ADFIAP Consulting

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Accomplishment Report

ADFIAP Consulting (AC) prepared a proposal to ADBEC providing options on how to better structure and enhance the relationship between the Caribbean Development Bank and the Development Banks of the Eastern Caribbean for the mutual benefit of all in terms of discharging their roles as development agents under a sustainable and risk-mitigated environment, drawing on experience from the Philippine DFIs where financial intermediary lending is a proven success.

AC prepared a Concept/Strategy Paper and a Project Document on the setting up of an SME Regional Centre aimed at accelerating economic growth and development, generating employment and reducing poverty by addressing the problem of lack of access to formal finance of Small and Medium Enterprises (SMEs) which constitute the major impediment to SMEs growth and competitiveness.

The project involves the setting up an apex organization responding to the specific needs of the Asia and Pacific region, specifically the 45 countries that are part of the ADFIAP network, by promoting a better dialogue amongst stakeholders, advocating better practices, facilitating knowledge sharing, identifying the needs of the most promising sectors and providing the region with a platform for incubating new approaches for consolidating existing SMEs and attracting new comers to do business.

AC prepared a Project Brief entitled “Pacific Islands Logistics for Economic Development and Green Environment (PLEDGE) Project” for the Pacific Islands Development Bank (PIDB) to be used in sourcing funds to support identified development projects of its 8 member-governments, namely: Guam, FSM States of Yap, Kosrae, Chuuk, Pohnpei, Republic of Palau, Commonwealth of Northern Mariana Islands and Republic of Marshall Islands. PIDB will act as the borrower and wholesaler of the said funds. It will lend the funds to accredited financial institutions or conduit banks in member-countries which in turn, will lend to investment enterprises or end-borrowers.

ADFIAP is one of the partners in the SMART Cebu Project implemented by a consortium of European and Philippine organizations in Cebu that is aimed at increasing the competitiveness of three (3) industry sectors (Gifts, Toys and Housewares; Furnitures and Furnishings; and Fashion Accessories) by greening their production processes and developing eco-friendly products to be able to enter the green markets in Europe and Asia. The efforts on the production side will be complemented by a marketing and export strategy in order to stimulate demand for these green products from Cebu as well as access to finance by MSME entrepreneurs to support investments relative to the shifting of production process to green technology.

AC’s role is to design, develop and implement training and coaching on how to develop a Business Agenda on Sustainable Consumption and Production (SCP); conduct advocacy programs for SCP and other environmental matters in related sectors; design, develop and conduct training programs to SMEs on financial management and how to access funding from financial institutions; coordinate with financial institutions in the development of financial schemes for environmental projects of MSMEs; and organize fora that would serve as platform for financial institutions and MSMEs to match their financing requirements.

AC, through the ADFIAP DFI-network of 130 member-institutions in 45 countries in the Asia Pacific Region, assisted ADB in the building up of data base for ADB’s National Infrastructure Information System (NIIS) which is the IT backbone of the Green Finance Network. ADB has committed to support through a technical assistance, together with the international organization R20 (Regions in Climate Action), the establishment of the Green Finance Network (GFN) of banks and other financial institutions interested to finance climate-positive projects in Developing Member Countries. Meeting this commitment requires the rapid establishment of communications channels to reach as many development finance institutions as possible in order to inform them of the GFN and to solicit feedback and constructive input into the proposed GFN structure and operations. Now that the NIIS project structuring platform and project documentation tools have been launched, the full implementation of the technical assistance calls for the dissemination of access to the NIIS platform to as many national and sub-national level development finance institutions in Asia-Pacific Developing Member Countries as rapidly and efficiently possible.

ADFIAP through AC was appointed as Technical Organizer for the project which involves the holding of a one-day international dialogue to further advance the new inclusive growth agenda launched during the 17th Economic Leaders’ Meeting in Singapore in November 2009. Basically it is focused on the implementation of the leaders’ instructions to build capacity and map strategies and programs related to the agenda. The dialogue offers a great opportunity in promoting inclusive finance given that large segments of the region’s economies. AC, as Technical Organizer, provided technical support to the Project Overseer (Philippine Department of Finance) to ensure that all aspects of the project’s implementation are carried out as approved and in line with APEC project guidelines; developed, in coordination with the Project Overseer, the Project content (theme, topics, speakers, workshop guide questions, budget, etc.); developed and maintained a detailed project schedule which included administrative tasks and all site preparation for the project; performed administrative functions for project management including requirements for financial disbursement, contracting and publications; coordinated meetings, including travel arrangements and expense reports and ensured the effective flow of information among agencies and individuals involved in the project; maintained and monitor project calendars; coordinated the interfaces of all agencies and institutions involved in the project; provided Secretariat and Administrative support during the forum proper; and prepared Project Completion Report.

