Accessible Finance Activity Final Report

ACCESSIBLE FINANCE ACTIVITY FINAL REPORT JANUARY 30, 2017 – NOVEMBER 30, 2020 February 2021 This document was produced for review by the United States Agency for International Development. It was prepared by the World Council of Credit Unions for the Accessible Finance Activity in Haiti, agreement number AID-521-A-17-00003. The views expressed in this document do not necessarily reflect the views of the United States Agency for International Development or the United States. Government. Accessible Finance Activity (AID-521-A-17-00003) Final Report i TABLE OF CONTENTS Figures ........................................................................................................................................ ii Acronyms ................................................................................................................................... iii Executive Summary ................................................................................................................... 1 Background ................................................................................................................................ 3 Objectives, Design and Implementation ..................................................................................... 4 OBJECTIVE 1: Expand financial services and products to rural areas and products to rural areas through groups and digital financial services (mainly field officer banking methodology)4 1) Field Officer Banking .................................................................................................... 4 2) Intermediary Agents ....................................................................................................11 3) Financial Education .....................................................................................................13 4) Leveraging Mobile & Digital Technologies ..................................................................17 OBJECTIVE 2: Sustainably address liquidity and capital challenges faced by MFIs and credit unions....................................................................................................................................19 5) OBJECTIVE 2.1: Deposits Mobilization for Credit Unions ...........................................19 6) OBJECTIVE 2.2: Investment Mobilization for MFIs .....................................................22 Program Impact & Sustainability ...............................................................................................26 7) Objective 1: Impact .....................................................................................................26 8) Objective 2: Impact .....................................................................................................31 Lessons Learned ......................................................................................................................32 Program Budget Overview ........................................................................................................33 Annex A – Performance Indicator tracking table (IPTT) Annex B – Accessible Finance Success Stories Annex C – Resonance’s Capital Raising Lessons Learned Annex D – Accessible Finance Closeout Presentation Annex E – Summary of Subawards *Cover page photo credits: Objectif Productions - upper left and center photos; WOCCU – lower left and right photos. Accessible Finance Activity (AID-521-A-17-00003) Final Report ii FIGURES Figure 1: KPPP Rural Agents Inputting Information into Tablet and Issuing a Transaction Receipt Figure 2: Field Officer Banking Core Principles Figure 3: Map of Areas Targeted by KPPP Figure 4: KPPP Rural Agents Serving Rural Members Figure 5: Intermediary Agents Point of Service Figure 6: Illustrative Posters from a Financial Education Session Figure 7: Illustration Explaining How to Prioritize Spending Within One’s Personal Budget Figure 8: Approach to Savings Mobilization Figure 9: KPPP Results (June 2020) Cumulative Figure 10: KPPP Financial Education Program Results as of October 30, 2020 Figure 11: Accessible Finance Quarterly Financial Report as of December 31, 2020 Accessible Finance Activity (AID-521-A-17-00003) Final Report iii ACRONYMS AFI Alliance for Financial Inclusion AGIRED Appui au Groupes et Initiatives Pour le relèvement Economique Durable AVEC Association Villageoise d’Épargne et de Crédit BRH Banque de la République d’Haïti (Central Bank) COP Chief of Party CU Credit Union DAI Development Alternatives Inc. DBA Doing Business As DCOP Deputy Chief of Party EOI Expression of Interest FI Financial Institution FinInc Finance Inclusive Project FY Fiscal Year HIFIVE Haiti Integrated Financing or Value Chains and Enterprises HOME Haiti HOME Ownership and Mortgage Expansion Activity ICT Information Communication Technology IA Intermediary Agent IT Information Technology IRA Investments Readiness Assessment KPPP Kès Pam Pi Pre’m (meaning My Credit Union Close to Me in English) MFI Microfinance Institution MUSO Mutuelle de Solidarite M&E Monitoring and Evaluation PAR Portfolio-at-Risk POS 3 rd Party Point of Service RFP Request for Proposal SIFT Sustainable Investment Facilitation Toolkit USAID United States Agency for International Development VSLA Village Savings and Loans Association WOCCU World Council of Credit Unions Accessible Finance Activity (AID-521-A-17-00003) Final Report 1 EXECUTIVE SUMMARY An estimated 56 percent of Haitians are excluded from the formal financial system (2018 Finscope study 1 ); thus, they cannot access services, such as savings accounts and loans, that could measurably improve their quality of life. Credit unions in Haiti provide a channel to reach these unbanked Haitians and are often the only financial institutions servicing less affluent and less densely populated areas. Leveraging decades of international experience in financial inclusion and seven years in Haiti working with USAID’s Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE), World Council of Credit Unions (WOCCU) carried out a pilot program that implemented innovative and scalable solutions to further financial inclusion in Haiti called Accessible Finance (or Finance Pour Tous) from January 2017 to November 2020. The Accessible Finance Activity supported USAID’s overarching Assistance Objective in its Haiti Strategic Framework (FY 2018 - FY 2020) of