Forum Overview

The world's microfinance industry is in the midst of unprecedented expansion and transformation. These changes are resulting in an increasing array of competing imperatives and the growing need for long-term strategic planning. Accordingly, the Asia Microfinance Forum 2008 focused on the challenges and innovations that would have the greatest impact on microfinance in the coming decades and provided a window into the future of microfinance, especially in Asia.

The Banking With the Poor Network (BWTP) and the Foundation for Development Cooperation (FDC), with funding from the Citi Foundation, were pleased to convene the Asia Microfinance Forum 2008 held in Hanoi, Vietnam, from August 26 -29, 2008. This milestone event brought together over 500 leading microfinance practitioners, policymakers, financiers, academics and advocates from around the world to outline their visions and priorities, and explore new ideas and opportunities.

The theme for the conference was:

Microfinance in the 21st Century: Future Trends & Opportunities

Background

The BWTP Network, in collaboration with the FDC, actively promotes the development of microfinance in Asia through research, advocacy, policy dialogue, information sharing and capacity building.

In March 2006, the BWTP Network and FDC held the first Asia Microfinance Forum in Beijing, China, with funding from the Citi Foundation. The three-day conference brought together over 280 microfinance experts and practitioners from over 20 countries, making it one of the most significant microfinance events in the region, and the largest international microfinance gathering ever held in China.

The Asia Microfinance Forum 2008 was built on the success of the Beijing event and aimed to help prepare the microfinance industry in Asia for a wide range of future challenges and opportunities.

Key Objectives were

To identify and target future challenges and opportunities arising from areas such as financing and investment, new technologies, and environmental issues;
To encourage the effective development of innovative microfinance products and approaches between and among stakeholders in the Asia region;
To encourage partnerships and cooperation in Asia among microfinance service providers, financiers and regulators in order to increase peer learning in microfinance.

Themes

The Asia Microfinance Forum 2008 included the following themes:

Theme 1. Financing & Investment

Access to commercial sources of finance provides an ever-increasing opportunity for the microfinance sector. However, how can investors and national microfinance networks and institutions receive the necessary information, know-how, and tools to facilitate investments? Of the financing mechanisms available, which ones are providing the greatest benefits to MFIs and customers? Is the future with social investors or is the importance of local finance markets being overlooked? How do MFIs maintain a poverty focus in this era of rapid commercialisation?

Theme 2. Savings & Asset Building

The capacity of the poor to accumulate savings and build assets is an integral part of poverty alleviation and sustainable economic development. Asset building, an important means to financial security, also relates to issues such as knowledge, education, health and housing. Savings mobilisation provides opportunities for MFIs but the effective resolution of regulatory, legal, capacity and cost constraints create future challenges.

Theme 3. Industry Networks

The commercialisation of microfinance has brought into greater relief the issues of institutional performance and capacity building, and the need for strong advocacy around regulatory issues. Networks play an essential role in offering a wide range of services and are essential to the maintenance of a healthy microfinance sector. However, priority areas often must be identified by networks which are often operating under financial constraints and may include, amongst other things, information exchange and dissemination, institutional development, development of best practices, peer learning, policy advocacy, research and measurement of impact and social performance.

Theme 4. Technology

New and better-applied technology is increasingly seen as a key strategy in increasing financial inclusion in developing countries. Innovations such as smart card services, biometric technology and mobile phone banking are well established in some contexts. The future of e-banking will continue to see a roll-out of ICT-enabled systems with the aim of improving operational efficiencies and decreasing transaction costs. E-banking may enable commercial banks to deliver microfinance services more profitably. Also, technology in the form of alternative energy sources is being linked with microfinance to improve the energy supply of microfinance clients at the village level.

Theme 5. Sustainable Development

The ever-increasing awareness of the effects of climate change has focused some debate on the issue of household and microentrepreneurs' CO2 emissions in the developing world. Microfinance provides a means of creating sustainable microenterprises through the financing of products such as renewable energy, environmentally sustainable sanitation and water systems, and ecotourism. Additionally, financing mechanisms such as green investment funds and carbon trading hold promise for both expanding the outreach of environmentally sustainable microfinance and enhancing the economic sustainability of MFIs.

