Pillar 1 - FSD Africa

Report
STRATEGIC PLAN
2013 - 2018
What is FSD Africa?

FSDA is a programme that promotes financial sector development across sub-Saharan Africa. It is based in
Nairobi.

Its goal is to reduce poverty. It achieves this by supporting efforts to improve financial inclusion and by
helping financial institutions and markets drive economic growth.

It is a market development agency, or “market catalyst.” It supports processes of change that result in
systemic benefits for financial markets – e.g. better policies, more innovation, greater competition. These
enhanced characteristics make markets operate more efficiently and improve choices for consumers.

FSDA strengthens market capacity by facilitating the transfer of skills, by making it easier to access and use
the different types of information on which efficient financial markets depend and by encouraging
investment in financial infrastructure.

It is a regional programme that looks for efficiencies and economies of scale – e.g. in training or research –
by operating across multiple jurisdictions. It is a platform that is available to other donors seeking to support
African financial market development at scale.

It supports a network of FSD programmes in 9 African countries by facilitating the exchange of market
insights and by providing strategic advice and co-funding.

It is highly focused on impact. By 2018, 3m more people will have access to formal finance (over half of
these will be women) and 4,000 financial sector employees will be trained as a result of initiatives supported
by FSDA. At least 20 financial institutions will benefit from technical assistance from FSDA which will also
catalyse change processes in at least 5 countries in SSA that do not have their own FSD programme. Two of
these will be conflict-affected countries.
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
About this document
INTRODUCTION:
This is an introductory narrative that contains a problem statement and a high-level
explanation of how FSDA will be positioned to deal with the problem.
SECTION 1:
This section introduces FSDA’s vision and mission and is a summary of the plan.
SECTION 2:
This section gives the contextual background, and suggests how this context has implications
for FSDA’s plan.
SECTION 3:
This is the longest section of the document and contains the substance of the operational
plan. A standard structure is applied to each of FSDA’s proposed 4 pillars – including key assumptions and activities,
budget and risks.
SECTIONS 4-7
These sections are self-explanatory and provide details of FSDA’s communications strategy,
impacts, governance and management, and finances.
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
Introduction. Financial exclusion in Africa –
pervasive but with regional differences

Sub-Saharan Africa (SSA) has the worst levels of financial exclusion of any global region.

There are significant regional disparities – some regions, and countries within regions, have much better
inclusion indices than others. Generally, however, financial exclusion is high in rural areas and among young
people and women’s access to financial services is persistently worse than men’s.

Rapid economic growth and asset inflation has increased affluence for some, stimulating demand for more
complex, higher value-adding financial products and, in some markets, creating a problem of overindebtedness.

However, growth has also increased the threat of rising inequality. Sustained investment is needed to
combat high levels of unemployment across the continent, especially among young adults. 200m Africans are
aged between 15 and 24; they account for 20% of Africa’s population and 60% of its unemployed.1

Financial institutions (FIs) face significant capacity constraints – keeping pace with growth and the rate of
technological change, catering to the more complex needs of the increasingly affluent and developing new
strategies to reach underserved market segments in a sustainable way.

Skills shortages appear greatest in managerial roles such as leadership and strategy, strategic and mid-level
HR and information management. With some exceptions, African business schools are “of low-quality, overly
academic and out of step with the requirements of fast-growing African economies.”2

Some countries have made financial inclusion a policy priority. Others have made policy statements about
financial inclusion but are yet to enact coordinated, or comprehensive reforms. Some countries do not even
have a baseline for financial inclusion.

This piecemeal progress reflects countries’ different socio-economic legacies but also the fragmented nature
of African financial systems. Regional financial market integration remains an aspiration.
1 Brookings
(2012); 2 African Management Initiative (2012)
Introduction. Financial inclusion – headline data
Low income countries
Lower middle income countries
Upper middle income countries
Formally served
26.6% 12.9%
37.4%
21.4%
60.5%
Informally served only
Figure 1 – country income status profoundly
affects overall inclusion levels.1
60.5%
41.1%
5.0% 34.6%
Excluded
Low income countries
37.0%
Lower middle income countries
Figure 2 – Savings rates - country
income status affects savings rates.
Upper middle income countries
54.8%
36.8%
1 Global
Findex
Introduction. Financial inclusion –
headline data
SSA
34.0%
15.6%
Post conflict countries 13.7%16.5%
Rest of SSA
Formally served
37.8%
Post-conflict countries1 exhibit dramatically worse
indicators on financial inclusion than countries that are
not affected by conflict….
50.4%
69.8%
15.5%
Informally served only
46.7%
Excluded
SSA
18.5%
Post conflict countries 6.4%
Rest of SSA
….and mobile money is not compensating for the
lack of formal financial services in conflict-affected
1 Global
20.7%
Used mobile phone
81.5%
93.6%
79.3%
Didn't use
Findex analysis: post-conflict basket included Liberia, Sierra Leone, CAR, DRC, Somalia, Burundi, Madagascar
Introduction. Financial exclusion –
an expression of financial system underdevelopment 1

African financial systems are underdeveloped because markets are small, because people earn and save
little and are often dispersed over wide geographical distances, making it more difficult for financial
institutions to reach them economically. Contract enforcement and corruption in an environment already
characterised by informality and poor information weaken banks’ incentives to lend.

As a result, levels of intermediation are low. When banks do lend to the private sector, almost 60% of loans
are for less than 1 year.

This undermines investment in the productive economy and job creation. Given the correlation between
employment status and access to financial services, this entrenches financial exclusion in a direct way.

African banking systems are generally concentrated and anti-competitive. Interest rate spreads are wide,
which means that banks can support high overhead costs but at the expense of the real economy.

Financial system underdevelopment causes financial exclusion because:
 It reduces growth rates and so incomes stay low, reducing the demand for financial products
 It prevents finance from flowing to economic sectors that affect the poor disproportionately, such as
agriculture and infrastructure

Financial inclusion allows people to contribute to economic growth, but growth (depending on the nature of
that growth) is also a powerful driver for financial inclusion.

While interventions like mobile and agency banking confront some aspects of financial sector
underdevelopment in a compelling way, broad financial inclusion will also depend on encouraging innovative
financing approaches to boost investment in economically productive sectors.

According to the World Bank: “Africa needs to become a laboratory for innovation…in financial sector
development, especially with regard to long-term finance.”
1 Financing
Africa: Through the Crisis and Beyond (World Bank, 2011)
Introduction. FSD Africa –
a catalytic response to a broad set of challenges

Through the £30m SIMBA programme, DFID has provided funding to support a wide range of innovative, marketbuilding interventions that will result in major advances in financial inclusion in Africa.

Core to the SIMBA logic is the belief that weak capacity undermines innovation and competition, increases
inefficiency in the financial system and perpetuates exclusion. Weak capacity refers to a lack of professional,
managerial and technical skills, but also to information gaps – “know-how” in a broad sense - especially around
how to develop strategies to reach underserved market segments.

FSDA will therefore provide resources for skills development by working directly with financial institutions, by
strengthening the regional infrastructure for financial training and by supporting the development of knowledgebased services markets, such as data analytics and HR.

FSDA has been set up as a regional platform to work across SSA. Its projects will almost always have a multicountry dimension, especially where it is engaged in market-building initiatives around core thematic
programmes, such as payments or agriculture finance. Its work will prioritise the exchange of information and
knowledge across borders. It will look for economies of scale as it builds regional services markets, including
training. It will stimulate change processes in countries that lack coordinated policies for financial inclusion.

It will work with regional actors – African and international – in the private sector and the donor community in
order to catalyse change at scale.

Critically, it will work with country-based FSDs to build a robust network in which the FSDs value the exchanges
they have with each other and where external partners see value in engaging with the network as a collective
whole . FSDA will broker relationships that will bring benefit to individual FSDs.

FSDA will be a flexible contracting platform to external partners seeking to engage in Africa. It will also provide
direct support to partners’ initiatives elsewhere in Africa.

Increasingly, FSDA will seek out linkages between the worlds of financial inclusion and mainstream financial
sector development in order to foreground economic growth as a key driver of financial inclusion.
Introduction. FSD Africa –
a distinctive value proposition
Broad mandate
Financial inclusion and financial sector development
Flexible - but long-term, market-building - approach
Making Markets Work ‘ethos’, wide range of intervention
tools, and ability to work with public and private sector
Regional perspective
Ability to address shared challenges; potential to coordinate
efforts of multiple actors to achieve impact at scale
Working with the FSDs – multiplier effect…
 FSDA will bring benefits to the FSDs – but FSDs will also
benefit FSDA
 FSDA will be better informed and more efficient by working
with the FSDs
 Collaboration should intensify impact
FSD network
Access to FSDs’ networks and experience
and ability to share across borders
Introduction. The relationship between financial
inclusion and financial sector development

Initially, FSDA will focus primarily on achieving the objectives of the SIMBA programme. SIMBA aims to bring 3
million poor people into formal financial provision by the end of the programme.1

Selectively, FSDA will use its SIMBA resources to explore the feasibility of intervening in the market using
innovative financing approaches to drive inclusive growth. This would move FSDA towards risk-sharing and away
from pure technical support or research. Such a move might involve catalysing the implementation of credit
enhancement structures or impact investments.

SIMBA does not have enough funding to accommodate these sorts of initiatives and FSDA would therefore need
to raise additional funding. Solid feasibility work would strengthen the fund-raising case.

Given the impact that innovation to support pro-poor investment could have on financial inclusion, FSDA believes
that positioning FSDA in this way is directionally appropriate.

There is increasing emphasis among donors on the growth agenda: while it is generally agreed that financial
inclusion helps people (and especially vulnerable poor people) manage their lives more effectively, opinion is
more polarised on the role financial inclusion plays in contributing to GDP growth. Exploring the interrelationship between financial inclusion, financial sector development and growth would be valuable.

There is also increased recognition that, in market environments that lack innovation or competition, some form
of market-leading intervention (“well-designed, restricted interventions, in collaboration with the private sector”
– to quote the World Bank) may be appropriate or even necessary to achieve the market change effects that
“pure” market-building programmes seek.
1A
7 year programme from 2012/13 to 2019/20
Introduction. The relationship between financial
inclusion and financial sector development
Financial
Sector
Deepening
Financial
Inclusion
Economic
Development
Financial
Sector
Development
MEANS
END
END
MEANS
SIMBA programme focus:
 Financial Sector Deepening
 Financial Inclusion of 3 million poor across SSA
 Economic development driven through market efficiencies and
entrepreneurialism
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
FSD Africa conceptual framework
Skills and information
will be delivered
through the regional
platform, strengthening
interventions in core
thematic programmes
Building
skills
Providing
information
Thematic
programmes
FSDA’s four main
activities are mutually
reinforcing and aim at
delivering – substantial
and sustained –
systemic change
Regional platform
Fostering
systemic change
regionally
FSD Africa’s vision
“Deep, efficient and inclusive financial markets that are responsive to the
broader developmental needs of Africa’s economies and its people”
Term
Explanation
Deep
Financial depth – private credit to GDP; vision speaks to FSDA’s long term goal to support inclusive
growth in an explicit way
Efficient
FSDA’s skills agenda aims to improve operating efficiencies of financial institutions, making them better
able to innovate and compete
Inclusive
Financial breadth. Notion of inclusion goes beyond product usage. FSDA is committed to developing a
better understanding of how access to financial services and inclusive financial systems improves
livelihoods
Responsive
Combines notion of economic relevance with the Making Markets Work ethos of flexibility and
“principled opportunism”. FSDA will strive to support innovation where there are gaps in provision (e.g.
underserved sectors, countries with very poor inclusion metrics)
Broader
developmental
needs
Access to financial services for poor households but also access to finance for investment. Economic
development as well as social development. Needs – analysis should identify clear demand
African
All of sub-Saharan Africa, including Francophone Africa and post-conflict environments
People
Poor people are central to FDSA’s vision – embraces client-centric approach to building financial
inclusion as well as pro-poor dimension behind vision of inclusive growth
FSD Africa’s vision
“To be a resource to facilitate innovation, skills development and research to
encourage the development of African financial markets that are robust and inclusive”
Term
Explanation
Resource
Financial resources but also knowledge-sharing and facilitatory role (see below). FSDA’s corporate
vehicle is a resource that can be used by partners as a contracting platform.
Facilitate
Highlights convening and connecting role but also the idea that FSDA can simplify or smooth processes
for partners (e.g. government, donors, FSDs) who may lack capacity in one area or another. Facilitative
role will involve bringing multiple players behind particular ideas or challenges in order to solve common
problems and build understanding.
Innovation
Change processes that lead to new products and services or ways of doing business; or that encourages
investment in underserved markets; or that allows governments to introduce new policies or regulation
that change the regulatory status quo; or that result in information products that shed new light on how
financial markets operate. May or may not involve ICT.
Skills
development
Demand side initiatives to boost professional, managerial and technical skills within financial
institutions; supply side initiatives to strengthen the regional infrastructure for financial training; marketbuilding initiatives to stimulate and nurture knowledge-based services markets.
Research
Cross-country research; market studies; initiatives to strengthen existing information products and
develop new ones; action research; impact research
Robust
Support for skills development aims to strengthen institutions’ capacity to embrace change safely and
effectively. Support for inclusive growth initiatives to make capital available for underinvested markets.
Summary of FSD Africa’s key activities –
four inter-related pillars
1. Skills development and training
Skills
development
and training



Change management: technical assistance to support processes of innovation and organisational change within
institutions looking to capitalise on opportunities in underserved segments .
Building services markets: research and grant funding to stimulate key services markets. Initial focus on
(i) coaching and strategic HR (ii) data management and analytics and (iii) e-learning.
Centres of Excellence: partnerships with regional academic or training institutions to build curricula relevant to
financial inclusion and increase volume of technical and professional training.
2. Knowledge and evidence

Knowledge
and evidence



Thematic
programmes
Cross-country research: investment in research to build cross-country comparisons to highlight regional
differences and reveal advocacy opportunities and showcase innovation.
Information products: support for research processes that enhance existing information products (e.g. FinScope)
and stimulate the development of new analytical tools.
Impact evaluation: coordination of a consultative process to strengthen capacity for impact evaluation across the
FSD network and find answers to outstanding research questions concerning the most effective channels through
which financial inclusion can be promoted.
Portal: development of a major information resource for financial sector development in the region.
3. Thematic programmes


Thematic programmes: investment in multi-country, multi-year sub-programmes, based on M4P principles, to
create new African centres of expertise around key thematic areas for financial inclusion.
Initial focus on (i) retail payments, interoperability and G2P (ii) credit markets development and (iii) agriculture
finance.
4. Regional platform
Regional
platform




Regionalisation: research and advocacy to encourage processes of regional harmonisation.
Cross-border initiatives: catalysing strategic financial inclusion initiatives in non-FSD countries; financial support
to complementary donor programmes.
Regional facilitation: coordination of FSD network activities and of other expert reference groups.
New initiatives: feasibility studies and pilots to test pathways for FSDA “post SIMBA.”
FSD Africa’s theory of change –
a high-level schematic
Improved access to financial services;
strengthened livelihoods for the poor
Enhanced market characteristics
Improved
evidence on
how financial
inclusion
benefits the
lives of the
poor






Clear and appropriate policy and regulatory framework
Effective competition between suppliers
Diversity of sustainable suppliers
Adequate credible information available to market players
Innovation in products and services
Appropriate knowledge-based services available to market
players
Increased market capacity
Thematic
programmes
Knowledge
and evidence
Skills development
and training



Motivation
Know-how and know-who
Resources
Regional
resource
Market
infrastructure
Summary of FSD Africa’s anticipated impacts

The SIMBA programme has specific output, outcome and impact objectives as laid out in its logframe. FSDA
is planned to outlive SIMBA and so its longer term impact objectives are broader than SIMBA’s.
SIMBA logframe – selected key indicators








3m more people formally included. FSDA’s initiatives will
result in 3 million more poor people in SSA having access to
formal financial services by 2020.
More than half of these will be women. 1.75m women will
have new savings accounts from formal financial
institutions; 450,000 will have new loan accounts.
FIs with which FSDA works will be more efficient and
sustainable.
 Operating costs as a percentage of loans will fall from
the market norm of 31% to 17%.
 Return on assets will increase from 4.8% to 14.3%.
3 strategic partnerships with training institutes. FSDA will
initiate at least 3 partnerships with academic or training
establishments over the lifetime of SIMBA.
5,000 people trained. Over 5,000 people will receive
certified training by 2020 from FSDA partner institutions.
Financial inclusion initiatives in 5 non-FSD countries. FSDA
will catalyse inclusion initiatives in at least 5 non-FSD
countries.
FSDA will double its SIMBA funding from non-DFID
sources. FSDA will crowd in £30m of additional non-DFID
funding.
Summary of FSD Africa’s anticipated impacts.
Broader indicators of FSDA impact (by Year 5)





Changed mindsets. FSDA will encourage a change in
mindsets:
 Private sector institutions will see value in investing in
skills.
 Donors will embrace the market building approach to
capacity building and subsidise training activities less.
Regional champion. FSDA will support the emergence of at
least one hitherto unknown regional champion providing
financial services to poor consumers.
FSD network. FSDs acknowledge the incremental value
FSDA has brought to their in-country activities. The FSD
network is valued as being more than the sum of its parts. In
collaboration with FSDA, FSDs provide finance to a range of
growth-related interventions. The FSD network’s reputation
for being able to embrace technically complex challenges is
enhanced.
FSDA support for underinvested markets. FSDA has helped
smaller, unsupported countries keep pace with
developments in financial inclusion and has intervened
effectively in underserved sectors.
FSDA has gained acceptance from African stakeholders (as
evidenced by raising African funding) and has one successful
pilot from a new “SIMBA Growth” programme whilst
delivering imaginatively and impactfully on SIMBA.
FSD Africa post - SIMBA







Strategic options for FSDA post the 4 year SIMBA funding period include:
 Sustain, scale up or replicate successful SIMBA approaches.
 Play a more instrumental role in driving growth by catalysing and providing finance towards investment.
As regards the growth agenda, FSDA believes there is a significant opportunity for it (and other FSDs) to catalyse
innovative financing initiatives .
FSDA would retain a systemic, or meso-level, focus (i.e. it will focus on market infrastructure) and would avoid
picking winners or taking positions.
Direct financing support would need to demonstrate ability to crowd in private funding at scale.
Possible areas of focus:
 Supporting PPPs
 Risk-sharing
•
Funding up front research to determine feasibility and likely impact and to assist with design.
•
Credit enhancement - i.e. a tranche of risk capital (e.g. first loss) where this can clearly be
demonstrated to be market-leading.
 Catalysing financing initiatives e.g. innovation or venture funds.
Potential partners: regional development banks, international DFIs, impact investors, insurance industry.
Near term strategy is:
 to be responsive to these new ideas (especially where the promoters have a good track record) .
 to allocate resources for initial feasibility work and design from current SIMBA funding.1
 involve FSDs in these deliberations where appropriate.
 determine a more comprehensive strategic approach as precursor to further funding.
Credit
Exchange
Fund
FSDA is exploring the feasibility of providing support to the Credit Exchange Fund. CEF seeks to boost interbank liquidity by allowing local banks to
borrow longer term funds, or forex, from international banks by guaranteeing their use of local collateral (e.g. local currency cash or T-bills). This
would create efficiencies in local banking markets by allowing local banks to service their SME and other clients’ need for investment capital more
comprehensively and would unlock “dead capital” on local bank balance sheets that larger banks currently deem to be worthless.
1 NB
FSDA is proposing to allocate £825,000 of SIMBA funding (2.75% of programme delivery budget) to these activities
FSDA – main risk areas and mitigation strategies

The main risks for each FSDA programme pillar are set out in Section 3 but the main risk categories and
proposed mitigation strategies are summarised below:
People
Strategic
choices
Programme
Management
Examples
Mitigation


Regional recruiting.