creating a foundation for resilience, stability, and inclusive growth. It also supported Haiti Central Bank’s (BRH) financial inclusion strategy that aims to assure the greatest possible access to savings, credit, and other financial products and services with the intent of creating a financially and economically more inclusive society. With two distinct but complementary objectives, WOCCU piloted scalable solutions to expand access to safe, affordable, and accessible financial services in Haiti: • Objective 1: Expand financial services and products to rural areas through groups and digital financial services (mainly field officer banking methodology). • Objective 2: Sustainably address liquidity and capital challenges faced by MFIs and credit unions. These objectives were addressed using a holistic approach comprised of three components: 1) Piloting the Field Officer Banking, locally referred to as ‘Kès Pam Pi Pre’M’ – (KPPP), “My Credit Union Close to Me” in English through which Rural Agents brought access to formal financial services and financial education to underserved rural communities. Rural Agents helped expand credit union membership by 4,215 members as of October 2020 (of which 62% were women); increase credit union deposits by 25,778,199 Gourdes (USD 409,178 2 ); facilitate disbursement of 1,252 loans, worth HTG 25,211,250 (USD 400,179); and improve financial literacy for 3,552 participants. Through the Intermediary Agents component of the Field Officer Banking methodology, the foundation was laid for members to be able to access their accounts through third-party points service (POS) located in local businesses, set up to further increase access to financial services. At the end of the project, two credit unions were in the process of piloting the 1 Finscope, Haiti 2018. https://static.globalinnovationexchange.org/s3fs-public/asset/document/Haiti_English_21-05- 2019.pdf?PaaDnXIQcMWOf2RTU7OMt1h1NfON86kk 2 Exchange rate of 63 Gourdes for 1 USD as of October 30, 2020 – exchange rate similar to the rate prevailing at the beginning of the project, despite significant fluctuation throughout the duration of the Activity. Accessible Finance Activity (AID-521-A-17-00003) Final Report 2 Intermediary Agents service, with an additional six credit unions within the nationwide network of credit unions equipped and configured to launch the service. 2) Leveraging mobile and digital technologies to improve credit unions’ core banking systems, thereby substantially increasing credit union operational capacities. Specifically, enabling Rural Agents to serve members in the field using digital tools, and to set up the Intermediary Agents component to further enable access to accounts through selected third parties. 3) Addressing liquidity and capital challenges faced by microfinance institutions (MFIs) and developing client-driven deposit products and mobilization strategies for credit unions to reduce short, medium, and long-term loans’ cash flow matching constraints. raised USD 7.5 million in debt funding with support of SSG Advisors (known as Resonance). In coordination ), credit unions developed six new options for savings products for the network of credit unions. Based on these options, twenty-nine credit unions adopted new savings products and 21 credit unions developed new marketing and communications plans to support launch of the products. It should be noted that these results were achieved despite the substantial disruptions brought about by the ongoing social and political instability in Haiti, which started in mid-2018. The unsafe conditions, fuel shortages, and the resulting negative economic impacts, combined with the COVID-19 pandemic in 2020, posed substantial operational constraints. A summary of results of the Accessible Finance Activity is included in Annex A, Indicator Performance Tracking Table (IPTT). Annex B includes the Success Stories produced during the life of the project. 3 La Fédération LE LEVIER (LE LEVIER) is a financial institution with a cooperative structure. LE LEVIER is a network of 42 federated member credit unions. The network has 83 points of service, which provide financial services to more than 800,000 members in the 10 regional departments of Haiti. LE LEVIER provides financial and technical services to its members and is supervised by BRH. Figure 1: KPPP Rural Agents inputting information into tablet and issuing a transaction receipt. (Photo by Objectif Productions) Accessible Finance Activity (AID-521-A-17-00003) Final Report 3 BACKGROUND Access to financial services is an important tool to help reduce poverty. 4 However, 1.7 billion people around the world are still unbanked 5 . Lack of access to financial services can cause significant financial hardship, including savings that are vulnerable to theft, lack of access to loans, higher cost loans, loss of interest on savings, and lack of credit history. This is a particularly pressing problem in Haiti where, according to the 2018 Finscope study, only 44% of people are accessing formal financial services (11% with banks and 33% with other regulated financial institutions) 6 . While this represents encouraging progress from the past, it still means a substantial majority of Haitians are completely excluded from the formal financial sector or rely on informal, unregulated financial services, especially the most vulnerable segments of the population. For example, only 25% of Haitians in rural areas are accessing formal financial services. Finscope lists distance from financial institutions, perceived lack of documentation, lack of trust in financial institutions and transaction costs as the most cited reasons for not accessing formal financial services along with lack of sufficient income. In addition to increasing access to financial accounts and services, there is a tangible need for increasing financial literacy in Haiti to help people better understand how to effectively use and benefit from financial services. Moreover, one of the barriers to access for the vulnerable/ segments of the population is the lack of financial products that are adapted to their specific needs and circumstances. For years, credit unions have been the only source of formal financial services in many parts of Haiti. 