Dear Friends,

Over the past year, we have seen tremendous achievements of our partner institutions and hit some important milestones for ourselves. Despite some deterioration of portfolios and slower growth in all business areas (including deposits, remittances and loans), most of Exchange’s partner banks remained fairly resilient to during the global recession. In 2009, ShoreCap Exchange’s active portfolio of ten client banks produced micro and small business loans to over 1.3 million borrowers and a similarly impressive 1.1 million savers.  

We know, though, that the impact of this financial crisis will continue to affect many of the world’s poor, potentially like no other, because the economies in which development banks and microfinance institutions (MFIs) reside are far more connected now to the global financial system. Perhaps one of the brighter spots that we are witnessing is the long overdue and increased attention on asset building and savings mobilization along with a reduced emphasis on the “volume, volume, volume” mantra which the microfinance world has grown so accustomed to expect.

In 2009 Exchange delivered key programs tailored to this unique environment. We developed, produced and/or hosted four of our signature in-person forums for over 100 bankers (CEOs, their deputies, senior managers and senior branch managers) with documented results and conducted nine well-attended phone forums for peer bankers.

On the capacity building front, we have had teams on the ground at partner institutions in Afghanistan, Bangladesh, the Gambia, Kenya, Nigeria, Pakistan, Rwanda, and Tajikistan. Key focus areas ranged from credit function strengthening including delinquency management, development of risk-based operations and internal audit and compliance to IT support including MIS system audits. Additional support was provided for management and leadership training as well as governance strengthening. We expect to be accelerating our on-site work with the addition new additional partner banks this year. Exchange is actively fundraising to support an additional 19 to 20 financial institutions that are focused on increasing access to finance for undeserved entrepreneurs and low-income households.

Finally, Exchange expects to significantly scale up its knowledge exchange and peer learning work in 2010, largely through the Small Business Finance Network – the first global network for small business banks and for microfinance institutions scaling up into the small business lending arena. SBN and other peer learning interventions enable us to leverage Exchange’s experience, reach and impact. You will certainly hear more of this exciting development during 2010.

As always, we look forward to hearing from you.

Wishing all a fulfilling year.

Sincerely,
Lynn Pikholz

Lynn Pikholz, President

Lynn Pikholz, a South African national and former Senior Managing Director of ShoreBankAdvisory Services, ShoreBank’s international consulting company, serves as the President and CEO of Exchange. Lynn has over ten years of development finance experience and has worked closely with development finance institutions in Southern and Eastern Africa, South East Asia, the Middle East, and Eastern Europe as well as in the U.S. Employed by ShoreBank Advisory Services since 1996, she has written extensively on development finance. Lynn previously worked in South Africa for a major commercial bank (Barclays) and for The Urban Foundation, and she holds an Honors Degree in Marketing and Economics from the University of Cape Town and the University of the Witwatersrand in South Africa, and a Masters degree in Planning from the Massachusetts Institute of Technology.