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29 Oct

Webinar on the EMN Overview Survey Report on a crossroads

Event Webinar

Objective
EMN’s first webinar came along with the publication of the EMN Microcredit Overview Survey Report on 2012-13. Rather than only presenting you the main conclusions, the goal of the webinar was to stimulate a discussion on the path forward of the publication. We opened the discussion by asking for your constructive feedback on the present report and collect ideas from you (“crowdsourcing”) on:

  • How can we further improve the Overview Survey Report to make it more representative of the situation of the sector?
  • Do you think that a more specific definition of microcredit would be needed to improve representativeness? If yes, which suggestions do you have about this definition?
  • What are your suggestions to make this report a valuable source of information on the European Microfinance Sector?

The webinar was presented by:

  • Mrs. Caroline LENTZ, Operations Manager at EMN (Moderator);
  • Mr. Michael UNTERBERG & Mr. Benjamin SARPONG consultants at Evers & Jung, Germany, and co-authors of the two last editions of the EMN Overview Survey Report (Presenter).

Outputs

  • To read the presentation shared by the presenters during the webinar, click below the video
  • Below the videocan find the minutes of the session.
  • And if you prefer to watch and listen to the webinar recording :

evers & jung

EMN Webinar:

Overview of the Microcredit Sector

in the European Union for the

Period 2012 - 2013

Discussing the future direction of the EMN Survey Hamburg, 29th October 2014

Do you have any question?

Titel der Präsentation Seite 2

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Content

Key Findings

Lessons learnt

Open Discussion

EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013 Seite 3

Content

Key Findings

Lessons learnt

Open Discussion

Seite 4 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Key Findings – Scale and development

Sustained growth in surveyed EU microfinance provision (total volume) due to:

 Increased coverage of organizations in certain EU-member states,

 More loans provided per institution covered (e.g. in France), and

 A higher average loan size per institution.

Seite 5 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

2003 2004 2007 2008 2009 2010 2011 2012 2013

Number 27,000 35,553 42,750 90,605 84,523 178,572 204,080 324,406 387,812

Value (million EUR) 210 295 394 802 828 779 1,074 1,303 1,528

Responses 109/139* 94/206* 94/206* 118/170 138/170 102/148 108/148 122/150** 122/150**

Key Findings – Scale and development

 A sample of 35 MFIs was constructed by clustering reporting data on no. & vol. of loan provision by MFIs that participated in both this survey and the previous iteration (2010- 2011)

 Value of microloans disbursed increased by 22% from 2011 to 2012 and by 17% from 2012 to 2013

 Number of microloans disbursed increased by 20% from 2011 to 2012, but slightly decreased by 3% from 2012 to 2013

 However, insights are not representative, since no explicit panel data

Seite 6 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Value o f loans d isbursed No. o f loans d isbursed

Country n 2010 2011 2012 2013 2010 2011 2012 2013

Total 35 566,390,213 656,720,997 799,812,587 933,690,670 128,775 148,282 177,356 171,730

Key Findings – Institutional types and missions

• European MF still characterized by a wide range and diverse set of institutions

• Highest shares of institutional types: non-bank financial institutions and NGOs or foundations (no changes since last iteration).

• Majority of mission statements still centers on employment goals: microenterprise/SME promotion and/or job creation

Seite 7 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Key Findings – Outreach

• Availability of data for employment impact, client outreach and social performance still limited

• Microcredit sector in Europe had an impact on at least 250,000 jobs according to lending activity in 2013 (based on rough calculation).

• Slightly increased outreach to women (+3%) and ethnic minorities (+6%) compared to last iteration. But availability of data remains scarce (1/3 of all participants reported distribution of loans to women and data on ethnic minorities is even scarcer).

Seite 8 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Key Findings – Financial performance and sustainability

• Availability of data for portfolio quality and financial performance is improving among the MFIs covered in Europe.

• Ongoing trend of decreasing impairment loss and operating expenses, which might lead to improvements in financial sustainability.

Seite 9 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Key Findings – Outlook

• Ongoing public awareness for MF provides further support, but also increases expectations to achieving political goals (e.g., job creation and reducing youth unemployment).

• A need for more transparency is still prevalent.