920,414 people 7 depend on one of Haiti’s 85 credit unions. As member owned, not-for-profit institutions, credit unions are committed to increasing access to financial services for all, offering democratic decision-making processes, and passing on profits to members in various ways, including lower rates on loans, higher interest on deposits, and dividends for members. Moreover, credit unions are able to generate deep community knowledge and ties, enabling them to reach vulnerable populations traditionally excluded from the financial system. As such, they are ideal partners to help increase financial inclusion in Haiti. The USAID-funded, Haiti Integrated Financing for Value Chain and Enterprise (HIFIVE), implemented by the World Council of Credit Unions (WOCCU), which ran from 2009 to 2015, was key to many of the recent improvements in Haiti’s financial inclusiveness. Working with 32 financial institution partners, including credit unions, it made substantial and measurable inroads into increasing financial inclusion 8 . Building on the progress made by HIFIVE, WOCCU’s Accessible Finance activity (known as Finance Pour Tous in French) began on January 30, 2017 and ran for more three years and ten months until November 30, 2020. 4 http://www.worldbank.org/en/news/infographic/2012/04/19/who-are-the-unbanked 5 https://openknowledge.worldbank.org/bitstream/handle/10986/29510/211259ov.pdf 6 Finscope, Haiti 2018. https://static.globalinnovationexchange.org/s3fs-public/asset/document/Haiti_English_21-05- 2019.pdf?PaaDnXIQcMWOf2RTU7OMt1h1Nf ON86kk 7 https://www.woccu.org/documents/2019_Statistical_Report 8 https://pdf.usaid.gov/pdf_docs/pdacu557.pdf Accessible Finance Activity (AID-521-A-17-00003) Final Report 4 During this time, Accessible Finance successfully piloted a number of financial inclusion initiatives despite the ongoing political and social unrest that started in mid-2018. Dedicated staff worked through challenging and sometimes dangerous conditions to deliver services. Still, there were significant disruptions to the Accessible Finance Activity and its ability to complete its planned scope of work on time. Violent protests and fuel shortages often made travel impossible. In addition, the Accessible Finance Chief of Party (COP) was evacuated twice in 2019, once in February and a second time in September (in accordance with WOCCU’s evacuation plans and procedures), further impeding operations. The onset of COVID-19 in March 2020 further impacted operational capacity of the project and implementation. Through these difficult circumstances, the Accessible Finance activity achieved successes in meeting its planned objectives in collaboration and with the dedication of partners and stakeholders. OBJECTIVES, DESIGN AND IMPLEMENTATION OBJECTIVE 1: Expand financial services and products to rural areas and products to rural areas through groups and digital financial services (mainly field officer banking methodology) 1) Field Officer Banking 1.1 Overview In order to address both access to financial services for individuals in rural areas and the challenging economics for financial institutions to service new customers and more remote areas, WOCCU pioneered the use of Field Officer Banking in Mexico and Colombia and then adapted it to the Haitian context. In Haiti, the methodology is locally referred to as ‘Kès Pam Pi Pre’M’ – (KPPP), “My Credit Union Close to Me” in English. This approach is uniquely suited to the context because it: • Disrupts the traditional banking approach of customers coming to financial institutions, which is mal adapted for the rural low-income population, by having financial institutions’ representatives come to the members. • “Leapfrogs” traditional banking approaches through the use of mobile digital technologies, enabling financial products to be safely offered and administered in rural and remote locations. • Transforms what can often be an intimidating and confusing interaction into one that is local, community-based, and tailored to individual needs. • Supports financial institutions in adapting their strategies, services, and products to include and meet the needs of more individuals and communities, particularly in rural areas. Accessible Finance Activity (AID-521-A-17-00003) Final Report 5 The use of Field Officer Banking extends financial services to marginalized people by: • Bringing financial services directly to unserved and underserved rural populations, thereby eliminating the transportation and opportunity costs of travel and long wait times at the branches. This particularly helps the most vulnerable groups’ including women and the poor. • Making servicing the rural poor economically viable for financial institutions by eliminating the need for dedicated brick and mortar branches and through the use of digital technologies. • Offering services that are adapted to financial situations of lower income and rural people. 1.2 Methodology In order to ensure this approach is beneficial and sustainable for all parties across a variety of contexts, WOCCU has developed the following core principles: Figure 2: Field Officer Banking Core Principles Challenge Principles Methodology Going to urban areas to access financial services is too costly and time consuming for the rural poor Field officers deliver finance locally ▪ Rural Agents make regular (at least 1x/month) visits to rural areas to offer financial services. Informal group lending methodologies (including village savings and loans associations [VSLAs] offer limited services and constraints linked to being in a group Members open individual accounts ▪ Members open individual accounts which increases their control over their assets compared to groups and allows them to start building a credit history. Locating branches in poor rural areas is unprofitable for other financial institutions Branchless banking enables financial sustainability ▪ Rural Agents provide services to groups in order make each visit cost effective. ▪ Groups are sized between 10-30 participants; enough that sending a field officer is financially viable, but capped to avoid lengthy wait times. ▪ High volume of transactions makes approach sustainable even with smaller than average transaction sizes. Manual record keeping is inefficient and prone to errors and fraud Leveraging mobile and digital technologies ▪ Customer information is input directly into an electronic device, eliminating the need to input field notes again in the office. ▪ Devices are linked directly to