Our Business

Blue Rhino Consult is a development consulting firm. Its consultants all have a long standing track record in development work and we apply our experience, expertise and skills to the microfinance sector.

Because of our roots in development work, we have a strong affinity with microfinance institutions (MFIs) that design and offer financial services based on developmental concerns. As MFIs that are firstly driven by a social or developmental motive, they consider their organizations to be part of the civil society sector in their countries.

All microfinance institutions work with small margins of failure because of the pressure of high efficiency and excellent portfolio management. On top of that, civil society MFIs  face the permanent question whether they service the right clients, with the right products and at the right price and stay true to their objective of contributing to poverty eradication and development.

Therefore, our core business at Blue Rhino is to assist MFIs to increase their operational margins. We aim to do this not by increasing interest rates or by catering to higher yielding classes of clients, but by achieving major efficiency gains. We specialize in helping MFIs to reach their priority clients with appropriate and affordable products and services.

Our Company

Blue Rhino Consult is a limited liability company incorporated in the Netherlands. The core team consists of managing and senior consultants each having at least two decades of experience in development work. Therefore, a first key company characteristic is an unusual depth and breadth of experience in both microfinance and broader civil society issues and development priorities.     

A second key feature is that we have worked extensively in four continents with numerous NGOs and MFIs. We have a premium capacity in the field of lateral learning that translates in a strong preference for South-South cooperation.

Thirdly, all of us have worked for donor and investment agencies as well as in NGOs and MFIs, which gives us a comparative edge in assessing and balancing concerns of various stakeholders in microfinance.

Blue Rhino is a relatively small firm. Instead of working with a stable of consultants, we bring in skills and expertise as needed, by co-operating with established consultancy organizations and associate consultants. This keeps our overhead costs low and ensures Blue Rhino’s presence in all three continents we focus on: Africa, Asia and Latin America. And we prefer team work. As a rule of thumb we try to involve two consultants to all assignments to facilitate peer progress and performance review and to prevent tunnel vision.  

Our Philosophy

State of Affairs

Microfinance has become a popular development sector; one of the very few where the public, private and civic sector work together on the basis of a broadly shared consensus on performance standards and future direction, both nationally and internationally. Moreover, the sector enjoys a high and increasing level of public support as it is widely recognized as a service system that works: it effectively reaches poor people with services they appreciate and are able and willing to pay for. When successful, the positive stories of individual clients give development work at large a much appreciated human face and builds confidence in poor people’s capacity to take their future in their own hands.

Furthermore, the sector is rapidly preparing for a massive expansion of service delivery: more clients to be reached, more products to be offered and, consequently, more investors to come aboard. This ambitious growth strategy brings in an added dynamic that is welcome to keep the momentum going, but is also somewhat perilous as it tends to obscure the fact that there are quite a few challenges other than rigorous expansion. 

The New Frontiers

The new frontier areas are emerging microfinance challenges such as reaching the hardcore poor; the affordability, accessibility and appropriateness of service delivery; rejuvenation of agricultural finance; servicing people living with HIV/Aids; provision of non-financial services; and pioneering delivery methodologies that make microfinance better compatible with traditional, cultural or religious customs to maximize client buy-in. To date, almost solely civil society MFIs have made inroads in these areas, driven by their social esprit and larger development objectives. Supporting MFIs in meeting these challenges is what we consider our prime market niche at Blue Rhino. They constitute, as it were, our natural habitat and that is where we can add considerable value.

Diversity and Creativity

In order to offer effective services, we have come to appreciate the principle and benefits of diversity in microfinance. Microfinance and microfinance institutions come in many forms and shapes, representing different objectives, motives, approaches, stakeholders and operating practices. This means that success cannot be captured in a single best practice model. What we find, however, is that many stakeholders increasingly apply uniform sets of expectations, performance standards and appreciation.

While this may be helpful for commercially driven microfinance operations, our experience indicates that established banking approaches are often not conducive to work the frontier areas. To be successful there, MFIs need creativity, and eagerness to pioneer combined with an unconventional mindset. That is where Blue Rhino consultants excel. We know and master the conventions of the microfinance business, but are prepared and equipped to help MFIs working on the frontiers. 

Our Services

We work in three main service sectors in microfinance: institution building to improve the performance of a MFI at all levels, client services to offer the most appropriate and affordable services and products to the MFI’s clients, and research and development to address issues and concerns of common interest in the microfinance sector.

Institution Building

Strategic Risk Management: a systematic analysis of both upside and downside risks. When an organization looks at its positive as well as negative risk exposure, it identifies opportunities with high potential for achieving its mission and goals, while managing threats to success. Our consultants have worked together on strategic risk management since 2001. They have experience in introducing strategic risk management practices into NGOs, networks, associations and business-civil society partnerships in Latin America, Africa and Asia, and published in this emerging field.