AC provided organization and technical support to the Australian APEC Study Center in the holding of the subject regional symposium to ensure that all aspects of the project’s implementation are carried out as approved and in line with APEC project guidelines. AC also developed and maintained a detailed project schedule which included administrative tasks and all site preparation for the project; assisted in the development of the Project content (theme, topics, speakers, workshop guide questions, budget, etc.); performed administrative functions for project management and during forum proper; ensured implementation of the agreed action plan in accordance with APEC Guidelines and agreed upon standards and deadlines; and attended to the speakers’ and participants’ logistical requirements.

Measures to increase the flow of funds to MSMEs is a major development challenge identified by G20, APEC and other fora in promoting financial inclusion in the Asia Pacific region. The symposium sought to address this challenge by promoting a regulatory environment in the APEC region’s economies conducive to supporting increased lending by development banks, the commercial banking system and through capital markets. The symposium reviewed existing regulatory impediments that impact on finance availability and considered the concept of proportional regulatory and supervisory frameworks conducive to increasing financial inclusion and proposed best practice regulatory principles. The output of the work contributed to broader and deeper financial inclusion, employment and investment in the region’s economies. The symposium brought together financial system policy makers and regulatory officials from the region, specialists from international and regional organisations and standard setting bodies, senior representatives of development, savings and commercial banks, the securities sector and non-bank financial intermediaries to evaluate regulatory and policy impediments that impact on the flows of finance to MSMEs; discuss measures and best practice regulatory principles that would enhance access to finance; to build capacities in regional economies to increase the flow of funds to MSMEs by promoting a regulatory environment in the region’s economies to enhance banking, equity and debt capital markets.

AC conducted a 4-month training program to Bangko Kabayan’s Branch Managers, Credit Advisers, and Credit Investigators to level up the bank’s MSME Lending Business by enhancing the competencies of its officers and staff involved in credit operations with the objective of nurturing of a vibrant and sustainable MSME loan portfolio geared towards risk minimization and profit maximization.

AC developed presentation materials covering the following topics: Module 1 – All About SMEs in the Philippines (What is a Small Business?; Characteristics of a Small Business; Ideal Qualities of an Entrepreneur; Why Go Into MSME Lending Business; Regulations Governing Small Businesses); Module II – The MSME Banking Opportunity (Environmental Scanning; Market Analysis; Market Potential; Account Prospecting and Generation of Pipeline Projects; How to Conduct Client Call and Interview; Preparation of Call Report; Module III – A Holistic Approach to MSME Lending (Lending Under a Risk-Controlled Environment; Good MSME Lending Practices; Basic Principles of Financial Analysis and Ratio Analysis; Construction/Reconstruction of Financial Statements; Loan Packaging/Preparation of Term/Offer Sheet; Loan Negotiations and Financial Closure Skills; Due Diligence Process; Credit Recommendation; Module IV – Early Warning Recognition and Remedial Management (Understanding Credit Quality Issues; Basic Procedures and Requirements for Project Monitoring; Credit Review Process; Problem Recogniton and analysis; Early Warning Signals; Module V – Loan Presentation Skills (Coaching on how to be an effective presenter; Preparation of presentation materials; Presentation of finalized loan recommendation)

AC conducted two “MSME Access to Finance” Workshops for the MSME and bank-members of the Ceylon Chamber of Commerce and the Federation of Chambers of Commerce and Industry in Sri Lanka with the objective of providing MSMEs with an overview of what banks typically look into in evaluating MSME loan applications, to share best banking practices in MSME lending in the Asia Pacific Region with focus on the Philippines and to introduce new technology that would help MSMEs organize and systematize their business processes for financial and operational efficiency, ad consequently, enhance their bankability. AC developed the presentation materials covering the following topics: development of a business plan, financial management, MSME lending and best banking practices and web-based operations management technology for MSMEs and coordinated with Asian Bankers Association, Confederation of Asia-Pacific Chambers of Commerce and Industry, EStorm Technologies of Singapore and SYNAPSIS of Sri Lanka on the topics to be discussed, profile of participants, travel arrangements, venue and logistical support.

