Opportunities through sustainable financial services

Bhutan neue Tablets
Foto: Sparkassenstiftung für internationale Kooperation
Niclaus Bergmann, Geschäftsführer Sparkassenstiftung für internationale Kooperation
Niclaus Bergmann, Geschäftsführer Sparkassenstiftung für internationale Kooperation

A long-term approach to achieve sustainability 

Our goal is to establish sustainable structures locally, with local sponsorship and adapted to local conditions. That is why our projects usually have a relatively long duration of six to 10 years. One of Sparkassenstiftung’s own employees always organises and controls the project work locally – often these are “Sparkässlers” (non-official term for staff working at the savings bank), who are released from work by their branches for two to three years. Our work is financed by contributions and donations from our members: two-thirds of all Sparkassen are members of Sparkassenstiftung, plus Landesbanken, Sparkassen-related associations and other institutions of the Sparkassen financing group. Their contributions, together with project-related grants from the federal government and international institutions, are the foundation of our work. The German Ministry for Economic Cooperation and Development (BMZ) is the largest provider of funding. In 2017, Sparkassenstiftung was able to invest a total of around EUR 18 million into the projects. 

Helping people to help themselves through a domino effect 

Of course, we are happy about every single project success, but I would like to highlight our consulting activities in the 1980s for CARD Rural Bank, a microfinance institution in the Philippines. CARD supports the poorest sections of the population and is specifically aimed at women. 

Together with experts from Sparkasse Essen, we advised CARD over a long period of time in many areas of banking. Since 1996, we have helped to transform CARD from a small and non-formal self-help association, with around 80 employees and around 6,800 female customers, into the largest microfinance bank in the Philippines today, with 1.5 million customers and around 1,500 branches. CARD MRI, a kind of holding company that now comprises 14 institutions, currently has 15 million insured people and around 4.7 million customers. This cooperation then became the starting point for further activities of Sparkassenstiftung in the microfinance sector in the former Indochina, namely in Vietnam, Laos and Cambodia. CARD passes on its experience to its partners in these countries. In this way, the recipient of support starts to help others – this is a great success for us!” 

Financial inclusion of large sections of the population 

I would like to mention another country in Africa where we have been active since 2008: Rwanda. This small country in the heart of Africa is known to many only because of its tragic history, but it is now regarded as a model student of development policy on the continent. 24 years after the genocide, the “land of 1,000 hills” is not only experiencing consistently high economic growth, it is also considered exemplary in the health and environmental sectors. Sparkassenstiftung's project work is therefore falling on fertile ground: starting with a small project to professionalise the microfinance umbrella association AMIR, which has two employees, there are now two large projects with several project components that aim to ensure the financial inclusion of broad sections of the population. Meanwhile, around 30 German and local employees are working on digitising the microfinance sector in Rwanda, introducing dual vocational training based on the German model in microfinance institutions, setting up a vocational school, professionalising association services and promoting the idea of saving to children and young people. The success in Rwanda has also been the driver for further projects in East Africa involving vocational training and strengthening the microfinance sector, in Burundi and Tanzania. 

Combining tradition and modern technology 

We have been active in Bhutan since 2011. Together with the local non-governmental organisation RENEW we established the first microfinance institution in the country. Bhutan is one of the poorest developing countries in the world, with an annual per capita income of just over 2,000 US dollars. More than a quarter of the population has to live on less than 1.25 US dollars a day. As so often, these difficult circumstances particularly affect women and children. RENEW (Respect, Educate, Nurture and Empower Women) therefore works to strengthen the role of disadvantaged women in Bhutan. 

The microfinance institution RENEW MFI, which Sparkassenstiftung has set up, together with RENEW, aims to help women in rural Bhutan to take their lives into their own hands. More than 10,000 customers are served today in the capital Thimphu and in seven rural regions of Bhutan. Due to the underdeveloped infrastructure in the country and the remote location of many villages, the organisation of so-called “centre meetings” (when our experts provide consultation hours in the villages) is a great challenge for everyone. RENEW MFI employees and their customers often travel extremely long distances to attend these centre meetings. However, on a positive note, RENEW MFI’s lending business has developed very positively, so that its earnings are now sufficient to cover the costs that arise due to these infrastructure weaknesses. At the end of the 2014/2015 financial year, RENEW MFI was in the black for the first time. Thus, we can say that tradition is meeting modernity: RENEW MFI relies on modern technology to keep costs down and expand its business. 

Our German partner, the savings bank Germersheim-Kandel, supports the project through the development of a management information system, the implementation of efficient processes and, last but not least, the communication of some of the values that are at the heart of savings banks, such as the promotion of the local economy and of saving. This is of particular importance for Bhutanese junior managers within RENEW MFI, as they will one day take over the management of the institution on their own.” 

Utilising our experiences for future foundation activities 

These are just three of the many projects that Sparkassenstiftung has initiated and managed over the last 25 years. During this time, the foundation has not only increased its project volume but also its staff numbers. This means that our structure has also had to change accordingly. In 2017, for example, we were intensively involved in realigning our IT so that we could integrate our many foreign colleagues working on our projects on site into all our operational processes, via an intranet. 

The topics of, and our approaches to, our projects are also subject to constant change. Until recently, “microfinance” was one of the main topics of our work, but today we have assigned all our specialist areas to an overarching theme – combating poverty through financial inclusion. Under this overarching theme we subsume six core topics: training and personnel development, financial education, micro, small and medium-sized enterprise financing – i.e. financing for micro, small and medium-sized enterprises, development of regional institutes, rural financing and green finance for investments in renewable energy and energy efficiency. 

With the introduction of green finance in 2018, we have taken account of the fact that environmental protection and financing are becoming increasingly closely interlinked. Another issue also increasingly concerns us: how can we give people in their home countries a perspective so that they do not risk their lives in the hope of achieving a better future in Europe? That is why we have developed programmes to help people build their own economic livelihoods in their home countries, but also in the transit countries where they are ‘stranded’.” 


Niclaus Bergmann 
Geschäftsführer Sparkassenstiftung für internationale Kooperation