financial institutions and encrypted so information is preserved even in areas with low connectivity. ▪ Mobile printers issue receipts for transactions increasing transparency and trust. Accessible Finance Activity (AID-521-A-17-00003) Final Report 6 Financial institutions can be uncomfortable and confusing spaces to navigate Hiring field banking officers with strong ties to the community ▪ Transactions occur in a familiar environment and in a group setting, increasing comfort. ▪ Greater opportunity to learn about financial services, especially with the financial education component. ▪ Field officers can operate more effectively in areas they are familiar with. Many rural populations lack access to even the simplest types of financial transactions Third party points of services set up through Intermediary Agents 9 ▪ Where regulations permit, sets up convenient points of service, usually in a local store, for day to day transactions such as deposits, withdrawals or paying bills. Many financial services are inaccessible or poorly adapted to the needs of the rural poor or low-income populations Adapted financial services for low- income clients ▪ Accounts that can be opened with just a few dollars: low initial balances are made viable through a higher volume of accounts opened. ▪ Micro loans with less onerous and more flexible approval processes. 1.3 Implementation Year 1 (FY 2017 – February to September 2017) • In collaboration with WOCCU selected two credit union pilot partners from a shortlist of credit unions that had previously worked under HIFIVE. and were selected based on their financial strength, governance, operational capacities and previous experience working with donor-funded projects. • The translation from Spanish to French and transfer of the Field Officer Banking methodology began with support from WOCCU’s technical team from the Colombia project (WOCCU Colombia). WOCCU Colombia 10 supported the overall process of transferring the methodology to the Haitian context. Particular attention was paid to operational efficiency and regulatory compliance. Furthermore, the Accessible Finance Chief of Party (COP) met with the Head of the Direction de l’Inspection Générale des Caisses populaires (DIGCP) at the BRH to introduce the activity and confirm compliance with existing regulations. • WOCCU worked with the pilot credit unions to identify the target areas and start forming KPPP groups, with a target of reaching four zones. Selection was based primarily on areas that are remote or areas where the credit unions have not actively recruited in the past. The map below highlights targeted areas. 9 For full description of the Intermediary Agents component see section 2) below 10 WOCCU Colombia previously worked with WOCCU Services Group, WOCCU’s for profit subsidiary, to develop and implement the field officer banking methodology. Accessible Finance Activity (AID-521-A-17-00003) Final Report 7 Figure 3: Areas targeted by KPPP worked in Saint-Marc, 3 rd section Goyavier and Marchand Dessalines, and 3 rd section Ogé. worked in Camp Louise and 4e section- Yago of Commune Saint-Raphaël. • WOCCU completed the KPPP Methodology training materials for rural agents and other credit union staff. These included: o Material about financial inclusion, culture of savings, rural finance, quality control, result management/performance management, including theory and practical exercises o Market surveys, planning, and performance management tools o Promotional materials, such as hats, shirts, leaflets and a promotional video • Rural Agent training was implemented and completed in five weeks, including an internship within the credit unions. Once trained, Rural Agents were able to: o Organize awareness sessions on KPPP service o Form KPPP groups o Train committee elected members on their duties o Enroll new members o Perform transactions o Collect information related to loan applications o Perform training sessions on financial education Figure 4: KPPP Rural Agents serving rural members. Rural Agents travel up to two hours from the credit union to provide access to formal financial services to underserved rural communities via digital channels. Accessible Finance Activity (AID-521-A-17-00003) Final Report 8 • WOCCU sourced locally suited tablets and mobile receipt printers for Rural Agents to effectively deliver services in rural areas. Rural Agents were also trained on how to use the tablets and mobile printers online and offline. • At the end of Year 1, WOCCU and its credit union partners carried out market surveys, using focus groups and individual interviews, in the four target areas for the test period. The main findings included the following: o High demand for savings products in the targeted zones. o Between 55% and 75% of people interviewed, depending on the area, had no savings account. This was mainly attributed to the absence of financial institutions collecting savings and the distance and costs incurred to reach a financial institution. o Revenues generated in these areas are significant (mainly agriculture) and suggest favorable mobilization of savings. o Credit unions closest to the zones are overcrowded. o There are no financial institutions in the targeted zones offering savings and credit services. o Need to process loan applications faster and with more flexible requirements. o Need for lower interest rates. o Lack of information on financial services. These findings confirmed the pressing need for the KPPP service in the targeted areas and the untapped opportunity to build membership and mobilize deposits. Year 2 (FY 2018) • The first months of Year 2 were focused on operationalizing the IT and mobile technologies used to connect credit unions and Rural Agents, in addition to launching promotional campaigns to raise awareness of KPPP services in the target areas. Promotional campaigns were comprised of the following elements: o Meeting with local authorities: Credit unions contacted community leaders, invited them to attend a presentation of the forthcoming KPPP service, and encouraged them to assist the credit union in the implementation and creation of a safe working environment. o Meeting with communities: Credit union representatives, including Rural Agents, organized meetings in target communities, which was preceeded by promotional announcements through megaphones, media channels, and