My name is Yvon Bernier, and I am vice-president,consulting expertise, Développement international Desjardins.
To provide you with some background, the Mouvement Desjardins, as you no doubt know, is now one of the largest financial institutions in Canada and operates virtually across the country. The Mouvement Desjardins currently has assets of approximately $190 billion, which makes it the fifth largest financial institution in Canada and the largest in Quebec, and its aim as a financial cooperative, after all these years, is still financial inclusion.
Développement international Desjardins, DID, is a non-profit organization that has been in existence for about 40 years and currently operates in some 30 countries, essentially developing countries, and whose objective is to promote access to diversified financial services, which means financial inclusion. DID, a non-profit organization, cooperates and acts extensively in partnership with the Canadian International Development Agency, mainly in major bilateral, and most of the time highly structural, projects, but always in the context of the Canadian partnership regarding which we have just renewed a co-financing agreement with the Mouvement Desjardins. In short, my comments will concern access to financial services as a development driver for the private sector.
For DID, improving access to financial services for all is an essential condition for development of a community's private sector. The fact that in many countries, more than 80% of the population does not have access to quality financial services constitutes an actual brake on economic growth of the private sector. In this context, we think that it is strategic to work with small entrepreneurs and farmers who create jobs and also to offer the entire population, including its poorest members, diversified financial services that include savings, credit, insurance and transaction services. Consequently, microfinance should be considered as overall leverage for sustainable economic development, rather than simply as microcredit.
While the cooperative financial model seems, in our opinion, to be particularly favourable to very close involvement by such institutions in the communities they serve, we naturally support financial cooperatives. We support the emergence and development of diverse types of financial institutions in order to ensure maximum access to financial services. Regardless of type, community finance institutions should all operate within the framework of the formal financial industry and in function of its norms, while still adjusting to a primarily informal economy, and focus on a horizon for local ownership.
We also believe that it is necessary to rely on local resources. This would include the mobilizing of savings deposits, which increases the dependence of the communities being served, plus the strengthening of local leadership and democracy that occurs when stakeholders in the community become increasingly involved in the various aspects of the democratic life of their financial institution, and also include local capacity-building, which is the foundation for the performance and viability of the institutions we assist.
DID believes that, in order to have a significant impact on community empowerment and economic expansion, the assistance delivered should aim at increasing the level of institutional professionalism to boost outreach and impact. We also believe that such assistance should focus especially on large cooperative groups, namely institutions whose territorial outreach is national in scope and covers both urban and rural regions.
In West Africa, for example, DID provides support to seven institutions which rank among the leaders in their respective countries. Taken as a whole, these institutions reach nearly 5,000,000 members and clients, 40% of whom are women. They have approximately 1,000 service outlets, employ over 5,000, with the support of just as many elected administrators, and have total assets of nearly CAN$1 billion, although the average loan amount totals only CAN$900.
We believe that community finance institutions must deliver diversified financial services that help create value. DID believes that it is of utmost importance to focus on the efforts needed to provide micro SMEs with access to sources of financing tailored to their needs, since lack of access often places a brake on development and consequently on the economic development of these countries.
To fill the gap separating small entrepreneurs from the financial services they need, DID sets up financial centres for entrepreneurs, which we call CFEs. The 10 CFEs created with support from DID in Africa and Latin America have, to date, issued US$220 million in loans to some 82,000 small entrepreneurs. Using the Calvert Foundation's Social Return on Investment, we estimate that over 53,000 jobs have been created thanks to these institutions.
In the context of a crying need for food security in many regions of the world, developing countries are facing enormous challenges. They must diversify crops, modernize their agricultural techniques and achieve increased agricultural productivity. In order for the men and women working in agriculture to contribute to its development, they absolutely must have access to diversified financial services, such as specialized agricultural loans such as credit for investment or marketing, and crop insurance. It should also be noted that, in most developing countries, nearly 80% of food production depends on the work of women. Indeed, if structural gender inequity is reduced, agricultural yields could reportedly be increased by over 20% on the continent of Africa.
Consequently, in light of these findings, it appears crucial that microfinance institutions make financial resources accessible so that farmers, especially women, may participate fully in agricultural sector expansion and economic growth.
Housing finance meets a rising need within communities in developing nations. One need only think of the current urbanization rate in the major capitals. The impact of sound, well-built homes is enormous, not just on health, education and security, but also on the creation of family wealth, which can be passed on to future generations, and entrepreneurship. These are also prerequisites for community private sector development.
Delivering community financial products and services to clienteles living in marginalized regions comes up against major constraints in terms of accessibility, security and cost. In this context, DID believes that introducing innovative and effective technological solutions is an essential condition for secure and expanded access to financial services. Transaction software, mobile applications, mobile banking services, for example, smart cards, biometrics and inter-coop transaction systems are some of the tools advocated by DID to reduce costs and improve service outreach.
For Développement international Desjardins, the emergence of genuine community finance that is truly inclusive requires suitable legislation and supervision with the purpose of improving professionalism in the sector and safeguarding depositors. DID also promotes sound microfinance practices aimed, among others, at preventing overindebtedness of members and clients.
In conclusion, we reiterate that all support for development, including investment, should be placed at the service of local capacity-building and local leadership development. Based on this prerequisite, the impact of aid intervention for development will be multiplied and significant results achieved on a larger scale.
Thank you very much for inviting us, Mr. Chairman. I was a little nervous at the start. If there are any important questions for us, we will be very pleased to take part.