41st Midi de la Microfinance et de l'inclusion financière

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41e Midi de la Microfinance

"Habitat is an integral part of our business model"

When microfinance and housing coexist under the same roof

Luxembourg, November 29, 2017 | While the European Microfinance Week has just started, this 41st session of the Midi de la microfinance was an opportunity to discuss the role of microfinance in accessing housing. To debate this issue, Banque de Luxembourg hosted the three final institutions of the 2017 European Microfinance Award, as well as the Director of the REDCAMIF microfinance network in Central America, a long-standing partner of ADA.

Although microfinance has the initial mission of meeting the financing needs of the productive and commercial activities of the poorest populations, it is clear that needs have changed. Even today, almost 50% of the world's population does not have enough to live in, while access to housing is considered a fundamental human right. Clients now need a home not only to pursue a business that generates income, but also to live with their family. Most often, it is the same roof.

Since traditional financial institutions do not manage to meet these personal needs, microfinance has taken over to position itself on this segment of the population. Thus, many actors of inclusive finance such as banks, NGOs or microfinance institutions, develop new financial and non-financial products, adapted to the needs of local populations.

Invited to testify, the three microfinance institutions First MicroFinance Bank in Afghanistan, Mibanco in Peru and Cooperativa de Ahorro y Prestamo Tosepantomin in Mexico, delivered their responses.

According to them, everything starts with the demand on the ground: "The demand exists; there is a real local need that drives us to create products for housing, either because the context is unfavorable, or because our customers do not have sufficient financial resources". According to Alex Perez, Director of Sustainable Strategy and Customer Analysis at The First MicroFinance Bank in Afghanistan, "The products we offer are intended to generate a positive social impact, improve the quality of life of our customers. Habitat is an integral part of our business model.". According to Iván Guitérrez, Executive Director of REDCAMIF, "20% of our loan portfolio is dedicated to improving or renovating existing housing. It is consequent! ".

Cesar Bazán, product manager at Mibanco in Peru, says it is essential to create business alliances around the product, because the materials are expensive. "We have developed a very specific methodology with all the players involved in construction: we offer complementary tools to the product, such as insurance to protect the micro-entrepreneur's investment for instance."

Alvaro Ayón, Chairman of the Board of Directors of the Cooperativa de Ahorro y Prestamo Tosepantomin in Mexico, offers eco-friendly products, such as "rainwater harvesting techniques or the establishment of solar panels".

According to our guests, the challenge consists in designing a product, even though there is not enough information on the market: where to build, how, to whom and with what materials, this is the initial question that everyone must answer.

"It is risky to evaluate the success of a product when you do not have an existing benchmark," continues Alex Perez. We must be well surrounded, rely on partners in the field. In addition to our products, we also offer our customers technical assistance via a network of partners, to advise them in their choice of materials for example." The same goes for the Mexican cooperative Tosepantomin, which has collaborated with a cooperative that supplies its customers with low-cost construction materials.

This is an opportunity for REDCAMIF to recall the support they have received from the Luxembourg organization ADA for many years already, with whom they have set up a pilot project in Latin America with 11 other institutions. This project allowed them to develop 6 products, each adapted to the needs of local populations.

In the end, this Midi has been the opportunity to tackle a new approach to inclusive finance: more and more, financial institutions are exploring new solutions to meet the personal and professional needs of people excluded from traditional banking circuits, while fostering job creation.

The panelists of this Midi

Cesar Vela Bazán, Product Manager, Mibanco, Péru

Economist by profession, Cesar Vela Bazán holds an MBA from the University of Alicante, Carlos III from Madrid and Autónoma in Barcelona. He was a panelist at:
- 1st meeting of adequate housing in Latin America and the Caribbean - Bogotá, September 2012.
- Microcredit Summit in Manila - Philippines, October 2013.
- World Urban Forum - Medellín, April 2014.
- Innovation Forum in Housing Markets for the Pyramid Foundation - Mexico, June 2014.
- BASE Forum on Access to Housing and Improving Health - Mexico, July 2015.
- Microfinance Product Development Forum - Kenya, October 2015.
- APEC Forum - Inclusive Business - Manila, November 2015.
- Social Housing Forum - Quito, April 2016.