Flexible use of consultants on drawdown
contracts.

Use of global networks (CGAP, DFID, Gates
etc.).
Hard to secure enough of the right kind of people to
manage projects (core team plus sub-programme
management).

Dependency on consultants (short/long term).

Finding committed directors who add value.

Market building – FSDA’s reliance on market actors
(e.g. FIs, business schools) to play their part.

Outstanding relationship management and
efficient delivery by FSDA.

Innovative approaches (e.g. in building services
markets) – risk of going up blind alleys.

Rigorous ex ante testing of assumptions;
close monitoring.

Distances: difficult to exert and sustain momentum
for change at a distance.

Being prepared to close projects down
early.

Right strategies but too slow for SIMBA timeframe
(e.g. setting up new institutions).

Strong FSD relationship; working through
other partners.

Broad FSDA scope will place heavy burden on
procurement systems and slow down
implementation.

Outstanding project management.

Openness and flexibility in dealing with
funding partner.

Failure to leverage in co-funding will materially
limit impact.

Outsource some admin functions
permanently to service provider.

Difficult to get good quality data linking FSDA
inputs to market impacts.

Strong focus on M&E throughout.
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
FSDA in context. Four sets of interrelated
‘mega-trends’ are driving Africa’s future
Demography
Economy


Rapid but uneven growth: While GDP is growing at
over 5% in SSA, growth is uneven across countries,
e.g., South Africa at 2.6% v. Nigeria at 7.1%, and
within countries, driving inequality.

Expanding middle class: The number of middle-class
Africans more than doubled from 1990 to 2010 and
continues to rise. However, 67% of the new ‘middle
class’ spend just $2 to $4 per day.

Youth bulge: 70% of Africans are under 30, with
nearly a third of Africans between ages 15 and 29. This
demographic dividend will both fuel and necessitate
inclusive growth. In Kenya, job creation will still trail
the number of young people coming to the market
“even if the economy grows at more than 10%
annually.“1
Urbanisation: For the first time, over half of all
Africans will live in cities (60% by 2050), which will
provide opportunities for growth but also
strain infrastructure.
Technology
“Topography”

Increasing connectivity: Mobile phone penetration
will pass 80% in 2013. Internet access lags but is
increasing rapidly, with social networking and ecommerce participation.
•
Resource riches: SSA’s growth is underpinned by its
resources – oil and gas and minerals but also
agricultural land. These attract big companies and
these will determine economic outcomes in SSA .

The rise of ‘Big Data’: Partly due to mobile phone
penetration, availability of consumer information is
growing rapidly, along with the technology to
capture and utilise it.
•
Regional integration: Only 12% of African trade is
within the region. However, informal trade is higher
and intra-African investment and other informal
linkages seem to be increasing.
1 The
East African 6th July 2013
FSDA in context. These African trends create challenges
as well as opportunities for Africa’s financial institutions
Challenges
Opportunities

Financial exclusion: How to serve the urban and
rural poor, the young and the new ”middle class”
and thus help reduce economic inequality?

Market expansion: Young, urban and increasingly
middle class households represent a vast market
opportunity for financial institutions.

Stagnation: How to keep up with the needs of an
increasingly sophisticated and dynamic private
sector, given limited skills and information?

Innovation: As economies expand, and
information improves, opportunities arise to offer
a wider range of financial products – if institutions
can develop, market and manage them.

Competition: How to deal with the certain
prospect of increased competition (at the high
end of the market) from other financial
institutions as well as new entrants (MNOs,
funds)?

Collaboration: Financial institutions can increase
efficiency and reach by partnering with agents,
complementary service providers and others.

Cross-border adaptation: Financial institutions
can learn from and build on the experience of
peers in more advanced markets.

Fragmentation: How to take advantage of
opportunities to expand regionally, perhaps into
faster growth markets, and avoid being trapped in
subscale, domestic markets.
FSDA in context. Africa’s financial markets are yet
to fully address challenges or seize opportunities
Limited access to
financial services
Financial intermediation has increased steadily across most of Africa, but most of
the growth has been at the top of the market: Only 24% of African adults have a
bank account. While nearly 80% of Africans use mobile phones, only 16% of
Africans currently use mobile payments.
Underserved sectors
Agriculture accounts for ~30% of Africa’s GDP and employs ~65% of its workers,
but receives less than less than 10% of all bank credit. Access to other financial
services, such as insurance (at 1% penetration across SSA, excluding S Africa) and
housing finance (only 3 SSA countries have mortgage to debt ratio of more than
5%), remains very low in most African countries, with services concentrated at top
of market.
Limited information
Financial markets’ ability to address the needs of the excluded and underserved is
constrained by a lack of information on markets and potential clients. Over 60% of
FIs interviewed in the course of developing this strategy cited a lack of market and
consumer information as key constraint.
Poor institutional
capacity
Financial markets’ are also constrained by a lack of internal capacity. Of 37 FIs
interviewed by FSDA, all cited internal factors as major constraints.
FSDA in context. Donors and financial sector
development in Africa. The FSD network.



Data on microfinance funding may be indicative of
trends in funding for FSD overall.1
The FSD network
 Some $2.6bn of cross-border funding was
committed to SSA as at end 2011, an increase
of $0.5bn over 2009.
 Five countries (Kenya, Ethiopia, Ghana,
Tanzania and Uganda) enjoyed commitments
of between $100-299m.
 Capacity building accounts for just under 25%
of total commitments (the bulk being debt for
refinancing).
 The most popular funding purposes were
rural/agricultural finance, responsible finance,
mobile/branchless banking.

The donor dialogue in FSD in SSA is quite vibrant. The
Alliance for Financial Inclusion reported that, as at
end 2012, 14 of the 25 countries which had made
financial inclusion commitments under the Maya
Declaration were from SSA.

The World Bank has called on development partners
to invest in capacity development and financial sector
deepening and to make “greater use of instruments
that work directly with the private sector to
incentivize and support innovation.”

1 CGAP:






DFID has committed £220m2 to financial sector
development in Africa, of which £170m is through financial
sector deepening “trusts”, or FSDs.
Two of the FSDs are regional (FSDA and FinMark Trust,
based in South Africa).
The other 8 are country-based FSDs, confined to operating
in their markets (Kenya, Nigeria, Uganda, Rwanda, Tanzania,
Zambia, Mozambique and Malawi (in development)).
Like FSDA, these are market development agencies but have
different priorities and use different modalities to achieve
their objectives.
Their rootedness in their markets is a key reason for their
success.
The diversity of the FSDs, spread across Africa, creates a
problem and an opportunity.
The problem is that, being busy and country-focused, they
do not work well as a network. It means they miss
opportunities to share insights and achieve operating
synergies (e.g. co-fund research).
External partners wishing to engage in more than one FSD
country would have to engage bilaterally with each FSD.
The opportunity, which FSDA is taking, is to remedy this by
putting in place a system of communication and knowledge
exchange (including regular network meetings) and by
providing a central focal point for external partners, should
they need this.
2012 Survey on Cross-border Funding to Microfinance 2 includes prospective commitment for Malawi, not yet approved
FSDA in context – some implications for programming

The diversity of the continent and the range of different needs of whole countries but within countries too create
near-limitless opportunities for different kinds of intervention by FSDA .
 FSDA’s strategy should have a strong conceptual structure and a clearly defined operational philosophy.
 But FSDA also needs the space to be able to take advantage of opportunities as they arise – these could be
quite varied - and should avoid sticking too rigidly to a pre-agreed strategy in the interests of “focus”.

The strength of donor support for FSD in SSA suggests it should not be too difficult for FSDA to raise co-funding
for catalytic initiatives. However it also suggests that FSDA should be quite resolute in targeting areas of genuine
need – i.e. additionality.
 This might involve building capacity in smaller, less developed countries, supporting underinvested sectors
and poorer population groups, and so on.
 It may be more difficult to achieve progress in these areas but successes, when they come, will be truly
innovative.

The prospect of sustained growth across SSA is good news for inclusion and FSDA should support growth-related
initiatives primarily to boost job creation.
 But it should also be attentive to the uneven dynamics of the growth that is taking place and seek out
investment opportunities that would encourage inclusive growth. Finance has been shown to reduce
inequality.1

Big companies are likely to shape economic outcomes in Africa in the coming years and FSDA should look for
opportunities to work with them (e.g. supply chain finance).

There is a compelling opportunity to make the FSD network function better as a “collective asset”. As a collective
they are a major force, relative to other donors, in the grant-giving arena.
1 e.g.
Rajan and Zingales (2003)
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
Table of contents
Key elements of Strategic Plan
Detailed implementation plans

Skills development and training (Pillar 1)

Knowledge and evidence (Pillar 2)

Thematic programmes (Pillar 3)

Regional platform (Pillar 4)
FSD Africa’s programme structure
Vision
Outputs
“African financial markets that are responsive to the broader
developmental needs of African economies and people ”
Skills, capacity and
performance of
financial institutions
and financial sector
professionals across
Africa enhanced
Transformative
information on
underserved
markets generated,
disseminated and
used by financial
sector stakeholders
Targeted, market
building
interventions in
priority areas
launched and
scaled regionally
Regional platform
established to
transfer skills,
knowledge and
technology across
countries and
coordinate efforts
across programmes
Mission
“ To be a resource to facilitate innovation, skills development and research to encourage
the development of African financial markets that are robust and inclusive ”
Programmes
Pillar 1. Skills
Development and
Training
Pillar 2. Knowledge
and Evidence
Pillar 4. Regional Platform
Pillar 3. Thematic
Programmes
FSD Africa’s programme synergies
FSDA supports institutions receiving
skills support to move into priority areas
FSDA directs some skills
support to institutions
working in thematic
programme areas
1
2
Skills, capacity and performance
of financial institutions across
Africa enhanced
FSDA identifies areas of
study from interactions
with beneficiaries of skills
development support
Targeted, market building
interventions in priority areas
launched and scaled regionally
FSDA identifies research
gaps and fills them in
thematic priority areas
FSDA applies research to
develop and refine
interventions in thematic
areas
FSDA collects further
information on
capacity building
market and applies it
to skills programme
FSD offices and FSDA
share knowledge
from skills
development
programmes
FSDA uses platform
to rally support and
advocate for
thematic priority
areas
4
3
Transformative information on
underserved markets generated,
disseminated and used by
financial institutions
Areas of interest for research
identified from actors
participating in
platform
Regional platform established to
transfer skills, knowledge and
technology across countries and
coordinate efforts across programmes
Information shared through regional
platform, including forums, events, etc.
FSD Africa will adhere to a clear
set of principles and intervention criteria (1/2)

Build
sustainable
markets



Aim for
transformative
change
Maintain
focus on
under-served
beneficiaries





Pursue
regional
agenda


Investments will be justified by whether they address components or characteristics of the market
that are weak or missing.
FSDA will act as a catalyst rather than a replacement for markets, “crowding” in private sector
actors.
In return for financial support, grantees (e.g. FIs) will be encouraged to act in ways that benefit the
market for all participants.
FSDA will prioritise programmes or institutions that can reach scale – either directly or indirectly
via demonstration effects. Smaller innovations can be disruptive and game-changing so FSDA will
support some of these.
“Transformative” – for the financial institution and/or for the market; “transformative” implies
strategic significance, so there needs to be strong evidence of CEO/Board buy-in.
FSDA will seek out opportunities to invest in projects that address economic inequality directly .
Market development activities may be indirect, but clear logical pathway must always be
maintained between activities and end beneficiaries, i.e. under-served market segments.
FSDA will support technology-led innovation for service delivery to under-served market
segments.
FSDA’s investments should have regional logic - either (i) by their very nature (e.g., coordination
benefits from regional harmonisation) or (ii) by their approach (e.g. unlocking economies of scale
from regional expansion of firms).
Research will be multi-country in nature so as to facilitate knowledge sharing and best practices
between countries.
FSDA will look for opportunities to promote financial sector development issues at level of
regional organisations (e.g., regional economic communities industry associations etc.).
FSD Africa will adhere to a clear
set of principles and intervention criteria (2/2)


Identify and
collaborate
with
strategically
important
partners




Look to leverage resources of other actors (public and private) for greater impact.
Partner with (financial and non-financial) institutions that are aligned with FSDA vision and
mission.
Build partnerships with existing institutions, including FSDs, where relevant and possible, rather
than starting afresh.
Choose partners that can achieve one or both of: (i) scale and (ii) innovation.
Recognise where others are better positioned to intervene and distinguish between areas
overcrowded by actors and those where increased coordination can enhance existing
involvement.
Pursue complementary activities, and avoid any overlap with donors, country FSDs, and other
partners.
Add value to
country FSDs


Support and co-invest with country FSDs in design and delivery of programmes, where possible.
Enable coordinated activity and aggregate learnings across network of country FSDs.
Adapt to
diversity of
African
markets

FSDA will adapt approach to different markets according to (i) stage of financial sector
development (ii) macro-economic climate, (iii) social and cultural environment, etc.
It will engage innovatively in smaller, undeveloped markets which do not have an FSD .
Involve stakeholders from a diversity of perspectives, e.g., including non-financial, nongovernmental, non-donor institutions, representatives of underserved segments.
Develop
African talent





Commit to recruitment and development of local staff.
Engage African consultants wherever possible, and promote their growth.
Bring in international expertise where necessary, but always include local elements.
Partnership strategy (1/4)

The successful execution of FSDA’s strategy is dependent on FSDA being able to broker and sustain multiple
partnerships of many different kinds – private sector, governmental, NGO and technical. The partnership ethos is
core to FSDA’s philosophy:

Risk sharing and mutual commitment are considered to be critical for successful change management programmes.

Top quality knowledge-based partnerships are needed in order to create the incentives for effective knowledge exchange.

Co-funding, whether at the FSDA level or at project level, is needed in order to maximise the impact of limited SIMBA
resources and entrench sustainability.

Fundamentally, FSDA believes that partnerships produce better impact because they can be an efficient way to
marshal intellectual and financial capacity from the best sources in order to address particular challenges.

Because it has a regional mandate, FSDA aims to crystallise long-term partnerships with organisations (e.g.
regional banking groups or non-financial sector multinationals) who have a pan-African vision and operate at
scale.

FSDA will be a “low ego” partner. It is more interested in the achievement of outstanding results than in the
promotion of its own brand .

FSDA intends to offer its corporate structure to partners who wish to take advantage of its user-friendly,
regionally-oriented contracting platform. This will allow them to operationalise their funding without having to
set up unnecessary bureaucratic structures in advance.

FSDA will actively seek out African partnerships – both funders and technical partners as well as FIs .

Evidence of the success of its partnership strategy will include:

Long term partnerships with private sector organisations where repeat collaboration indicates that FSDA’s contribution
has been relevant and value-adding.

Research and learning programmes having catalysed new and sustainable, knowledge-based partnerships between the
private sector and the research environment, or academia.

Financial resources leveraged into FSDA at scale.
Partnership strategy (2/4)

Although this may change over time, the three most important partners for FSDA are currently DFID, CGAP
and the FSD network:
 Provider of core funding: SIMBA funding, plus further funding for post-SIMBA activities (subject to new Business
Case).
 Connector: as a leading donor in FSD, DFID constantly attracts interest from individuals and organisations (often
global) interested in African financial markets and can therefore effect valuable introductions for FSDA. DFID is also
able to make cross-sectoral connections between FSD and other private sector development initiatives. It also has
convening power that could be of great benefit to FSDA, e.g. research dissemination.
 Provider of technical support: e.g. on impact evaluation, procurement, procedures etc.
 Intellectual partner: CGAP has a major stake in FSDA’s success , given its financial inclusion mandate and the fact
that the vision of the two organisations is remarkably similar. CGAP can make a powerful intellectual contribution to
the design and evaluation of FSDA programmes. FSDA/FSD insights will provide material for CGAP’s global
knowledge-sharing.
 Access to people: CGAP may be able to facilitate FSDA’s access to technical experts across the world.
 Funding partner: in certain FSDA programmes (e.g. technology or agriculture finance –related), there may be
opportunities for CGAP to bring its financial resources alongside FSDA’s.
FSDs
 Raison d’être: the FSD network provides FSDA with part of its raison d’être. Therefore much of what FSDA does will
revolve around the FSDs.
 Local networks and insights: this is the capital that underpins the FSD network and is of great value to both FSDA
and other stakeholders with an interest in their markets. The FSDs can be a channel for FSDA or others’
interventions or, by supporting due diligence, can strengthen the quality of interventions.
 Funding partners: FSDs may provide funding towards FSDA-led initiatives.
Because of their role as de facto promoters of FSDA, these organisations will be
represented in the governance structure of FSDA
Partnership strategy (3/4)

Each of FSDA’s sub-programmes will have its own priority list of partners but FSDA also envisages the possibility
of working closely with these (NB list excludes African FIs who are the target focus of FSDA’s work anyway) :
Type of partner
Potential partner
Rationale
Foundations and
donor funding
partners
MasterCard Foundation
Clear focus on microfinance and skills development, especially leadership.
Restricted to funding in SSA. Capable of funding at scale.
Gates Foundation
Likely overlap of strategic interest around digital finance. Capable of funding at
scale. FSDA may be able to get Gates indirect exposure to SSA countries that are
not priorities.
AFD
Would be logical partner (with CGAP) for Francophone strategy
Rockefeller/Gatsby/Ford
Innovative financing in rural finance and agriculture
USAID
Agriculture focus
Tony Elemelu
Focus on African management development and Nigeria
Alliance for Financial
Inclusion (AFI)
Focus on financial inclusion. Complementarity as their focus is on policymakers
and global network management whereas FSDA’s is on micro and meso level
and on in-country initiatives
UNCDF
Complementary interests in both inclusive payments and LICs. UNCDF is also
interested in supporting FSD model of market development in other countries.
TradeMark East Africa
Not prioritising trade finance and would be keen to partner with FSDA in this
growth-related area.
World Bank
Numerous overlaps especially around regional integration and “finance for
growth”
Other donors/donor
funded organisations
Partnership strategy (4/4)
Type of partner
Potential partner
Rationale
DFIs/IFIs
AfDB
Leading African development bank. FSDA may be able to help implementation.
IFC
Overlaps, especially around MF and m-payments but also inclusive finance
CDC (and other DFIs)
FSDA could provide TA, or a way of accessing “harder to reach” dealflow
BFA
Clear expertise in payments and G2P, and other areas. Has been motivated to
produce concept papers already for FSDA.
Genesis
Leading Africa-based consulting firm with expertise in strategy consulting for
banks.
GIZ
Several overlapping thematic areas of interest and also geographies
TNS Research Surveys
Pan-African market research player, deep FinScope experience
Centre for Affordable
Housing Finance
Housing finance research centre, based in Johannesburg
Yara
Value chain finance for agriculture. Has been in the forefront of SAGCOT
discussions in Tanzania
Diageo
Has an interest in developing local supply chains in Africa
British Gas
Extractive industry players increasingly required to maximise local content in
procurement
Global Business School
Network
Has indicated willingness to partner on Centres of Excellence strategy
Technical partners
Non-finance
multinationals
Education partners
Youth, women’s access to finance and SME:
cross-cutting themes



FSDA has considered, and (for now) rejected, the idea of establishing special programmes dedicated to youth,
gender or SME finance.
Vital as these are, it views them as cross-cutting issues which will be given due weight in the roll-out of the
strategies for each pillar.
It should therefore be relatively easy for FSDA to construct a narrative for what it is doing in these areas, if it
needed to do so.
Youth
Women’s
access
to finance
Considerations
Possible FSDA narrative







Massive demographic issue for SSA
Exclusion among youth exceptionally high
Definitional problems – how old is “youth”?
Prone to government gimmicks
How can this “market” be made profitable?
Legal problems – not entitled to bank account
Technology-savvy


Gender gap in A2F in SSA is not massive but it is
persistent
Systemic interventions likely to result in more women
being included than female-targeted interventions….
….although G2P initiatives will drive up numbers of
women included (NB S Africa)
Which women? Women farmers? SMEs etc











SME finance



Crowded space (e.g. IFC) – what is FSDA’s value
proposition?
Not as much of an orphan as agriculture finance
Definitional issues, poor data
Broad challenges – too much for FSDA to focus on to do
well



Working with FIs to (i) explore market
potential for youth finance (ii) on youth
savings or transactions products
Training activities , if entry level, target youth
Segmental insights via research work leads to
policy change and innovation
FSDA supports FI innovation that targets
women (e.g. WWB)
Support for women in leadership positions in
FIs
G2P work targets women
FSDA encourages gender segmentations in
social performance measurement
FSDA supports change management in SME
(e.g. regional GrowthCap)
Services suppliers typically SMEs
Regional research captures SME themes (e.g.
leasing)
Credit market development work helps SMEs
Uganda and Nigeria

DFID offices in Uganda and Nigeria have committed £1m and £2m respectively to SIMBA so that FSDA achieves
particular impacts in those markets.