• New communication channels and digitalization of financial services provide new opportunities for the microfinance sector.

Seite 10 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Content

Key Findings

Lessons learnt

Open Discussion

Seite 11 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Lessons learnt – Two survey iterations conducted by e&j

2010/11:

• Limited inclusion of country coordinators

• Two survey versions (basic and extended)

• Expansion of EU member state base

• Integration of Code of Good Conduct

2012/13:

• Inclusion of 12 country coordinators (decentralized approach)

• Reduced questionnaire length

• Exchange with mix market for harmonization of financial indicators

• Exclusive online survey approach

Seite 12 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Lessons learnt - Achievements

• Focussing the questionnaire (Code of Good Conduct)

• Extended coverage of bigger MFIs especially in Eastern Europe

• Availability of data and key ratios

• Including data on personal micro-loans

Seite 13 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Lessons learnt - Challenges

• Response rate is still (too) low

• Quality of data provided is mixed

• Differences in national sectors regarding definitions of microloan provision

• Mixed picture regarding collaboration with national networks

• Low EMN member base and not all members participated

• Data ownership issues (who is allowed to use which data?)

Seite 14 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Lessons learnt - Challenges

• High degree of coordination necessary and limited ressources for EU-wide data collection

• Impossible to show representative insights

• Survey does not include all MFIs within a given country

• Iterations not comparable, since MFI sample differs (no panel data)

• Impact of European MFIs on employment and inclusion is hard to measure

Seite 15 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Content

Key Findings

Lessons learnt

Open Discussion

Seite 16 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Open Discussion – Input by e&j on future positioning of the survey

Option 1: Comprehensive Overview survey of the MF sector in the EU

• Inclusion of all relevant MF actors, including Non-EMN members, public authorities, credit unions, banks, crowdfunding/peer-to-peer platforms

• Direct support by EU bodies and EIB/EIF to collect information of beneficiaries of EU support (ESIF, EASI facility, Code of Conduct, TA) and to rise overall participation level

• Integration into TA activities offered under FI-TAP, e.g. JASMINE Online, including budget support

• Data is owned by DG Employment

Seite 17 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Open Discussion – Input by e&j on future positioning of the survey

Option 2: Overview survey of the members of EMN

• Including all member organizations of EMN that provide microfinance products to clients

• Closer connection to issues covered by EMN (Annual Conference, Idea Labs, Research Group, Training and Support)

• Sponsoring by affiliated members, e.g. BNP Paribas

• Data is owned by EMN

Seite 18 EMN Webinar: Overview of the Microcredit Sector in the European Union for the Period 2012 - 2013

Your contact persons

evers & jung Deichstraße 29 20459 Hamburg 040-3680968-0

Titel der Präsentation

Benjamin Sarpong Consultant Benjamin.sarpong@eversjung.de

Michael Unterberg Executive Board Member michael.unterberg@eversjung.de

Seite 19

Thanks!

Brussels, 29th October 2014

The EMN Overview Survey Report on a crossroads

Minutes and Main Takeaways of the Webinar

Agenda / Invitation:

EMN’s first webinar comes along with the publication of the EMN Microcredit Overview Survey Report on 2012-13. Rather than only presenting you the main conclusions, we would like to stimulate a discussion on the path forward of the publication. We would like to have your constructive feedback on the present report and collect ideas from you (“crowdsourcing”) on:

- How can we further improve the Overview Survey Report to make it more representative of the situation of the sector?

- Do you think that a more specific definition of microcredit would be needed to improve representativeness? If yes, which suggestions do you have about this definition?

- What are your suggestions to make this report a valuable source of information on the European Microfinance Sector?

Presented by:

- Mrs. Caroline LENTZ, Operations Manager at EMN (Moderator);

- Mr. Michael UNTERBERG & Mr. Benjamin SARPONG consultants at Evers & Jung, Germany, and co- authors of the two last editions of the EMN Overview Survey Report (Presenter).

Content:

The webinar started at 11h30

E&J presented the key findings, followed by the lessons learned and finally opened up the discussion on the future of the Overview Survey. PowerPoint presentation is available on EMN Website.

