1. contact@e-mfp.eu www.e-mfp.eu Cooperatives and Rural Financial Development Hans Groeneveld SVP Cooperative and Sustainable Business Rabobank Nederland 15 November 2012

2. contact@e-mfp.eu www.e-mfp.eu Rural population in developing and emerging countries classified by available level of rural finance Source: estimations by Rabobank

3. contact@e-mfp.eu www.e-mfp.eu Financial players Informal groups SACCO Cooperative bank MFIAGDB Commercial bank

4. contact@e-mfp.eu www.e-mfp.eu Standalone formal SACCO Informal group Time SACCO network Rabobank Nederland (Credit led) MFI network Bank (licensed) Players and phases in rural financial development

5. contact@e-mfp.eu www.e-mfp.eu From access to finance to access to financial services Skipping traditional development stages: technological innovations Overbanked in terms of institutions, underbanked in terms of products Broadening of product range: structured products, warehouse receipt financing, supply chain financing structures Consolidation of credit union type of institutions into banks with cooperative characteristics Recent developments

6. contact@e-mfp.eu www.e-mfp.eu Cooperative beliefs of Rabobank 3. Connecting with society: community as shareholder - Locally rooted - Dialogue with many – local – stakeholders - Social goals - ‘Co-operative dividend’ - Sustainable business 4. Connecting with each other: Network organisation - Local meetings - Local boards of supervisors - Knowledge and information sharing - Virtual communities 2. Connecting with the future: Long term focus - Long term relationships - In good and bad times - Future proof products - Solid enterprise - Innovations Vision: Together WE achieve more 1. Connecting with the customer: Customer’s interests first - Corporate governance with members - Influence and say - Close (physical and virtual)

7. contact@e-mfp.eu www.e-mfp.eu Determinants for successful and viable cooperatives Determinants Member attitude and commitment Policy and legal environment Governance Financial ability Knowledge Sustainability Scale and scope Market orientation

8. contact@e-mfp.eu www.e-mfp.eu Scale and Scope Clear responsibi- lities and tasks of coopera-tive and members Sufficient scale of cooperative Financial Ability Capitaliza- tion Policies Zero-loss policy Principle of self- financing Service at cost Governance Proportiona- lity or OMOV principle Apex Statutes and regula- tions Member attitude and commitment Empower- ment Communi- cation Delivery duty of members Involvement Market orientation / cooperative as economic instrument Integration of value chain Quality of product Knowledge Education of members Business methods compe- tence Production compe- tence Policy and legal environment LegislationInstitutions Political Stability Regulation Donor influence Guarantee funds Cooperative support Sustainability Ecological impact Food Security Socio- economic impact Cooperative performance Determining Factors

9. contact@e-mfp.eu www.e-mfp.eu Peru: access to producer finance (Norandino) Ecuador: financial inclusion for the lower segments of the F&A sector (COOPAC San Jose) India: linking the poor to the formal financial sector (BWDA, Tamil Nadu) Uganda: the added value of an APEX organization (UCCFS) Brazil: the importance of partnerships for APEX organizations (Sicredi) Rwanda: commercial bank with cooperative characteristics and background (Banque Populaire du Rwanda) Tanzania: a broad retail bank with a focus on rural finance (NMB) MINORITY STAKES!! Rabobank cases

10. contact@e-mfp.eu www.e-mfp.eu Economic motives must be guiding principles No universal recipe: cooperative banks are not always solution Quick development of players: scale, APEX, new products, new technologies To ensure long-term focus by financial institutions on rural areas, both rural and urban clients should be represented in their corporate governance Concluding considerations

11. contact@e-mfp.eu www.e-mfp.eu Thank you for your attention!