Working in both Uganda and Nigeria requires effective collaboration with the local FSDs in order to ensure
complementarities and avoid confusing the local market with two FSD brands .
Uganda
 Possible opportunities:
 Working with FIs on strategy and skills development.
Promising early discussions with Opportunity, Finca
and DFCU.
 Collaboration with GIZ on consumer protection.
 Re-purposing a DFID SME grants programme in N
Uganda.
 Agriculture finance.
 Strategic support to new programme.
Nigeria
 Possible opportunities:
 Working with FIs on strategy and skills e.g. in MFB
sector. Promising discussions with Diamond.
 Research (e.g. scoping study on Centres of Excellence
to have a specific Nigeria chapter).
 Possible funding collaboration with EFInA on agent
banking roll-out (TBD).
 Finca greenfield.
 Challenges: Distance and governance; massive
 Challenges: Distance; new FSD programme will
(rightly) prioritise its own objectives as it gets going.
 FSD relationship: Strong support from managers
of new programme (FSIP), KPMG and Nathan for
co-working. Details to be worked through.
scale of opportunity/need; difficult market to
initiate change.
 FSD relationship: EFInA broadly supportive of
FSDA pursuing complementary strategy but has
limited capacity to “hand hold”.
Table of contents
Key elements of Strategic Plan
Detailed implementation plans

Skills development and training (Pillar 1)

Knowledge and evidence (Pillar 2)

Thematic programmes (Pillar 3)

Regional platform (Pillar 4)
FSD Africa’s Pillar 1 – Skills development and training
“African financial markets that are responsive to the broader
developmental needs of African economies and people ”
Vision
“ To be a resource to facilitate innovation, skills development and research to encourage
the development of African financial markets that are robust and inclusive ”
Mission
1
Outputs
Skills, capacity and
performance of
financial
institutions and
financial sector
professionals across
Africa enhanced
Transformative
information on
underserved
markets generated,
disseminated and
used by financial
sector stakeholders
Targeted, market
building
interventions in
priority areas
launched and
scaled regionally
Regional platform
established to
transfer skills,
knowledge and
technology across
countries and
coordinate efforts
across programmes
Pillar 1 – Skills development and training.
Key assumptions driving design, delivery and impact

Many FIs lack the organisational capacity to expand due to constraints in both the supply of and demand
for services.

Investing in skills development, including buying in knowledge-based services from external suppliers,
increases efficiency and productivity of FIs reducing the transaction costs of innovating and delivering
financial services to poor people.

FIs under-invest in training (due to concerns about staff retention, because of a perceived lack of
availability of qualified trainers, etc.) and consulting (due to market gaps in availability, affordability, etc.).

Training is not standardised or certified, and there are challenges with both content and methodology.

Increased supply of skilled labour reduces costs to FIs .

There is insufficient supply of commercial skills development and knowledge based services regionally to
meet likely increased demand for these services .

Taking a regional approach to market-building is appropriate. Financial markets in Africa are fragmented,
i.e. small, and this reduces the scope for service providers to be able to build a sustainable business in their
domestic market. This applies equally to formal training establishments (like universities or business
schools) as to commercial providers of technical services.

Regional integration efforts raise the prospect, in future, of free movement of labour across economic
regions. More standardisation in financial qualifications would make it easier for FIs to source talent from
across a region.

FIs themselves are already expanding regionally – typically from the larger, better-resourced countries in
the region (e.g. Nigeria, Kenya) to the smaller, less well-resourced countries. They need to be able to
source skills and services locally in order to justify their financial investment.
Pillar 1 – Skills development and training.
Inputs, activities, stakeholders and impact
Inputs
Financial:
£13m over 5 years
– plus matched
funding from FIs,
donor coinvestments
Human:
FSDA project
management
consultants;
bought-in TA
Research:
Key indicators
Needs analysis,
market studies,
action learning
(analytics), skills
gap analysis





Pillar 1: Skills Development and Training
Key activities
Participants
 Provide TA funding to
at least 20 FIs, on a cofunded basis
 Use different routes to
market to source
investments – FSDs,
challenge funds etc.
 Support marketbuilding efforts in 3
industries – coaching
(HR), data, e-training
 Develop strategic
partnerships with
African training
institutes
 Broker relationships
with international
professional training
entities
 FSD country
programmes
 Financial
institutions
providers
 Investors and
donors
 Regional
training,
consulting
and research
firms
 Industry
associations
and bankers’
institutes
 Regional
training
institutes
Pillar 1 results
Near-term
Long-term
 Increased
efficiency, outreach
and sustainability
of supported FIs,
directly resulting
in…
 …3m people being
brought into formal
finance
 Improved quality
and scope of
formal training
programmes –
5,000 people
trained
 FIs benefit from
coaching and other
services
 New FI champions
created; success
stories catalyse
further investment
 Better
understanding of
effective routes to
market for TA
 FIs more aware of
existence and
value of quality
service providers
 Better industry
coordination on
skills development
 Better data on
links between
training and career
prospects
Impact
Enhanced
financial market
characteristics –
innovation,
diversity of supply,
competition,
knowledge-based
services available as a result of
stronger FIs having
access to better
quality staff and
as a result of
increased effective
demand for
services
Number of FIs supported with TA for skills development and with improved performance, (a) operating cost ratios, (b) return on assets, (c) PAR30
Number of FI s who say they rely less on donor subsidy for skills development and knowledge-based services
Successful regional roll-out of at least one proven approach to capacity building
Supply of skilled labour to the financial sector: (a) number of people receiving formal training, (b) number of partnerships with regional centres of excellence
Number of FI s encouraged to take up commercial services in targeted services industries (“pump priming”); number of service providers who benefit from
FSDA efforts to stimulate supply
Pillar 1 – Skills development and training.
Summarised 5 year budget.
£’000
Skills development and training
Change management
TA grants
6,300
Own staff
1,095
Consultants
Other change management initiatives
Building services markets
Centres of Excellence
Total
251
1,400
General management
200
Scoping studies
300
General market building
540
Pump priming demand
£’000
9,246
1,040
Stimulating supply
530
General support
135
Scoping studies
325
Engagement with Centres
527
Management costs
400
2,545
1,252
13,043
Pillar 1 - Skills development and training.
Three inter-related components.
Change
management

FSDA will work with:
 FIs to stimulate demand for skills and
knowledge-based services.
 Regional training institutes and services
companies to increase supply of trained
professionals and good quality technical
and services (including training) into the
market.

Change management:
 Re-purposing established FIs to address
underserved markets will typically require
significant organisational change.
 New entrants may also require support to
manage change as they grow.
 Leadership development and training will
be part of the required package of services
support but so too are technical services
such as data management.

Formal, academic or technical training institutes
(Centres of Excellence) play a complementary
role alongside private training companies.
Centres of
Excellence
Building
services
markets
Demand
Supply
Pillar 1 - Skills development and training.
Key insights from scoping research.
Overview
 Dalberg commissioned to conduct research into the market for capacity building services for FIs across SSA.
 Research assessed the current state of supply and demand, as well as opportunities for FSDA and the FSD network to
make a decisive impact on the financial inclusion agenda through skills development and training within FIs .
Methodology
 Cross-sector interviews: 85 interviews with FIs and Capacity Building Service Providers (CBSPs) at tiers 1, 2, and 3.
 Different spatial scales: FIs interviewed at the micro-level (37); meso-level (46); and macro-level (2).
 Five SSA markets: Evidence from Kenya, Nigeria, Senegal, Tanzania and Uganda,
Key findings

The findings are consistent with the CGAP (2012) and MasterCard Foundation (2012) studies.

On the demand-side: a) limited internal capacity amongst FIs (e.g. lack of market information, weak mid-level
management and lack of economic data) is one of the biggest barriers to financial inclusion; b) FIs are under-investing
in skills development; and c) need varies by FI type, rather than by geography.
On the supply-side: a) international CBSPs tend be expensive; b) a small set of promising local CBSPs is emerging; c)
donor influence is distorting the market; d) there are concerns of CBSP quality; and e) a lack of information about
CBSPs has weakened the market.

Opportunities for FSDA
 Increase availability and credibility by: a) training local consulting firms and certifying them on certain topics; b)
promoting regional Centres of Excellence; c) establishing twinning arrangements to share best practice; and d)
developing voucher-systems for skills development services from 10-20 trusted CBSPs.
 Increase information and awareness by: a) establishing a regional clearing house (e.g. YELP, TripAdvisor or Elance);
and b) organising regional trade shows.
 Increase affordability by: reducing fixed costs through subsidies for training materials; e-learning options and toolkits
 Increase the perceived value of skills development by: conducting a research piece to illustrate value of skills
development on the bottom-line of FIs.
Pillar 1 - Skills development and training.
Change management: activities and resourcing (1/2)
Activities
FSDA will…
 Originate a minimum of 20 investments in FIs over 5 years:







Build a portfolio of investments - mixture of large (e.g. regional, large national etc.) and small FIs; different
institutional types – e.g. pro-poor as well as Tier 1.
Seek out investments that deliver financial inclusion at scale – but not exclude investments that strengthen
internal operating capacity (front and back end).
Maintain a minimum investment threshold of £100,000.
Use a mixture of routes to market – MF networks, FSDs, Calls for Proposals , consultants, FSDA direct origination.
Work with FSDs on deal origination - paying for market scoping work, maintaining a central resource within FSDA
to nudge forward origination activities, pitching for investments alongside local FSDs, co-investing alongside FSDs,
involving FSDs in due diligence.
Use two types of RFP (marketed in advance, may be repeated subject to demand, effectiveness etc.):



Year 1 – 4 new FIs; Year 2 - 5, Year 3 – 6; Year 4 - 5
Pump priming: Awards of up to £100k each to help FIs with needs assessments (may include a requirement to use local
consultants)
Service industry–led: larger TA grants (e.g. up to £500k) to support use of specific types of service provider (e.g. CRM)
Facilitate investments (originate, design, oversee, monitor and evaluate). FSDA will always be involved in the
governance arrangements.
Pillar 1 - Skills development and training.
Change management: activities and resourcing (2/2)
Activities
FSDA will…
 Invest in a range of different approaches to bring about change management as appropriate to the circumstances
- peer learning, study tours, embedded advisers . FSDA will also seek to regionalise promising existing approaches
to change management promoted by others.
 Build a database of trusted external consultants : however, FIs should ideally choose their own consultants
subject to FSDA approval .
 Maximise linkages into other FSDA programme areas – notably other sub-pillars of Pillar 1.
 Disseminate learnings (via case studies) in accordance with market development principles.
Resourcing
FSDA will…
 Commit a total of £9.2 million to change management activities.
 £7.6 million will be invested in individual FIs; £1.6 million will be used to support other, regional approaches to
change management (ideally with co-financing from FSDs) where these appear innovative or likely to yield high
impact.
 FSDA will hire an in-house team of consultants – 3 full time hires – and will also use external consultants.
 In-house team will be recruited from strategy/change management consulting profession .
Pillar 1 - Skills development and training.
Change management: delivery options.
MicroSave: rapid assessment study for FSD Kenya
(Oct 2012 – Nb. Kenya only)
Dalberg market scoping (June 2013)








Dalberg report points to high demand for support in
area of market information and customer service
 Mid-level HR, professional development,
product development and strategic
planning also featured highly
Strategic nature of these stated needs suggests FIs
recognise they are in “make or break” times because
the market is changing so rapidly.
They acknowledge their own weak capacity for
managing what little talent there is in the market.
Implication is that “quick technical fixes” will not do
FSDA will therefore seek out long term, strategic
engagements with its investees.
Needs assessments expected to reveal requirement
for multiple interventions at the same institution.
The comprehensive, and long-term, nature of these
interventions is why FSDA has called this sub-pillar
“change management.”
Training will undoubtedly play a part in these
assignments but so will other services.






TORs: “to rapidly assess the scale and scope of
institutional capacity building needs in a range of
selected mass-market focused financial institutions.”
8 FIs reviewed in some depth. Broad range of needs
but some commonly cited needs were:
 Product development.
 Business plan development.
 Board training/exposure.
 Institutional culture review/change.
 Market research internal training.
Common requirement for support around deposit
mobilisation given high borrowing costs.
Conservative cost estimates were in the range $100300k per institution (excluding support for market
research or pilots).
FIs experienced some difficulty in articulating needs
MicroSave recommended the use of challenge funds
for large institutions, a dedicated delivery channels
window and a small projects window to deal with
urgent or scoping-type needs.
Pillar 1 - Skills development and training
Change management: investment evaluation process
FSDA investment evaluation process








Investee sends Concept Note to FSDA - reviewed
by FSDA team.
Revised Concept Note forms basis of a short
Screening Paper – this is reviewed by the
Investment Committee (IC).
If approved, Investment Committee:
 Authorises expenditure on due diligence.
(DD), up to agreed maximum level of
delegated authority.
 Specifies areas to be covered in DD.
DD papers reviewed at interim and final stages
by IC.
IC either rejects or approves investment for final
Board approval.
Board rejects or approves. FSDA disburses.
Board receives copies of all papers.
Board should be prepared to meet on an ad hoc
basis to approve investments if needed.
FSDA 5 year
budget model
uses these
metrics:
Small
investments
 £250,000 FSDA contribution
(£500,000 total project size)
 150,000 new clients over 5 years;
£3.30 (US$5) per new client
Investment principles and criteria (selected)







Should be consistent with FSDA General
Investment Principles and Criteria.
Scale.
Minimum FSDA investment £100,000.
Must boost inclusion (new to formal finance) by at
least 100,000 directly or indirectly. NB. FSDA
model (NB. not “gating” criteria).
Co-pay arrangements:
 Ideally 50/50 cash contribution – must
come from beneficiary institution.
 FSDA will also consider more flexible
arrangements for investee share (e.g.
loan).
Investee must demonstrate capacity to absorb TA.
Investee must have credible strategy for measuring
impact and be prepared to share results .
Large
investments
 £750,000 FSDA contribution
(£500,000 total project size)
 500,000 new clients over 5 years;
£3.00 (US$4.50) per new client
Pillar 1 - Skills development and training.
Change management: catalysing activity by other partners.


While FSDA will focus initially on developing its own pipeline of investment opportunities, FSDA will also
selectively look to catalyse change management approaches initiated by others.
It will prioritise those that:
 Have an explicitly regional dimension.
 Give FSDA exposure to new market segments e.g. which are not priorities under the current strategic
plan.
 Appear intrinsically innovative.
Potential SME-related opportunities for FSDA:
Regionalisation of
GrowthCap
GrowthCap is a new programme of FSDK. Funded with an initial $2.865m over 3 years, it provides
funding to enable 5/6 Kenyan banks to reorganise internal management processes with a view to be
able to service SMEs more effectively. If successful in Kenya, this approach could be replicated in
other EAC countries. FSDA could provide seed funding to support this regionalisation and other
FSDs could potentially co-fund in their markets.
Funding for Business
Partners’ TA facility
Business Partners is a provider of risk capital to SMEs. Based in South Africa, it has a presence in
East Africa (Kenya, Rwanda) through funds it manages on behalf of DFIs. It also provides TA
funding to its investees but not as grants. Instead, these are subordinated loans and so , once
repaid, the TA can be redeployed in other SMEs. This novel approach is attractive as a more
sustainable and business-minded model for TA provision.
Pillar 1 - Skills development and training.
Change management: indicative timeline
H2 2013/14





First three
investments
approved
4th investment in
due diligence
At least 1
promising
investment (or
promising)
prospect)
originated through
FSD channel
Call for
applications from
FIs for needs
assessments
Put out general
RFP for consulting
firms
2014/15





5 new investments
approved
Substantial
co-marketing activity
with other FSDs
Call for applications
from FIs for serviceindustry led
interventions , e.g.
CRM (Q4)
Substantial growth
in Concept Paper
pipeline to allow for
failures in due
diligence
Assess proposals
for/initiate
regionalisation of
independently
managed change
management
approaches
2015/16




6 new investments
approved
Repeat needs
assessment Call for
Proposals (if
necessary)
Initial results start
to come through
from Year 1 cohort
Disseminate
learnings
2016/17



5 new investments
approved
Impact assessments
on earlier
investments
Disseminate
learnings
2017/18



No new
investments
approved (NB
SIMBA funding is
for four years)
Impact assessments
on earlier
investments
Disseminate
learnings
Pillar 1 - Skills development and training.
Change management: implementation risks
Risk
Detail

Good quality do not get to hear about FSDA’s offer or are too busy
to focus on change management. FIs strategic priorities may
change and withdraw from an investment process
Conversion rate of TA into new 
clients is slower than expected
Initial expectations about how quickly the strategies being funded
would reach the targeted number of new clients prove overoptimistic.