streamers. Promotional meetings typically gathered 50 to 200 individuals. • Group formation: Rural Agents made comprehensive presentations to those interested, describing the functionalities of the group. Members were registered, they signed the act of consitution, and elected a group committee composed of a President, a Treasurer, and a Secretary. • and then launched the KPPP service with their initial groups by the end of March and April 2018 of Year 2 respectively. Group formation continued on a rolling basis. The Accessible Finance Senior Community-Based Saving and Credit Groups Accessible Finance Activity (AID-521-A-17-00003) Final Report 9 Specialist accompanied the newly trained agents in the field to supervise the early stages of implementation and ensure regular quality control throughout the Activity. • Next, an expansion phase was planned to reach more people in new target areas. The launch of the expansion phase was delayed by almost eight months until new subawards were issued, after WOCCU received approval for an agreement modification. However, partner CUs kept the pilots going using their own limited resources from August 2018 to May 2019 until additional funding was made available, proving their dedication to implementing the promising methodology. Year 3 (FY 2019) • In the last quarter of Year 3, selected pilot credit unions received new subawards to expand the KPPP pilot to additional zones and groups. • The IT adjustments necessary to link the Field Officer Banking application to the credit union network operating system, as well as assist the Accessible Finance team in coordinating activities generated over the project, were completed. • New target areas were selected for expansion of the pilot following the initial test period. The new target areas for were Quartier Morin and Port-Margot and for , Gonaives and Liancourt. The Gonaives area regrouped a significant number of existing Village Savings & Loan Associations, Associations Villageoise d’Épargne et de Crédit (AVEC) in French. These AVEC groups were initially formed by CARE. As CARE was winding down its activities, WOCCU ensured continuity of the AVEC groups and sustainability of their activities by including them in the KPPP services and connecting them with credit unions, thus enabling their access to the formal financial sector for the first time. • Despite periods of unrest throughout Year 3, KPPP service continued to operate on a regular basis, until Haiti experienced a fuel shortage in September 2019, which prevented Rural Agents from using their motorcycles to reach the groups. The unrest grew increasingly violent through November 2019, further hampering Rural Agents’ ability to visit existing groups and form new ones. Artibonite was in the ‘red zone’ during the lengthy periods of ‘péyi lock’ (blocked country); sub-zones around Marchand Dessalines were also hard hit with violence and instability. Credit unions worked mostly part time during this unstable period, while banks closed. Focus was directed to securing the loan portfolio and recovering as many loan payments as possible from members. • In Year 3, WOCCU continued to cultivate its relationship with regulatory authorities by coordinating areas of overlap between the BRH financial inclusion strategy and the Accessible Finance activities to find areas of potential collaboration. In addition, WOCCU continued to discuss with BRH strategies to deal with issues of connectivity that hamper the use of digital technologies and the financial services they could bring to remote areas; ultimately, no solutions were established; however, BRH has the opportunity to learn more about Field Officer Banking, and WOCCU was invited to participate in a working group on financial education in Year 4. Accessible Finance Activity (AID-521-A-17-00003) Final Report 10 • In Year 3, WOCCU carried out a mid-term survey assessment per the M&E plan to better understand participant satisfaction levels at the mid-way point of the KPPP activity. The purpose of this assessment was to identify gaps in implementation and make adjustment to KPPP services as needed prior to expanding the pilot to new zones in Year 4. Year 4 (FY 2020 until November 2020) • In Year 4, KPPP service was deployed by 19 employees in total for both credit unions. o : 6 Rural Agents, 1 Credit Officer, 1 Coordinator o : 8 Rural Agents, 2 Credit Officers, 1 Coordinator • Adaptation of WOCCU’s route costing tool for field officer banking to the Haitian context was completed and KPPP Coordinators were trained. • A credit analysis application was introduced at to facilitate small loans processing and secure the management of the overall portfolio. is responsible to make the application available to other credit unions. Collection of member data can be performed in the field thanks to the tablet application. Then, the information is stored in the central software designed to perform calculations, assess payment capacity, establish financial statements up to five years per member, and generate members’ scoring. This application will help standardize loan applications throughout all points of services, ensure better monitoring, and avoid fraud. • Following a request from to expand KPPP to other credit unions, WOCCU organized a training in Port-au-Prince for Credit Union Regional Advisors on how to implement the KPPP service. The seven Advisors are appointed to different regions of the country to cover the 42 member credit unions across ten Departments. They support credit unions in management, operations, and governance to ensure that policies and procedures are followed according to law, regulations, and the network’s internal procedures. Advisors received a condensed training on the KPPP Rural Agents’ training program, as well as an introduction to the financial education program and the Intermediary Agent component of KPPP. The Advisors were introduced to both systematic and technological aspects of the methodology and discussed approaches for further expansion of the methodology into different regions and credit unions. • All technical supporting documentation for the core KPPP application, including source codes, were transferred to for further replication in the future. • After the onset of the COVID-19 pandemic, the project team and partners were able to successfully collaborate and adapt to the consequences of the pandemic and