ADFIAP through AC co-organized the conduct of a series of seminars on MSME Financial inclusion to Thrift and Rural Bankers’ Associations and Industry Associations in partnership with the Financial Executive of the Philippines (FINEX), Eastern Communications and EStorm Technologies to assist banks create an effective MSME desk and to make SMEs be more financially and operationally efficient. The seminars adopted the following Agenda:

  • The MSME Perspective
    • Potential source of growth for the economy
    • What they need to succeed
  • The Core Needs of MSMEs
    • Funds: to start the business
    • Skills: to manage the business
    • Opportunities: to sustain the business
  • The Program
    • Multi-sectoral MSME capacity-building strategy
    • Opportunity for banks to develop their own effective MSME desk and toolkit

Conducted a two-week training program on Bank Operations Management from June 25 to July 6, 2012 for 12 account officers of Bhutan National Bank, Ltd. in Manila, Philippines.  The program was aimed at leveling up the bank’s operational efficiency in various aspects of banking.  It covered the areas of project management, financial and risk management, customer relations and sustainability reporting.  The program also afforded the participants the opportunity to familiarize and orient themselves on the topics through institutional visits and interaction with Philippine banks.

AC and DBT forged a Memorandum of Agreement (MoA) to undertake joint training programs and other services to ADFIAP members.  An AC-DBT joint seminar  on Strategic Financial Management Program for SME Bank Lending Officers focusing on strengthening SME lending of  development finance institutions (DFIs) was held on July 23-27, 2013 in Manila, Philippines, attended by 17 loan officers of ADFIAP members from Malaysia, Palau, Samoa, Micronesia and the Philippines.  The course covered a broad array of topics such as principles of financial management for SMEs; understanding production and service processes and differences in financial modeling;  importance of market conditions, technology and economies of scale; working capital management for SMEs; insolvency cost approach; financial analysis; budgeting for SMEs; growing strategies and effects to financial statements; and environmental risk assessment and sustainability  reporting      

The Development Finance Institution (DFI) Network-building exercise for the National Infrastructure Systems (NIIS) has resulted in a growing number (now approximately 40) Asia-Pacific national-level DFIs expressing interest in using NIIS for project preparation and structuring. However, the need has become apparent for development of a hands-on training module through which to build capacity in these DFI in project preparation and use of the NIIS platform.

 

For this reason,  services are required to develop the curriculum and training modules for a “NIIS Users’ Project Preparation Training and certification Course” and associated publications and materials, and to assist with integration of this Course with existing NIIS programs and workshops.  The ADB Infrastructure Project Preparation Training Program named “Local Infrastructure Feasibility Expert (LIFE) Training Program was piloted on June 10-14, 2013 at the ADB Headquarters participated in by 40 technical staff from the Regional Development Council Secretariat, concerned national government agencies and provincial governments of the MIMAROPA region in Southern Tagalog, Philippines, comprising of the provinces of Occidental and Oriental Mindoro, Marinduque, Romblon and Palawan.

ADFIAP is one of the partners in the SMART Maynmar Project implemented by a consortium of European organizations in Myanmar that is aimed at preparing SMEs from the garment sector to produce sustainable products which will be marketed to Europe and Asia. These sustainable products shall fulfill the requirements of international and in particular European buyers. The project shall on the one side contribute to render the garment companies more competitive and on the other side, the project also wants to contribute to create a model how to replicate sustainable consumption and production (SCP) toward other sectors.

The project will set preconditions for replication primarily with the training of consultants. They will be able to work not only in the garment sector but in most sectors. Once trained in resource efficiency and cleaner production as well as CSR, it will be easy to re-train them on sector-specific issues. In the field of CSR it will be even easier as topics such as anti-corruption and social dialogue are generic topics not very dependent on the sector. This will be already the case during the project as the consultants offer their services to all companies interested in their services.