Procurement delays, the difficulty of securing scarce consulting
resource in a timely way, or internal organisational delays within
the FI result in impact being delayed

Failure to secure meaningful co-pay arrangements from FIs would
undermine the financial viability of this part of FSDA’s plan
Lack of buy-in from FI
beneficiaries
Project implementation delays
slow rate of new client uptake
Difficult to secure meaningful
co-pay arrangements
Likelihood of Ease of
occurrence mitigation
High





Low
FSDA’s impact targets in this area are dependent on numerous risks not arising or being mitigated.
Those mentioned above are among the more significant but others include FDSA’s possible failure to hire a team of in-house
consultants or lack of buy-in/commitment from FSDs.
Above all, there is little good quality data to validate or disprove the assumptions in the plan underlying the rate which FIs are able
to convert TA into new clients. Furthermore, innovations may perform very strongly or flop entirely, making predictions difficult to
make.
There will also be trade-offs to consider as the project unfolds – such as whether to avoid making TA investments in projects that
do not directly contribute client numbers (e.g. risk management) in favour of others than do (e.g. new delivery channels), or in
small companies in favour of large.
Since FSDA is able to originate from across SSA suggests it should be able to pick the best FI partners to work with. The need to
deliver results in a time-bound project may reduce the time for comprehensive market scoping.
Pillar 1 – Building services markets

FSDA will invest in building services markets as a key
supporting function for financial markets.

Dalberg research has highlighted a considerable gap
between supply and demand for business services due
to:
 Availability of services. Good quality, local service
providers either do not exist, are not known or do
not have credibility.
 Quality of services. FIs express dissatisfaction with
business services received.
 Affordability of services. International firms’ fees are
significantly higher than local firms’. This
disadvantages Tier 2 buyers.
Market system structure
(adapted from Springfield Centre)
SUPPORTING
FUNCTIONS
Information
Informing &
communicating
Demand
CORE
Supply
 Awareness of services. Links between demand and
(local) supply are weak.
 Perception of value. FIs do not fully value certain
business services, either there is no tradition of
investing in them, or because they genuinely believe
they will not get a return from investing in them.
Setting &
enforcing rules
Standards

African FIs - Tier 1 as well as Tier 2 – spend half as much
in absolute dollar terms on training, consulting and
coaching than banks in other regions.
RULES
Laws
Pillar 1 – Building services markets.
What FSDA’s market building approach entails.







Market building is about understanding what shapes the way markets operate and intervening in order to
cause markets to operate differently (e.g. in a more pro-poor way ),
All markets are different, so different interventions will be required for each industry. However, marketbuilding principles are the same. These will be adopted by FSDA as it builds services markets:
 Analysis as a precursor to action.
 Importance of building a solid understanding of the market system and its constraints.
 Facilitation role: “crowd in” market players and activity, avoid becoming a market player.
Financial markets are complex market systems, being highly regulated and heavily dependent on access to
information. Market facilitators therefore have many levers to pull.
Services markets are much simpler systems, lightly regulated and fairly unstructured. So the facilitator’s task
is to focus on the core market function – to facilitate effective supply and demand.
FSDA ‘s strategy will therefore emphasise:
 Building awareness - introducing buyers and sellers (the “marketplace” function) but also helping
potential buyers of services understand the value of investing in them.
 Pump priming demand: stimulating demand through matched grants to FIs.
 Stimulating supply: through grants to suppliers for business plan development and other support.
FSDA will also work to strengthen the quality of supply of services through training and accreditation as
appropriate to each industry .
Scoping studies will guide the detailed interventions to be adopted. These will identify:
 Industry structures.
 Information constraints.
 Leverage points for FSDA as market facilitator.
Pillar 1 – Building services markets. Initial focus
on three services markets relevant to the financial industry.

FSDA will initially invest in developing three markets that are particularly relevant to the financial industry.
Simplified rationale:
Executive coaching
and strategic HR
E-training
Data management
and analytics



 Enhanced skills allow FIs to innovate and compete more effectively.
 As regulated institutions, whose licence to operate is based on being able to
demonstrate they have people with the appropriate skills to be able to manage
their affairs prudently, FIs have a strong interest in maintaining skills at a
minimum level.
 Badly managed FIs eventually lose the trust of their customers who expect nearfaultless service. Banks must be “virtuosos of the every day. They must “do”
routine extremely well” (BAI , 2001).
 The high informational requirement in financial services, which makes searching,
collecting and processing information expensive, leading to high transaction
costs, means FIs should achieve high returns from investing in managing data
more effectively.
These markets have also been selected because they are synergistic with other pillars of FSDA’s work.
Over time, FSDA will assess the traction it achieves with these three markets and decide whether to continue with
them or not.
The logic of investing in services markets (and in these three in particular) is strong. However, the positive impact
of donor funding on these services markets will take time to be achieved and the consequential impact of these
better functioning services markets on financial inclusion is hard to quantify ex ante.
MicroSave (to FSDs, January 2013): “Market development requires time, good people and
multi-faceted interventions, not necessarily enormous resources”
Pillar 1 – Building services markets.
Services market #1 - Executive coaching
Definition
 Executive Coaching offers a: ‘one-to-one mechanism to provide targeted support to leaders to address the specific
challenges they face in their own operating context.’1
 Executive Coaching is: ‘designed to facilitate professional and leadership development and aims to achieve improved
business performance and individual growth.’2
 Specific professional goals include: ‘enhancing strategic thinking, performance management, organisational effectiveness,
managing change, managing career transition, interpersonal and professional communication, and building effective
teams within an organisation.’3
Key issues, trends and gaps
 Internal capacity constraints identified by FIs across SSA as their primary challenge. Specific issues around: a) strategic
planning and leadership; b) corporate governance; c) strategic/mid-level HR.4.5
Market dysfunction
 Scoping study illustrates a widespread appreciation of and stated demand for Executive Coaching, but limited effective
demand amongst all tiers of FIs across SSA (except in more mature markets, such as Kenya).6
 Crowding-out by donor subsidy and international experts has contributed to few, local and high quality suppliers of
Executive Coaching,
Indicative impacts
Rationale for FSDA intervention
 Executive Coaching valued by Tier 1, 2 and 3 FIs and seen as
 Value-add: M4P approach in a new niche.
a tool to deliver success rather than a luxury once success
 Partners: Creative Metier and Strathmore Business
has been achieved.
SchooL are both well-positioned to support.
 FI executives better enabled to encourage their
 Regional: Potential to develop pan-SSA cadre of coaches
organisations to deliver financial products and services to
 FSDA fit: Strong link to Pillar 1, reasonable link to Pillar 3.
underserved segments across SSA.
 Closure of the ‘information gap’ between FIs demanding
Risks associated with FSDA intervention
Executive Coaching and providers Executive Coaching.
 FIs don’t see the business value-add; it remains a CEO perk.
 Creation of new cadre of quality African Executive coaches.
1 Creative
Metier (2013); 2 Creative Metier (2013); 3 Creative Metier (2013); 4 Dalberg (2013); 5 CGAP (2012); 6 Dalberg (2013)
Pillar 1 – Building services markets.
Services market #2 – Data management and analytics









FIs are sitting on massive amounts of data which they do not manage effectively.
Big data – “ a growing torrent” (McKinsey) – is both a threat and the key to productivity and competitiveness.
Managing big data effectively enables experimentation and creates new business models, allows firms to create highly
specific segmentations and supports process automation – all critically important for client-centric financial inclusion
strategies.
Emergence of digital channels for financial services underpins importance of effective and strategic data management
Shortage of analytical talent: demand for “deep analytical positions” in the US could outstrip supply by 140,000-190,000
positions by 2018 (McKinsey).
Analytics is the process of examining large amounts of structured and unstructured data to derive business benefits such
as more effective marketing.
FSDA will work with FIs, Customer Relationship Management
Indicative impacts
 FIs better able to develop client-centric
(CRM) service providers, marketing consultancies and data analysts.
strategies and innovate.
We will provide incentives to support data mining and encourage

CRM providers aware of opportunities in
integration of FinScope with existing transactional data and
financial inclusion.
segmentations.
 FSDs’ greater understanding of data
We will work with CRM providers to raise awareness of the
processes within banks – greater uptake
opportunities in financial inclusion and broker relationships between
of FinScope.
FIs and CRM providers to address weaknesses in IT systems.
CHANNELS
Customer
POS Terminal
ATM
Internet Banking
Email/Fax
Correspondence
Mobile Banking
Contact Centre
Branch Operations
Pillar 1 – Building services markets.
Services market #3 – E-training
Introduction
 E-training involves the provision of skills development and training to groups or individuals through ICT systems where
the teachers and students are either apart or the teaching material is provided virtually.
 Corporate e-training is one of the fastest growing markets across the education industry.1 A $56.2 billion global market
today, it is expected to grow to a $107 billion market by 2015.
 FSDA will consider support for a broad range of innovative training delivery methods, seeking out partnerships with SSAbased providers and donor funded initiatives such as the Centre for Education Innovations.
E-training advantages
 Compared to equivalent classroom modules, E-training can reduce teaching time by between 25% and 60%.
 85% of the cost of classroom training is spent on its delivery.
 Corporations can save up to 70% when they replace instructor-based training with e-training.
 According to a 2009 study from the UK’s Department of Education: “Students who took all or part of their class
online performed better, on average, than those taking the same course through traditional face-to-face instruction.”2
Market dysfunction in SSA
 Internal capacity constraints identified by FIs across SSA as\ their primary challenge. Specific issues around: a) strategic
planning and leadership; b) corporate
governance; c) strategic/mid-level HR.Nonetheless,
Indicative impacts
SSA FIs significantly underspend on training relative
 E-training modules in critical areas identified, developed
to international counterparts.
and utilised across SSA.
 New entry level qualifications and in-job training modules
Rationale for FSDA intervention
for staff at tier 1, 2 and 3 institutions across SSA.
 Scale/effectiveness: cost savings, scale, better outcomes
 Financial inclusion promoted as an important theme.
 Value-add: M4P approach in a new niche.
 Significant reduction in training costs and significant
 Regional: Potential to deliver pan-SSA e-training.
increase in skills development and training as a corner FSDA fit: Strong link to Pillar 1, reasonable link to Pillar 2.
stone of FSP success.
1 Shift
E-Learning (2011); 2 Shift E-Learning (2013)
Pillar 1 - Building services markets. Activities and resourcing
Activities
FSDA will…









Support long term market building initiatives in 3 services markets of particular importance to the financial industry:
 Executive coaching and strategic HR.
 Training (with a particular focus on e-training).
 Data management and analytics.
Conduct scoping studies (2 in Year 1, 1 in Year 2) to identify industry-specific leverage points for market building activities in these 3 areas
Support industry associations to:
 Build awareness of these industries.
 Introduce quality standards (accreditation systems if appropriate).
Build awareness of services through:
 Seminars, events (e.g. involving high quality speakers, international experts, international industry associations); databases; support
to industry associations.
Provide financial incentives to FIs to encourage them to use service providers in these 3 areas – e.g. themed RFPs, matched grants:
 Use early adopters as case studies;
Identify service providers in these areas who can be used as a channel to FIs;
Work with FSDs to:
 Build their awareness of these industries and their value to FIs;
 Identify FIs who could be incentivised to buy in these services;
Provide funding directly to service providers by way of a regional challenge fund (grants or loans etc.) in 2 of these areas to strengthen
operational capability and marketing.
Provide funding) to ensure CGAP’s on-line survey of FIs and capacity building providers is repeated at least annually in SSA and enhanced
Resourcing
FSDA will…


Commit a total of £2.5 million to building services markets activities.
FSDA will build relationships with specialist consultants who will act as strategic knowledge partners in these areas.
Pillar 1 - Building services markets. Indicative timeline.
H2 2013/14






Executive coaching
(EC) pilot scaled up
Further research via
scaled up EC
project highlights
scope for work in
strategic HR field
EC programme
defined –
investment
approved
Nairobi seminar
series for EC to
highlight
importance of
market
Scoping studies on
e-training (ET) and
data management
(DM) concluded
Knowledge
partners for ET and
DM identified
2014/15






Pump priming grants
for FIs for EC
Training course
material finalised for
an accredited EC
training programme
Small grants window
for TA for strategic
HR needs analysis
Project investment
approved for ET and
DM
Challenge fund for
DM (e.g. in CRM)
Small grants window
for FIs to trial ET
approaches
2015/16






First year of formal 
training for EC
coaches
Repeat needs

assessment Call for
Proposals (if
necessary)

Initial results start
to come through
from Year 1 cohort
Business plan or
strengthening
grants to ET
suppliers
Impact assessments
on early progress on
market-building
Disseminate
learnings
2016/17
2nd window for
pump priming
grants for EC
2nd data
management
challenge fund
Business plan or
strengthening
grants to ET
suppliers
2017/18



Business plan or
strengthening
grants to ET
suppliers
Impact assessments
Dissemination
Pillar 1 - Building services markets. Key implementation risks.
Risk
Detail
Likelihood of
occurrence
Ease of
mitigation
Specialist services markets  FIs needs for some technical services may be more specialised than
FSDA appreciates, making it difficult for FSDA to appear relevant to
make it difficult for FSDA
both service providers and FIs . New networks for FSDA may make it
to pitch offer effectively
harder to achieve momentum.
Difficult to find the right
knowledge partners
 FSDA needs to buy in support from specialist consultancies who share
its goal of building markets. It may be difficult to find sustained
support from a good quality, affordable firm.
Initiating multiple
interventions across 3
services markets carries
execution and timing risk
 There are relatively high transactions costs associated with these
interventions , many of which are individually quite small. Increasing
the average investment size is probably not desirable (ie would distort
markets). There may also be increased reputational risk from dealing
with small, quite entrepreneurial service provider firms
Achieving measurable
linkages into financial
inclusion will be difficult
 In the timescale of the project it will be difficult to obtain good data on
the impact that services market building has had on financial inclusion
High



Low
As with the Change Management investments, FSDA is also exposed to the difficulties of dealing with FIs whose priorities may
change or whose appetite to keep committing resource to experimental initiatives may wane.
The primary implementation risk on Building Services Markets is that transaction costs will be quite high (relative to the level of
investment) and impact may be low initially and difficult to measure.
It will be critical for scoping studies to define the parameters of these markets clearly and to set very specific targets.
Pillar 1 – Centres of Excellence


The SIMBA Business Case calls for the establishment
of “regional centres of excellence in East and West
Africa to provide standardised, certified financial
services training to address the acute shortage of
skilled labour in the financial sector.”
Major contributory factors towards this shortage
(according to OPM) are:
 A shortage of graduates - SSA has 696
graduates per 1 million population compared
with 4,766 per 1million in Asia.
 A scarcity of specialised financial training in
the region.

MasterCard research (Oliver Wyman) suggests that:
 For entry level, the major problem is not the
shortage of graduates but that they are not
job-ready.
 This requires a high-volume but relatively lowcost training strategy.
 By contrast, approx. 80% of the required
investment in skills development in
microfinance is for middle management and
leadership.
 Per head, this can cost 20-50 times more than
training costs for entry level staff.

It follows that, ideally, FSDA’s strategy should address
both executive education and entry level needs.
What is a Centre of Excellence?

Can be defined as a shared facility for research, training
and advisory support around a particular topic. A “space”
where academics and industry practitioners can pool
resources.
 Notion of “shared facility” is important: implying a
collaborative effort (e.g. public/private) to achieve a
superior result; and independence from vested interests.
 International examples:.
Australia
 Centre for International Finance and Regulation:
 Australian universities and research centres.
 Sponsored by Commonwealth and government.
 Will provide post-grad training for financial sector
professionals and regulators.
Scotland
 Scottish Financial Risk Academy:
 At Heriot Watt University.
 Training and knowledge exchange activities to
promote links between academia and industry.
 Caledonian Business School:
 Backed by Chartered Institute of Bankers Scotland
and the UK’s CI of Securities and Investment (CISI).
Germany
 SAFE (Sustainable Architecture of Finance in Europe)
Centre of Excellence at Goethe University, Frankfurt.
Pillar 1 – Centres of Excellence. Partnership approach
to involve existing and new training institutions









Detailed approach to be defined following scoping
research which aims inter alia to:
 Map institutional infrastructure for financial
training in EAC, Nigeria and Zambia.
 Assess effectiveness of coordinated industry
efforts to address common skills gap.
 Identify opportunities for collaboration – with
existing Centres and funding partners.
FSDA will consider providing support to (i) physical
and virtual Centres (ii) established and greenfield
Centres.
Support envisaged to cover curriculum design and
scholarships but not costs of physical establishment
All interventions to be rigorously tested for their
demand-driven logic.
Opportunities for supporting development of
regional standards or accreditation will be assessed.
FSDA will maximise linkages with other sub-pillars,
e.g. we may provide incentives to a business school
to pilot e-training approaches or train executive
coaches.
Initial priority for a pan-EAC training course.
FSDA will explore opportunities to work with MF
networks to open up their internal training
academies to a wider market.
We will look selectively to involve international
professional/industry
training
entities
to
encourage transfer of know-how.
Potential partners
African skills/training
institutions
Strathmore, KSMS, Centre for
Financial Inclusion (Pretoria), Lagos
BS, GIBS, Kigali School of Finance
and Banking, Makerere
African capacity
building initiatives
African Capacity Building
Foundation, MEFMI, African
Management Initiative
International
professional
development partners
Global Business School Network, ifs
School of Finance, Frankfurt School
Potential funding
partners
MasterCard Foundation, Tony
Elemelu Foundation, Omidyar
MicroSave’s E/M Banking Academy




Under this programme sub-pillar, FSDA is exploring whether to
provide support to this MicroSave initiative.
If successfully launched, it would become an African Centre of
Excellence for innovation in digital finance, offering research
and leadership development, sharing insights from across SSA.
Location – E Africa, but not tied to an academic institution.
Partners – IFC, UNCDF, others.
Pillar 1 – Centres of Excellence. Activities and resourcing.
Activities
FSDA will…

















Conduct scoping research in EAC, Zambia and Nigeria and act on recommendations.
Initiate strategic relationships with regional institutions involved in financial training.