address to the best extent possible its effects on the flow of project activities. • Training of staff on the SQL server was completed to increase their skills in managing technical issues arising from the SAF operating system. Accessible Finance Activity (AID-521-A-17-00003) Final Report 11 2) Intermediary Agents 2.1 Overview Intermediary Agents, or Agents Autorises in French, are third-party points of service (POS) that act as extensions to the Field Officer Banking methodology. Setting up a POS can be an effective way to increase access to financial services in rural areas through frequently visited local businesses and third parties. This component of the KPPP service, which was also successfully first developed by WOCCU Colombia, consists of a CU selecting an individual or a legal entity to perform certain transactions on its behalf. These are usually established local businesses, as a reliable, regular physical presence and access to the internet are required to be effective. Transactions are limited to deposits, withdrawals, and obtaining balance information. The operator is not an employee of a credit union; therefore, they cannot access members’ personal information nor register new members. 2.2 Methodology To operate, the Intermediary Agent is provided by the credit union with: • A computer solely dedicated to safely processing transactions for its members and a printer. • An agreement signed between the Intermediary Agent and the credit union, specifying the terms of collaboration. • Training on credit union’s systems, activities, and products. • Training on how to use the equipment and transaction procedures. The relationship between credit union and Intermediary Agent is mutually beneficial because the Intermediary Agent collects fees for operating the service, increasing customer traffic. Meanwhile, credit unions are able to increase savings mobilizations, facilitate loan payments, and improve customer loyalty by providing convenient, reliable services. A POS will be typically set up if the volume of transactions increases significantly during the course of the Field Officer Banking activity, leading credit union members to need transactions processed more than once or twice a month when Rural Agents visit their location. When the vast majority of transactions are simple, like withdrawals and deposits, setting up a POS can further help credit unions by alleviating the high volumes of people visiting their branches, freeing up Rural Agents to handle more complex transactions, such as loans, and operate more efficiently. Figure 5: Intermediary Agent point of service. Accessible Finance Activity (AID-521-A-17-00003) Final Report 12 2.3 Implementation Year 1 (FY 2017 – February to September 2017) Year 1 was dedicated to piloting the Field Officer Banking methodology. Implementation of this program started in Year 2. Year 2 (FY 2018) • The feasibility study framework and procedures related to the Intermediary Agents were translated from WOCCU Colombia’s Spanish documents. • Unfortunately, further progress to support the Intermediary Agents implementation was hindered in this period due to the aforementioned unrest and delays in receiving subaward funding from August 2018 to May 2019. Year 3 (FY 2019) • In August 2019, the Accessible Finance COP and ICT Expert visited WOCCU Colombia and two credit unions there, which have a network of Intermediary Agents to service their members. This visit helped facilitate support to the pilot credit unions in Haiti with better understanding of the commercial and operational aspects of implementation. • As of year-end, ICT developments to connect the Intermediary Agent application to the credit unions’ operating system were completed. The application was fully functional and supported by operational documentation and procedures on how to operate the service. Year 4 (FY 2020 until November 2020) • Although implementation was considerably delayed compared to the original timetable, as of the end of the project, the Intermediary Agent service was successfully tested at and and in the process of piloting. also selected six credit unions to participate in the launching of the service, which were equipped and configured to launch the service. • All technical supporting documentation for the core Intermediary Agents application, including source codes, were transferred to for further replication in the future. • Three members of Senior Management, including the General Manager of the Federation, received training on the implementation of Intermediary Agents methodology. • and , as well as designated Intermediary Agent staff, received training on Intermediary Agents methodology and procedures. • Our ICT team completed some additional options to facilitate management of the service by the credit union and the Intermediary Agent. This included photo capture at the credit union counter to secure identification and an Excel application to calculate fees gained by the Intermediary Agent automatically on a daily basis. Accessible Finance Activity (AID-521-A-17-00003) Final Report 13 3) Financial Education 3.1 Overview While KPPP is focused on increasing financial inclusion, the most underserved populations often have little knowledge of how financial services function. In fact, according to the 2018 Finscope study, 53% of Haitian adults felt they needed more information about personal finances 11 . This need is even more pronounced for less educated and affluent Haitians. In order to ensure that everyone not only has access to financial services but also makes the most productive and beneficial use of them, WOCCU used its Financial Literacy Tool to bolster KPPP’s effectiveness. This tool was the result of WOCCU’s in-house effort and leveraging some of the standard lessons developed by CARE in their financial literacy programs in Haiti. WOCCU’s approach is uniquely effective because it: • Synchronizes education and financial services outreach. Offering just education without also facilitating the use of financial services is largely a theoretical exercise with limited impact. By offering both financial education and services, WOCCU’s approach truly enables underserved populations to understand and use financial services. • Designed specially to suit the most vulnerable. The WOCCU pedagogical approach is centered on creating a participative, comfortable, and safe environment. In