Impact Studies

in the Middle East

Objectives and Main Findings
5 May 2008

Sébastien Duquet, Managing Director – PlaNet

Finance
PlaNet Finance www.PlaNetFinance.org
6 ACTIVITIES TO DEVELOP
THE MICROFINANCE SECTOR

The objective of PlaNet Group Entities is to

respond to all the needs of those involved in
microfinance by providing them with a wide range
of services.
1. TECHNICAL ASSISTANCE: AT THE CENTRE
OF PLANET FINANCE’S ACTIVITIES

2. PLANET FINANCE INVESTMENT SERVICES (PlaNIS):

FINANCIAL SERVICES

3. PLANET RATING: THE RATING AGENCY

4. MICROCRED: THE INVESTMENT COMPANY

5. FINANCITES: THE VENTURE CAPITAL COMPANY OF

SENSITIVE URBAN NEIGHBORHOODS

6. PLANET GUARANTEE: THE MICROINSURANCE

EXPERT
TECHNICAL ASSISTANCE

Achievements in 2007:
79 PROGRAMS
27 OFFICES
166 EMPLOYEES
275 MFIs SUPPORTED

Through technical assistance, PlaNet Finance

offers its services and experiences to all types
of microfinance officer: Microfinance Institutions
and networks, governments, banks, insurance
companies and APEX institutions, and
microentrepreneurs.

Partners and Sponsors:

Public Sector : World Bank, IFC, European Commission, Bilateral Aid (USA, Luxembourg, FMO, AECI)….
Private Sector : Evens Foundation, PepsiCo, Oracle, Microsoft, Sanofi, Orange, Damas…
THE 11 FIELDS OF TECHNICAL ASSISTANCE
Regulation : Establishing legal and administrative frameworks that can advance microfinance development.
Setting up MFIs : Setting up specialised new microfinance institutions.

Risk management : Developing risk management solutions (credit bureaus) to prevent microentrepreneurs from
over indebtedness.

Developing Products, Services and Methodologies : Developing new microfinance products, services or
methodologies with the aim of better serving existing microentrepreneurs and/or reaching out to new populations.

Greenfield and Institution Building : Capacity building in MFIs management and direct operational
management of MFIs.

Strategic & Business Planning : MFIs audits, leading to the revision of development and work plans.

Market & Impact Studies : Carrying out qualitative and quantitative studies to provide improved knowledge of
markets, MFIs’ clients and of the impact of microfinance activities on their clients.

Downscaling / Pre-downscaling : Working with banks and insurance companies in creating microfinance
products and services.

Business development service (BDS) : Training, capacity building and coaching of microentrepreneurs.

Training / Training Centres : Professional training provided as part of specific programs or within training
centres set up and managed by PlaNet Finance.
IKM – Impact Knowledge Market (IKM)

IKM is a research and training methodology.

Its main objective is to provide information and to make

recommendations through the implementation of different
studies focusing on the impact of microfinance, knowledge of
clients and market research.

IKM methodology is constituted of nine independent and/or

complementary studies that can be selected according to the
needs and demand of IKM clients.

5.
IKM – Nine independent and/or complementray studies
MARKET RESEARCH
Demand Evaluation

Client Satisfaction

Drop-outs Analysis

Study of Households Competition Analysis

and
Economic Activities
Repayment Problems

Social Capital

Access to Credit

Impact of
IMPACT Microfinance
6.
PlaNet Finance’s IKM MENA Credentials

1. Morocco - National Impact Study (2005)

2. Oman – Country Market Research Report (2006)
3. Palestine - UNRWA - Impact and Market Research (2006)
4. Palestine - ASALA - Market Research (Client Satisfaction and Product
Development (2007)
5. Palestine - IFC PNSMF - Microfinance Market Survey in West Bank and
Gaza (2007)
6. North Sudan - Market Research Study- Khartoum (2007)
7. Jordan – National Market and Impact Study (2007)
8. Palestine - REEF - Microfinance Market Survey in West Bank and Gaza -
Focus on rural areas (2007)
9. Egypt - National Impact Study of Microfinance (2008)
More than 6 000 microentrepreneurs interviewed in the MENA region in 3 years
7.
Impact Studies in the MENA Region - Overall objective

Help microfinance stakeholders in Morroco, Jordan and Egypt

to ensure a sustainable and effective expansion of their
microfinance operations, and that microfinance is fulfilling its
social mission in terms of poverty alleviation, economic
development and empowerment.