Prioritise collaboration in those areas where there is an obvious gap in supply (e.g. for particular technical/management skills):
Encourage regional partnerships between training academies, e.g. by way of a multi-site training initiative involving distance learning as well
as physical interaction.
Develop new/expand existing courses to reach at least 4,000 people by Year 5.
Understand regional accreditation systems:

Explore with EAC/W African industry associations fitness for purpose of existing accreditation schemes and ways of strengthening
them.
Explore options for expanding accredited/certified courses, or for strengthening the credibility of these:

Track the impact of accreditation/certification on the career progression and remuneration of trainees.
Encourage use of e-training methods by “bricks and mortar” institutions.
Consider providing financial support to virtual Centres (i.e. not linked to existing institutions).
Provide funding to partner Centres to help them develop course material.
Broker collaboration between international training establishments (Frankfurt Institute, Boulder etc.) and African entities.
Work closely with relevant Kenyan institutions (KSMS, Strathmore, KBA, KIB) to drive regional strategy in this area.
Provide funding for scholarships to encourage initial take up of new courses.
Work with FSDs to understand their approach to skills gap research.
Conceptualise a strategic partnership with MasterCard Foundation that complements their leadership and youth focus.
Produce research/evidence as advocacy material to strengthen arguments for why FIs should invest in skills development.
Appoint a Head of Education as a full time role.
Maximise synergies with other parts of Skills Development pillar (e.g. Executive Coaching initiative).
Resourcing


Total commitment: £1.2m
Funding mainly for Head of Education (£400k over 5 years), scoping and other research (£300k) and engagement with Centres (£500k).
Pillar 1 - Centres of Excellence.
Indicative timeline for this sub-pillar.
H2 2013/14







Scoping research
concluded
Detailed strategy
for CofE refined
Recommendations
shared with key
stakeholders e.g.
MCF, Strathmore
Due diligence for
MicroSave project
progressed
Head of Education
appointed
Exploratory
discussions with
regional Centres
Heads of
Agreement agreed
with at least one
2014/15





2015/16
Investment in course
material
development for 1
Centre
New training course
(Course 1) marketed
Scholarships funded1
Supplemental
research, following
scoping work
Strategic partnership
agreed with funding
partner




Course 1 repeated2 
2nd new training
course (Course 2)

marketed
Scholarships funded

Further targeted
research (possibly
to track career
impact)
1 Scholarships
2Short
2016/17
Courses 1 and 2
repeated
3rd new training
course (Course 3)
marketed
Scholarships
funded
2017/18



Courses 1-3
repeated
Scholarships funded
Impact evaluations
to be provided on market-leading basis; strict conditions for being repeated
technical training courses could be repeated 2/3 times per year; professional/certified courses could be multi-year in nature
Pillar 1 - Centres of Excellence.
Key implementation risks.
Risk
Working with academic
institutions is slow and
delays impact
Likelihood of Ease of
Detail
occurrence mitigation
 Although private business schools may respond to the profit motive,
other institutions may be slow and prefer their own way of doing
things. Institutional politics within academic institutions is part of
this risk.
Regional politics may
intervene to slow or derail
initiatives
 The vision of regionally relevant training will evaporate if there is no
genuine desire for cross-regional collaboration. Students (e.g. in
EAC) may prefer to receive training from local champion, even if of
inferior quality. Similarly, regional systems of accreditation will
require political buy-in from across an economic region.
Partner institutions may be
ineffective at generating
uptake of courses
 Although motivated academically, partners may not be effective
business partners.
They may be ineffective at drumming up
students, perhaps because of poor marketing or misconceived
approaches to pricing.
Failure to secure an
effective Head of Education
 Executing on this specialised agenda requires FSDA to identify an
outstanding Head of Education, almost certainly from the EAC region
High



Low
Political risks – both regional (e.g. EAC) and internal (to partner institutions) appear to be a significant risk area. Mitigating the
political risks requires FSDA to be able to articulate very clearly the rationale for regional training.
The business risks (mainly securing adequate throughput of students to justify the investment) are compounded by the
availability of donor funding which may undermine (i) initial uptake (students prefer to go for subsidised, inferior training (ii)
the long term sustainability of new initiatives (donors keep funding scholarships).
The Head of Education role is fairly unique, requiring specialist expertise and well-honed diplomatic skills.
FSD Africa’s activity Pillar 2 – Knowledge and evidence.
Implementation risks
Likelihood of Ease of
Detail
occurrence mitigation
FSDA achieves limited traction  Stakeholders, including FSDs, already have to manage a lot of
information. FSDA will need to ensure that research is genuinely
with intended knowledge
demand-driven (i.e. has a purpose), different and imaginatively
beneficiaries (including FSDs)
presented and that it focuses on information being used, not just
produced.
Risk
Impact exercise proves
more complex and difficult
to coordinate than
envisaged
 Complexity of subject matter and challenges in coordinating FSDs
may mean that concrete, value-adding outcomes take longer to
achieve than envisaged
Difficult to secure a good
Head of Research
 This Pillar is a major strategic initiative in its own right. It will require
leadership from someone who is comfortable in public and private
sector environments and who is practical (i.e. outcomes-oriented),
yet
intellectually searching. This leader also needs to be
comfortable with travel and management.
High



Low
The key risk for FSDA here (besides not being able to find the right people) is that money and effort are wasted on producing
information that turns out to be superfluous.
This can be mitigated by FSDA ensuring that research is genuinely demand-driven (e.g. FSDs are consulted in selecting topics to be
researched) and that strategies are in place to use the data, not just produce it. A major part of the sub-programme will in fact focus
precisely on this: it will aim to produce segmentations and other data tools that are specifically designed to encourage data uptake .
Around the FSD network, there are already strong opinions on how to develop FinScope in future. There is not necessarily a “one size
fits all” answer and FSDs will want to continue using FinScope and other information tools in ways that suit their purposes the best. This
is appropriate. Success is about achieving good, self-critical collaboration and a pooling of ideas, and FSDA will not be seeking
standardisation at all costs.
Pillar 1 - Skills development and training.
Impact - interlinked sub-pillars reinforce impact
Poorer people, whether consumers or producers of goods and services, are better able to manage their economic lives
because they use appropriate and affordable financial products more extensively as a result of improved access
Enhanced financial market characteristics lead to greater choice for consumers: more innovation, greater competition,
more diverse range of suppliers of financial services, better market information, knowledge-based services more available,
better policies and regulation
Skills development and training
 Minimum 20 FIs benefit from TA.
Building services markets
Centres of Excellence
 These FIs reach 3m previously excluded
people by Year 3.
 Annual surveys reveal that FIs claim to rely less
on subsidy to fund investment in services (i.e.
they are prepared to pay for it themselves).
 Measurable improvements in operating
efficiency as a result of TA – lower cost
ratios, higher RoA, reduced PAR.
 Annual surveys reveal that FIs rate the quality
of local suppliers of services more than
previously.
 New champions created; established FIs
repurposed.
 FIs derive direct commercial benefit from use
of locally-supplied services in their core
business in ways that benefit financial
inclusion.
 Successful TA interventions (e.g. as
evidenced by ROI or improved customer
feedback) encourage FIs to invest more in
skills development and training – improving
sustainability.
 Donors better able to effectiveness of
different routes to market for TA.
 FSDA has influence on how donors provide
support for capacity building.
 Case studies of innovation encourage
“copycat” investment by others.
 Better data on better use of services increases
financial inclusion.
 Strategic relationships developed with at
least 3 training institutions.
 At least 4,000 people trained by Year 5
(5,000 by 2020) on FSDA supported
programmes.
 Successful pan-EAC training programme
demonstrates rationale for adopting regional
approach.

Support for training activities have an
appreciable impact on FIs’ ability to access
good quality staff.
shared
 Greater industry awareness of need for
coordinated response to skills gap challenge
results in new industry initiatives.
 FIs more aware of existence of quality, local
suppliers.
 Greater understanding of linkage between
accreditation and career prospects.
 International technical
within local market.
knowledge
 Market-building approach acknowledged by
donors as important complement to subsidy,
and changes capacity building policy.
Table of contents
Key elements of Strategic Plan
Detailed implementation plans

Skills development and training (Pillar 1)

Knowledge and evidence (Pillar 2)

Thematic programmes (Pillar 3)

Regional platform (Pillar 4)
FSD Africa’s Pillar 2 – Knowledge and evidence
Vision
Mission
“African financial markets that are responsive to the broader
developmental needs of African economies and people ”
“ To be a resource to facilitate innovation, skills development and research to encourage
the development of African financial markets that are robust and inclusive ”
2
Outputs
Skills, capacity and
performance of
financial
institutions and
financial sector
professionals across
Africa enhanced
Transformative
information on
underserved
markets generated,
disseminated and
used by financial
sector stakeholders
Targeted, market
building
interventions in
priority areas
launched and
scaled regionally
Regional platform
established to
transfer skills,
knowledge and
technology across
countries and
coordinate efforts
across programmes
Pillar 2 – Knowledge and evidence
Key assumptions driving design, delivery and impact

Addressing information gaps can have a highly catalytic impact on market development: absent, imperfect
or asymmetric information is often the root cause of market failure and can lead to coordination failures – e.g.
in policy change processes which, as a result, can be inordinately slow or fail altogether.

It can be easy to produce information but much harder to turn it into usable knowledge: by investing in the
development of analytical tools and capacity, FSDA aims to make research more accessible and actionable.

There is an increasing need for more specialised knowledge : this applies equally to industry sectors, client
behaviour or research methods. To address this, FSDA will invest in long term learning programmes with
research experts.

The fragmented, diverse nature of African financial markets presents a logic for creating a regional
information clearing house:
 By conducting multi-country research, FSDA can highlight regulatory or other discrepancies between
countries. This will support efforts to bring about regional harmonisation of financial market and may
engender peer pressure between countries and stimulate policy change .
 As most FSDs are confined to operating in their own markets, the FSD network is not effective at
sharing information or lessons learned. FSDA could also share insights with FSDs from outside Africa.

FSDs are effective at using information to promote market change so it is logical for FSDA to make it easier
for them to play this role. FSD reviews have revealed how their role in building knowledge by creating and
facilitating the use of information has been transformational and highly valued.

Multi-country research will create cost economies of scale and crowd in co-funding. Major funding partners
will often prefer to conduct research on a multi-country basis because they want to achieve impact at scale.

A coordinated effort is needed to build FSD capacity around impact evaluation. FSD funders are seeking
better tools with which to measure impact and FSDs are approaching the task in a fragmented way.
Pillar 2 – Knowledge and evidence
Inputs, key activities, stakeholders and impact
Inputs
Financial:
£5.5m over 5 years
– plus matched
funding from FIs,
FSDs, donor
co-investments
Human:
FSDA staff;
consultants and
analysts; data
(eg MIX) and
academics
Research:
Key indicators
Studies,
segmentations
Pillar 2: Knowledge and evidence
Pillar 2 results
Key activities
Participants
Near-term
Long-term
 Cross-country research
projects in thematic
areas relevant to FSDs
 Mobilise multi-country
research programmes
with international
partners
 Support technical
development of
FinScope
 Oversee consultative
process on impact
evaluation; work with
FSDs on impact
 Develop regional
information platform
 Work with strategic
content partners to
create and disseminate
knowledge
 FSD country
programmes
 International
funding
partners
 Regional
training,
consulting
and research
firms
 Academics
 Data content
and
management
companies
 Comm’s and
PR
companies
 Cross-country
insights available
on key thematic
topics
 FSD engagement
on FinScope has led
to specific
enhancements and
harmonisation
 New research tools
piloted and results
shared
 Consultation on
evaluation has built
consensus around
measurement
approach
 Portal strategy live
and effective
 Cross-country
research has
helped
regionalisation
processes and FSD
advocacy efforts
 FinScope
harmonisation has
enhanced its
reputation
 Learning
programmes with
researchers
enhance quality of
FSD research
 FSDs better able to
evaluate impact
 FSDA portal seen
as vital information
source in region
 Number of research projects co-designed with/co-funded by FSDs.
 Number of multi-country research projects managed on behalf of international funding partners.
 Common approach to FSD programme impact evaluation established and delivered.
 Number of FSDs who receive capacity building from FSDA on impact evaluation.
 FSDA information platform established and enhanced.
 Website hits.
Impact
Financial market
change processes initiated by FSDs,
FIs, policymakers,
others – enhanced
by greater
availability of
pertinent, good
quality
information;
sustainable market
capacity for
creating and
analysing data
strengthened
Pillar 2 – Knowledge and evidence. Summarised budget.
Knowledge and evidence
£’000
Cross country research
Funding for research
Data products and programmes
FinScope-related
690
Other data products
320
Learning programmes
1,550
£’000
800
Impact evaluation
Consultative process and follow-on
Portal
Website, communications
433
MIX grant
400
2,560
275
833
Management costs
1,078
Total
5,546



FSDA’s Knowledge and evidence team will help coordinate information and evaluation related activities in
other pillars and will derive disseminable “product” from these activities. So, the Pillar 2 budget will
effectively be augmented in this way.
Learning programmes, as with other major budgetary commitments, would be subject to due diligence and
Board approval.
MIX grant negotiated between DFID and MIX prior to FSDA becoming operational.
Pillar 2 – Knowledge and evidence
High level programme rationale and partners
Cross-country
research
Rationale
Possible examples/partners






Leasing, cost of collateralisation
Consumer protection
FSDs, CGAP
Consultants (SBI, OPM, Genesis)
Industry associations, EAC



FMT, and other FSDs
Academics (technical advisory
panel)
TNS, Research Solutions
AgFiMS (agriculture)
Centre for Affordable Housing
Finance (housing)
SBBN (SME finance)




Impact evaluation experts
CGAP
DFID M&E experts
FSDs


MIX
Comms, PR



Data
products
and
programmes




Impact
evaluation



Portal

Cross-country studies to support regional
harmonisation.
Will also create product for website and build
collaboration with FSDs.
Will crowd in research funding from others.
Work with FMT, and other FSDs, on programme to
enhance uptake and credibility of FinScope.
Trial use of other research tools for FSDs.
Learning programmes will support long term
research in specialist areas via partners.
This will give FSDA exposure to “non-core” sectors
and leverage external, specialist resources to
generate information products.
Commission consultative process to build FSD
consensus on approach to impact evaluation.
Develop toolkits and support capacity building
efforts with FSDs.
Lay down research funding to address difficult,
outstanding research questions.
Build regional information platform as a resource for
FSDs as well as for non-FSD stakeholders.
Comprehensive communications strategy as well as
website.



Pillar 2 – Knowledge and evidence. Activities and resourcing
Activities
FSDA will…
















Initiate, and provide funding, for cross-country research, where possible (i) in thematic areas considered priorities by other FSDs (ii) with active
FSD participation (design, co-funding).
Mobilise and manage multi-country research programmes with international partners, preferably involving other FSDs.
Proactively reach out to these partners to better understand their research priorities and explore synergies (Africa research conference).
Support FSD network efforts (especially FinMark Trust) to drive technical development of FinScope:

Encourage regular peer review of FinScope by international academics through research grants.
Encourage use of FinScope by (especially) private sector providers by:

Involving marketing professionals and CRM providers in FSD discussions related to FinScope.

Working with individual ‘showcase’ FIs on data, e.g. on segmentation, marketing strategy .
Provide research funding to test appropriateness of other research methodologies e.g. sectorally-based (usch as AgFiMS) .
Work with FSD network to develop new analytical tools (e.g. based on FinScope).
Build strategic partnerships (‘learning programmes’) – both technically and thematically-based – with research firms and institutions.
Carry out a mapping exercise to determine extent to which African research institutions are engaged in financial inclusion research.
Initiate a consultative process on impact evaluation, involving all the FSDs, to understand their needs and current practice in this area, and;
encourage a harmonised approach to impact evaluation across the FSD network.
Subject to recommendations we will (i) develop tools or systems to enable FSDs to evaluate more easily (ii) build their capacity in other ways.
Disseminate impact evaluation learnings to a global donor audience.
Establish a regional information platform for financial inclusion, centred on a dynamic website.
Work with strategic content partners (e.g. MIX, MicroFinance Gateway) to streamline production and dissemination of online content.
Host externally-produced content via FSDA website where it complements the regional financial inclusion goals of the programme (e.g. FEF).
Use Twitter routinely to communicate with FSDs and other stakeholders.
Resourcing

Total commitment: £5.5m

FSDA will hire a Head of Research, a part-time M&E specialist, a Comms Manager and two analysts.

Relationships with research firms and institutions for strategic knowledge partnerships .
Pillar 2 – Knowledge and evidence.
Indicative Timeline
H2 2013/14







First 2 research
projects completed
and disseminated
FinScope
enhancement
meeting of FSDs
Engagement with
academic
community on
FinScope (seminar)
Impact evaluation
consultation
underway
Static FSDA website
enhanced
Head of Research
appointed
Heads of
Agreement reached
on 1st learning
programme
2014/15








Impact evaluation
consultation
concluded
Impact evaluation
toolkits prepared
Heads of agreement
on 2nd learning
programme
Cross-country
research used for
regional advocacy
Comms manager
and analyst(s)
appointed
Africa research
conference
Multi-country
research project cocreated with
international funder
Website hits build
2015/16







More cross-country 
research
Capacity building on
impact evaluation

Global
dissemination of
impact evaluation
process

FinScope technical
advisory panel adds
value through 2nd
seminar
MIX systems to
collect data for
impact evaluation
used by FSDs
Research
dissemination and
advocacy
Further
enhancement of
website
2016/17
More cross-country
research and
advocacy
Good quality,
harmonised impact
data starts to flow
through
Disseminate
learnings
2017/18


Evaluation of
research
programme
Disseminate
learnings
Pillar 2 – Knowledge and evidence. Impact pathways.
Impact pathway
Creates a baseline. Allows
for target-setting and
monitoring
Implications for Knowledge and evidence strategy

FSDA will initiate baseline surveys in markets which lack FinScope or other relevant datasets,
from which access-related strategies can be developed.

FSDA will fund cross-country comparisons to engender peer pressure and drive policy action.

FSDA will fund market studies which help FIs make the case for new product launches or market
entry strategies .



FSDA will fund segmental analysis to reveal pockets of untapped opportunity.
Ex ante regulatory impact assessment (RIA) work will help frame appropriate (e.g. light touch)
regulatory stance.
Ex post RIA work will test whether regulation has been effective.
Encourages investment

Case studies of successful innovation aim to stimulate copycat investment.
Encourages new, more
sophisticated products

Better data about clients (analytics) allows FIs to develop products that have a more compelling
value proposition in the market.


FSDA will fund client-centric research (including mystery shopping) that reveals problems in
delivery, encourages product re-design and improves uptake.
FSDA will fund research that brings financial market stress or dysfunction to public attention.


FSDA will ensure all its interventions have robust impact measurement components .
Action learning with FIs will provide insights into product adoption .
Creates benchmarks for
countries and FIs
Accelerates innovation.
Makes a business case.
Confirms initial ideas
Challenges assumptions and
prejudices
Highlights problems.
Avoids mistakes
Demonstrates impact
Pillar 2 – Knowledge and evidence. Implementation risks
Risk
Detail
Ease of
Likelihood of
mitigation
occurrence
FSDA achieves limited traction
with intended knowledge
beneficiaries (including FSDs)
 Stakeholders, including FSDs, already have to manage a lot of
information. FSDA will need to ensure that research is genuinely
demand-driven (i.e. has a purpose), different and imaginatively
presented and that it focuses on information being used, not just
produced.
Impact exercise proves more
complex and difficult to
coordinate than envisaged
 Complexity of subject matter and challenges in coordinating FSDs may
mean that concrete, value-adding outcomes take longer to achieve
than envisaged
Difficult to secure a good
Head of Research
 This Pillar is a major strategic initiative in its own right. It will require
leadership from someone who is comfortable in public and private
sector environments and who is practical (i.e. outcomes-oriented), yet
intellectually searching. This leader also needs to be comfortable with
travel and management.
High



Low
The key risk for FSDA here (besides not being able to find the right people) is that money and effort are wasted on producing
information that turns out to be superfluous.
This can be mitigated by FSDA ensuring that research is genuinely demand-driven (e.g. FSDs are consulted in selecting topics to
be researched) and that strategies are in place to use the data, not just produce it. A major part of the sub-programme will in
fact focus precisely on this: it will aim to produce segmentations and other data tools that are specifically designed to
encourage data uptake.
Around the FSD network, there are already strong opinions on how to develop FinScope in future. There is not necessarily a
“one size fits all” answer and FSDs will want to continue using FinScope and other information tools in ways that suit their
purposes the best. This is appropriate. Success is about achieving good, self-critical collaboration and a pooling of ideas, and
FSDA will not be seeking standardisation at all costs.
Table of contents
Key elements of Strategic Plan
Detailed implementation plans

Skills development and training (Pillar 1)

Knowledge and evidence (Pillar 2)

Thematic programmes (Pillar 3)

Regional platform (Pillar 4)
FSD Africa’s Pillar 3 – Thematic programmes
Vision
Mission
“African financial markets that are responsive to the broader
developmental needs of African economies and people ”
“ To be a resource to facilitate innovation, skills development and research to encourage
the development of African financial markets that are robust and inclusive ”
3
Outputs
Skills, capacity and
performance of
financial
institutions and
financial sector
professionals across
Africa enhanced
Transformative
information on
underserved
markets generated,
disseminated and
used by financial
sector stakeholders
Targeted, market
building
interventions in
priority areas
launched and
scaled regionally
Regional platform
established to
transfer skills,
knowledge and
technology across
countries and
coordinate efforts
across programmes
Pillar 3 – Thematic programmes
Key assumptions driving design, delivery and impact

The idea behind these sub-programmes - in retail payments/G2P, credit markets development and agriculture
finance - is that Africa would benefit from regional centres of expertise in these areas that are (i) responsive (ii) locally
informed and connected and (iii) specialised .

