FINCA Impact Finance

March 2018
The FINCA Impact
Finance Network
About Us | Video

Click here to learn more about FINCA Impact Finance.

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Launch of FINCA Impact Finance

In 2017, FINCA International moved the global operations

and management of its microfinance-related activities to
FINCA Impact Finance.

FINCA Impact Finance is FINCA International oversees the

evolving our core financial social impact research, manages the
services to further our mission FINCA brand, and develops new
programs to complement FINCA
Impact Finance services

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FINCA Impact Finance’s Evolution
Creation of FINCA - Restructure to lower overhead - Expansion of strategic
Microfinance Holding and give greater authority to projects and
Company (FMH): Subsidiary Boards investment in
Social investment partners - Divestiture of El Salvador and technology & analytics
to help fund subsidiary Mexico subsidiaries - Continued focus on
growth and transformation - Release of Strategic Plan and risk & controls, and
into full-service financial Roadmap towards new org subsidiary board
institutions design and 2020 vision governance

2011 2015 2016 2017 2018 2020

Launch of Customer - Separation of FI and FINCA Impact

Experience culture Finance - Network of fully deposit
transformation funded institutions
- Andree Simon appointed as CEO
of FINCA Impact Finance - Decisions driven by data
- Updated Strategic Plan to reflect analytics
new business model strategy - Faster and smarter
- Divestiture of Russia subsidiary organization further
outreach for those who need
- Launch of SimSim, HaloYako, and
us most
MonCash projects
- Answering needs our clients
- Return to profitability
didn't even know they had
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Our 3 Core Priorities

Customer Experience: Our customers are at the

center of everything we do
• We treat our customers and employees as collaborators, designing
responsible products and ways to deliver them that meet our clients’ needs.
• Every employee delivers a warm and trusting customer experience to our
external clients and to our internal colleagues.

Products and Channels: Innovation is part of our DNA

• We deliver financial products that are flexible and easy to use.
• We are consistently refining our products and leveraging opportunities
to improve speed and efficiency, all while protecting our clients.

Funding: Our funding sources are diverse

• We ensure diverse funding sources through mobilizing deposits, local
currency debt funding and capital to fund stable growth.

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Enhancing Our Business Model

We are Shorter Term

transforming
Leverage credit scoring/analytics, digitization and
FINCA Impact
new channels to enhance our core business
Finance by
maintaining our
core business
while rigorously
Longer Term
investing in our
future
Develop entirely new offerings with technology
and fintech partnerships

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Enhancing Our Core Physical Business

Kiosks

Mobile Agency
Banking Banking

Biometrics

Tablets Apps

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Management Reflections
Our Business Model
• We successfully lowered our overhead costs and are enhancing our core business model

• Our competitive position has improved significantly

• We are working on our digital banking strategy and moving quickly to integrate technology to move faster and

assume more risk

• We have a real opportunity – and mandate – to transform inclusive finance as a disruptive, responsible digital bank

• We want to develop best practice for what it means to be a socially responsible Digital Financial Services (DFS)

provider

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Continued Focus on Client Protection
• Launching a working group to
develop internal standards
around responsible DFS
• In discussions with experts in
the industry on client education,
protection, DFS, etc.
• Continuing to pursue Smart
Certification
• Plan to partner with FINCA
International to conduct
research and determine an
appropriate strategy

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Key Strategic Projects
Key Business Model Projects
 Digital Financial Services
 SimSim, F/Pakistan

 HaloYako, F/Tanzania

 ELSOM, F/Kyrgyzstan

 Digital Field Automation – now in 9 subsidiaries

 Agency banking and branchless channels

 Credit scoring and data analytics

 Bond offerings

 Smart Certification – 6 subsidiaries certified,

2 pursuing in 2018

 Strategic partnerships

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Agency Banking
9 FINCA subsidiaries are now doing agency banking: DRC, Malawi, Nigeria, Tanzania,
Zambia, Ecuador, Guatemala, Jordan and Pakistan.

FINCA customers may visit agents to conduct transactions using biometric POS
devices in the convenience of their local community’s store front.

