COFIDE-CMAC ICA: Medida Complementaria al Programa de Crédito Rural Assignment Name: Medida Complementaria al Programa de Credito Rural – COFIDE III
2017-12-31 - 2018-10-31
The objective of the project was to strengthen Caja ICA’s ability to evaluate credit risk in the rural sector, and to apply methods of risk mitigation specifically adapted to rural MSME lending in Peru. The project addressed all aspects of rural lending, including the development of new financial products/adaptation of existing products.
The project contemplated five phases:
(1) Preparatory Phase, including desktop market research and kick-off workshop,
(2) Strategy and Rural Model Business Plan,
(3) Qualitative research of pilot branch,
(4) Design of products, methodology and processes for rural product;
(4) Human resources and capacity building activities,
(5) Pilot phase and launching of new product.
Under (1) Preparatory Phase, LFS researched the current market conditions and current level of penetration of the 25 rural branches in CMAC Ica. A pilot branch was selected jointly with the institution through a SWOT Analysis. In the Kick-off workshop a work plan for the implementation of the TA was agreed with the organization. For phase (2) Strategy and Rural Model Business Plan, the MYPER Strategy Expert facilitated the process of incorporating the new rural credit aspects into the Strategic Planning of the CMAC as well as into their Business Plans. In (3) Qualitative Research of pilot branch, the team of consultants conducted a thorough market research exploring market potential, typology and client segmentation, needs and preferences for rural finance products and technical evaluation of economic activities in the area, to better inform the next phase (4) design of the products. This component had as an objective to adapt the rural offer to the needs of the target market and to design a profitable and sustainable offer for the institution. The process concluded with the design of a tailored made product, taking into consideration also the current offer in the market by other providers. It also produced as deliverables all necessary documents such as policies and procedures, technical sheets and so forth for disbursement of the new loans. Under the (4) Human Resources and capacity building activities, the main objective was to strengthen the capacities of the institution in rural finance. For doing so, LFS conducted a gap analysis in order to determine the specific needs of staff. Job descriptions, Career plans, guidelines for a capacity building strategy in rural finance as well as capacity building material are some of the outputs to be delivered under this component. It is under phase (5) Pilot phase and launching of new product where the most intensive man-day component was found. The activities here contemplated capacity building activities of up to 10 members of staff in the new policies and procedures, including both classroom training and on the job training. While conducting the later, the loan officials disbursed the new loans under the LFS consultant team supervision. The capacity building plan contemplated that 3 members of the staff were trained as internal multipliers so that the organization could replicate the process in other branches. LFS consultant team supervised the whole process so that the new rural finance business was fully implemented in the pilot branch.