Human Resources Development: a major challenge for MFIs is to match the growth of operations with adequate hiring and training of front and back office staff. Our consultants are experienced in designing growth oriented staffing schemes in combination with on-going review and grading of functions. A special feature is to do so in view of growing options for ICT-based processing and outsourcing and balancing these applications with staff fulfillment objectives. Their experience covers NGOs and MFIs in three continents.  

Back-office Operations: MFIs need proper and detailed procedures for all their operations to live up to asset management requirements in their field of work but also need a keen eye on organizational efficiency to keep costs in check. Some of our consultants have extensive managerial experience in microfinance and work with MFIs to review and streamline procedures towards maximizing functionality while installing or maintaining professional standards throughout the organization. They have done so in various countries in Asia in Africa.

Governance and Management: non-shareholding organizations such as foundations and trusts are challenged by the combination of a large asset base in the form of (granted) loan capital and an unclear ownership status thereof. This puts great responsibilities with the Board and Management of these institutions in terms of balancing varying stakeholder interests while securing high quality service delivery and prudential financial management. Our consultants are well experienced in working with the Board and Management on these issues and designing good governance packages in combination with Board and Management training programs to enhance their skills in Asia and Africa.  

Business Planning: MFIs are regularly tempted to embark on a strategy to reach full sustainability merely based on growth of operations. Often such strategies fail to deliver on that promise; the MFI only sees its costs structure exploding without capturing higher returns on investments. Our consultants can work with MFIs to design more efficient strategies that combine horizontal with vertical expansion: offering the same products to new clients, but also offering new products to old clients, or to new clients in current operational areas. Key in such alternative strategies is a business planning model that primarily looks at the feasibility of seperate products and branches, and only then at overall feasibility. A second main component is to target a diversified capitalization pattern to finance future growth. Third is to combine growth with the realization of efficiency gains. Also in the areas of business planning our consultants are well experienced.

Social Impact Assessment: there is ongoing debate on the impact of microfinance on poverty eradication and development. In fact, many MFIs are insufficiently equipped to keep track of the results and impact of their work in the social arena, rendering the debate rather inconclusive. Particularly civil society MFI with an expressed concern to contribute to development ought to know what the results, effects and impacts of their operations are on their clients’ livelihood and on the communities they live in. A prerequisite to this is designing and building social performance indicators that keep track of social progress. At Blue Rhino we have worked with various groups and networks of MFIs by selecting a limited number of key indicators and incorporating these in the MFIs’ management information systems. Our experience shows that such indicators do not only contribute to public accountability of the MFIs operations, but also function as a prime management instrument for future product development and for keeping track of client satisfaction.      

Start-Up and Early Expansion MFIs: with the decline of broadly available donor resources, financing start-up operations becomes a more complex and challenging endeavor. Blue Rhino consultants have worked with various emerging MFIs to design their business plans and funding strategies as well as to design the layout of products and back-office operations. Nearly all are in full swing today. Success factors in this field include a clear market and client profile, building revenue streams right from the start and diversification of grant and capital flows to prevent  single-source dependency. The same approach works well, we find, in supporting early expansion MFIs to get to their break-even point as quickly as possible. This usually requires simultaneous and rigorous pursuit of efficiency gains, for which the MFIs must be ready if our services are to pay off.

Client Services

Product Development: non-profit MFIs often work with products and lending methodologies that were designed quite some time ago. Also they may offer a range of products but find that their clients are only marginally moving up to the next product level, usually sticking to entry-level products. This indicates limited product development capacity, sometimes caused by a lack of change potential rather than a lack of understanding client motives and aspirations. When product range become fossilized MFIs face increasing problems in more competitive markets. Blue Rhino consultants work with these MFIs to create new perspectives and approaches in the field of product development, based on prioritizing client demand and increasing change potential. This may require adjustments of securitization concepts, marketing strategies and back-office functionalities. We have done so successfully with various MFIs in two continents.

Beyond Microfinance: another obstacle faced by MFIs is that current financial services only respond to a limited part of client needs. This may call for adjustments in three areas.

Our consultants have ample experience in working with MFIs aspiring to explore such venues. They have done so in many countries and can also be instrumental in designing exchange or training programs based on linking and learning methodologies.

Reaching the Poorest: many civil society MFIs face challenges in reaching the poorest. Their mandate requires them to do so, but the demand for sustainability of operations and overall financial health usually makes it difficult to actively pursue this objective. Blue Rhino consultants have worked with various MFIs facing this dilemma and although we are not able to suggest that reaching the poorest can be done sustainably, right from the start, under all circumstances, we have gained sufficient experience to suggest that most MFIs can do a better job than they might think, provided;
- Strong Board and Management commitment to the objective.
- Application of creativity and persistence.
- Willingness to cooperate with non-financial NGOs, the public and even the private sector in the MFI’s operational areas. 