His 21 years of experience in microfinance and his level of specialization have enabled him to gain access to his current position at Mibanco, where he leads the design, proposal and implementation of new products, channels and tools, offering more great opportunities for customers at the base of the pyramid, seeking financial inclusion and improving their quality of life. The entity he represents - Mibanco - is strongly active in this segment of the population, with a strong dimension of social responsibility, which allows it to establish more and more its leadership throughout Peru and internationally.


Álvaro Aguilar Ayón, President of the Board of Directors of the Tosepantomin Savings and Loan Cooperative, Mexico

Positions with responsibilities
- Advisor to the Tosepan Union of Cooperatives from 1980 to 2017.
- Chairman of the Board of Directors of the Tosepantomin Savings and Credit Cooperative from 2012 to 2017.

Experiences in housing
- Responsible for the Tosepantomin housing program from 2007 to 2017.
- Founding partner of the Network of Producers of Social Housing in 2008.
- Representative of the network of producers of social housing from 2014 to 2017.
- Certification of the Tosepantomin cooperative as promoter of social housing, executing entity and executing agency before the National Housing Commission in Mexico.
- Responsible for the bamboo shelter support program for families affected by earthquakes in Mexico in September 2017.

His 37 years working as an advisor to the Tosepan Union of Cooperatives, made up mostly of indigenous partners, has allowed Alvaro to convince himself that cooperativism and the social and solidarity economy are the best ways to advance a "live well" project in the most vulnerable families. For this reason, the last ten years have been intended to encourage Tosepantomin's most vulnerable partners to benefit from adequate housing and to transform it into a sustainable home, which includes the protection of the environment, efficient use of energy, production of healthy food and recycling of crop residues. Álvaro has a Licenciatura in Agronomía y una Maestría in Rural Desarrollo.


Alex Ive Perez, Director of sustainability and customer analysis at FMFB-Afghanistan, Afghanistan

Alex Perez joined the FMFB-Afghanistan team in October 2016, with the goal of developing and implementing his sustainability strategy and establishing a solid customer analysis and quality of service structure, in order to meet the needs of customers. Alex holds a Master in Business Administration from Carlos III University in Madrid and a BA in International Relations and Law from the London School of Economics. After starting his professional career in the legal sector and corporate relations, he has worked six years in inclusive finance for financial institutions, impact investors and organizations supporting the sector.

Iván Gutiérrez Aguirre, Executive Director, REDCAMIF

Nicaraguan, Iván Gutiérrez Aguirre is an economist. He graduated with a Master in Business Administration (MBA) with postgraduate studies in Investment Banking and Environmental Economics from the Central American Institute of Business Administration (INCAE). Specialized in development finance, he has worked in second-tier financial institutions, financial consulting firms and has been an advisor to entities supporting the technical development of microfinance.

He has held various positions in the financial sector in Nicaragua and in public entities in development programs, as director of the credit and technical assistance program for small agricultural producers of the Ministry of Agricultural Development and the National Development Bank of Nicaragua, then Director of financial Institutions of the Inversiones Financiera Nicaragüense (INF), a second-tier entity in the financial system. He was senior manager at LAFISE BANK, Banco de Inversiones Latinoamericano, in charge of the structuring of commercial paper issues for the stock market, as well as the design of innovative financial systems. He has also been a consultant and financial advisor to various financial institutions in the country.

From 1998 to date, he has been involved in the founding of Microfinance Networks in Central America, both as an advisor and director. He has been Executive Director of the Association of Microfinance Institutions of Nicaragua (ASOMIF) and has been involved in the creation and organization of the Central American Microfinance Network (REDCAMIF) since 2002, where he has been Executive Director since its creation. Within REDCAMIF, he has the executive responsibilities of the Network and the operational coordination of the integration of the National Networks of Central America.


Paula Cortes, Project officer, ADA, Luxembourg

Paula Cortes joined the ADA team in Luxembourg in January 2016, after obtaining her Masters in Poverty and Development from the Institute of Development Studies at the University of Sussex in the UK. Paula has 6 years of experience in the inclusive finance, where she started working with Accion in Bogotá, Colombia. To date, she is in charge of implementing ADA projects for institutional strengthening and product diversification in microfinance institutions through national and regional networks in Central America and the Philippines.


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