They would play a role akin to a specialised FSD, intervening at macro, micro and meso levels, facilitating market
development in the chosen sectors .

They would operate regionally but would have particular country priorities as well. These may or may not be FSD
countries. Country selection would be influenced by (i) the presence of an FSD (or not) (ii) the extent of underresourcing (i.e. does the country need the support?) (iii) scope for material impact.

These centres, being regionally credible, would be well-placed to match top quality international or regional
expertise to the particular needs of local policymakers and regulators and would reject “cookie cutter” approaches.

In order to maximise impact, these interventions would be managed by domain experts – ideally from SSA. FSDA
believes that it will achieve more impact by creating a platform for talented individuals with experience in the field
than by attempting to master all the details itself.

FSDA has the resources to initiate these sub-programmes but not to meet their full funding needs. As demanddriven projects, they will need to raise additional funding from elsewhere. Their specialised nature should help them
appeal to funders that have a particular interest in that field.

The choice of sub-programmes has been determined after consultation with FSDs and so reflects FSDs’ interests and
needs. Pillar 3 should produce synergies across the FSD network (e.g. shared research and advocacy) and may open
up opportunities for funding collaboration with the FSDs.

These programmes will help drive the sustainability of FSDA’s work. Self-standing programmes will develop their own
networks, encouraging buy-in from African as well as international stakeholders, and could even outlive FSDA.
Initiating these programmes early in FSDA’s programme life will give them time to develop sustainability strategies.

Outsourcing model also addresses FSDA’s near term capacity constraints.
Pillar 3 – Thematic programmes
Inputs, key activities, stakeholders and impact
Inputs
Financial:
£3.7m over next 5
years
Human:
FSDA Director,
Senior Project
Director, insourced
management
teams
Research:
Key indicators
Scoping research
to validate
strategies (e.g.
country choice,
management
options)





Pillar 3: Thematic programmes
Pillar 2 results
Activities
Participants
Near-term
Long-term
 Confirm choice of
thematic areas
 Conduct design work
to validate country
choice, management
strategy, institutional
“home”, impact goals
 Broker co-funding
arrangements with
other donors
 Conclude multi-year
grant arrangements
with new entities
 Leverage in support
from other FSDA pillars
 Monitor closely and
evaluate impact
 New or
existing
African
institutions
(e.g. research
entities)
 FSDs
 Int’l cofunders
 Int’l technical
partners (e.g.
CGAP, AFI)
 In-country
and regional
stakeholders
 New market
development
programmes
established in 3
areas critical for
FSD in Africa
 FSDA governance
arrangements
prove to be robust
and supportive
 Programmes
develop productive
relationships with
regional
stakeholders
 Co-funding
commitments
secured
 Under-resourced
countries benefit
from sustained,
responsive
capacity support
from programmes
 Conduit in place
for global expertise
into region
 FSDs benefit from
easier access to
specialist expertise
 Sustainable African
institutions
Impact
Financial inclusion
accelerated
through provision
of responsive ,
high quality
support; better
policy frameworks
maximise potential
for formal financial
inclusion;
innovation grants
enhance
competition and
consumer choice
Number of new programmes.
Amount of co-funding leveraged in alongside FSDA; reduced (or zero) programme dependence on FSDA funding.
Appropriate and supportive governance relationships between FSDA and sub-programmes implemented and working smoothly.
Sub-programme impacts – (i) instances of policy/regulatory change (ii) examples of successful innovation as a result of sub-programme support etc.
FSDs say they benefit from existence of sub-programmes.
Pillar 3 – Thematic programmes. Summarised budget.



Thematic programmes
£’000
Retail payments, interoperability and G2P
1,000
Credit markets development
1,337
Agriculture finance
1,000
£’000
3,337
Management costs
401
Total
3,738
Thematic programmes will also benefit from FSDA’s investment in other pillars.
Funding amounts are intended to be catalytic and not to provide “cradle to grave” support. Subprogrammes, with FSDA support, will raise additional funding from elsewhere (subject to demand). FSDA
funds could therefore be used for overheads (typically harder to source), leaving other donors free to fund
programmes directly.
It is anticipated that significant additional funding will be available for the payments and agriculture finance
programmes, given the level of donor interest in those fields.
Pillar 3 – Thematic programmes.
Programme #1 - Retail payment systems and G2P
Key issues and trends
 Growth in African economies is increasing the demand for greater diversity of non-cash retail payment instruments.
 E-payments are a powerful driver for financial inclusion but they also make financial markets more efficient (N.B. growth effects)
and transparent – hence growing calls from government for cashless, or “cash lite”, economies.
 Continuing uncertainty among regulators about how to:
 manage the changing nature of the relationship between the banking and telecoms industries.
 support development of national payments systems to accommodate innovation and increased regionalisation.
 Increased interest (led partly by donors) in the use of national payments systems as a conduit for welfare payments (cash
transfers, or G2P) and the part this can play in boosting long term financial inclusion.
 Technical complexity and lack of capacity among regulators has resulted in stasis or regulatory conservatism.
Market gaps
 Lack of common understanding among regulators and the wider sector about what the term interoperability means and how
to apply it in practice.
 Lack of coordination between different regulatory authorities in-country and across regional borders.
 Scarce technical resources rarely available to assist regulators in a timely and sustained way.
 Not easy for regulators to procure technical support directly from consultants due to government rules.
Rationale for FSDA intervention
 Facilitatory role: market catalysts are effective at
lubricating complex processes.
 Partners: CGAP, AFI, Better than Cash, UNCDF, BFA.
 Value add: good experience to share from across FSD
network (e.g. Kenya - on G2P, NPS development) .
 FSDA fit: Strong links into Pillars 1 and 2.
 Regional: Lessons learnt in Kenya and Nigeria can benefit
other jurisdictions; call from recent EAC FSAP for pilots in
cross-border retail payments.
Indicative impacts
 Interoperability will result in lower costs for small-value
high-volume transactions resulting in increased usage of
formal retail payment channels by low-income users
leading to greater financial inclusion.
 Will enable definitions and good practices to be developed
 Will enable peer learning.
 A central resourcing platform will overcome fragmentation
and harness scarce resources.
Pillar 3 – Thematic programmes.
Programme #2 - Credit markets development








Payroll lending has made access to credit for salaried employees dangerously easy in some markets, leading to a growing
problem of abusive lending and over-indebtedness.
Yet access to credit for the majority (i.e. non-salaried) remains extremely constrained, not least in developmentally important
areas such as housing and small business finance. While the importance of savings and payments in microfinance is now
well-understood, there is a need for innovation in credit in order to achieve balanced and broad financial inclusion and drive
growth.
Credit market reform tends to be promulgated in a fragmentary way – e.g. credit bureaux under SME development,
consumer protection under a separate responsible finance pillar – when in fact the different elements interrelate.
FSDA would like to bring these elements together by facilitating the establishment of a single African centre of expertise
around credit markets whose mandate would be to encourage the role of responsible credit in African economies.
Credit market regulators , financial institutions and donors, seeking advice and information, would be its primary
stakeholders.
A major activity for the centre would be to develop information products, allowing for trend data and cross-country
comparison. There is currently no single African “observatory” monitoring the evolution of credit markets in Africa and no
single Africa resource dedicated to combating credit market dysfunction.
The centre would support identification of obstacles to credit market development and inform regulatory reform (e.g.
interest rate, consumer protection, credit information) as well as meso-type interventions (e.g. credit guarantee structures).
At the micro level, the centre would catalyse pioneering approaches to credit scoring and innovative credit products .
Indicative impacts
FSDA and the Bank of Zambia (BOZ)
 Regional stakeholders able to access resources of an
African centre of excellence for credit markets.
 Highly specialised global credit market expertise drawn
into Africa through this conduit.
 Better quality regulation.
 More sustained growth-focused innovation through
locally-relevant information products and other
resources.
 African experience communicated globally .
 FSDA is supporting BOZ as it deals with the market
implications of recently-imposed interest rate caps.
 This involves near term technical advice; support for a formal
regulatory impact assessment; a “fitness for purpose”
assessment of regulatory and institutional architecture of
Zambia’s credit markets for long term development needs.
 Learnings will inform the approach to be adopted for this
thematic sub-programme.
Pillar 3 – Thematic programmes.
Programme #3 - Agriculture finance
Definition
• Beyond rural finance, agriculture finance supports activities
such as: input supply, production, distribution, wholesale,
processing and marketing.1
• Agricultural value chain finance addresses the: ‘inter-linked
processes from farmer to consumer.’2
• Key stakeholders include: Smallholder farmers, food
processors and agri-businesses.
Key issues, trends and gaps
• Agriculture significantly underfinanced in SSA – just 10% of
commercial bank portfolios.3
• Primary lever for growth as well as poverty reduction:
agricultural growth is generally pro-poor but especially if
generated by increased smallholder productivity in staple
crop production.4
• Increased global interest in innovative, sustainable models
of agricultural investment.5
Donor engagement
• Large number of donors (USAID ˜ $2bn; AGRA ˜ $500m;
Gates Foundation ˜ $300m; World Bank; IFAD).6
• But varied focus area (macro, meso, micro); thematic
priorities (finance, rural poverty, technology, value-chains
etc.) and a lack of overall co-ordination.
1 FAO
Rationale for FSDA intervention
• Scale: Growth and poverty reduction impact, pan-SSA.
• Value-add: M4P finance niche, innovative financing,
credibility with FIs.
• Partners: Multiple, also CGAP well-positioned to support.
FSDA /FSDs can be a bridge between global initiatives and
on-the ground intervention.
• FSD support: Strong demand from FSD network – FSDs
have some prior experience, but patchy.
• Regional: Pan-SSA value chains.
• FSDA fit: Linkages with all four FSDA activity pillars.
Risks associated with FSDA intervention
• Feasibility: Breadth of issues, lack of in-house expertise.
Indicative impacts
 Foster a ‘new dialogue’ about agriculture finance amongst
a well-coordinated SSA ‘ecosystem’ of farmers, FIs,
investors, donors, and policymakers .
 Foster development of new suite of financial products or
services for underserved segments across SSA.
 Close the information gap between agriculture and
finance through the systematic production of knowledge
and evidence.
 Create/embed greater agricultural expertise within Fis.
(2013); 2 FAO (2013); 3 Dalberg (2013); 3Dalberg (2013); 4World Bank Africa Pulse Spring 13, Diao et al. (2012); 5GIIN Terragua (2013); 6Dalberg (2013)
Pillar 3 – Thematic programmes.
Programme implementation – four sequential stages
1
2
Design




Identify key
programme elements
and impact pathways,
understanding where it
fits in to FSDA’s Theory
of Change
Refine areas of focus
Review implications of
geographic focus
(urban/rural, countryspecific, etc.)
Adjust programmes
based on results of
impact evaluations
3
Diligence and partner
selection



Develop long list of
broad set of potential
partners
Review partners
against impact criteria
and
Select those partners
(co-funders, FIs, service
providers, etc.) best
suited to impact /
delivery
4
Delivery


Identify requirements
for execution, e.g.,
monetary, physical and
human resources, etc.
and execute
Revise programme
components as
required to achieve
greater impact, reach
broader audience, etc.
Impact evaluation


Evaluate impact of
programme (and
individual components)
based on original
theory of change and
programme goals
Identify key questions
for re-design or to
discuss end of
programme
Pillar 3 – Thematic programmes. Activities and resourcing
Activities
FSDA will…











Identify core themes around which multi-country M4P sub-programmes can be built. Initial focus will be on: retail payments,
interoperability and G2P; credit markets development; agricultural finance.
Validate the choice of each thematic sub-programme, together with any ex ante design hypotheses, through significant project preparation
facilities (PPFs) to enable research, pilots, in-country stakeholder engagement, programming design and formal due diligence.
Use the PPF to determine priority countries (up to 4 per sub-programme) for interventions. Country choices will be strongly influenced by
existing or planned FSD activity in the thematic area. Overlaps will be handled in accordance with FSD Partnership Principles.
Invest along M4P principles, thus ensuring balance of activities across all 3 market levels (macro, meso and micro). FSDA may be more
activist in some thematic programmes than in others.
Look for opportunities to broker co-funding arrangements with other donors and/or strategic relationships with technical partners.
Only invest in thematic sub-programmes where there is a credible management story or institutional home.
Investigate feasibility of bringing other sub-programmes on stream during the programme lifetime. Budget will be allocated specifically for
these feasibility studies.
Bring capacity to these sub-programmes from the other FSDA pillars (e.g. change management expertise from Pillar 1, information or
research know-how from Pillar 3).
Design these sub-programmes so as to maximise their chances of sustainability and allow FSDA to exit in due course.
Be actively involved in the governance arrangements for these sub-programmes so as to drive impact.
Appoint a Senior Project Coordinator to oversee these strategic sub-programmes.
Resourcing
FSDA will…



Commit a total of £3.7million to thematic programmes.
FSDA’s Senior Project Coordinator will play an active oversight role (i.e. admin/finance) but will also need to familiarise him/herself with
the programme content so as to minimise the risk of mission creep.
FSDA will use external consultants where necessary but the basic idea is that the outsourcing model should reduce FSDA’s transaction
costs.
Pillar 3 – Thematic programmes. Indicative timeline
H2 2013/14



Design work on 1
sub-programme
completed and
underway on 1
other
Co-funding
discussions opened
with international
funding partners
FSDA PSC approval
for 1 subprogramme
2014/15




2 sub-programmes
underway
Funding
commitments from
3rd parties secured
for at least 1
programme
Design work on 3rd
programme
concluded
Monitoring and
evaluation
2015/16



3rd sub-programme
now operational
Funding
commitments from
3rd parties secured
for another 2
programme(s)
Monitoring and
evaluation
2016/17


Monitoring and
evaluation
FSDA explores spinoff strategies for
these programmes
2017/18


Monitoring and
evaluation
At least 1
programme spun
off (FSDA retains
non-funding link)
Pillar 3 – Thematic programmes. Key implementation risks.
Risk
Institutionalisation risks
slow down implementation
and impact
Another institutional layer
increases complexity of
intra-FSD relations
Likelihood of Ease of
Detail
occurrence mitigation
 Setting up new institutions is risky (and potentially inefficient)
mainly because of the premium on scarce management but also
because of funding considerations , political economy factors and
the need to spend time and resources creating an institutional
strategy and identity

Although the new institutions will not be FSD-branded, FSDs will
want to ascertain how the new institution relates to them in their
markets, who “owns” regulator relationships etc.

Arms’-length management arrangements inevitably increase the
risk of financial misfeasance but also reputational damage for
FSDA and its promoters. Further, there is a risk that intended
impacts get diluted through mission creep.

If programmes cannot raise co-funding, the limited budget
provided by FSDA may mean that their contribution will be
ephemeral. These are quite big topics in which other funders
have far greater resources at their disposal .
Governance and control
issues
FSDA funding is too small to
make much of a difference
High

Low
The important judgement here is whether the benefit that comes from setting up a new institution – a platform for talented
management, specialisation, sustainability etc. – outweigh the risks. Limited evidence from FinMark Trust, whose success in setting
up both Cenfri and the Centre for Affordable Housing Finance as autonomously managed entities (in Cenfri’s case, wholly financially
independent), suggests it is a prize worth going for. Scoping work may indicate that the institutional strategy is appropriate in one
or two sub-programmes but not in a third in which case FSDA will modify its approach and bring the initiative in-house. Ultimately
the feasibility of the institutional strategy will be driven by the availability of appropriate management and FSDA may have to
warehouse the initiatives in-house until it finds its management team.
Table of contents
Key elements of Strategic Plan
Detailed implementation plans

Skills development and training (Pillar 1)

Knowledge and evidence (Pillar 2)

Thematic programmes (Pillar 3)

Regional platform (Pillar 4)
FSD Africa’s Pillar 2 – Knowledge and evidence
Vision
Mission
“African financial markets that are responsive to the broader
developmental needs of African economies and people ”
“ To be a resource to facilitate innovation, skills development and research to encourage
the development of African financial markets that are robust and inclusive ”
4
Outputs
Skills, capacity and
performance of
financial
institutions and
financial sector
professionals across
Africa enhanced
Transformative
information on
underserved
markets generated,
disseminated and
used by financial
sector stakeholders
Targeted, market
building
interventions in
priority areas
launched and
scaled regionally
Regional platform
established to
transfer skills,
knowledge and
technology across
countries and
coordinate efforts
across programmes
Pillar 4 – Regional platform. Overview.

