2019 marks ten editions of the European Microfinance Award, launched in 2005 by the Luxembourg Ministry of Foreign and European Affairs, as a biennial Award – the first of which took place in 2006, and after considerable interest and exposure, became annual after 2014. The Award serves two parallel goals: rewarding excellence, and collecting and disseminating the most relevant practices for replication by others.
The Award’s influence and prestige has grown, and its €100,000 prize for the winner (and €10,000 for the runners-up), attracts applications from many organisations that are innovating in a particular area of financial inclusion. As well as the significant prize, an important additional benefit to winners is the exposure that they receive, and the opportunities for expansion and replication that the attention of the sector can provide.
To celebrate ten editions of the Award, e-MFP has decided to reach out to the previous winners, for a ‘where are they now?’ blog series, published in the order we receive them throughout 2019, to look at what they have been doing with their initiative since they won, and how the winning of the Award has helped, and what plans they have in store.
In 2014, the theme of the Award was Microfinance and the Environment, focusing on microfinance initiatives to improve environmental issues in the developing economies, and encourage the sector to find innovative solutions to environmental challenges.
Established in Kyrgyzstan since 2004, Kompanion Financial Group provides microloans in combination with technical assistance to small-scale farmers and pastoralists (livestock herders and shepherds) to promote sustainable agriculture and natural resource management. The initiative presented for the 2014 European Microfinance Award, Kompanion’s 'Pasture Land Management Training Initiative’, was an ethno-ecological approach to pasture land preservation, addressing the pressing issue of pasture land degradation in Kyrgyzstan. It consists of a specialised loan package, 'Credits for Conservation', linked with a training program.
e-MFP: How has your initiative evolved since you received the Award? What have been the biggest changes?
Kompanion: Many things have evolved since receiving the Award in 2014. Most notably, we have developed several livestock and pasture land management projects for local communities.
The Asyl-Mal Project (cow breeding and pasture land management) enables Kompanion Bank to provide a series of pasture land and livestock management training sessions to local communities. In the four years after winning the Award, the Kompanion team provided 2,400 training sessions for more than 36,000 people across Kyrgyzstan. The training program covered a range of pasture land management and cattle breeding topics, including: the importance of using grazing maps for grazing and arrangement of cattle camps; the importance of rotating pastures; the required preparatory work that should be done before grazing; as well as vaccination of cattle. After the training, many participants have become active members of pasture land committees and continue to independently address pasture land recovery issues in their villages. To let people share their best practices, Kompanion Bank hosted a round-table for community leaders and members of pasture land committees from various villages. This project was implemented in collaboration with the Kyrgyz Ministry of Agriculture that helped prepare handouts for training sessions.
Also within the Asyl-Mal Project, over 2015-2018 the Bank introduced a special-purpose “soft” loan, for the purchase of pedigree dairy cows and construction of cattle yards. Kompanion disbursed a total of 14 loans accompanied by free consultations from Kompanion’s veterinarians on how to buy and properly look after pedigree cattle. Kompanion’s clients that received this loan were able to acquire calf feed, attain higher milk yields and, consequently, increase their family income.
Kompanion has also introduced what it calls ‘Smart Investments’ and ‘Smart Savings’. Every year, Kompanion Bank prepares materials for rural people providing examples of smart investments and smart savings, such as “Intensive fattening of bull-calves” and “Culling” that were aimed at reducing grazing pressure, boosting pedigree livestock farming, and increasing income of local people.
Plastic waste on pasture land is a major problem in Kyrgyzstan. Kompanion Bank conducted training on how to protect pastures from plastic waste and initiated several plastic collection campaigns.
Kompanion Bank also provided financial assistance in the construction of Beccari Pits in two remote mountainous villages in the Issyk-Kul area, in order to protect pastures and farmers from infectious animal diseases.
Finally, every year, Kompanion Bank hosts Development Fairs and “Aiyl, Alga!” (Kyrgyz for “Go, Village!”) Festivals for farmers. These events provide networking opportunities to farmers and serve as a platform for them to sell farming products, discuss pasture land preservation issues and get advice on how to improve cattle breeds.
e-MFP: What did winning the Award mean to your organisation? Did anything change as a result of winning, both within the specific initiative for which you won and in the organisation more broadly?
Kompanion: Winning the EMA was a landmark event for Kompanion. It was recognition of the Company’s social contribution to the development of our country. In 2016, Kompanion transformed from a microfinance company into a bank. Kompanion’s new status, refreshed Mission, and new financial products and services have strengthened the importance of our community-based focus. The Bank will continue to expand its socially responsible and environmental-conscious activities.
Kompanion Bank has introduced “green” loans with reduced interest rates aimed at environmental conservation and expansion of energy saving technologies. Kompanion is the only bank in Kyrgyzstan that has an internal team of 30 agronomists and veterinarians (called ‘business development officers’). They provide free consultations and training on livestock, farming and “smart” investments.
In 2018, the Bank launched the Financial Literacy Program for rural people and farms. This program contributes to a better understanding of banking products among the unbanked population, as well as helping people accumulate savings and make informed decisions about loans.
e-MFP: Are you aware of any impact your initiative has had on other organisations?
Kompanion: With the support of Mercy Corps of Mongolia, in 2018 representatives from the Mongolian Ministry of agriculture and XacBank visited Kompanion to learn about our ‘Pasture Land & Livestock Management Training Initiative’, Kyrgyz experiences and best practices in the field of livestock management and pasture land preservation. XacBank has subsequently developed and implemented a similar project in Mongolia. In addition to that, various international institutions show interest in Kompanion Bank’s training programs and have approached the Bank with ideas for collaboration. Finally, Kompanion has started collaborating with Helvetas in the implementation of the financial literacy and livestock training program for residents of the remote southern regions of Kyrgyzstan.
e-MFP: What do you see in the future for your initiative and for this area of practice more generally?
Kompanion: We have various plans in the short, medium and long term. The ‘Pasture Land & Livestock Management Training Initiative’ has become an ongoing training program of the Bank. This year, we plan to deliver training to 1,800 new households. In 2019, all training materials relating to this initiative will be updated. Kompanion’s in-house agronomists and veterinarians will take TOT training on new training modules. Further, Kompanion’s agronomists and veterinarians will participate in refresher training sessions on forage production in order to subsequently share this new knowledge and practices with the population. This will help people increase their livestock yields and reduce grazing pressure.
Kompanion’s Smart Investments and Smart Savings projects have also become ongoing. Each quarter, the Kompanion team comes up with new training materials on livestock and agronomy for rural people, and will continue to expand this. Kompanion also plans to expand the Financial Literacy Program so that it will reach farmers from the more remote regions of the country. The program will include training sessions on effective family budget management, accumulation of savings and wise use of new banking products.
Finally, Kompanion plans to bring about the new project called “Pasture Protection & Energy-Efficient Grazing” for farmers of two regions. The aim of the project is to help farmers address everyday challenges of the grazing season by teaching them how to use innovative energy-efficient technologies (electric fences, solar panels, etc.), and more effectively rotate pastures. The Bank also plans to provide education on protection of pastures and selection of cattle for breeding purposes.
The European Microfinance Award is jointly organised by the Luxembourg Ministry of Foreign and European Affairs, the European Microfinance Platform (e-MFP) and the Inclusive Finance Network Luxembourg (InFiNe.lu). For more information on the 2019 Award on "Strengthening resilience to climate change" , visit the Award website .