MFIs (Microfinance institutions), which primarily fund microcredit through loans, need partners...
Testimonials : how the bank deals with the MFIs
Ranked 155th on the Human Development Index (HDI), Madagascar is one of the world’s most underdeveloped countries. As part of the BNP Paribas talent strategy "Leaders for Tomorrow", Emmanuelle Aubertel and Christopher Claude lent a helping hand to SIPEM, one of the microfinance institutions supporting the development of the “Red Island”.
What are your responsibilities at BNP Paribas?
Emmanuelle Aubertel : I work in the Corporate and Institutional Banking (CIB) division of the BNP Paribas Group based in London. My work aims to increase the support we give our clients on issues relating to sustainable development, through innovative solutions tailored to meet their new needs.
Christopher Claude : I also work for BNP Paribas CIB, but am based in Lisbon, where I manage the Global Markets Front Office team, within CIB Portugal Solutions.
You work in two different countries and in two different fields within BNP Paribas… and yet you worked together to carry out an assignment in microfinance.
C.C. : Exactly. Our work together began as an initiative in line with the Group’s CSR strategy and proposed by “Leaders for Tomorrow” (LfT), an internal program aiming to develop the Group’s high-potential talents and prepare them for the major challenges ahead: financial, human and societal. The framework offers employees a chance to travel on assignment to conduct a social audit of a microfinance institution (MFI). This type of assignment is a unique opportunity for BNP Paribas employees, and I have to say that I received full support from my managers. Participants are trained in how to use a social audit tool, while discovering a new activity, a new country and incredible people. But most importantly, we get out of our comfort zone. Changing your perspective helps your personal development and creates value around you.
E.A. : I agree completely! It’s an incredible opportunity to discover other businesses and horizons. We were lucky to get accepted into the program, and even luckier to take part in this assignment in Madagascar.Our assignment turned out to be an extremely enriching experience on every level, both personal and professional. Staying flexible in how we work and practicing active listening to identify needs and develop constructive recommendations were essential attributes for carrying out this assignment to success.
What did the assignment in Madagascar entail?
C.C. : We performed a social audit at the Investment Company for the Promotion of Businesses in Madagascar, or SIPEM ("Société d’Investissement pour la Promotion des Entreprises à Madagascar"). It’s an MFI managed by SIDI, a partner of BNP Paribas. The audit aimed to help SIPEM evaluate and improve its practices with respect to international standards.
E.A. : For historical and legal reasons, SIPEM received its license as a territorial bank in 2014. In this context, our particular role was to understand how SIPEM articulates and translates its social mission into its activity, while still respecting the new profitability requirements tied to its status as a bank. SIPEM has nearly 300 employees and 18 branches, including seven in Antananarivo and 11 outside the capital, which serve more than 21,000 customers, half of whom are women.
How did you carry out the assignment?
E.A : This type of assignment can be divided into four phases. First, we received training to use the social audit tool (SPI4, developed by Cerise), which includes all the international “best practices” in terms of social management. We also needed to certify this training in order to become auditors. Second, we made contact with the MFI and studied their documentation to prepare the audit. Next came the on-site portion of the assignment, which lasted one week for us. Finally, we handed over a final report to explain the audit conclusions and offer areas for improvement and recommendations.
C.C : And we will also have a chance to benefit from a coaching session to identify the best lessons from the assignment.
Did the assignment go well?
E.A : It went very well! But it was not an easy challenge. We had to master a new tool in an unfamiliar environment. Our credibility was not a given. We came from another country—and from a large corporation at that —to work with an institution that did not share the same work methods. And we had just one week to establish a climate of confidence and build trust.
C.C : To pull off the assignment and overcome any doubt, we had to communicate to employees that this was not a “control” but a “collaboration”. Our role was to identify which practices were already well integrated and which still showed some room for improvement. But we worked our magic in no time. Everyone cooperated with complete sincerity and absolute transparency. Management offered an attentive ear from start to finish. We have even kept in touch with several people since then.
What did you take away from the assignment?
C.C : The social purpose of SIPEM’s banking activity notably involves small to medium-sized enterprises (SMEs). This legal status covers business situations that diverge widely from our own. For example, a person selling t-shirts on the street can be considered a small business.
E.A : Yes, SIPEM’s social utility was crucial. But it’s not always easy to strike a balance when you add economic targets to the mix. It is nonetheless possible to solve the equation, because a healthy social performance can have a positive impact on economic and financial performance, and vice versa.
Does that mean that microfinance is a necessity in Madagascar?
C.C : Yes, it plays a major role in the development of a strong and solid local economic fabric by opening up access to borrowing. It is absolutely crucial in a context in which some people are still totally excluded from any financial system.
E.A : It also gives us insight into our own operation as several parallels exist. For example: putting the client at the center of the company’s priorities applies just as much to an MFI as to a large bank like ours.
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