In fact, reaching the poorest requires an unconventional mindset that is based on acknowledging opportunities rather than risks only.

Microfinance in Relief Work: common wisdom in the microfinance sector has it that the insertion of loan components in relief and rehabilitation packages has to be treated with great caution for many good reasons. At the same time, this does not imply that it cannot be done successfully altogether. Our consultants have built experience in the Balkans, the Caucasus and tsunami effected regions in Asia that show that, under certain conditions, this is very well possible and occasionally results in the building of delivery systems that gradually emerge into professional microfinance operations. Success factors differ from place to place, but generally require;
- the presence of a strong,  motivated and capable agency,
- a good deal of client awareness building and
- the design of aid packages based on the right mix of grants, loans and business development support.

Research and Development

Policy Development: given our broad experience in development work, we are well placed to assist donor agencies in formulating their microfinance policies in a way that clearly links up with their overall institutional objectives and their other major intervention areas. This helps preventing microfinance being considered as a stand-alone activity. As much as MFIs, donors can struggle with the twin objectives of high social impact and excellent financial performance.  We have developed conceptual frameworks that bring these objectives together in a functional way that allows for formulating effective operational directives. We have done so for various donor agencies. A key success factor is to extent the rights based approach, broadly accepted by the donor community, to the microfinance sector. At the same time we work with practitioner networks in the same area: designing policy and strategy documents that capture their concerns conceptually and elaborating these in operational plans. 

Mapping and Surveys: at the request of donors and investors, including banking corporations, we regularly undertake mapping and survey exercises; to take stock of certain microfinance markets, to look into the feasibility of pursuing certain corporate objectives, to scout for funding or investment opportunities or to keep track of trends and developments in the sector. We usually undertake such exercises in close cooperation with other consulting firms to benefit from their experiences and expertise, particularly those with established R&D capacities in their respective markets.

New Delivery Platforms: the microfinance sector is in high pursuit of new delivery models and platforms to live up to its expressed contribution to the Millennium Development Goals (MDGs). This results in global efforts to increase handling capacity of existing MFIs as well as to generate massive involvement of the private and public banking sector. While we occasionally contribute to these efforts in the form of mapping and surveys, we at Blue Rhino also have a keen interest and capacity in developing other potential platforms to increase overall handling capacity. We are particularly involved with efforts to strengthen community based delivery models, based on self-organization and self-management at the community level, but professionally facilitated by enabling institutions to install quality standards in service delivery and to mediate external capital provision. According to our experience to date, this is a high potential investment area if it comes to global expansion of microfinance and we are keen to explore it further with interested parties.  

Our Specials: Frontier Partnerships Models

Corporate and Partnership Models

Blue Rhino Consult is preparing various partnerships that will be tested and launched in the coming years. These initiatives is inspired by the realization that many actors in microfinance, practitioners, investors and supporters alike, repeatedly stumble on the same obstacles when working the frontier areas of the sector. Frontier work usually comes with high risk exposure, often requires the application of grants and low cost capital and might also entail major adjustments of products and delivery formats.

Generally it is difficult for MFIs to absorb those risks, source the financial means and adjust products and methodologies without jeopardizing the financial health of their institution. Likewise, donors eager to work the frontier issues have to be cautious keeping up professional standards and not being criticized for engaging in poor donor practices. 

This means that working the frontiers is not always easy to fit in with the mainstream activities of MFIs and donors. The solution we have found most effective is to place pioneering frontier work temporarily outside the institution and in a partnership that is exclusively devoted to the pioneering work. Once the results are successful, the work can be mainstreamed in the institution. That way initial risk can be absorbed by the partnership. 

Successful Partnerships

Our experiences with partnerships indicate a number of success factors; participation of various committed MFIs, one or two funding agencies and preferably a private or public sector partner; limitation of the objectives of the partnership in order to allow for specialization; coordination or management of the partnership not by one of the partners but by an experienced third party to create proper checks and balances between all partners; and strong research and development capacity to monitor progress and disseminate information to allow for mainstreaming the partnership’s objective within the partner organizations upon completion of the program.

Blue Rhino consultants have gained experience with the design, formation and management of various partnerships and we now plan to make that experience available to the frontier areas in microfinance. In doing so we aim to cooperate with other consulting firms or development organizations adding regional or sector specific expertise.

Planned Partnerships

Various plans are presently developed in the area of Rural Enterprise Finance: building SME and value chain investment and management capacity on top of existing farm input financing structures. We aim to launch partnerships to that affect in Southeast Asia and in East as well as West Africa.   

A second area of interest is Community Based Microfinance: building low-cost rural microfinance delivery platforms on the backbone of existing community based organizations to leverage their handling and service capacity. 

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