[email protected] Microfinance and the environment The experience of the MFI sustainability guidance...

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Microfinance and the environmentThe experience of the MFI sustainability guidance

30th November 2010Alberic PaterTriodos Facet


Consultancy firm promoting sustainable banking and SME

development in developing countries & emerging economies

Part of the Triodos Group, innovator of sustainable banking

Headquarters: Zeist, the Netherlands

Representative offices in Africa, Latin America, Easten

Europe, Asioa

30 professional staff consultants

Triodos Facet


Triple bottom line reporting

EE / REfinancing

Social and environmental

risk management

MFI / SME banks

Triodos Facet

Sustainability Performance Management


What can we as investor do to improve the environmental, health & safety impact of microfinance clients?

The objectives of FMO


Help MFIs to develop & implement a social & environmental risk management system

2006 – 2008: Face to face trainings to more than 50 MFIs

2009: Develop e-learning toolkit to support MFIs during implementation phase.

The objectives of FMO


Awareness raising / Training Integrate E&S management in existing systems Guiding management & offer practical tool for loan

officers Help clients improve their impact, instead of excluding

them Focus on clients in risky sectors

The principles of the toolkit


The structure of the toolkit


Awareness raising


Simplifying E&S risks


Exercise: recognising E&S risks


Why E&S management: case study


Why E&S management: reality check


Integrating E&S in the loan cycle


Assessing E&S risks


Assessing risks at client level


Planning the pilot project


Develop E&S policy and roll-out


Checklist and planning tool


Several MFIs have used it, positive feedback on practical approach icons, photo tools, factsheets, step-by-step approach Basix India: pilot with “peer group approach”

Particularly for MFIs with small enterprise portfolio rather than “traditional” microfinance.

Useful for awareness raising and addressing “low hanging fruit” at client level

Reflections on E&S toolkit


Interesting prototype. Maintain the practical and step-wise approach

Additional modules to be developed: Offer client-interaction courses for loan officers Sustainable product development module (energy/water

efficiency) Client protection module

The future of E&S toolkit


MFIs are interested, but low urgency to address E&S issues Loads of other priorities Business case is longer-term Higher management champion is important

Donors / investors have not really addressed E&S issues beyond the level of exclusion lists

Addressing E&S by MFIs


Alberic Pater

www.triodosfacet.nl

[email protected]

Thank you for your attention

Any questions?

[email protected] Microfinance and the environment The experience of the MFI sustainability guidance...

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