The main achievements of this recent version consist in the:

- Revised and reduced questionnaire;

- Decentralized approach to work with the national coordinators, but the role of the N.C. is crucial – performance is not equal;

- Inclusion of data on personal microloans.

The main challenges are:

- A remaining low response rate of 33 % (150 / 447);

o Lack of notoriety of EMN in Europe outside the network; o Some EMN members don’t provide data; o Not possible to have a picture of the sector, nor to make forecasts.

- Dataset/base:

o Quality of data provided is mixed; o No comparative dataset, as participants are changing over the years.

- Definition of microcredit;

- Quality and level of performance of national coordinators and their incentives;

- Ownership and further use of the database.

Given these challenges, E&J mainly sees two main options for the future of the O.S.:

- Comprehensive Overview survey of the MF sector in the EU:

o Inclusion of all relevant MF actors, including Non-EMN members, public authorities, credit unions, banks, crowdfunding/peer-to-peer platforms, etc.;

o Direct support by EU bodies and EIB/EIF to collect information of beneficiaries of EU support (ESIF, EASI facility, Code of Conduct, TA) and to rise overall participation level;

o Integration into TA activities offered under FI-TAP, e.g. JASMINE Online, including budget support; o Data is owned by DG Employment.

- Overview survey of the members of EMN

o Including all member organizations of EMN that provide microfinance products to clients; o Closer connection to issues covered by EMN (Annual Conference, Idea Labs, Research Group,

Training and Support); o Sponsoring by affiliated members, e.g. BNP Paribas; o Data is owned by EMN.

Questions/Discussion:

EIF asked how much of the entire European microfinance market was covered in the recent edition of the survey and also to what extent banks were included in the survey (market coverage rate).

 E&J is not able to estimate the coverage rate of the latest edition seriously, but was advancing a figure of 50-60%. Banks were only included if they had a dedicated microfinance scheme/programme.

 EUROM advanced that EIF has a methodology to calculate the gap between demand and supply at national level, which might be used for the O.S.

E&J wondered where are the limits on Social Performance indicators within the survey in order not to overload even more the questionnaire.

MICROFINANZA queried about the role of credit unions in the survey, if they were included in the contact database. Some Romanian credit unions were considered, what about the UK ones? The measure of the sector could be significantly underestimated by not considering UK credit unions (I know that they are totally 416 http://www.creditunions.co.uk/); what do you think?

 E&J: The UK Credit Unions were not specifically contacted, but this year for the first time the 10 major Romanian Credit Unions were contacted and provided data. This depended pretty much on the motivation of the national coordinator.

 EUROM suggested only to take C.U into account that actually provide professional microcredit.

COOPEST was wondering how EMN would be able to differentiate between personal, social inclusion lending and personal, consumer lending. Also, Coopest queries about the lower participation rate regarding the 2008-09 edition of the OS.

 E&J admits that there is no easy answer to this question and that indeed this is tricky to handle in the scope of the O.S. Anyway, this adds on the discussion with regards to the definition of microcredit at a European level.

 E&J replies that in the 2008-09 smaller and more numerous organizations took part in the OS (e.g. Italy)

FGDA commented that it is indeed really disappointing that the response rate is so low and suggests EMN to ask for a formal commitment for 3-5 years and to make it compulsory for EMN members to participate and share the data. Also they feel that this publication and its relevance should be much better promoted at the institutional level, so that contacted MFIs understand the importance of this survey.

 EUROM suggests to sending the final publication to the entire contact database (447 institutions).

 EMN recognizes that the network has yet a big share of the market to cover (currently 83 members, of which 40-50 are practitioners vs. more than 400 who seem to be active) and is planning to launch promotional actions to improve the notoriety of the network in the sector.

E&J considers that the OS needs to be reconsidered, what’s the survey for? EMN should consider the options and take a decision about it.

 EMN considers that a re-definition of Microfinance would give more clarity about the purpose of the document and the image that we pretend to show with it.

F. BOTTI (Researcher) raised the issue of data ownership and the transparency issue and suggests EMN to make this data available and to create something like a mix market. Also he observes the need for a more stable questionnaire and set of indicators to allow for comparison and analysis over time.