low literacy rates environments like rural Haiti, it makes ample use of storytelling, games, and visual supports to make the financial lessons more accessible and memorable. • Engages staff at financial institutions to sustain the program. Financial institutions stand to benefit from better understanding the needs specific to the unbanked and underbanked to make their financial products appealing, relevant, and accessible. • Adaptable to different ages, socio-economic, and cultural environments. The lesson plans are tailored to be appropriate for a variety of audiences, including children and more financially sophisticated populations. Benefits: • Participants benefit by creating new, more financially sound habits and improving their ability to navigate financial services, thus helping bolster their finances. • The workshops help build confidence and generate a sense of solidarity among participants by openly discussing and learning about financial issues within a supportive group setting. • Financial Institutions benefit by increasing their number of clients, decreasing the number of inactive accounts, and building good will around their brand. 11 Finscope Study 2018, p.10 Accessible Finance Activity (AID-521-A-17-00003) Final Report 14 • Clients served are more likely to be financially savvy, helping increase their savings and reduce their delinquency rates on loans. 3.2 Methodology In addition to linking to financial services, Rural Agents teach financial education courses. To increase efficiency and accommodate participants, sessions are designed to be 30 minutes long and are delivered along with the financial transaction services offered by the Rural Agents. To increase the program’s reach, it is not restricted to credit union KPPP members; non-members are welcome and encouraged to participate. To monitor attendance, the Accessible Finance team developed a guidance booklet for each participant to record the sessions they attended. Each session attended is recorded and signed by the Rural Agent. Practical and Adapted Curriculum WOCCU’s Haiti financial education curriculum is comprised of eight progressive training sessions, which focus on teaching 3 key concepts: Budget, Savings, and Credit. Budget • Overview: This is the first and most crucial module. Here, the participants go from often having an imprecise understanding of their financial situation to a clear one. Armed with this newfound information, participants are empowered to effectively improve their financial planning. • Process: Participants go through the simple but rigorous process of measuring their income and expenses. For those who are running a deficit or wish to save more, expenses are ranked from most essential to least. Staff then help participants identify “leaks” in spending, less expensive ways to achieve similar outcomes, and non-essential items that could be discarded to help save money. • Outcome: This module creates an easily understandable framework that helps participants gain clarity on their financial situation and improve it. This gives participants concrete steps to help meet their financial goals and helps manage their day-to-day finances. Moreover, the module helps add rigor and clarity to an often haphazard financial planning process. Saving • Overview: This module defines what savings are and their importance to reach financial goals and manage unforeseen expenses. It also introduces the concept of saving as a regular, planned habit. Lastly, it discusses formal vs. informal saving. It Figure 6: Illustrative posters from a financial education session. Accessible Finance Activity (AID-521-A-17-00003) Final Report 15 explains the benefits of a formal account which makes funds available, safe, and interest bearing. • Process: These concepts are introduced via the use of stories, group discussions, and visual supports. Participants follow illustrative posters with various scenarios about financial decisions faced by a fictional local couple. Participants work through exercises and together discuss steps towards financial responsibility. • Outcome: Participants better understand the importance of savings to face unforeseen expenses and how to increase savings through planning. They also better understand how financial institutions can help achieve this outcome. Credit • Overview: This module discusses key concepts around loans, including interest, credit, formal vs. informal and consumptive vs. productive loans. Participants acquire a better understanding of the risks (financial, reputational) and benefits (faster access to capital) of taking on debt. • Process: Participants study a variety of loan types and scenarios, are given a simple payment schedule example, and have a chance to discuss whether a loan makes sense for them. • Outcome: Participants are better able to assess ahead of time whether it is feasible and beneficial to take on debt. This leads to better informed and more responsible borrowing decisions. Pedagogy WOCCU’s pedagogical approach is built around three core concepts: accessibility, inclusiveness, and applicability. • Accessibility: Because many of the participants have little experience interacting with the financial sector, there is an emphasis on conveying simple, clear but helpful concepts and adapting material to the audience. For example, for less literate audiences, lessons rely more heavily on non-written communication, such as oral storytelling, songs, games, and visuals. These tools also help make the material more engaging and therefore more memorable. • Inclusiveness: Because issues surrounding finances can be associated with embarrassment, fear, and shame, WOCCU’s workshops emphasize creating a comfortable atmosphere for participants. A supportive group atmosphere is created through fun partner activities, encouraging sharing personal anecdotes with the group, positive reinforcement for working on improving ones’ situation, and never shaming participants for “wrong” answers. Participants are encouraged to set group goals and discuss lessons together to create a sense of solidarity. • Applicability: Materials and scenarios presented are designed to be immediately applicable and pertinent to the participants’ life situations. Concrete solutions are offered to help with goals, such as increasing savings, paying off loans, and meeting longer-term financial objectives. Accessible