This week, e-MFP announced the launch of the 6th European Microfinance Award. This year, the Award will recognise one of most important challenges that some financial institutions face: providing financial services to vulnerable clients in post-conflict or post-crisis regions. As all e-MFP members well know, providing quality services to clients in stable markets poses many challenges – from managing portfolio risk, to expanding product offerings, hedging risk, understanding clients, adapting to regulatory changes, sourcing funds and innovating with new technologies.
Doing this in the unique context of a post-crisis environment may well be the single most difficult thing an MFI can attempt. For this reason, e-MFP is looking forward to receiving applications from those demonstrating Best Practice in this special context, measured against a range of performance criteria.
How can these institutions tackle systemic risks, such as increasing PAR and delinquency? How can they thrive in the face of macroeconomic instability, environmental changes or failing infrastructure? How can they work with NGOs and governments to ensure that necessary relief and aid efforts complement the provision of sustainable and fair financial services? How can they ensure their staff is protected from kidnapping or sectarian violence? How can MFIs play a role in increasing social cohesion – bringing people together in the aftermath of tragedy or civil strife?
Those institutions that achieve this can have an immense positive impact on their clients, including driving employment and economic growth, protecting families, providing key social services and, perhaps less tangibly, providing hope for a better future. These institutions who will be contenders for this prestigious Award will have demonstrated flexibility, vision, patience resilience and compassion – providing a range of financial and non-financial services to clients with unique circumstances and needs, and doing so in a way which can be replicated in other contexts.
To this end, the 6th European Microfinance Award will recognise MFIs that operate in post-disaster/post-conflict areas and aim to combine their own institutional resilience with that of their clients in the affected, vulnerable population. Potential candidate institutions will be those that:
* Have demonstrated an integrated response to support and build resilience for vulnerable households and communities living in exceptionally difficult environments or circumstances;
* Demonstrate an effective strategy to increase both their own resilience (i.e. operations, staff, policy, control) and that of their clients (appropriate financial and non-financial services), while insuring responses that provide both for the immediate, medium- and long-term resilience of their clients; and
* Are active in the financial services sector in in a developing country. Various types of microfinance institutions are eligible, including NGOs, cooperatives, MFI networks, investments funds, commercial banks, development banks, leasing firms and insurance companies.
The extensive assessment criteria against which the candidates will be considered can be found here. The twin themes of resilience and vulnerability will be core in the assessment process: the resilience of institutions in adapting to an unstable and difficult environment (including in risk management, staffing, reputation and funding); the resilience which is engendered in clients by the institution’s actions (including by adapting financial services to clients’ needs and providing non-financial social support to the community); and the vulnerability of the post-crisis context which this resilience can guard against – comprising both the hazard of the external environment, and how that affects clients’ internal environment: the household and workplace.
Applications from candidates are required by 3rd June, after which a multi-stage selection process will take place, culminating in the announcement of the three finalists in September and the winner in November.
This is the sixth incarnation of the European Microfinance Award, and the first since transitioned into an annual (rather than biennial) event. First held in 2006 and jointly organised by the Ministry of Foreign and European Affairs – Development Cooperation and Humanitarian Affairs, e-MFP and the Inclusive Finance Network Luxembourg (InFiNe) in cooperation with the European Investment Bank (EIB), it includes a prize of €100,000 from the Luxembourg Development Cooperation and with it the invaluable promotion of the institution through the Award’s various support networks, to be awarded during European Microfinance Week at a ceremony to which the three finalists will be invited and where a short video about their programs will be presented.
Previous subjects for the Award have included Innovation for Outreach in 2006; Socially Responsible Microfinance (2008); Value Chain Finance (2010); Microfinance for Food Security (2012); and Microfinance and the Environment (2014).
e-MFP is thrilled that this year’s Award will take on this especially challenging and important area of the microfinance sector. In a world in which civil conflict appears to be increasing, and climate change poses a special threat to many microfinance markets, there has never been a more important time to evaluate and disseminate Best Practice in providing financial services to clients who are victims of conflict and crisis. The autonomy, cohesion and self-reliance which access to quality finance can create are never more important than for vulnerable populations. We look forward to learning about the innovations underway around the world in building the resilience of vulnerable populations, and helping to bring these innovations to new markets.
For more information on the Award and how to apply click here