AC’s role is to design, develop and implement training and coaching on how to develop a Business Agenda on Sustainable Consumption and Production (SCP) both for  the garment industry associations in Myanmar and the Myanmar Bankers Association; conduct advocacy programs for SCP and other environmental matters in related sectors; design, develop and conduct training programs to SMEs on financial management and how to access funding from financial institutions; coordinate with financial institutions in the development of financial schemes for environmental projects of MSMEs; and organize for a that would serve as platform for financial institutions and MSMEs to match their financing requirements.

A Memorandum of Agreement (MoA) was signed by ADFIAP and  SERDEF to accelerate the development of entrepreneurial and managerial resources through the conduct of training, research studies and innovative approaches in the development and promotion of micro, small and medium enterprises (MSMEs) in the country and in the Asia-Pacific Region.  The MoA will enable ADFIAP through AC, to jointly undertake programs with SERDEF to attain more effective sustainable assistance to MSMEs leading towards access to finance.

Presented the role of national development banks in mobilizing private investments and shared the member-DFIs’ environmental initiatives, including green financing and guarantee programs during the regional climate finance workshop  on April 22-24, 2013 at the National University of Singapore, organized by GIZ, Singapore Ministry of Foreign Affairs, Lee Kuan Yew School of Public Policy and the Climate Development Knowledge Network.  The workshop, which was participated in by 61 delegates from various organizations in the Asia-Pacific Region, gave an overview of climate finance concepts with the latest data on global and regional climate financing sources, public and private; the most recent developments on the United Nations Framework Convention on Climate Change and Green Climate Fund; and the current state of work of regional initiatives by development banks, agencies and think tanks.

Presented Value Chain Finance and Small Infrastructure Development Finance:  Experiences from the Work of Development Financing Institutions during the APEC financial inclusion forum held on June 11-12, 2013 in Batam, Indonesia, organized by the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), the Asian Development Bank (ADB), the Asian Development Bank Institute, ADBI), APEC Indonesia 2013, Ministry of Finance, the Government of Indonesia and the Foundation for Development Cooperation.  It was proposed that value chain finance and small infrastructure finance be included as additional themes to step-up APEC’s financial inclusion initiatives in the Asia-Pacific region. 

Conducted the SEIP Training  Program on July 8-12, 2013 in Manila, Philippines attended by ADFIAP members from Malaysia and the Philippines.  SEIP is a new program which offers three (3) value propositions, namely:  innovation – which allows the participants to think creatively in developing new programs, products and services or enhancing existing ones for the SME sector; results-oriented – by enabling the participants to strategize and actualize business initiatives by completing a project proposal framework and sustainability reporting roadmap as back-home action program; a holistic approach – by teaching the participants the strategic planning methods, core business operations and sustainable management action to ensure sustainability of proposed programs or projects.  An added feature of the program is the creation of an online campus via the ANEX portal, ADFIAP’s Network and Education Exchange platform which provides participants access to the course content, submit their homework, post messages and download presentation at any given time.  SEIP introduced a new methodology wherein each interactive lecture was followed by a workshop that enabled the participants to apply their learning’s and build up their project proposals which they presented to a panel as the culminating output of  program and which will serve as their back-home action programs.

Conducted credit risk management course on August 19-23, 2013 in Manila, Philippines, attended by ADFIAP members from Bhutan, The Federated States of Micronesia and the Philippines.  The program is aimed at providing lending officers with the necessary tools, knowledge and best practices in lending under a risk-mitigated environment using various credit scoring models, focusing on credit risk identification, analysis and management; market, technical and financial viability of business plans;  and internal credit risk rating system.   The culminating activity was the crafting by the participants of credit scoring models that would reflect the credit policies and  risk tolerance of their respective banks.