 E&J does agree on the creation of a publicly available database and reminded that such thing was foreseen under the former project known as “Jasmine Online”. E&J wonders whether the solution could be the creation of a “European Mix Market” website tool.

 E&J admits that the questionnaire can’t be modified for every edition. A big effort has been done to align the current questionnaire with international standards so the current one should be maintained for 2 or 3 editions more.

QREDITS suggested to analysing the data around peer groups rather than by country or region. For example creating peer groups by financial services that the MFI provides: professional microloan up to 25K EUR / up to 50K EUR, personal microloan, etc. In case a MFI does provide multiple financial services, the MFI would need to provide the data separated.

Further, she suggested EMN / E&J to share the given input with the MFI after completion in order for them to validate their input. Also Qredits reported about some differences between the information submitted and the final national report data showed in the final document.

MICROFINANZA shared more feedback in writing:

 I think that for the growth rate/trend of the sector in Europe (in terms of the total value of microloans and in terms of the number of microloans) that you report in the executive summary, is more appropriate to focus and to provide information basing on the panel data set (you have constructed). In fact, looking at this sub-sample stable over the time, the growth rate in terms of volume (for the period 2011-2013) is 30% instead of 45%. It’s true that in this last survey there are more or less as many respondents (150) as the previous one, but the weight of the MFIs that have exited the survey is different from the weight of the ones that have come in (in terms of portfolio, number of loans disbursed). I think that are not comparable and it could create confusion.

 I see that your survey is a kind of middle way between a “census” and a “sample survey”. With regard to the proximity to a kind of “census” for the microcredit sector in Europe; what about the MFIs that decide to not participate to the survey, why not trying to estimate their weight however?

 Which forecasts could be also done for the future? It could be interesting.

RESEARCH GROUP FINE shared feedback in writing (but was not able to attend the meeting):

 printed versions are always useful for people, do not underestimate the effect of it;  EMN surveys should not pretend to give full picture on MF in EU; they do not. There are many other

financing options that we did not cover;  be careful with averages... use weighted averages;

 be careful with general statements ref EU, the diversity on our approaches is too wide;  country specific lessons are most interesting;  we are still looking mainly into micro credit not in micro finance.. be aware of it;  think about a more digital-based survey techniques for coming surveys;  survey teams must be guided by a committee composed of researchers who are willing to critically

guide the process and review outcomes.

Conclusion:

There are several challenges to address for the EMN to further improve this publication. On the one hand, EMN needs to redefine the scope of this publication. If EMN wants to provide a picture of the activity and performance of the sector, it needs to revise its approach and to further collaborate with other stakeholders to improve the response rate. EMN as a network has demonstrated its limits in terms of outreach and capacity to incentivize practitioners. Another main challenge to set the scope of this publication is the definition of microcredit, because right now the scope of the O.S. is broader than what is actually considered as microcredit at the EU level. On the other hand, also the sector needs to evolve and adapt. MFIs in the sector need to improve their way of (quality) data recording and their level of acceptance towards transparency.

The EMN Research Think Tank (composed by researchers) will look into more detail of the future of the EMN Overview Survey and submit a reflection note to EMN Secretariat. The revision of the definition of microcredit is also on the agenda of EMN.

The webinar was closed at 12h50.

Attendees: 21

1. Bee Rosangela

2. Benaglio Nicola

3. Bokhoven Louise

4. Botti Fabrizio

5. Chea Vuthy

6. Costan Loredana

7. Cozarenco Anastasia

8. Daganzo Lola

9. Dagradi Diego

10. Deboos-David Severine

11. Di Mauro Marilù

12. Doiciu Maria

13. Elena Burgui

14. Kamporidou Despoina

15. Lang Frank (+ Ricardo Aguglia and Salome Gvetadze)

16. Norek Izabela

17. Ramirez Puerto Jorge

18. STAMKOS NEOKLIS

19. Vilela Guilherme

20. Sarpong Benjamin

21. Unterberg Michael

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Webinars

One of the many functions of the European Microfinance Network (EMN) is to organise debates and webinars addressing a wide range of subjects pertinent to microfinance in Europe. These activities are a chance to foster an exchange of ideas among different partners, and contribute to spreading knowledge of microfinance throughout Europe.
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