Specific Objectives
1. Quantifiably assess to what extent participation in a microfinance program has
had a positive impact on micro-business development and poverty alleviation.
2. Serve as a basis for new product and service development as well as market
stratification, providing MFIs with valuable information on how to better serve
their current clients and develop a competitive strategy for expansion.
3. Provide policy makers and regulatory bodies with useful information related to
the state of a microfinance sector and its needs in terms of legal framework
and industry-building.
8.
Impact Studies in the MENA Region – General outcomes

1 – What characteristics of the financial services that are

associated with a better impact ?
2 – What characteristics of the non financial services that are
associated with a better impact?
3 – Is there a greater impact when women borrow?

Specific Outcomes
1. Reveal socio-economic characteristics
2. Assess investment practices
3. Measure impact on the household, women empowerment and wealth
accumulation
4. Evaluate the demand
5. Produce an index for the sample based on asset accumulation
6. Assess clients’ satisfaction, as well as reasons for drop-out clients 9.
Quantitative and Qualitative Approaches

Quantitative Approach Qualitative Approach

Questionnaire for comparing results Focus Group discussions

10.
Indicators at Three Levels

ECONOMIC INDICATORS
ƒ Sales
ƒ Profits
HOUSEHOLD INDICATORS
ƒ Investments
ƒ Number of employees ƒ Income

ƒ Access to inputs ƒ Consumption INDIVIDUAL INDICATORS

ƒ Accumulation of assets ƒ Contribution to budget
ƒ Education of children ƒ Empowerment
ƒ Feeling of well-being
ƒ Time/Attention to home
ƒ Health
ƒ Nutrition

11.
Comparison: Egypt - Jordan - Morocco

Socio-Economic Characteristics
Country Women Clients Illiteracy Principal Activities
Trade (62%), Handicrafts (10%), Services (15%), Agricultural
Egypt 47,00% 35,00% (5%), Other (1%)
Trade (59%), Handicrafts (15%), Services (14%), Agricultural
Jordan 69,00% 6,00% (1%), Other (1A%)
Trade (44%), Handicrafts (39%), Services (10%), Agricultural
Morocco 68,00% 45,00% (6%), Other (1%)

‰Median spending per capita equivalent to 1,7$/day

‰Even with the upscalling of their portfolio, MENA MFIs are targeting clients below
the poverty level

‰MFIs working in rural areas work with poorer clients

‰MFIs are the MOST IMPORTANT FORM OF BUSINESS FINANCE after Self
Financing 12.
Comparison: Egypt - Jordan - Morocco
Impact on Economic Activity (Old Clients versus New Clients)
Increase in Contribution to
Increase in Level of Start of a New
Country Monthly Household
Investments Employment Activity
Revenue Budget
Egypt 25% more 81% more 44% more 11% more 25% more
Jordan 15% more 133% more 83% more 28% more 20% more
Morocco 38% more 36% more 66% more 5% more 11% more

‰One year of participation in a microfinance program raises profits of 4%

‰If Microfinance increase the size of the investment , it does not change the nature of those
investments (stock and not fixed assets)
‰If at an individual level, the impact of microfinance activities is obvious, the impact at a global
economic level of microcredit has not been established by our studies : level of new
employment, start of new activities remain quite low.

13.
Comparison: Egypt - Jordan - Morocco

Impact on Household Poverty Levels (Old Clients versus New Clients)

Education of Accumulation of Improvement of
Country Monthly Spending
Children Assets Housing Conditions
Egypt 25% more Inconclusive Less than 10% Insignificant
Jordan Insignificant Inconclusive Less than 10% Insignificant
Morocco 33% more Inconclusive Less than 10% Insignificant

Perception of Positive Impact

Food Education of Sense of
Country Consumption Children Health Autonomy
Egypt 50,00% 40,00% 40,00% 76,00%
Jordan 70,00% 58,00% 48,00% 87,00%
Morocco 62,00% 36,00% 37,00% 68,00%

•Positive impact but :

•Strong perception on impact on primary needs such as alimentation and on the sense of
autonomy
•Impact on health and education not evidence 14.