Papers/Proposals

  • Concept paper on the creation of an ADFIAP Fund circulated to ADFIAP members
  • Reaction Paper on “Financing Adaptation in the Philippines: What is Needed and Where”
  • Paper on “Sustainable Finance: The State of Play in the Philippine Financial Sector”
  • Paper on “Managing Portfolio Risk in Lending to Micro, Small and Medium Enterprises”
  • Paper on “Conceptual Framework for a Regional SME Finance and Knowledge Center”
  • Strategy Paper for a “Pilot SME Finance and Knowledge Center in the Asia Pacific Region “

Presentations

  • “Financing Adaptation in the Philippines: What is Needed and Where” at the OXFAM Financing Adaptation Roundtable held at Cravings, Quezon City
  • “Sustainable Finance: The State of Play in the Philippine Financial Sector” at the ADFIAP-UNEP-FI Pre-CEO Forum Workshop on Evaluation and Management of Environmental and Social Risks in Lending and Investment Practices held at Dusit Hotel, Makati City
  • Presented the “Conceptual Framework for a Regional SME Finance and Knowledge Center” at the 1st Manila Roundtable Meeting held at Plantersbank, Makati City hosted by the International Trade Center (ITC) Geneva as Executing Agency and ADFIAP and the Institute for Trade and Development (ITD) Bangkok as Implementing Partners
  • Presented the paper on “Managing Portfolio Risk in Lending to Micro, Small and Medium Enterprises at the 4th Annual SME Banking and Financing Forum at the Hyatt Hotel in Kuala Lumpur
  • Conducted a Seminar on “Holistic Approach to SME Lending – Philippine Setting” to ADFIAP-member institutions at the SME Bank in Kuala Lumpur
  • Presented the Strategy Paper for a “Pilot SME Finance and Knowledge Center in the Asia Pacific Region at the 2nd Bangkok Roundtable Meeting held at the Novotel Siam Square Hotel, Bangkok, Thailand

Partnerships

Part of the Group that prepared EOIs/Concept Papers for :

  • Vanuatu Agricultural Development Bank
  • VBCP Access to Coordinated Credit and Enterprise Support
  • Mekong River Commission- Training Course on Integrated Water Resources Management
  • DBP–Environmental Development Project
  • Philippine Water Revolving Fund Grant Funding

Consultancy Engagements

  • Association of Development Banks in Eastern Caribbean for the preparation of a “Working Paper on the Proposed Future Role of Development Finance Institutions in Caribbean Development Bank ‘s Financial Intermediary Lending” (Status – Completed)
  • United Nations – International Trade Centre on two (2) engagements for the pilot design of SME Finance and Knowledge Center in Asia-Pacific Region with the following deliverables :
    • Strategy Paper discussed in the Bangkok Roundtable Forum ( Status – Completed)
    • Project Document for Grant Application ( Status – Ongoing)
  • SWITC Asia Program – SMEs for Environmental Accountability, Responsibility and Transparency (SMART) – Cebu co-funded by the European Union and BMZ and implemented by SEQUA as lead together with other partners, including ADFIAP, for the conduct of advocacy programs on Sustainable Consumption and Production (SCP) and other environmental-related sectors; and design, development and implementation of training programs and coaching on how to develop a business agenda on SCP matters, particularly on financial matters for related sectors (Status – For Implementation)

Papers/Proposals

  • Project Document on the setting up of an apex organization, the “Asia and Pacific SME Finance and Knowledge Center”
  • Fund Sourcing Concept Paper Framework for Pacific Islands Development Bank
  • Proposal to the European Union on “Institutionalizing SCP Financing Programme for SMEs in Development Banks in Asia-Pacific” under the SWITCH Programme
  • Project Proposal to the Asia Pacific Economic Cooperation (APEC) to hold a forum on “Accelerating Financial Inclusion in Asia and the Pacific: An Operational Dialogue on Innovative Financial Inclusion Policies”
  • ADFIAP Paper for the session on “Outlook for Ongoing Initiatives: SME Finance” during the Fourth Meeting of the Advisory Group on APEC Financial System Capacity Building in Yokohama, Japan
  • Inputs to the booklets on “Accessing 2 Finance for Energy and Resource Efficiency: a Guide for SMEs” and “Enabling Asian SMEs the Access 2 Finance for Energy and Resource Efficiency: a Guide for Financial Institutions and Investors” which are part of the SCP project under the SWITCH Programme