Deposits

School
Withdraws
fees

Taxes Transfers

Startimes CANAL+

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SimSim E-Wallet: FINCA Pakistan

Smartphone Based Agnostic Wallet Frictionless Onboarding Free Payments

Load money from multiple sources

Invite Friends

Fund Transfers QR Code enabled instant

payments

Bill payments and top-ups

Discounts and offers from a
Gift Vouchers number of merchants

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HaloYako Savings & Loans: FINCA Tanzania
• Customers can open a savings account,
make deposits and withdrawals using their
mobile
• Basic Savings & Target Savings
• No visit to a branch needed
• Loans, coming in April

HALO AKIBA
MENU
1. Save
2. Withdraw
3. Auto-save
4. Check balance
5. Back

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Appendix
Putting Clients First
FINCA MISSION
FINCA INTERNATIONAL
To alleviate poverty through lasting solutions that help people
PURPOSE
build assets, create jobs and raise their standard of living.
To build a global network of
sustainable and scalable social
FINCA IMPACT FINANCE PURPOSE enterprises that improve lives
worldwide and to measure the
To be an unconventional community-based bank that profitably
FINCA Impact Finance’s social
and responsibly provides innovative and impactful financial
impact on customers and
services to enable low-income individuals and communities to
communities.
invest in their futures.

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 Where We Work
Our staff (majority local) of over 10,000 are servicing nearly 2 million clients across
five continents and 20 countries.

Kosovo
Georgia
Armenia
Kyrgyzstan
Tajikistan
Azerbaijan

Haiti
Honduras
Guatemala

Nigeria Pakistan
Nicaragua
Uganda Afghanistan
Ecuador
D. R. Congo Jordan
Tanzania
Zambia
Malawi

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Social Impact: Sharing Our Results
https://results.finca.org/

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Social Impact: Sharing Our Results

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 Social Impact: How We Measure
Theory of Change
Category

Employment
and Income

• % clients <NPL • Education of • Jobs created by • % female- • % of clients

primary earner FINCA as % of headed who achieve
• % women
Indicators

total enterprises their personal

• Single-parent
• % rural goals
Households • Wages above • Job creation by
legal minimum women
• % w/o Access
to Internet • Net income > NPL

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Products & Processes
• Deposits are being mobilized in 11 subsidiaries and
exceeding network budget. Licenses in Nicaragua and
Guatemala are pending clarity on local regulations. Tajikistan
savings suspended until 2019 due to politico-economic
situation.
• Consumer loan product introduced by 10 subsidiaries to
better meet clients’ needs; 5 have plans to offer.
• A few subsidiaries in Eurasia and MESA are launching
Women Entrepreneurship Loans to better serve female
clients. Afghanistan opening all female branch in March to
meet female clients’ needs.
• Guatemala now offering basic and family Health insurance
plans for clients – serving as a broker for insurance agent.
93% of clients enrolled since rollout to all branches in
February 2017.
• All subsidiaries are continuing to evaluate and improve
lending processes and digitize business model to ensure
efficient delivery of services. Strategic partnerships key focus.

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Transactions by Branchless Channels

Note: Excludes partner bank transactions

Globally, 48% of transactions across the network are executed via branchless
channels. Global figures decreased slightly due to a reclassification of mobile
transactions in DRC. Although Africa still continues to lead across all regions, Africa’s
total number of branchless transactions dropped slightly from Q3 levels to 67% in Q4. 23
Customer Experience (CX)
Nearly 50% of all 10k+ staff have received CX training

Customer-centric focus established Focus on our external CX (that

as global priority. Key steps: charter, CX and client
of our clients) – VOC – how we protection as
assessment, Steering Committee design and deliver products
and champions around the network. part of DFS
and services. Expansion of strategy.
Rolled out communications, tools client pulse checks.
and resources.

2014 2015 2016

2018
2017

Focus on our internal CX (that our staff)

and encouraging cross-functional
collaboration. CX dashboard launched.
CX Day introduced.

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CX in Action: Kosovo Dashboard
In Q4 2017, 9 Subsidiaries participated in the CX Dashboard. All dashboards are
included in the appendix. Aim to have all Subsidiaries engaged by end of 2018.
Corporate Ownership Structure at a Glance
Majority Shareholder Minority Shareholders
FINCA International, Inc. (“FI”) (62.36%)
New York 501(c)(3) Not-for-Profit Corporation created in 1984 to provide
microfinance services globally. The Members of FI hold a function similar
to Shareholders but have no economic interests in the company. FI Board of
Directors is separate from FMH Board of Directors.

FI Subsidiaries Partner
Entities
FINCA Microfinance Holding Company
• FINCA Plus, LLC LLC (“FMH”)
(Delaware), a special FINCA UK Created in 2011
purpose vehicle

 FINCA Plus, LLC Uganda

FINCA Canada
FINCA Microfinance Netherlands based
Branch, operating as
Global Services, LLC
BrightLife, with its own Cooperative
capital and staff structure (“FMGS”)
(Uganda)
DR Congo Kosovo Afghanistan Malawi
Ecuador Kyrgyzstan Azerbaijan Pakistan
Guatemala Nicaragua Armenia Zambia
Haiti Tajikistan Uganda
Honduras Tanzania Nigeria
Jordan Georgia

Trade Name: FINCA Impact Finance