International Course in Israel on:

The Promise and Limitations of Microfinance Institutions as a Major Tool in Developing SMEs

September 8 - 17, 2008

Course Objective

Microfinance has increasingly become a major tool in ensuring that small and micro scale producing people as well as low income and poor households that are economically active (production, services, trade and transportation) would have an adequate access to effective financial services (credit, saving, insurance, and money transfer) that until recent years was confined to the more well to do clientele.

The microfinance revolution which is hardly 25 years old and in many countries has started much later or has not started at all is capable of delivering the following:

• Increasing substantially the share and number of low income people that can benefit from access to diversified financial services
• Allowing this target clientele to benefit from lower interest rates compared to rates paid to money lenders
• Facilitating adequate saving instruments that ensure safety, low clients’ transaction cost and access to effective saving withdraws
• Access to other financial services such as insurance and money transfer
• Allowing clients to “grow” with the microfinance institutions (MFI) , thereby facilitating higher value loan over time upon prompt repayments of prior borrowing and reducing of lending interest rates paid by veteran clients as an outcome of their gradually becoming a better credit risk that entails lower transaction cost in processing their repeated loans
• Favorably impact on economic growth and poverty reduction as a result of providing access to financials services to low income clientele that allow better investments, consumption and saving opportunities to segments of the population that were not reached out adequately by the financial sector
• Deepening the financial sector and its clientele served, thereby leading to a more inclusive financial system

Applying “good Practices” in microfinance by successful microfinance institutions (MFI) through the provisioning of diversified financial services (credit, saving, insurance and money transfer) have contributed significantly to the creating of an inclusive financial system, thereby facilitating benefiting of a large share of the country’s population from access to financial services that addresses their effective demand and allows reducing spreads and transaction cost of the MFIs and their clients over time.

Technological improvements, learning by doing, incentives to clients and to MFIs’ staff facilitated the provisioning of financial services to many that the traditional, profit maximizing banks considered credit unworthy before. The microfinance revolution that was successfully implemented in many countries transformed many micro producers to creditworthy borrowers and savers.

The course is being conducted with the support and cooperation of: ISMEA - the Israel SME Authority, a joint government – private sector organization.

 

Program of Studies:

The course includes frontal lectures, workshops, study visits to relevant institutions and organizations as well as 2 days of cultural and historical tours.

The course would cover the following subjects :

• The history of the state owned development banks and the rise of the microfinance sector
• The political economy of directed concessionary credit and the Main factors that explain the success of a few world large microfinance program
• The division of labor between the state, the private sector and donors in promoting a healthy microfinance industry
• The promise, benefits and limitations of microfinance
• Best practices in microfinance operation
• The two primary assessment criteria in assessing MFI’s operations outreach to target clientele and financial sustainability
• Key performance financial indicators used in analyzing and reviewing operations of MFI
• Financial sustainability and social mission- can the two be achieved?
• Review and analysis of the best performing MFIs-lessons from Indonesia Bolivia and Kenya
• The Israeli policy and the operations of the public and private funds that support the SM&E and microfinance sector
• Strategies of development
• Contribution of SMEs to the economy, society and the individual
• The role of SMEs in rural development
• Establishing and managing comprehensive support systems for SMEs - the central and local/regional levels
• The advantages and disadvantages of subsidies in supporting the sector.
• Local/regional-level Small Business Development Centers (SBDCs)
• Integrating financial and non-financial (training, consulting, etc.) support measures
• The role of local, regional and national governments in promoting micro and small enterprises

Requirements for Admission

The course is designed for: decision makers; senior staff of government ministries involved in economic, industrial and social development; senior staff of regional and local governments; entrepreneurial and SME support and developmental agencies; banks and development financial institutions; micro finance institutions (MFI); leaders of chambers of commerce and non-governmental economic and social associations (NGOs); leaders of SME associations; international organizations involved in development issues; economists; business consultants and trainers.

Applicants must have good communication skills in English

 

Duration and Language

The course will last 10 days between the 8^th and 17^th of September, 2008. It is scheduled to officially open on the afternoon of September 8^th.

Participants are requested to arrive September 7^th or the morning of September 8^th. (Accommodation prior to these dates is problematic).

The language of instruction will be English.

 

Course Site

The course will be held in the in the facilities of NISPED, which are located in the Golden Tulip Hotel in Beer Sheva, the capital of the Negev (southern Israel). Each room is equipped with air conditioning and its own shower and bathroom. There is a health club available to NISPED's guests.

 

Fees and Scholarships

The total fee is Euro 2,850. Partial scholarships of up to Euro 750 are available for participants from developing countries. This fee covers all in-country costs including tuition, background materials, full room and board (single rooms, breakfast, lunch, dinner and coffee/tea break), all inland transportation, study visits, visits to cultural and historical places, health insurance and transfer from and to the airport.

Applications

Candidates must submit the application form available on the NISPED website.

The completed application, including the health form, must be submitted no later than August 7th, 2008.

 

Passport and Visa

Passports must be valid for at least six months from the opening day of the course. Applicants must submit an official visa application form. The dates and flight numbers for the return trip to and from Israel must be confirmed before arrival.

 

Health Services

Medical insurance covers medical services and hospitalization in case of emergency. It does not cover the treatment of chronic diseases, dental care other than first aid, or repair of eyeglasses. Candidates using specific medications on a regular basis must bring sufficient quantities for the duration of their stay.

 

Clothing

Most days casual clothing is appropriate. Temperatures usually range from 20 to 30 degrees Celsius during this time of year. For the closing ceremony and official visits, participants may want to bring clothes that are little more formal. For those coming from countries that have a national costume, it is recommended to bring it. It is important to also bring: a bathing suit, sun hat and comfortable walking shoes for excursions.

 

Country Presentations

Each participant is requested to prepare in advance and bring to the course a general presentation of his/her country in four parts:

a. Geography, short history, population, economy, international trade, etc.

b. Description of SME sector and existing support systems,

c. Role of one's own organisation.

During the course, time will be allotted for the delivery of these presentations.

 

Course Directors Jacob Yaron and Shmuel Bahat

The program is run by two world renowned experts:

Jacob Yaron, A specialist in SMEs and Microfinance that provided technical assistance to Governments and managements of Development Finance institutions in more than 30 countries. He also wrote the policy paper for Rural Finance of the World Bank and many other related articles.

Shmuel Bahat, the chairman and chief trainer of INCEP-SME. Shmuel Bahat is also a senior adviser to WASME - World Association for Small and Medium Enterprises. In the early 1990^s, Mr. Bahat was the founder, and first chairman and CEO of the Israel Small and Medium Enterprise Authority (ISMEA), which is a joint government–private sector endeavor.

Registration