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Regional Network Summit: Dispatch from Shanghai

by on Aug 14, 2012  |  posted in Association Services, Regional Network Summit  |  0 Comments
SEEP Network's Director of the Association Development Community of Practice Jenny Morgan and Program Assistant Melissa Matlock spent the early part of July in Shanghai, China, attending the Regional Network Summit. Melissa authored a blog to give us her perspective on the meeting. On July 25 – 27, 2012 microfinance regulators and industry stakeholders from across the Asia region met in Shanghai, China for the second Asia-Pacific Forum on Financial Inclusion. The event was organized by the Asian Development Bank Institute (ADBI), Asia-Pacific Finance and Development Center (AFDC), and APEC Business Advisory Council (ABAC) in collaboration with Citi Foundation and three SEEP members: Banking With The Poor Network (BWTP), China Association of Microfinance (CAM) and the Foundation for Development Cooperation (FDC). The forum brought together government officials/regulators and practitioners to engage in dialogue that would be mutually beneficial for the microfinance industry in the region. It is interesting to note that in two industry risk surveys, Microfinance Banana Skins 2012 and SEEP’s Market Outlook: Perspectives of Microfinance Association Leaders, the second highest ranking risk for the Asia region was political interference. This event was an excellent opportunity for practitioners and regulators to interact and to raise awareness among regulators on important issues facing the industry.  Microfinance regulation varies country by country but practitioners know that working with regulators is crucial to achieve greater financial inclusion. The first two days of the forum consisted of sessions on five topics: promoting financial literacy; financial identity and how to gather client information; microfinance regulation; consumer protection; and cross-border microfinance. While these topics are being widely discussed across the entire microfinance industry, there seems to be a particularly strong emphasis on client protection and social performance issues in Asia where the Andhra Pradesh crisis occurred. Although microfinance received bad press globally, the reputation of microfinance in Asia was badly damaged and there were strong measures taken by regulators in the region in response to the crisis. In the opening session, Bob Annibale, the Global Director of Citi Community Development & Microfinance echoed the sentiment of the need for strong social performance in the region, stating that the industry must bring client awareness back; before there was a greater focus on microfinance institutions but we need to re-focus our attention to the clients. It was a theme that was underscored throughout the conference. On the third day, CAM organized field visits to four local microfinance organizations and companies and participants were able to choose which organization to visit. One of the options was to visit a microfinance company, Shanghai Songjian Junhe Micro-Credit Co., Ltd., and it was an interesting experience for many of the participants. The company was a conglomerate of seven different businesses and they started their microfinance operations in 2008 after realizing that many small and microfinance enterprises (SMEs) in the Shanghai region weren’t able to access credit from the formal banking sector. After a brief presentation on the history of the company and a few words from the director, the conference participants had the chance to share their country experience. The company and its staff were very interested to learn how microfinance operated in other countries and they were especially interested in learning how the participants balanced the financial and social returns. The company received pressure from investors to have high returns but at the same time they were concerned with the social aspects and helping those who needed it. It was impressive to listen to the participants as they explained the importance of social performance management and client protection to the management and staff of this multi-million dollar company. It was remarkable because it was a concrete demonstration that social performance and client protection are important to practitioners in the Asia region and it has become a priority for them. The last day of the conference week was the Asia Network Summit (ANS). This was the 5th ANS and participants from 13 different national and regional microfinance associations attended. The topics covered at the summit were: sustainability of networks, the role of networks in risk management, collaboration among national, regional, and global networks, and the role of networks in savings. Every network was able to make a formal presentation on the work it had done in one of the areas in addition to participating in the informal discussions. One of the highest ranked sessions by participant evaluations was the session on sustainability of networks in which four networks presented their experiences including two mature networks and two nascent networks. The session generated a lot of discussion with interesting examples from Pakistan Microfinance Network (PMN) and Microfinance Council of the Philippines (MCPI) on how their networks have dealt with the issue of sustainability and the measures they have taken. One example from PMN is that they have become a knowledge hub in their country and they are now starting to act as consultants for organizations such as the World Bank. The Board decided to increase the network’s equity and all revenue earned from consulting projects is put into the equity fund. In the case of MCPI, one of their key services is training and while it took a while to build a culture of payment for services among their members, in the end, it has paid off. The importance of creating services responsive to members’ needs was emphasized in the presentation as well as high quality so that services are worth the costs in members’ views. [caption id="attachment_1166" align="alignright" width="300" caption="SEEP's Melissa Matlock Presents at the Asia Network Summit"][/caption] Conversely, two nascent networks presented on their experiences with challenges to sustainability. As in the case with many newer networks, the Vietnam Microfinance Working Group is heavily dependent on grants from donors and does not charge membership fees which leaves the network in a vulnerable financial position. Similarly for the Lanka Microfinance Practitioners’ Association the network has limited funds for operations which results in significant participation of the Board to support and manage the network’s operations. Overall, the summit was a great opportunity for networks exchange experiences and with the mix of networks in the room including nascent to mature networks, everyone was able to learn something new and applicable to their work. Participants were satisfied with the content and quality of the discussion giving the ANS a 3.7 out of 4 in their evaluations. List of networks that participated in the ANS 2012:  

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