Presentations

  • SMART-Cebu “Project’s Implementation Framework” and “Proposed Approach to Action 11″ to Mr. Thomas Ritter, Project Director
  • Project Document on the setting up of an apex organization, the “Asia and Pacific SME Finance and Knowledge Center” at the 3rd Manila Roundtable Meeting held at Plantersbank, Makati City
  • “SME Access to Finance” at the Financial Executives Institute of the Philippines (FINEX) Forum held at New World Hotel, Makati City
  • “ADFIAP Consulting’s SME Lending Business Management System” for the:
    • Specialized Study Tour for Vietnam Development Bank held at Prince Plaza, Makati City
    • FINEX Banking Forum “Doing the Right Things Right to Help SMEs Succeed” held at the Bangko Sentral ng Pilipinas, Manila
    • Bank of Negara Malaysia Study Tour at the ADFIAP Office, Makati City
  • Fund Sourcing Proposal to the Pacific Islands Development Bank Board of Directors at the Tiara Oriental Hotel, Makati City

Training/Seminars

  • Participated in the SMART Cebu Facilitator’s Training held in Cebu for the selection of Nucleus Counselors
  • Facilitated the conduct of the Sustainable Consumption and Production (SCP) Awareness Briefing for ADFIAP member institutions and other financial institutions by Mr. Michael Niemczyk of Effizienz-Agentur NRW Germany under the SMART Cebu Project held at the Development Bank of the Philippines, Makati City
  • Participated in the Philippine Economic Briefing sponsored by the Bangko Sentral ng Pilipinas held at the Dusit Hotel, Makati City
  • Participated in the Specialized Study Tour for Vietnam Development Bank on Institutional Capacity Development held in Manila
  • Participated in the Asian Development Bank’s Financial System Architecture for Effective SME Financing Seminar conducted by Dr. Hyoung-Tae Kim, President of Korea Capital Market Institute at the Asian Development Bank, Manila
  • Participated in the SMART Cebu Workshop on Instruments for SCP Related Advocacy conducted by Mr. Daniel Thomann of Sequa gGmbH held at the European Chamber of Commerce of the Philippines, Cebu City
  • Participated in the Second SWITCH Asia Networking Workshop in Beijing, China on the regional means and process that enhance the outreach of the SWITCH-Asia projects and the replication of SCP in Asia

Partnerships

  • Sustainable Program for SMEs

    Partnership with FINEX and Eastern Communications to provide a sustainable program for SMEs with the ultimate objective of (a) access to finance, (b) financial governance, and (c) operational excellence

  • SME Financial Inclusion Program

    Partnership with the Asian Bankers Association (ABA) and the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI) for the conduct of a series of seminars on SME Financial Inclusion

  • APEC Forum on Financial Inclusion

    Partnership with the Department of Foreign Affairs (Philippines) and Department of Finance (Philippines) on the preparation of the Project Proposal of the Philippines on the holding of a Financial Inclusion foru

  • Independent Review of Internal Credit Risk Rating System of Banks

    Partnership with PSR Consulting on the conduct of external review of the Internal Credit Risk Rating System (ICRRS) of Banks to enable banks to comply with Bangko Sentral ng Pilipinas (BSP) Circular 439

  • Assisted in the Bid Preparation of GITEC Consult GmbH for KFW Project on the Conduct of Workshops or Mindanao LGUs and Officers of the Land Bank of the Philippines.
  • United Nations International Trade Centre for the preparation of the Project Document for Grant Application for setting up of an apex organization, the “Asia and Pacific SME Finance and Knowledge Center” (Status Completed in June, 2010)
  • SWITCH Asia Program – SMEs for Environmental Accountability, Responsibility and Transparency (SMART) Cebu Project for the conduct of training and coaching on SCP advocacy to financial institutions, SMEs and Local Government Units to encourage green investments.
  • Independent Review of the ICRRS of Bank of Commerce – ADFIAP Consulting will handle the Qualitative component covering documentation/process review of model design, data, process and governance and PSR Consulting, the Quantitative component covering actual outcomes of benchmarking and back testing. Deliverable is an independent opinion as to the accuracy and stability of the ICRRS and compliance with BSP’s requirements.
  • APEC Forum on Financial Inclusion Designated by the Project Overseer, the Department of Finance (Philippines), to be the Organizer of the forum entitled “Championing Financial Inclusion: Through Innovative Policies: A Policy Dialogue on Promoting Financial Inclusion in the Asia Pacific Region to be held within the margins of the APEC Senior Finance Officials’ Meeting (SFOM) sometime in 2011.