Capacity building in European Microfinance
Organisations in Microfinance
Banks
What is it good for?
Building what?
For which organisations?
Capacity
ca·pac·i·ty  (k-ps-t)
n. pl. ca·pac·i·ties
1.
a. The ability to receive, hold, or absorb.
b. Abbr. c. A measure of this ability; volume.
2. The maximum amount that can be contained: a trunk filled to capacity.
3.
a. Ability to perform or produce; capability.
b. The maximum or optimum amount that can be produced: factories operating below capacity.
4. The power to learn or retain knowledge; mental ability.
5. Innate potential for growth, development, or accomplishment; faculty. See Synonyms at ability.
6. The quality of being suitable for or receptive to specified treatment: the capacity of elastic to be stretched.
7. The position in which one functions; role: in your capacity as sales manager.
Capacity to perform
Outreach
Growth
Impact
Capacity of people
Human resources
Expertise/Know-how
Capacity of structures 
Policies
Processes
Infrastructure
(Semi-)public bodies
MFIs
In Western Europe:
small and relatively young
non banking organisations
socially oriented
 



organisations, that are: 
Capacity building is...
…a broad concept for organisational and institutional development, closely connected to technical assistance (TA)
…a tool for social inclusion as it allows to reach excluded target groups more efficiently
…a long-term, continuing process, in which all stakeholders have to participate

A sector under construction
Example Germany
Strong policy interest in recent years
A new national guarantee fond set up in 2010
Aim: Building building up a nation-wide supply of MF providers
So there is a case for.....
Practioners
Donors
Advisors
Networks
Example Romania
Legal framework for microfinance changed markedly in the last 5 years
Dedicated microfinance organisations becoming banks
New providers with commercial orientation
Frameworks
serving niche markets
reaching difficult target groups
unfavorable and/or changing legal frameworks
absorbing EU funding

What are the challenges?
Organisations
Status Quo?
Pilot study in eight European countries
Western Europe
low overall capacity levels 
underdeveloped systems for performance measurement and analysis
average capacities in human ressources
lack of sustainable funding models

Central and Eastern Europe
higher overall capacity levels
need to further develop already existent performance and impact measurement systems. 
need to adapt these systems to changing regulations and monitoring requirements, e.g. with flexible MIS
What is EIF's vision for MF in Europe?



Speaker: Mr. Cyril Gouiffés, 
Organisation: European Investment Fond (EIF) Coordinator of the JASMINE programme
Speaker: Mr. Georgi Breskowski
Organisation: Mikrofond, Bulgaria

Actual capacity building needs?
Are there lessons to learn in working with advisors?
Experiences and expectations in participating in  JASMINE? 
What is the role of the networks/ressource centres in capacity building?
Speaker: Mr. Piotr Korynski 
Organisation: Microfinance Centre (MFC), Poland
How to monitor capacity levels of MFIs on a regular basis?
MFC as facilitator of the JASMINE TA-programme?
Speaker: Mr. Aldo Moauro 
Organisation: Mikrofinanza Rating, Italy
What services do Advisors/TA-providers have to offer to European MFIs?
Experiences in working with European MFIs
They don't see the microcredit market as a main business proposition
They favor efficiency for profit
They have organisational structures built for providing many different financial services
Doing microcredit only as part of their mission e.g. employment offices
Only weak incentives for efficiency in place
Organisational structures built for administration tasks 
Dedicated to microcredit provision
Efficiency as pre-condition for outreach
Organisational structures are flexible 
social inclusion
access to finance
Are they 
double-bottom line
self-sufficiency
Building...
Markets
"MAKE IT HAPPEN"
Capacity to plan
Vision for MF
Strategies
Funding models
Monitoring
capable
to meet these challenges?
5 dimensions of capacity 
self-assessment questionnaire
interviews and focus groups
visualisation in spider diagrams
Study can be dowloaded from the EMN website
How to
?
How is it connected to social inclusion?


In Central and Eastern Europe
More matured 
Sometimes „semi-banking“ organisations
More commercially oriented
Realising outreach
Target groups need activation and support
How to monitor impact?
limits of efficiency in inclusion lending


MFIs in Europe are facing  specific challenges. A lot of them might not be able to absorb available funding at EU-level.
Capacity building is a useful concept that touches all vital aspects of organisational development of MFIs.
The level of organisational capacity is especially low in Western European MFIs. In MFIs from Central/Eastern Europe there is also need for improvement in certain dimensions of organisational capacity.
What are the challenges in selecting MF providers for funding in Europe?
How does the EIF supports capacity building in European MFIs?
What is the TA strand of the JASMINE programme, and how does it work?  
Good practice lessons in capacity buidling?
Assessing the level of capacity.
What are the main TA-needs of European MFIs in regard of capacity building? 
What are the most relevant tools and strategies for building up capacity for lending to excluded target groups?
Experiences in bringing together donors, advisors and MFI for capacity building?
Funding Options
New EU-level funding facilities for MF are built, with growing volumes.
PROGRESS
JASMINE