than on a donation. Babyloan is also an interactive community-based website, explaining what microfinance is and acting as a forum for discussion and debate.

Today, 7,000 people have chosen this new form of solidarity. They

have lent more than EUr 1,000,000 to fund over 3,700 projects.

acted Microfinance

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The logic behind Babyloan?

Inter naute"Babyloanien"

Babyloan.orgplate-forme Internet

Partenaire IMFInstitutions

de Microfinance

Virement mensuel

à la clôture du mois

Remboursementpar virement

E ntr epr eneur"Babyloané"

Remboursement+ intérêts

Micro-crédit

Paiement en ligne

P 2 P L endingPrêt de pair à pair

microcredit

repayment+ interests

Online payment

Onlinerepayment

Web platform

Partner MFIsMicrofinance Institutions

online user

entrepreneur

Monthly wire

at the end of the month

what does Babyloan hope to achieve?

Babyloan was launched to raise awareness about this fantastic development tool and find a new source of responsible and sustainable financing necessary to its growth. As a pioneer in peer-to-peer lending in France, Babyloan does its best every day to uphold its founding principles and best practices.

Far removed from the Internet start-ups back in 2000, Babyloan is a development program geared towards sustainability, efficiency and collaboration with development enthusiasts and social finance. Babyloan hopes to become a key financing actor for Microfinance Institutions, thereby helping to fight poverty in the world.

The goal is: to • raise EUR 10 million of social loans from 100,000 Internet users to support 25,000 micro-entrepreneurs in 20 countries,

to develop proximity cooperation by supporting •micro-entrepreneurs in France,

to develop Babyloan’s European expansion: •Babyloan is the first European micro-lending Website. In Italy, Babyloan has already obtained agreement from the Italian Central Bank and concluded a partnership with the Etimos consortium to develop its Website for Italian Internet users.

and Social Business initiatives

ACTED Microfinance andSocial Business Initiatives

OXUS groupemail: paris@oxusnetwork.orgweb: www.oxusnetwork.org

ACTED Platformsemail: paris@acted.orgweb: www.acted.org

Octopusemail: info@octopusnetwork.orgweb: www.octopusnetwork.org

Convergences 2015email: convergences2015@acted.orgweb: www.convergences2015.org

SAMnemail: sugandh.saxena@samn.euweb: www.samn.eu

Babyloan.orgemail: contact@babyloan.orgweb: www.babyloan.org