COFIDE-CMAC Piura: Medida Complementaria al Programa de Crédito Rural

2018-05-31 - 2019-02-28

The objective of the project is to strengthen the institution 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 addresses all aspects of rural lending, including the development of new financial products/adaptation of existing products. The project contemplates 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, and (5) Pilot phase and launching of new product.
Under (1) Preparatory Phase, LFS will research the current market conditions and current level of penetration of the 25 rural branches. A pilot branch will be selected jointly with the institution through a SWOT Analysis. In the Kick-off workshop a work plan for the implementation of the TA will be agreed with the organization. For phase (2) Strategy and Rural Model Business Plan, the MYPER Strategy Expert will facilitate 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 will conduct 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 has 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 will conclude with the design of a tailored made product, taking into consideration also the current offer in the market by other providers. It will also produce as deliverables all necessary documents such as policies and procedures, technical sheets and so forth. Under the (4) Human Resources and capacity building activities, the main objective is to strengthen the capacities of the institution in rural finance. For doing so, LFS will conduct 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 is found. The activities here contemplate 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 will disburse the new loans under the LFS consultant team supervision. The capacity building plan contemplates that at least 3 members of the staff are trained as internal multipliers so that the organization can replicate the process in other branches. LFS consultant team will supervise the whole process so that the new rural finance business is fully implemented in the pilot branch.