Agence de Credit pour l'Enterprise Privee
Senegalese Micro-Finance Institution



Slide Presentation
by Jessica Jacobson and Wendy Shapiro


Slide 1

 The West African Context

  • 1994 CFA Devaluation
    - 35-40% Inflation - Decapitalized many loan portfolios
  • Government reforms
  • Institutional models
    - Credit union - NGOs
  • Challenge to sustainability

Slide 2

 align= Senegalese Context

  • Economically relatively well off
    - GDP per Capita is $ 780
  • Mostly Muslim
  • Very active informal sector
  • Rural population
  • 49 Year Life Expectancy

Slide 3

 Origin

  • Rural beginnings, expanded to urban
    - 1985 - Small loan program
    - USAID Community Enterprise Development project
  • Additional donor funding
  • 1987 - Private NGO
  • 1988 External Audit

Slide 4

 Evolution

  • 1993 - Licensed as credit union
    - AID project ends
    - Able to lend from own resources
  • 1996 - Redefined Objectives
    - Provide credit and savings services
    - Promote social and economic development
    - Develop financial services network
    - Cooperatively manage activities

Slide 5

  Administration/Operations

  • Adopted new microfinance techniques since founding
  • Modest staff salaries
    - Incentive structure that emphasizes loan quality

Slide 6

 ACEP Organizational Chart


Slide 7

 Clientele

  • Rural/urban
  • Upper end microentrepreneurs
    - Lack access to formal financial institutions
    - Expanding business-owners
    - Low level of outreach
  • Serves 4,000-5,500 clients depending on source

Slide 8

  Loans

  • Exclusively individual loans to continuing businesses
  • Collateral and credible credit reference required
  • Graduated
  • New loans granted only after previous loans paid off
  • Almost half of clients receive multiple loans

Slide 9

 Loans

  • Interest rate - 17% plus 1% for admin. costs
  • 12-18 month term
  • $20,000 Loan ceiling
  • $5 million outstanding

Slide 10

  Loan Management

  • Loan acceptance:
    - Based on personal knowledge and client evaluation by ACEP rep.
    - Approved by regional committee of ACEP execs
  • Average loan balance is around $1,600 (depending on source)
  • From 1996-1997 loan portfolio grew 49%
  • More than 99% recovery rate

Slide 11

  Savings

  • No compulsory savings requirement
  • Two types of savings collected since 1993
    - 4.5% fixed rate of deposit interest
    - Project savings
    - Business savings
  • 10% of repayments go to savings account
  • Grew by 514% from 1996-1997
  • No widespread voluntary deposits to general public

Slide 12

 Self-Sufficiency

  • Achieved operational and financial sufficiency
  • 1995 transitioned from level II to level III
  • Positive impacts on sufficiency:
    - Strong management
    - Institutional changes

Slide 13

  Factors of success

  • Effective donor assistance
  • Clarity of mission and goals
  • Clear credit administration operations
  • Efficient management and loan monitoring
  • Strong financial management

Slide 14

  Criticisms

  • Supports mainly trade activities, not enough production
  • Only 5% market penetration
  • Reaches small percentage of women
    - 20-30% of borrowers

Slide 15

 Comparisons with ten other successful endeavors

  • Relatively young among successful examples
  • Only program without deep outreach
  • Very high average loan size and long loan term
  • Exhibits success in developing self-sufficiency
  • High administrative costs and low efficiency
  • Interest rate and return on assets is low in comparison
  • Very high rates of loan loss

Slide 16

 Conclusions/Recommendations

  • Focus on institution strengthening
    - Increase transparency
    - Standardize application procedures
    - Improve loan portfolio recovery
  • Continue moderate expansion rate
    - Increase depth of outreach
    - Offer savings to non-borrowers
  • Target addressing client demand and reducing transaction costs

Slide 17

 Contact Address

ACEP:
Mayoro Loum
Director General
35 Avenue Bourguiba
B.P. 5817
Dakar, SENEGAL
Tel: 221-8-25-29-32/3
Fax: 221-8-25-29-35
Email: acep@telecom_plus.sn
Slide Presentation:
Jessica Jacobson
1209 North Taft Street, #5
Arlington, VA 22201
USA
jessica_jacobson@jsi.com

Wendy Shapiro
1751 Willard St. NW #3
Washington D.C. 20009
wshapiro@hotmail.com


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