Everything that FSDA does will have a regional dimension. However, there are certain activities which do not
fit easily into the other three Pillars, despite obvious complementarities.
Cross-country
initiatives
Regionalisation

Supporting efforts towards
harmonisation of regional
financial markets

Catalysing financial
inclusion in non-FSD
countries
Grants to donor
partners
Regional
platform
Facilitation

FSD network activities

Reference groups
New initiatives
Feasibility work for FSDA
activities post SIMBA
(“SIMBA Growth”)
Pillar 4 – Regional platform
Inputs, key activities, stakeholders and impact
Inputs
Financial:
£3.4m over 5 years
Human:
FSDA Director,
admin staff and
consultants
Key indicators
Feasibility for,
and evaluation
of, cross-border
pilots; new
country
diagnostics





Pillar 4: Regional platform
Pillar 4 results
Activities
Participants
Near-term
Long-term
 Research (e.g. crosscountry studies) and
advocacy (e.g. with
EAC) to accelerate
regional harmonisation
 Catalyse change
processes in underresourced non-FSD
countries to promote
inclusion
 Grants to funding
partners
 FSD network meetings
 Feasibility studies to
explore FSDA post
SIMBA strategy
 Regional
bodies
 FMT
(regional
working)
 FSD network
 Experts,
practitioners
programs
 Policymakers
in non-FSD
countries
 Donor
partners
 Research projects
concluded;
generate
uptake/reaction in
EAC/other regional
fora
 Credible
information base
built in non-FSD
countries
 M4P approach
adopted in
Francophone
country
 Regular FSD
network meetings
 Approved Business
Case for “SIMBA
Growth”
 Regional entities
regard FSDA as
having played
instrumental role
in harmonisation
processes
 Institutional
capacity built in
non-FSD countries
 FSDs see the
network as
relevant,
responsive and
value-additional to
their work
FSDA operation: number of staff hired; additional non-DFID funding leveraged in to FSDA.
New countries: number of new strategic financial inclusion programmes initiated in non-FSD countries.
Regionalisation: number of regional/multi-country macro or meso-level financial inclusion initiatives supported by FSDA.
FSD network: number of meetings; number of research- and non-research based collaborations between FSDA and FSDs.
Reference groups: number of expert-reference group meetings held on specific financial inclusion themes.
Impact
Financial market
characteristics
enhanced across a
broad, regional
front by providing
seed funding and
supporting
facilitation to to
catalyse change
processes and
knowledge
transfer
Pillar 4 – Regional platform. Summarised budget.
Regional platform
£’000
Regionalisation
Research, pilots, advocacy
Cross-border initiatives
Financial inclusion initiatives in non-FSD
countries
665
Support to donor partners
600
FSD network activities
350
Reference groups
540
Facilitation
New activities
Total



Feasibility studies for post SIMBA work
£’000
625
1,265
890
825
3,605
The regionalisation budget is effectively augmented by the cross-country research budget in Pillar 2
(£800,000) which is intended to generate insights that will help speed regional harmonisation.
Cross-border initiatives:
 New country initiatives: budget covers scoping visits, diagnostic work (non-FinScope) and stakeholder
dialogue.
 Donor partners: grants for activities that complement FSDA’s inclusion goals.
Reference groups: funding for reference group work, seminars etc. as part of FSDA’s knowledge-building
agenda.
Pillar 4 – Regional platform High level programme rationale
Rationale and approach to be adopted
Regionalisation
Cross-country
initiatives
Facilitation
New activities
(post SIMBA)
 Although regional institutions are weak, they may, eventually, play a more effective coordinating role around
inclusion. In the near term, failure to engage with them may obstruct country-based, or private sector-led
efforts to build inclusion.
 FSDA will look for ways to engage fruitfully with EAC but will avoid intensive involvement; maintaining a
neutral and independent stance may be a more effective advocacy tactic.
 FSDA will look to engage with FMT in this area, given its prior experience with SADC.
 Some non-FSD countries are way behind others in Africa in getting inclusion processes underway. These
include post-conflict states: intervening in these greenfield environments could result in surprisingly
promising impact.
 FSDA will look to engage in at least one Francophone country, in partnership with CGAP/AFD.
 Working through other partners (e.g. GIZ) on complementary initiatives will accelerate impact, increase
FSDA’s geographic reach and give it exposure to thematic areas that may not be core to the current strategy.
 It could also produce valuable insights that could be brought back into the FSD network.
 It is part of FSDA’s raison d’être to support the FSD network so that it functions more effectively as a
collective asset (see subsequent slides for further detail).
 FSDA will use its African and international networks in Africa to convene reference group meetings (or similar
fora) to exchange insights and problem-solve in areas of relevance to the inclusion, or broader financial
sector development, agenda.
 FSDA believes this type of activity can play an important role in creating knowledge and building thought
leadership.
 FSDA believes it and other FSDs have a role to play in supporting growth through initiatives more associated
with mainstream financial sector development than with traditional financial inclusion work.
 Exploring these possibilities requires appropriate, but explicit, investment in feasibility studies and pilots.
Pillar 4 – Regional platform.
Supporting the FSD network in different ways.
Unifying
purpose
Adequate
resources
and capacity
Effective
management
FSD
Network
Enhanced
communication
Managed
growth
Adaptability

Unifying purpose. FSDs are focused on different
issues, with some overlap. FSDA can identify and
expand areas of overlap.

Effective management. FSDA can ‘manage’ how the
network operates, identifying and taking advantage
of synergies.

Enhanced communication. FSDA can take lead in
convening regular network meetings, and establish
open lines of communication via platform.

Adaptability. FSDA’s regional and network-wide
perspective can support network to be flexible to
changing market conditions.

Managed growth. FSDA can advise DFID on viability
of establishing new FSDs, being active in supporting
new offices in becoming operational.

Adequate resources and capacity. FSDA can act as a
convener of network resources, through which FSDs
may pool resources or receive support from other
parts of network.
Pillar 4 – Regional platform. FSDA will play
different roles in its engagement with the network.
Support
Partnership
Agency
External
stakeholders
External
stakeholders
FSDA
Country FSD
FSDA
Country FSD
Support country FSDs by providing
resources and expertise, acting as
repository of information,
facilitating knowledge-sharing
across network, assuring
consistency in impact evaluation.
FSDA
External
stakeholders
Partner with country FSDs on
projects, providing co-funding
and technical support, bringing
regional learnings, expanding
investments across borders.
Country FSD
External
stakeholders
Act as agent for network,1
engaging with regional and
global stakeholders, pushing
forward policy agenda,
developing independent
regional programmes.
Although the network is flat-structured, FSDA can play a leading role in making it
function more like a network by committing time and resources to network activities
1
This should not be misunderstood as FSDA seeking to speak on behalf of individual FSDs or to disintermediate them from their bilateral relationships with external stakeholders. In uplifting
the interest of the network with these stakeholders, FSDA should create more opportunities for FSDs to engage externally on a bilateral basis
Pillar 4 – Regional platform.
Partnership Principles of FSD network.
FSDA will aspire to work within a set of
partnership principles…
…even as it takes on a number of roles
with the FSDs
 Collaboration is more effective than
working alone: FSDA and FSDs should
actively support the network.
 With individual FSDs: Help FSDs do
things they would like to do (and which
they believe need to be done).
 FSDA should respect the market position
of in-country FSDs:
 In countries with no FSD: Initiate change
processes through a seed-funding role,
leveraging FSD network experience.
 It should not independently engage in
business development activities in an FSD
country.
 It should not fund activities that would
not have the support of the in-country
FSD.
 It should find ways to involve the local FSD
in activities funded by FSDA (e.g. build
FSD’s capacity).
 FSDA is not a service provider to FSDs: It
has programme objectives of its own
which FSDs should support. Similarly,
FSDs are not service providers to FSDA.
 With external partners: Play a platform
role by facilitating multi-country and
multi-partner interventions and
reducing transaction costs.
Pillar 4 – Regional platform.
Possible tools for engaging with/managing the network.
Recommendations

Governance


Meetings


Communications


Programme
‘champions’
Seat on FSDA Board for FSD representative (subject to
approval of Chair/members).
Rationale / Examples



Network meetings for senior staff three times a year,
location to be rotated across FSD countries.
Smaller themed meetings “on demand” (probably 2/3
times a year).
Annual retreat for broader selection of FSD staff.

Symbolic of inclusion and
transparency
Good for communication
Given time cost, network
meetings should be fewer and
higher quality
Retreat can be net-benefit as
enables mid-level staff to
interact, improving
information flows
FSDA will assess options for enterprise social network
platform and/or Twitter to facilitate more fluid
communications between all staff.
Communications staff will be responsible for compiling
news-mail updating network on activities across all
offices.

News-mails are effective way
of keeping network informed
and feeling connected
FSDA will look for informal champions within each
country FSD to actively seek collaboration
opportunities, not wait for FSDA to propose.

Country directors are busy
and may not always have best
sense of programme
collaboration opportunities
Pillar 4 – Regional platform. Activities and resourcing
Activities













Pursue a cluster of projects that are explicitly rationalised by reference to the harmonisation of East African Community (EAC) financial
markets. These are likely to involve (i) cross-border aspects (e.g. trade financing or payments) (ii) regulatory harmonisation (e.g. consumer
protection, leasing).
Engage selectively with EAC (and EAC partners, such as the World Bank) to offer strategic support for financial inclusion.
Through direct interventions, catalyse strategic financial inclusion initiatives in at least 5 non-FSD countries by Year 5, of which 2 will be in
post-conflict environments.
Conceptualise a strategic partnership for supporting market-building financial inclusion work in Francophone Africa; this is likely to involve
explicit support from both CGAP and AFD. FSDA would be interested to support FSD-style start-ups in Francophone C/W Africa.
Give grants to other donors/partners looking to promote financial inclusion, where they have particular expertise or capacity.
Manage a programme of network activities on behalf of FSD network, to include at least 3 network meetings p.a. plus at least 2 other
thematically focussed meetings p.a. Meetings will be high quality, involving external thought leaders and facilitators and will balance
‘information push’ and ‘information pull’.
Travel to meet FSDs on a regular basis (outside FSD meetings) to discuss joint projects or upcoming opportunities.
Appoint a staff member to act as a ‘point person’ within FSDA for FSDs so as to facilitate interaction and relationship-building.
Provide ad hoc strategic support to FSDs, if requested – for example, around programming or governance.
Create a comprehensive contacts database (in addition to the consultants database referred to above) for the benefit of FSDs and other
stakeholders.
Provide core funding, as well as project co-funding, to FSDs where it is administratively appropriate to do so.
Develop a series of reference group meetings with appropriate experts to problem-solve and build thought leadership.
Invest in feasibility studies and pilots to validate a strategic approach for a “SIMBA Growth” programme (post SIMBA activities).
Resourcing
FSDA will…

Commit a total of £3.4million to the regional platform role.

FSDA’s Director (supported by other staff and in-sourced consultants) will lead on content (e.g. of FSD or reference group meetings)
with logistical arrangements handled by FSDA administrative staff.
Pillar 4 – Regional platform. Indicative timeline
H2 2013/14







Scoping work for
regionalisation
strategy completed
Initial engagement
with EAC
Grant to at least
one donor partner
Scoping mission to
at least one nonFSD country
At least 5 network
meetings held
At least 1 reference
group meeting held
Due diligence on at
least one new
initiative concluded
2014/15







Research projects
create traction with
EAC
Diagnostic work
undertaken in one
non-FSD country
Scoping mission to
one other non-FSD
country
Basis of
Francophone
partnership agreed
Communications
platform between
FSDs and FSDA
functions well
FSD meetings have
continued to identify
common areas of
interest
FSDA pilots a new
initiative
2015/16




EAC collaboration
as resulted in
regional
guidelines or
regional policy
statement
Diagnostic work
in 2 more
countries (one
Francophone)
plus related
facilitative work
FSD/reference
group meetings
continue
Strategy for
“SIMBA Growth”
finalised’
Business Case
approved
2016/17




Deepening
relationship with
EAC documented
FSDA has now
catalysed
initiatives in 5
non-FSD
countries
FSD network
conference (for
external
stakeholders)
New initiatives
trialled by SIMBA
Growth
2017/18




Monitoring and
evaluation of all
regionalisation
efforts
New initiatives in
non-FSD countries
are by now semisustainable
At least 1
programme spun
off (FSDA retains
non-funding link)
New initiatives
trialled by SIMBA
Growth
Pillar 4 – Regional platform. Key implementation risks.
Risk
Detail
Likelihood of Ease of
occurrence mitigation
Limited political support for
regional integration nullifies
harmonisation efforts

Regional institutions, being weak, do not have the credibility to
push forward integration processes with any vigour. External
advocacy, however pertinent, may be ineffective.
Too difficult to stimulate
financial inclusion in non-FSD
countries by remote control

Without good partners on the ground, FSDA will find it difficult to
sustain its newly-catalysed financial inclusion initiatives from a
distance, however promising the initial uptake.

A network is only a network if its members want it to exist and re
prepared to invest in it. FSD Directors may be too busy on other
things, or genuinely short of capacity, to give the network enough
attention.

FSDA risks being “busy fools” if it tries to take advantage of too
many of the opportunities that undeniably exist without being
able to sustain high quality delivery.
Lack of buy-in to network
by FSDs
Too many regional
opportunities; too little
capacity to follow through
High


Low
There is the potential for FSDA to stretch itself very thinly across a wide geographic area (SSA) and in multiple opportunities.
Budgetary constraints will help to ensure that this does not happen but, in any event, FSDA will need to pick its partners carefully ,
leveraging FSDs where it makes sense to do so.
FSDA’s early engagement with FSDs has indicated strong support from them for the idea of the network but limited effective
engagement with it. This is undoubtedly a product of FSDs (i) being busily engaged delivering their own programme goals and (ii)
not fully understanding FSDA’s objectives or value proposition. Settling FSDA’s strategy will partially address this but the distractions
of programme management will obviously remain. FSDA will try to mitigate this risk through excellent “coverage” (ie relationship
management), by mobilising very high quality meetings that make it worthwhile for them to attend and by consulting with them to
identify opportunities for network collaboration that really do add value to them.
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
FSDA – Communications strategy
(1/2)
Communications vision
 To develop and maintain clear, trusted and impartial communication platforms and products to demonstrate
FSDA’s role, disseminate information and evidence, promote current and future stakeholder dialogue, and
facilitate partnership and network-building.
Branding
 FSDA’s will adopt a ‘low-ego’ approach to its branding.
 Its brand values include: openness, innovation, regional, credibility and responsiveness.
 As far as possible, this will be reflected in its choice of logo, document templates, and communications platforms.
Primary communications platforms
 FSDA website, Twitter and LinkedIn.
Other communications products
 In line with FSDA’s Pillar 2 objectives, FSDA will develop novel approaches to the generation, collection and
dissemination of topical thematic content.
 Products could include: newsflashes, thematic bite-sized serials, and industry insights.
Sequencing and development
 FSDA’s communications platforms will developed in two broad phases .
 Phase 1 involves the relatively rapid launch of communications platforms to establish FSDA’s presence (by the end
of August 2013). It will not overstretch FSDA’s capacity, but provide clean, predominantly static information
sources.
 Phase 2 will involve enriching the platforms established in phase 1 with more information and a greater level of
interactivity as required and as capacity allows.
Dissemination
 FSDA recognises a widespread ennui towards traditional ‘newsflashes’ and ‘publication repositories’ and will seek
to find new and dynamic ways to provide information and evidence that is digestible, interesting and relevant.
 FSDA will use its own contacts database but also leverage the relationships of key strategic partners such as: a) the
FSD network, and b) CGAP to ensure that information is shared carefully, is targeted and gains traction.
FSDA – Communications strategy
(2/2)
Brand/communications management

There is provision in the FSDA budget for a full-time communications manager, who will report to the Head
of Research/Director, as well as for external PR/Communications support.

This provision will help to develop and deliver a creative and effective communications strategy that helps
to implement FSDA’s strategic priorities, with a particular focus on its Pillar 2 objectives.
FSDA website overview

The website will be a critical
communications platform for
FSDA.

It aims to provide a virtual
presence for FSDA as well as a
clear, trusted and impartial
source of knowledge and
information
about FSDA,
financial inclusion, and regional
financial services markets.

It will also act as a gateway to
FSDA services and strengthen the
sub-Saharan African financial
inclusion ‘ecosystem’ by acting as
a ‘bridging point’ between FSDA,
FSDs and other financial inclusion
stakeholders.
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
FSDA – Impact




FSDA’s Theory of Change is premised on the fact that enhanced market
characteristics will improve access to financial services for the poor,
resulting in greater usage of services and benefits to livelihoods as a
result of increased incomes and reduced vulnerability.
Without capacity, however, these markets will not be sustainable. So,
FSDA’s primary focus is on building capacity – strengthening skills and
building knowledge so that market actors are better equipped to play
their roles, and are more motivated to take advantage of opportunities.
The Theory of Change diagrams in this section illustrate the pathways
through which investment in skills and information produce impact.
FSDA’s 4 proposed pillars inter-relate – they complement each other.
Viewing (say) the Skills Development Theory of Change in isolation from
Knowledge and Evidence is not really reflective of how FSDA sees the
holistic nature of this programme.

FSDA’s regional nature complicates the impact evaluation challenge which
is already considerable country-based FSDs in view of the unpredictable
way in which markets develop.

FSDA will be required to test impact in at least 4 different theatres – at a
SSA-level, at a regional level (e.g. EAC), in FSD countries and in non-FSD
countries .

FSDA is committed to putting in place a comprehensive system of impact
monitoring and evaluation that addresses this challenge .
Enhanced market characteristics

A clear and appropriate policy
and regulatory framework.

Effective competition between
suppliers.

Diversity of sustainable
suppliers.

Adequate credible information
available to market players.

Innovation in products and
services.

Appropriate knowledge-based
services available to market
players.
Impact. SIMBA logframe and other targets

The draft SIMBA logframe is copied at Annex 3. As FSDA’s only source of funding currently is SIMBA, this
logframe will be the primary, formal impact measurement tool.
 This sets out the indicators and where they will come from.

If, as expected, additional programme funding is secured for FSDA, a new logframe will need to be developed
to incorporate the new outcome goals.

As indicated already in Section 1, FSDA’s platform role as a regional programme and the scale of funding that it
will have give it the opportunity to create impacts that go broader than those laid out in the SIMBA logframe.
These include:
 Changed mindsets – for example:
•
Private sector: greater appreciation of the value of investing in skills.
•
Donors: changed attitudes towards subsidising “capacity building.”
 Crystallising imaginative new partnerships and encouraging much greater donor coordination in FSD.
 Financial inclusion programmes being able to play a meaningful and credible role in a more explicitly
growth-focused agenda (e.g. using a range of different financing instruments).
 Acceptance by a range of pan-African stakeholders of FSDA’s catalytic role in supporting African growth.

FSDA has agreed to coordinate a consultative process on impact evaluation that aims to work with FSDs to
identify minimum standards and preferred evaluation tools for FSD-type programmes.

This exercise will also be used to refine FSDA’s own impact evaluation approach, recognising that it is
somewhat different to other FSDs, and will design an implement a formal system for the regular capture of
data for impact evaluation.
Impact. Illustrative projections of outreach
FSDA – where outreach numbers could come from
6,000
5,000
4,000
Outreach
3,000
(‘000s)
2,000
1,000
0

FSDA’s headline impact indicator is 3m more people having access to formal financial services by Year 5.

The forecasts have been prepared on the basis that all of the 3m could come from change management activities in Pillar 1.
These assumptions behind this were set out earlier in this document and should be considered to be reasonably aggressive

The chart illustrates the (possible) relative, incremental contributions from other FSDA activities.

The largest contributors are anticipated to be the payments/G2P programme and catalytic initiatives in new, non-FSD countries.

While the chart shows Knowledge and Evidence contributing nothing to the total, in reality the impact of this sub-pillar on the
ability of all other programmes components to deliver impact is immense.

