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[Radio announcer] A shop for natural cosmetics
or behavioral therapy for animals
an Algerian restaurant
or your own heating company
the ideas of entrepreneurs could
not be more varied
I believed in the idea
of course we also had to invite big
institutions
Everybody screamed:
"Don't do that. Loan customers run away
or do not pay and there is an huge outcry,
and the opposite was the case.
For the startup industrie it was quite clear:
without money there was no startup
and normal lenders do not give loans.
In Germany we have a differentiated
banking system, but we had virtually no
system of micro-credit
We were clear and realistic
and we said: "Who can we get on board?"
A few adventurous people in ministries -
but they could be counted
on the fingers of two hands.
This amount seems ridiculously
small to many others.
But it is real money.
The biggest risk in this approach was
whether the German Microfinance Institute
would persevere.
We operate at very different speeds
and whereas for them
two or three years is nothing,
for a private institution
that moves in the market this is too long.
I had ceased to believe that it would work out.
Before the Stuttgart Assignment, we were eight
organizations and we had 250-300 credits
and that was all from 2004 to 2007.
One could also say what we started it all,
but there was no visible result.
They said: "You don't believe in your own project anymore.
And one of your top people is resigning."
I could say flippantly: "hope is what dies last".
But I'll put it another way.
At that time ... I also remember the number 300.
There were questions as to whether it really made sense
to develop this project further
especially since it was naturally
associated with a lot of effort.
But I must say: I have always been
convinced by Falk Zientz
If we try to change our laws, then we will
never reach our customers. And with 129 customers
we don't need 50 members in the Institute.
Instead we could offer one-on-one coaching.
That was not possible.
[Radio announcer]: This system of small loans
works well in Bangladesh.
But it also works in Germany
Oliver Foerster is working for the German Microfinance Institute
Mr. Foerster, who takes these small loans? ...
We were doing the planning for next year and said: O.K.
we now have 129 loans. No one was motivated to say:
next year we may have another 100 loans.
It didn't do justice to the whole framework.
And then we decided at the board meeting:
O.K. Project 5000
Our project starts today, here and now
and it ends when we have granted our 5,000th loan.
It may be pretty hard to imagine for a traditional bank,
granting a loan with the security being a draught horse;
that's as bizarre as having 250 credits and saying:
we are now doing 5000 successfully
Yes - How do we run the project?
I still remember very well that
in the next four days, a big fuss was
going on to get it all on track.
Special things had to be created.
For example, to transfer the idea to
politicians in Stuttgart: What is our goal?
What do we want to achieve as a goal?
We had this huge poster, where the first supporters
of the project signed their names.
Especially in Stuttgart, when a woman like Helga
Breuninger is the patron it is easier for politicians
and easier for the banks, and that's like a good sign.
I think you have to take advantage
of such a situation and that's what I do.
This was certainly a very important event.
We were happy to be involved as L-Bank.
That's our job.
And from today's perspective
this event has definitely resulted
in a very strong drive for microfinance as such.
It's actually at a critical size,
a size where no one can say anymore:
"That's nothing."
5000 is an outstanding figure
that we are able to work with.
When one encounters customer needs
that are really not yet covered,
developments like this are possible.
In my view,
the largest share of the success
is due to the microfinance institutions
which have been organized into the
German Microfinance Institute DMI.
Then of course the GLS Bank, and I think
KfW has helped to anchor the topic permanently in
the economic debate.
I remember, I talked to
Mr. Irsch and said,
"Dr. Irsch, I need 400,000 euros."
He said: "Why 400,000 euros?" I said:
"We need it to pay loan fees to MFIs.
To test what we have always claimed.
what an illusion.
There were surely many, many people in Germany
who smiled when we announced that number,
but it did work. In September this year
-four years later- we granted
our 5,000th credit.
This is an incredible thing.
Develop new concepts, develop new models
What are the conditions that a
microfinance institution needs
to achieve a sustainable business?
Do not hope for the Big ***,
where you suddenly create 50,000
out of 5,000, but fine tune the adjustment
screws where necessary.
One might also ask
who in Germany really wants to do something to
help people to launch their startup
and give them an unsecured loan.
If we can show that there is a
belief in this process,
then, I think, many people would be interested
in investing their money there.
The system needs several alternatives:
We need a second and third bank so as to react more flexibly.
Unification for the product.
This is yet another target: one product distributed nationwide
Recently, we have focused strongly on lending
and I think the next step is to look again:
what makes us different from banks?
what makes us different and how can we meet
the needs of our customers
who need more than just money
It is 50 percent selling effort.
Even if the administration
people don't believe it.
We have over 57 organizations.
We have about 200 to 250 people in
our system as a network. We have
all the expertise we need to drive
this topic forward.
The next step is to involve
more people in the whole process,
more people we can offer the loans to,
more people that have enough money
to contribute to the system,
more people in politics who support us,
more people that are driving the whole system.
That is the essential topic:
to reach the broad mass of people,
to promote the idea of microcredit in Germany,
so that it becomes a very normal choice:
you can get a loan from the bank or
you can get a microcredit.
Hannes the draught horse