For our business clients, ProCredit institutions in Africa accompany entrepreneurs along the entire development of their businesses. Skilled ProCredit staff evaluate the debt capacity of each business, tailor a financial offer to that client’s needs and maintains a long-term relationship with that client. In our countries of operation, small businesses, particularly those involved in vital local production and agricultural activities, are still very poorly served by the banking sectors as a whole. ProCredit is committed to those businesses because they play an essential role in sustainable development and employment creation.
For the ordinary people that live and work around our branches, ProCredit institutions in Africa focus on promoting savings and providing efficient modern payment services with transparent fee structures. In Africa, nine out of ten ProCredit clients are non-loan customers. We serve large numbers of account holders with small balances because we believe providing people with a safe place to save is an essential service. Through our network of more than 60 branches and service points, 1,428 staff and 78 ATMs at the end of 2011, ProCredit institutions in Africa managed 375,312 accounts with a volume of some USD 210.5 million. Thus, the loan portfolios of the ProCredit institutions in Africa are financed with locally mobilised savings.
We have ambitious goals in Africa: to create strong institutions which have a significant development impact, and set new standards in terms of transparency, access and service quality for our clients and for the markets in which we operate. We do this in often challenging environments. The global phenomenon of aggressive consumer lending has been felt increasingly in Africa. In many areas, since credit bureaus function poorly and financial literacy is limited, the problem of over-indebtedness has reached worrying levels. Levels of non-performing loans are typically high in banking sectors in Africa. The operating environment more widely is also difficult since the legal and fiscal frameworks is weak, and administrative costs high.
However, ProCredit institutions are establishing a valuable and sustainable positioning in Africa. They focus on serving Very Small and Small businesses, especially working with clients taking loans in the size range from USD 5,000 to USD 50,000. There is tremendous value in supporting these businesses to develop and gradually increase their level of formality. This requires a “whole customer” approach, embracing loans, account services and electronic banking. It requires staff committed and ability to accompany clients in the formalisation process. These businesses are often not easy to serve: they tend to be informal with poor financial record-keeping, their collaterals are unreliable, and their business and personal environments are volatile. Consequently, we have invested heavily in staff training, knowing that professional expertise and enhancing financial literacy with our clients are crucial for continued success in expanding our business and the businesses of the very small and small enterprises we serve. click here to read more »