DEA can help Governments with financial sector reforms through improvements in the banking, insurance securities and other laws and regulations and supervision. Our restructuring practice includes bank restructuring, state owned banks in particular. We also help with insolvency both at the regime level as well as the firm level. Our debt advisory services help reduce sovereign or parastatal distressed debt. We also help with access to finance and micro finance.
Access to Finance
Financial regulations serve two main purposes. They help ensure that savings are fully utilized and put to the best and most efficient use. They also serve to prevent loss of savings through predatory, imprudent or irresponsible behavior. The focus of DEA’s financial sector practice is the first which in turn involves two areas: Access to finance and Intermediation, although the two are interlinked. Our clients in these areas are mostly Government bodies and donor organizations providing technical assistance to government.
We help Government’s reform their laws and regulations and other practices to facilitate access to finance. We offer our expertise in areas such as collateral laws, property registration and titling for both movable and immovable property, perfection of title, pledge laws, laws and processes on attachments and foreclosures. We help Governments and communities balance debtor and creditor rights through due process and speedy resolution. We also help to set up, and further strengthen if needed, credit information systems and credit reporting agencies. We also provide advice on insolvency to firms in distress as well as to Government on setting up the most effective and economically beneficial insolvency regimes.
The other side of intermediation is that bank and non bank intermediaries must be able to attract deposits and savings. This requires populist confidence in the banking system so that people are comfortable in using banking services. We help to design and implement effective and efficient transaction systems, introduce private participation into state owned banks and facilitate the transfer of know how and best practice from banking systems in high intermediation regions to lower intermediation countries.
Micro Finance and Mobile Banking
The other area of our financial sector practice is to bring banking to the unerbanked. In addition to credit, there are vast numbers of people who are in need of, but do not have, basic financial transaction services. We work with Government, local and regional authorities, donors and the private sector to help them bring credit and other banking services to the underbanked.
The expertise we offer, to achieve this, is in two areas: Micro Finance and Mobile Banking.
(i) In micro finance our services focus on its wholesale aspect. Given the demand for micro credit worldwide it is unlikely that the traditional mostly non commercial sources of funding for micro finance will be anywhere near adequate. The focus of our practice here is to increase access of microfinance institutions to commercial sources of finanicng and to the capital markets. To this end, we offer our knowledge of developing countries and microfinance to help socially responsible investors, development financial institutions and the growing number of Microfinance Investment Vehicles to identify, evaluate and select suitable Microfinance institutions for inclusion in their micro-finance investment portfolios. We also help to increase the exit potential for MIV investors by working with specialized microfinance rating organizations and microfinance networks and MIX MARKET, to increase the number of MFIs that are rated by the specialized organizations and also to help "graduate" MFI's rated by the specailized agencies to become rated by the mainstream rating agencies.
(ii) Mobile Banking: The use of mobile handsets for money transfer and other banking services is rapidly gaining popularity in may parts of the world such as Africa, East Asia and others. The market for this type of mobile banking is still vastly untapped and rapidly growing. The World Bank Group ( IFC) was one of the main pioneers in this development and the IFC origins of of the DEA team leading this practice uniquely positions them to work with mobile service providers and network operators as well as banks, to help them develop and implement strategies to enter and compete in this space.
In Association with our Alliance Partner, Debt Advisory International, we offer emergency debt relief services to our Client Countries as well as help our Corporate and Banking clients improve their recovery of non performing assets. Specifically joint offerings include:
- Restructuring and settling debt;
- Secondary market trading of debt for funds managed by DAI;
- Brokerage of debt for clients;
- Structuring and execution of debt and currency
- Conversion and recovery programs for creditors;
- Acquisition and cancellation of obligations owed by debtor governments;
- Advisory and due-diligence services for lenders and investors; and
- Origination of new trade-related, project and general purpose financing within emerging market countries.