Finance Activity (AID-521-A-17-00003) Final Report 16 3.1 Implementation Year 1 (FY 2017 – February to September 2017) Financial education was to be launched after the testing of KPPP and once the Rural Agents and groups were accustomed to the financial transaction aspect of the methodology. Implementation of this program started at the end of Year 2. Year 2 (FY 2018) • During the second half of Year 2, the curriculum was put together and adapted to the local context and Rural Agents were trained to deliver it. • The first financial literacy classes were delivered in December of 2018. Year 3 & 4 (FY 2019 to November 2020) • Financial literacy courses continued to be dispensed throughout Years 3 and 4 and were expanded as KPPP was launched in new areas: Quartier Morin, Port-Margot, Gonaives, and Liancourt. • The education program was maintained and adapted to the COVID-19 safety measures. This activity has been consistently cited by members as one of the most appreciated services provided by the credit unions. Participation in the steering committee organized by BRH on the Haitian National Financial Education Program Accessible Finance was invited to participate in the BRH financial education working group to contribute to the drafting of the 2020-2024 National Financial Education Program. Participants Figure 7: Illustration explaining how to prioritize spending within one’s personal budget. [... middle sections omitted for long document ...] Point de vue du partenaire: FINCA Haïti HamidineBako, Directeur Général A FINCA Haiti client using her mobile phone to repay a loan, photo by FINCA Haiti Augmenter la capacité des IMF à mobiliser des capitaux afin de répondre aux besoins de la clientèle et développer des solutions d’affaires pérennes ‘Investment ReadinessAssessment’; étude de marché ‘Digital Product Roadmap’; stratégie de développement et présentation aux investisseurs ‘Capital RaisePlaybook’; engagement graduel de l’investisseur 7.5 millions USD mobilisés sous forme de dette 26 investisseurs contactés Conclusions Continuité et avantages au-delà du projet pilote DÉFIS CAPACITÉ DE CONNECTIVITÉ INTERNET LIMITÉE POUR GARANTIR L’EFFICACITÉ DES SERVICES À DISTANCE OU MOBILES ENVIRONNEMENT POLITICO -SOCIO ÉCONOMIQUE ET SÉCURITÉ ENJEUX (TECHNIQUES -FINANCIERS) RELIÉS À LA MODERNISATION DES STUCTURES INFORMATIQUES ET DE TÉLÉCOMMUNICATION DES IMF OPPORTUNITÉS EXPANSION Poursuite vers le développement des méthodologies ‘Field OfficerBanking’, de l’éducation financière et des Agents Intermédiaires au sein du réseau des caisses d’épargne et de crédit. INCLUSION Outils et structures administratives permettant aux membres des caisses populaires d’avoir accès à des produits d’épargne diversifiés et répondant aux besoins des membres. CAPITALISATION La méthodologie ’SustainableInvestment Facilitation Toolkit (SIFT) développée par Résonance pour FINCA contributeà la captation de capital grâce à un modèle d’évaluation clair pour les investisseurs. Période de questions Merci ANNEX E – SUMMARY OF SUBAWARDS November 30, 2020 (Q1 FY 2021), End of Project Activity #Status Institution Description of Activity Approved Subaward Amount Current Contract Obligation Disbursed Amount Balance Activity starting date Activity closing date Institution HQ Commune In or Out of the USG Corridor Type of Institution 1 Closed Savings mobilization market assessment 21,935.00$ 21,935.00$ 21,935.00$ $0.00 8/10/2017 2/28/2018Port-au-Prince In Association of credit unions 2 Closed KPPP implementation - pilot phase 73,490.00$ 73,490.00$ 73,490.00$ $0.00 7/31/2017 3/31/2018St-Marc In Cooperative financial institution (credit union) 3 Closed KPPP implementation - pilot phase 73,490.00$ 73,490.00$ 73,490.00$ $0.00 7/31/2017 3/31/2018Cap-Haitian In Cooperative financial institution (credit union) 4 Closed KPPP implementation - IT upgrades/coordination 388,000.00$ 388,000.00$ 388,000.00$ $0.00 7/31/2017 9/30/2019Port-au-Prince In Cooperative financial institution / network of federated member credit unions 5 Closed Savings mobilization market assessment Extension 93,571.50$ 93,571.50$ 93,571.50$ $0.00 8/13/2018 11/30/2019Port-au-Prince In Association of credit unions 6 Closed KPPP implementation - pilot phase II 144,669.25$ 144,669.25$ 133,666.92$ 11,002.33$ 6/18/2019 11/15/2020St-Marc In Cooperative financial institution (credit union) 7 Closed KPPP implementation - pilot phase II 65,488.50$ 65,488.50$ 65,488.50$ $0.00 6/18/2019 5/31/2020Cap-Haitian In Cooperative financial institution (credit union) 8 Closed Savings mobilization market assessment Extension - pilot phase III 49,969.00$ 49,969.00$ 49,969.00$ $0.00 2/28/2020 5/31/2020Port-au-Prince In Association of credit unions 9 Closed Intermediary Agent component of KPPP implementation 33,000.00$ 33,000.00$ 33,000.00$ $0.00 2/28/2020 10/15/2020Port-au-Prince In Cooperative financial institution / network of federated member credit unions 10 Closed KPPP implementation - pilot phase II 9,984.70$ 9,984.70$ $9,984.70 $0.00 7/1/2020 10/15/2020Port-au-Prince In Cooperative financial institution (credit union) 953,597.95USD 953,597.95USD 942,595.62USD 11,002.33USD Activity #Status Pool of Funds issued to various contractors/companies Description of Activity Approved Subaward Amount Current Contract Obligation Disbursed Amount Balance Activity starting date Activity closing date Institution HQ Commune In or Out of the USG Corridor Type of Institution Various Closed Support for KPPP / field officer banking implementation Activities to include translation service, and additional initiatives to expand and/or upgrade the methodology. 9,419.82$ 7/13/2017 6/30/2020Port-au-Prince N/A Various contractors and companies to support implementation and expansion of the methodology Activity #Status Institution Description of Activity Approved Subaward Amount Current Contract Obligation Disbursed Amount Balance Activity starting date Activity closing date Institution HQ Commune In or Out of the USG Corridor Type of Institution 1 ClosedSSG Advisors Testing and tailoring of SSG's SIFT methodology to support capital raising efforts for MFIs 438,420.00$ 438,420.00$ 438,418.97$ 1.03$ 2/10/2017 11/30/2019Washington DC N/A Consultancy firm IR 2.2 - Implementing Partner IR 1 - Accessible Finance Fund - Sub Contractors ACCESSIBLE FINANCE SUBAWARD AND DISBURSEMENT REPORT IR 1 and IR 2.1 - Accessible Finance Fund - Local Grantees