No account is taken of the fact that FSDA activities could result in FSDs achieve better outreach results in their markets.
Impact. Theory of Change – Skills development and training
Usage of a range of financial services benefits livelihoods
Market building
in analytics
Markets more competitive, innovative etc.
Financial services more accessible to poor
Support for development of new products , channels etc.
FI staff have more capacity to develop services and
enact strategies that benefit underserved
Professional
training
FIs better able to set strategies that benefit
underserved markets
Management
training
Knowledge
inputs
Executive
coaching
Entry level
training
Better strategic planning helps FIs define
long-term HR needs and training gaps
Strategy consulting
Strategic HR consulting
Enhanced leadership capacity
Market building in
executive coaching
Outcomes
FSDA inputs
FSDA inputs
Peer-to-peer
learning
Study tours
Better quality supply of training available
to FIs
Curriculum
development
Market building
in e-training
Scholarships
Impact. Theory of Change – Knowledge and evidence
Usage of a range of financial services benefits livelihoods
Enhanced momentum
for regionalisation
Regional policy
advocacy
Regional
bodies more
aware of
intraregional
differences
Outcomes
FSDA inputs
FSDA inputs
FSDA inputs
Better policy and
regulation
Markets more competitive,
innovative etc.
Strategy
consulting
National policy
advocacy
National regulators aware
of sector challenges,
opportunities
Cross-country
research
Feedback
FIs more aware
of regional risks,
opportunities
Multi-year learning
programmes
FinScope
enhancement
: support for
academics,
analysts etc
FSDs
interventions
have more
impact
Capacity building
for FSDs in M&E
Enhanced M&E
systems across
FSD network
Market
building in
analytics
Investors, new
players
crowded in
FSDs, global
partners
benefit from
regional
insights
Research, innovation
showcased
Portal development
Impact evaluation
consultative
process
Facilitation (FSD network
activities, reference groups)
Impact. Theory of Change – Thematic programmes
Financial inclusion of up to 1 million more poor people across Sub-Saharan Africa
by 2018
Outcomes
FSDA inputs
FSDA inputs
FSDA inputs
Impact evaluation
Enhanced market
characteristics
Increased market
capacity
Cross-border initiatives
Regional Facilitation
New information provided to
stimulate supply, challenge outdated
practices and drive innovation
New suite of products,
services and
approaches established
Rejuvenated and focused regional
‘ecosystem’ of stakeholders
motivated to deliver more effectively
Skills
Development
and Training
New, regional cadre of skilled
financial inclusion policymakers and practitioners
New, specialist institution with a regional mandate
Retail payments,
interoperability and G2P
sub-programme
Agriculture finance
sub-programme
Credit markets
development subprogramme
FSDA future sustainability enhanced through
increased expertise, experience and credibility
Multi-year learning
programmes
Portal development
Cross-country
research
Impact. Theory of Change – Regional platform
Financial inclusion of up to 1 million more poor people across Sub-Saharan Africa
by 2018
Outcomes
FSDA inputs
FSDA inputs
FSDA inputs
Impact evaluation
Enhanced market
characteristics
Increased market
capacity
M4P approach to financial inclusion adopted across
SSA and new, innovative interventions to link financial
sector development to pro-poor growth supported
New interventions that go beyond
financial inclusion to address
financial sector development
New Regional
Initiatives
Sharing of best practice and economies
of scale achieved by and between
financial inclusion stakeholders
New interventions in
2+ (FSD and non-FSD)
countries at once.
Cross-country
Initiatives
Greater co-ordinated and effective action by and
between donors, the FSD-network, policy-makers
and the private sector on financial inclusion
Greater harmonisation
across regional
financial markets in SSA
Regionalisation
A better enabled FSD network and
better co-ordinated group of financial
inclusion stakeholders across SSA
Regional Facilitation
Portal development
Thematic subprogrammes
Change
management
FSDA future sustainability enhanced through
increased expertise, experience and credibility
Cross-country research
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
FSDA – a company limited by guarantee

FSDA’s legal form will be a company limited by guarantee (CLG).

In order to allow FSDA’s funders to provide oversight and strategic guidance, but without fiduciary
consequences, the Board of FSDA will work with a Steering Committee of donor representatives who have a
range of consultation and veto rights.

While decision-making is centralised on the Board, funders have ultimate control through their control of the
“members” (or shareholders) of the CLG.
Why a CLG, not a trust?
Member of
FSDA Steering
Committee


Oversees
Appoints

Appoints
Members
FSDA
Board
Professional
Services
Provider


Appoints
Provides
services to
Non-profit status requires FSDA to be
either a CLG or a trust. Either is feasible
but the CLG is marginally preferable.
CLG projects a stronger private sector
character than a trust. It is, after all, a
company.
CLG structure lends itself well to the
balance of control needed between the
Steering Committee and the Board.
Easier to define/explain the role of the
professional service provider than a
trustee (even though the roles may be
performed by the same kind of firm).
CLGs can have subsidiaries (including in
other jurisdictions) whereas trusts cannot.
This may be helpful as an option when
considering FSDA’s regional role.
FSDA – three elements to governance of FSDA’s CLG

A CLG requires members and directors. FSDA’s governance structure also has a Steering Committee, where
donor representatives exert influence and oversight, and a professional services provider (PSP).

Donors will control the appointment of the members who in turn control the appointment of directors.

The involvement of the PSP strengthens FSDA’s capacity to manage its financial and administrative affairs.
Steering Committee/members
 Donors will control FSDA by appointing
members and, if needed, by requiring
members to remove and replace
directors.
 SC has the right to veto:
 strategy documents.
 an annual budget.
 appointment of directors.
 appointment of PSP.
 changes to investment.
procedures, including authority
limits or procurement
processes.
 SC also has right to be consulted on
operational developments and to
monthly and quarterly management
accounts, Board minutes and
investment papers.
 SC members can sit on Board subcommittees if they wish
 Meets twice a year.
Board of Directors
 Directors have fiduciary
responsibility for the affairs of the
CLG.
 Operational decision-making
centralised on the Board, including
all investment decisions (typically,
no referral onto Steering
Committee).
 Sets strategy and approves annual
budgets (subject to SC veto).
 Provides support to Director in
execution of strategy; reviews
performance and pay.
 Manages/oversees key processes
e.g. procurement, appointment of
new directors.
 Ensures smooth communication
with Steering Committee.
 Meets four times a year but also
works through sub-committees
which may meet more frequently.
Professional services provider
 A Big Four accounting firm.
 Plays an important role in the set-up of
FSDA including:
 putting in place a
comprehensive policies and
procures manual.
 reviewing and agreeing
authority limits for
procurement and investments.
 ensuring that systems and
controls for authorising
payments are in place.
 Ongoing role includes acting as part
time finance manager (e.g. preparation
of annual budget and management
accounts, maintaining cash flow
forecast), attending Board meetings,
acting as co-signatory etc.
 Responsible for ensuring systems work
smoothly; will be independent “eyes
and ears” for directors on governance .
FSDA Board committees






It is envisaged the Board would appoint a
number of committees to ensure Board
meetings, when they happen, are efficient.
This is essential for allowing FSDA to be
able to progress investments and other
initiatives quickly.
Steering Committee members could decide
to sit on these committees and so would
get detailed operational insights.
The FSDA Board would be represented on
these committees but so too might
independent technical experts who are not
directors.
The Investment Committee should
comprise technical experts and should
meet quite frequently (e.g. one a month) in
order to approve funding for due diligence ,
progress due diligence processes and
ensure investment proposals are prepared
to an appropriate standard ready for Board
approval.
The Steering Committee would set the
upper limit for the amount of money that
the Investment Committee could authorise.
FSDA
Board
Investment
Committee
 Reviews concept
notes
 Approves due
diligence spending
 Oversees due
diligence processes
 Clears investment
proposals for Board
approval
 Meets once a month
Impact
Committee
Audit
Committee
 Reviews FSDA
performance against
targets and impact
metrics
 Proposes
independent
evaluators for Board
selection
 Reviews reports on
impact to present to
Board
 Meets 2/3 times a
year
 Ensures fiscal and
ethical accountability
of organisation
 Ensure appropriate
financial
management is in
place
 Liaises with auditors
and service provider
 Meets 2/3 times a
year
FSDA Board composition

FSDA’s broad mandate leaves a large
number of stakeholders and potential
beneficiaries with an interest in FSDA’s
success.

However, FSDA intends to have a lean
Board structure to ensure efficient
decision-making with limited ex officio
representatives.

FSDA aims to attract directors who are
primarily African and from the private
sector. Ideally 50% will be women.

Directors should be drawn from across
Africa but should be able to travel.

There should be sufficient technical
expertise
on
financial
sector
development but experience of other
industry sectors (e.g. IT, FMCG) may be
useful in order to introduce fresh
perspectives, especially where the
director has experience of HR or of
delivering or buying services.

Representation from the business school
or academic environment would be
helpful.
Independent
Chair
FSD
representative
FSDA Director
African; private sector or
academic (4)
During the transitional phase, as FSDA scales up,
it is hoped that CGAP will continue to be
represented on the Board
FSDA organisational structure
Director
Board of Directors
Executive Assistant
Team Leader (Senior
Consultant), Change
Management
Head of Education
Senior Project
Director
Consultants, Change
Management (2)
Head of Research
Finance Manager
M&E Manager
Office Manager
Communications
Manager



In addition to a core team of 14 full time staff, FSDA will make
extensive use of consultants on retainers as well as consultancy
firms to manage specific projects. Procurement arrangements for
this will have to be sufficiently flexible if project delays are to be
avoided.
A key early decision is whether to outsource the Finance Manager
function to a professional service provider (see earlier slides on
governance). Cost and benefits will have to be weighed.
Total staff costs are £5.5m over the 5 year period, or 18.5% of total
project spend. Two-thirds of these costs are charged against
programmes.
Analysts (2)
Table of
contents
Executive summary
FSD Africa Strategic Plan 2014 – 2018
Introduction
Section 1
Vision, mission and key activities
Section 2
FSD Africa in context
Section 3
Programme delivery

Key elements of Strategic Plan

Detailed implementation plans
Section 4
Communications
Section 5
Impact
Section 6
Governance and management
Section 7
Financial information
Annexes
1.
Detailed budget assumptions
2.
Job descriptions
3.
Draft SIMBA logframe
Section 7 – Financial information.
Overview of 5 year budget
(£m)
2013/14
2014/15
2015/16
2016/17
2017/18
Total
Total (%)
Skills development and
training
1.3
2.6
2.8
3.6
2.6
13.0
43
Knowledge and evidence
0.7
1.1
1.3
1.3
1.2
5.6
19
Thematic programmes
0.4
1.3
0.8
1.1
0.1
3.7
12
Regional platform
0.5
1.1
0.6
1.0
0.4
3.6
11
Total delivery costs
2.8
6.2
5.6
7.0
4.4
26.0
87
Total management costs
0.6
0.7
0.7
0.9
1.0
4.0
13
TOTAL FSDA COSTS
3.5
6.8
6.2
7.9
5.3
30.0
100
Own staff
6
13
15
15
15
Consultants
2
3
4
4
4
Programme delivery
costs
Programme
management costs
Staffing
Section 7 – Financial information
Programme management costs
£’000
2013/14
2014/15
2015/16
2016/17
2017/18
Total
347
420
452
485
522
2,226
93
180
194
208
224
898
Sub-total
440
600
645
693
745
3,124
FSDA set-up
155
0
0
0
0
155
M&E
50
100
100
200
300
750
Total
645
700
745
893
1,045
4,029
Salaries
Other
management
costs

Salary inflation is at 7.5% per annum.

Salaries are assumed to account for 70% of recurring overheads, excluding M&E. This is based on
experience at similar organisations.

Programme management salary costs are 36% of total staff costs, the remaining 64% being charged against
programmes.

Other management costs comprise general admin costs (audit, legal etc.), premises, communications,
Board costs etc. Assumptions based partly on Dalberg estimates (i.e. locally-informed).

M&E is 2.5% of total SIMBA budget.
Section 7 – likely causes of variances against
budget projections


Underspends will likely be caused by:
 External factors:
• Internal processes within FIs slowing the on-boarding process or complicating change
management processes or de-railing them altogether.
• Weak demand for FSDA support (e.g. in Building Services Markets sub-pillar) – or demand is
harder to stimulate than anticipated .
 Internal factors:
• Procurement processes applied to FSDA’s broad scope of activities creating delays (i.e. high
transaction costs).
• Hiring takes longer than anticipated and new hires slow to get going.
Overspends will likely be caused by:
 External factors:
• Projects requiring larger amounts of investment than anticipated.
• Sub-programmes that demonstrate ability to absorb more investment than planned
• Difficulties in raising co-funding.
 Internal factors:
• Cost of the professional service provider may be much higher than budgeted costs of full time
Finance Manager.
• New hires may be more expensive than anticipated.
• Salary inflation may be higher than 7.5% p.a. provided.
• Other admin costs (e.g. premises costs) higher than budgeted.
There is significantly greater near term risk of an underspend than an overspend but good prospects overall
that the platform, once built, will be highly effective at disbursing imaginatively and at scale
ANNEXES
ANNEX 1
Detailed budget assumptions
ANNEX 2
Key responsibilities of staff members
ANNEX 3
Draft SIMBA logframe
Annex 1 – Detailed budget assumptions (1/3)
1. Skills Development and Training

Change management
 Model built on basis of 20 FIs – 9 “large” (£750k FSDA investment per institution to produce 500k new clients
after 5 years ; 11 “small” (£150k FSDA investment to produce 150k new clients).
•
First crop of new clients lag Year 1 investment by a year.
 Staff costs (at peak) – 1 Team Leader, plus 2 other full-time staff on payroll; plus use of 3 external consultants
at 25 days each (£700 per day).
 Staff cost inflation at 7.5%; consultant inflation at 10%.
 Travel budgeted – each consultant assumed to do 6 trips p.a.
 Other change management initiatives.
•
2 initiatives provided for – 1 at £1m over 4 years, 1 at £400k over 4 years; assume FSDs will contribute
to roll-out costs.
 £50k annual provision for external support to manage processes (e.g. RFPs).

Building services markets
 3 scoping studies at £100k each.
 General market building – each of the 3 services markets allocated 3 “packages” of market-building support
(seminars, publications, targeted research etc.) at £60k per package.
 Pump priming demand: different approaches for the 3 markets but a mixture of (i) grants programmes (ii)
small grants window for needs assessments (£25k per institution) (iii) larger challenge funds (£100-150k per
institution). RFPs repeated twice over 5 years.
 Stimulating supply: again, a mix across the 3 industries but includes provision for dedicated training (e.g. via
business schools), small grants for needs assessments and business plan development grants.
 General oversight: retainers for specialist consultants (£15k per annum each), 1 for each industry.
 Centres of Excellence
 Research: landscaping study (£125k); other scoping studies (total £100k); other research (£25k each).
 Engagement with Centres: support for course material development (£180k), scholarships (£300k).
Annex 1 – Detailed budget assumptions (2/3)
2. Knowledge and Evidence

Cross-country research
 Assume 2 self-generated studies p.a. at £100k each.
 £50k p.a. to support other people’s multi-country research.
 £50k p.a. for an Africa research conference.
 Data products
 FinScope related:
•
Academic grants (£100k over 4 years).
•
Expert Panel (£190k over 4 years).
•
FSD facilitation on FinScope (£155k over 5 years).
 Other data products:
• Contribution to pilots (£200k).
• Proof of concept research (£120k).

Learning programmes
 Provision for 2 programmes – 1 at £1.15m over 4 years, the other at £400k over 4 years.

Impact evaluation
 £175k initial cost of consultative process; £25k p.a. follow-on work thereafter.

Portal
 MIX - £400k over the 5 year period.
 Includes £15k p.a. for external PR.
3. Thematic programmes

Credits markets development £1.3m starting in 2013/14 (Zambia project follow-on).

Payments and agriculture finance (£1m each) start in 2014/15.
Annex 1 – Detailed budget assumptions (3/3)
4. Regional platform




Regionalisation
 Funding for regional pilots (e.g. cross-border retail payments) at £50-100k p.a.
 Regional facilitation (e.g. EAC etc) £50-75k p.a.
Cross-country initiatives
 Catalysing FI initiatives in new countries assumes 5 scoping visits at £25k each, all complete by Year 3, and
thereafter total investment across the 5 countries of £540k.
 Grants to partners – assumes 3 grants made: £100k in Year 1, £250k Year 2, £250k Year 4.
Facilitation
 Assumes £70k p.a. for FSD network facilitation - £350k in total over 5 years.
 Reference groups - £70k p.a. rising to £150k p.a. by Year 5.
FSDA post SIMBA initiatives
 £825k total provision over 5 years.
 Model assumes due diligence on 3 opportunities (at £75k each) and pilots on two (at £200k each).
Annex 3 – Key responsibilities of staff members (1/4)
Key responsibilities
 Lead development and implementation of strategy and plans.
Director
 Establish and lead a team of professionals to deliver on log frame.
 Manage the external stakeholder relationships, particularly with FSD
Directors.
Reporting lines
 Early on, FSDA
Steering Committee,
then Board of
Directors after legal
structure in place
 Provide thought leadership on financial inclusion in Africa.
Team Leader
(Senior
Consultant),
Change
Management
 Manage and administer capacity building grants / investment
programmes, including identification of FSP partners through
networks.
 Maintain relationships with senior leaders at FSP partners.
 Develop needs assessment framework and methodology to conduct.
 Develop Africa capacity building services providers database.
 Maintain relationships with senior leaders at FSP partners.
 Contribute to development of needs assessment framework.
Consultant,
Change
Management
 Director
 Conduct needs assessments and support design of specific programme
interventions with FSP partners.
 Manage external (contractor) relationships, as required.
 Oversee collection of data from FSP partners.
 Contribute to African capacity building services providers database.
 Team Leader,
Change
Management
Annex 3 – Key responsibilities of staff members (2/4)
Key responsibilities
Head of
Education
 Develop strategy for Centres of Excellence programme, particularly
outreach to potential partner institutions, identifying and reviewing
areas of focus
Reporting lines
 Director
 Manage team to deliver on results along with partners
 Maintain quality of education curricula, and programme execution
 Validate and select key programme areas of focus
Senior Project
Director
 Director
 Develop interventions to address challenges in a sub-set of SSA
countries
 Develop partnerships with key SSA and global organisations
 Manage and administer innovation interventions
 Identify strategic areas of focus for FSDA data collection and research
projects
Head of
Research
 Provide strategic advice on key learning and impacts for dissemination
 Maintain relationships with relevant stakeholders (researchers, FSDs,
co-funders)
 Provide input into and ensure quality of all research/analytical outputs
 Director
Annex 3 – Key responsibilities of staff members (3/4)
Key responsibilities
Reporting lines
 Design and maintain impact measurement methodology for each FSDA  Head of Research
output and programme.
M&E Manager
 Ensure data and analysis integrity and oversee data collection
activities.
 Manage analysts and external relationships on data collection,
analysis.
 Conduct (economic, statistical) analysis of data received.
 Head of Research
 Complete landscape of available relevant information and the gaps:
Analysts

Identify relevant lessons learned for existing or new programmes.

Identify research questions in coordination with other FSDA programmes.
 Maintain Africa capacity building services providers database, with
input from other FSDA teams.
 Maintain FSDs database(s) .
 Identify common M&E challenges and develop solutions.
 Design, implement, and evaluate communications strategies for FSDA  Head of
and for each FSDA pillar.
Research/Director
Communication
Manager
 Identify opportunities for dissemination of research, information, and
achievements to demonstrate thought leadership, and coordinate
dissemination, e.g., regional for a, generation of content for FSDA
website.
 Provide strategic advice on communications and knowledge sharing.
Annex 3 – Key responsibilities of staff members (3/4)
Key responsibilities
 Prepare budgets, financial projections for projects and various
initiatives.
Finance
Manager
Reporting lines
 Director
 Monitor spending and complete regular reports to management,
board.
 Support development and implementation of funding strategy, i.e.,
fundraising and development of sustainable entities / sources of
funding including fee structure.
 Implement financial management and reporting system.
 Oversee administrative functions.
Office Manager
 Ensure office is maintained and equipped with the technology to
support programme delivery, e.g., computers, phones, furniture,
etc.
 Manage day-to-day operations of the office, including travel.
 Support Finance Manager in procurement and payment processes,
preparing invoices, reviewing expense reports, and providing input
to the regular management/Board reports.
 Finance Manager
Annex 3 – Draft SIMBA logframe

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