AN INITIATIVE OF:

The Banking with the Poor Network

The Banking with the Poor Network (www.bwtp.org) is a network of more than 30 national policy institutions, commercial banks, MFIs and NGOs from numerous countries in the Asia-Pacific region - including Australia, Bangladesh, India, Indonesia, Laos, Nepal, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam. Established in the 1990s, the BWTP Network's objective is to link microfinance with the financial system and to support the provision of inclusive financial services in Asia. It pursues this objective through capacity building, information sharing, policy dialogue, advocacy and research.

ORGANISED BY:

The Foundation for Development Cooperation

Established in 1990 in Australia, The Foundation for Development Cooperation (www.fdc.org) is an independent, not-for-profit international development organisation. The mandate of FDC calls for it to conduct policy-oriented research, foster public awareness, mobilise broader Australian and overseas development cooperation, and support nongovernmental development efforts. Through partnerships and alliances, FDC undertakes a range of initiatives which seek to improve the lives of poor people in developing countries, foster innovative approaches to development, and connect policy work to self-help efforts at the grass roots level. FDC's work includes economic development and assessment, policy analysis, grass-roots community based initiatives, strategic research, partnerships and leverage, advocacy, consulting and advisory services.

LEAD SPONSOR:

The Citi Foundation

The Citi Foundation (http://www.citigroupfoundation.org/) is committed to enhancing economic opportunities for underserved individuals and families in the communities where we work throughout the world. Globally, the Citi Foundation is focusing its giving on Microfinance and Microentrepreneurship, which helps individuals become economically self-sufficient; Small and Growing Businesses leading to economic expansion and job creation; Education, which prepares young people for personal and professional success; Financial Education, which helps individuals make informed financial decisions; and the Environment with a focus on sustainable enterprises that generate jobs and stimulate economic growth while preserving the environment.

IN ASSOCIATION WITH:

PlaNet Finance

PlaNet Finance (http://www.planetfinance.org/) is an international non profit organization, which aims at alleviating poverty by contributing to the development of the microfinance sector. PlaNet Finance’s aim is to support banks, cooperatives, Non Governmental Organizations (NGO), and the Microfinance Institutions, by providing them with operational services in terms of capacity building and financing to facilitate their growth. PlaNet Finance also works with the private sector (banks and financial institutions),international agencies and governments to facilitate the creation of an efficient microfinance sector.

European Commission

The mission of the European Commission is to promote the general interest of the European Union. It does so by anticipating in the decision-making process, in particular by presenting proposals for European law, by overseeing the correct implementation of the Treaties and European law, and by carrying out common policies and managing funds.

State Bank of Vietnam

The State Bank of Vietnam was established in 1951. Until 1988 SBV played the role of a Central Bank, setting broad monetary policies and regulations, and the role of a commercial bank, carrying financial activities of a regular retail bank. Since 1988, and the reform of the financial system, the banking sector follows a regular two tiers system, with the establishment of specialised commercial banks. The law on the State of Bank of Vietnam (1998) clarifies the roles and responsibilities of the central bank.

IN PARTNERSHIP WITH:

Vietnam Bank for Social Policies

The Vietnam Bank for Social Policies was established under Premier’s Decision No. 131/2002QD-TTg dated October 4th, 2002 and the Government’s Decree No. 78/ND-CP dated October 4th, 2002 on providing credit for the poor and other policy beneficiaries; based upon the re-organization of the Bank for the Poor and separation from Vietnam Bank for Agriculture & Rural Development for purpose of detaching policy lending from commercial lending. VBSP is a State-owned non-profit credit institution that is currently in charge of providing policy credit to the poor and other policy beneficiaries.

Vietnam Microfinance Working Group

Vietnam Microfinance Working Group (MFWG) was founded to create a forum for microfinance practitioners to share experiences with each other, come together to debate relevant issues, and speak to policy makers with a unified voice. Founded in 2004 as an informal organization under the VUFOâ€NGO Resource Center, according to the Working Group Guidelines approved by the Resource Centre Steering Committee in April 2003, the MFWG is open to all individuals and organizations interested in microfinance in Vietnam. The goal of the MFWG is “to enhance the impact of microfinance on poverty alleviation by promoting quality and sustainability of microfinance in Vietnam both in the practice of institutions and in an improved enabling environment.”

Asia Microfinance Forum 2008

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