ABA Alexandria Business Association SME Project 13 June 2010 ١
H I S T O R Y 1983 Economic Committee for Businessmen 1988 Establishment of Alexandria Businessmen s s Association 1989 First Cooperative Agreement with USAID 1990 Launch of ALEXANDRIA SME Operations in January 1994 Full Financial Sustainability 1998 Start capacity building for MFI s outside Egypt (Bahrain- Yemen Saudi) 1999 Launch of BLOSSOMS PROGRAM 2000 Launch of TOWARDS SELF-EMPLOYMENT PROGRAM 2001 SME Project won the AGFUND International Prize 2007 Establishment of Training Center and Show Room 2007 Launch of Development path 2008 ABA Establishment a Bail Fund to Support Client During Crisis, Death and Disability as a step toward introducing Micro Insurance. 2008 pilot test for Agri- product and commercial vehicle products. 2009 Life and disability insurance (ALICO) 2009 No. of Branches Reached 54 Branches working in 6 Different Governorates ٢
Vision The working poor are partners in community and national level development. ٣
Mission Statement Developing the poorest of the poor through demand driven products improving their life. To be as a leading organization, targeting to balance between our social and financial goals. ٤
Ethics and Core Values Our institution will be: Transparent Objective Committed to maintaining ABA s message (Only income generating loans) ٥
Ethics and Core Values Our staff will value: Cooperation and team spirit Loyalty Diversity Positive attitudes ٦
Project s Components (1) Provision of Micro Credit L.E. 150 100,000 ($26 $17,544) (2) Business Support Services (Non-Financial Services) (3) Consulting Services (Advisory Services) ٧
Target Group Existing MICRO Enterprises ٨
SME Clients ٩
Blossoms Clients ١٠
CREDIT PROGRAMS ACHIEVEMENTS 11
Average Number of Loans Per Month 18000 17,212 16000 14000 12000 10000 8000 6000 4000 2000 0 13,232 9806 8891 5600 4100 2600 876 1600 2000 136 464 90 92 94 96 98 0 2 4 6 7 8 9 12
Average Amount of Loans Per Month (in Million Pounds) 36 32 28 24 20 16 12 8 4 0 36 27.38 19.6 14.8 8.7 6.6 7.4 6 4.8 2.7 0.3 0.9 90 92 94 96 98 0 2 4 6 7 8 9 13
Total Amount lent Achievements Up to November 30 th 2009 EGP 2,116 Billion Total number of loans 1,061 Million Average loan size EGP 1,994 Clients reached 368 thousand No. of Active Clients 134 thousand Loans Outstanding EGP 210 Million Latest Repayment 99.36% Percentage of Women Borrowers 56.01% Number of Staff 827 14
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Non Financial Services 16
Business Support Services (Non Financial) 4 Types of Services Training Marketing Library Technical Assistance Objectives Upgrade managerial and technical skills Improve production technology Assist in marketing Provide updated knowledge and technology 17
Middle East Training Centre Alexandria Business Association SME Project 13 June 2010 18
Exhibition The exhibition presents important marketing services for clients of Small and Micro Enterprise Project. Egyptian exporters through this exhibition can identify some of the industrial production of small and micro enterprise projects in different areas to contract with them. 19
Library The library provides all the necessary technical catalogues to customers in their service also; it provides them with access to the internet, so that they can have access to the latest technology. 20
Literacy Program Mainly targeting Group lending clients. Provides additional incentives & benefits to the official program No. of beneficiaries 5040 No. of graduated 2875 21
Consulting & Advisory Services Saudi diarabia Association of Upper Egypt Bulgaria Albania 8 African Countries 22
114 Projects from 95 countries have been nominated for the Prize. ABA s SME Project was the winning Project The AGFUND 2001 International Prize Mr. Ragab ABA s Chairman receives the Prize from HRH Prince Talal Ben Abdul Aziz in UN building in Geneva Switzerland In November 2001 23
Additional Steps aiming at graduating clients and improving their living standards. Discounts on medical Services. Networking between Clients. Networking within the business community. Participation and attendance of local conferences and exhibitions. 24
The insurance The idea started on 2005 Several insurance companies were consulted The proposed cost was too high with limited benefits Several initiatives were discussed Alexandria Business Association SME Project 13 June 2010 25
ABA was seeking insurance knowledge ABA became a member in MIWG Participation with Micro insurance MFI providers was an added d value Several conferences and meetings with industry stakeholders in Egypt Alexandria Business Association SME Project 13 June 2010 26
Alternatives Legal framework was discussedd Several meeting with EISA Discussions with local, international insurance companies Internal discussions with BOARD and Executive Committee Market surveys covering client needs Alexandria Business Association SME Project 13 June 2010 27
The Egyptian Market Very low penetration rate for insurance (0.8% of GDP) Total ignorance for low income bracket Only traditional products are offered Demand driven products do not exist No innovations Alexandria Business Association SME Project 13 June 2010 28
ABA and Micro insurance Microfinance clients are exposed to high h risks ik Financial security concept do not exist Clients do not understand d or realize importance of insurance ABA started financial education classes and decided to present free insurance to create awareness Alexandria Business Association SME Project 13 June 2010 29
The Bail fund During 2008 ABA established a bail fund (Takaful) to support its clients in death, disability and crisis. The fund resources are deducted from ABA income. Resources were accumulated for one year before actual launch of the fund Several cases were supported by the fund covering different risk categories after conducting social study. 30
Contract with ALICO The contacts t were reactivated t following a presentation in Sokhna. Other insurance companies started to offer better rates Reasonable agreement was achieved The fund contracted with ALICO on March 2009 to provide life & disability insurance for all clients covering principal amount of loan. 31
Achievements Since March 2009 an average of 30 death cases per month are presented for insurance An average of 3 cases/month are covered by the Bail fund (out of insurance coverage) The fund disburse LE 250 as funeral expenses for each case The fund also support clients to restart operations Payment of insurance elapse 3 4 weeks 97% of cases were accepted 32
Financial Indicators Despite the relatively lti l new program (9 months) some indicators were realized The Bail fund is achieving ing 25 30% surplus s after covering all obligations and insurance premium The insurance contract is projected to achieve 10 15% return after meeting all obligations and reserve requirements 33
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Future steps Additional risk ik coverage is under study to be presented to clients (for a price) Market researches, focus groups, client satisfaction surveys to achieve demand driven product taking into consideration Gender issues Penetrating Micro insurance is considered 35
Future steps Legal frame is under study Partnership/representation with local/ international insurance providers is an option Partnership with other MFI s is another option Our ultimate objective is WIN Insurance Company WIN Delivery Channel WIN Clients 36
The Family Health Program ABA is contacting ti the Family Health Program to provide medical services to the poorest category of its clients for free. The program started in Alexandria during May 2009. Almost 7 thousand families will be members of the program All registered families are group lending (95%) women. The program will expand to cover all our group lending clients. 37
ABA Small & Micro Enterprise Project Grant Activity Credit Programs Commercial Banks Towards Self- Employment Program (TSEP) Development Path Blossoms Of Micro Enterprise Sep 2006 SME Credit Program Jan 1990 March 2000 Oct 1999 ABA s approach to graduate poor people to micro credit 38
Our Overall Objective: Reaching Down And Scaling-Up 39
Thanks you for visiting ABA Please visit our web site at www.aba-sme.com 40