> Posted by Elisabeth Rhyne, Managing Director, CFI
Monique Cohen just stepped down as head of Microfinance Opportunities, the non-profit organization she founded ten years ago. She is leaving MFOpps in very capable hands. Guy Stuart, formerly of the Kennedy School of Government, has already started as the new CEO. This change of leadership provides a good moment to pause and recognize the significant contributions Monique has made not only through Microfinance Opportunities but also as a researcher and thinker about microfinance clients.
Monique staked her position from the start as a champion for the client. She argues that anyone offering financial services to the poor needs a deep understanding of, and even empathy with, the poor. And by empathy, I do not mean sentimentality, but the intent to fully listen to and be guided by what low income people say about their situation and their views. This requires a market researcher to set aside preconceived ideas as much as possible, and draw conclusions from client-based evidence, both qualitative and quantitative.
By looking at prospective clients carefully, Monique generated important insights. And since I’ve known Monique quite a long time, I remember when she first talked about some of them. In fact, many of Monique’s insights became part of my own understanding about money and the poor. My first lesson from Monique was about how people in Andean cities finance the construction of their houses through incremental, one-room-at-a-time building patterns. This insight is at the basis of successful housing microfinance in Latin America, which offers relatively small short term home improvement loans to support that process.
In the late 1990s, Monique’s work on the AIMS project at USAID highlighted vulnerability as a central concept in understanding the lives of the poor and the function of financial services in helping people protect themselves against such vulnerabilities. This focus on coping with vulnerability has become important in enabling the microfinance field to gain a more nuanced understanding of the impact of its services on its clients.
When she started MFOpps, Monique intended to assist microfinance institutions learn how to learn from clients. And MFOpps did this. But MFOpps broke new ground when it received one of its first major grants from Citi Foundation to explore financial literacy. At that time the topic was barely recognized as a significant concern. MFOpps developed some of the first financial literacy curricula aimed at low income residents of developing countries. It worked on creative delivery mechanisms and wrestled with the still-daunting challenges of getting messages to people effectively and efficiently. In this way Microfinance Opportunities contributed to the growth of knowledge about financial capability, helping to move the topic to the forefront of financial inclusion.
These days, Monique is participating in a working group on financial capability as part of CFI’s Financial Inclusion 2020 campaign. In her feisty way, she challenges the group not to impose their middle class, western definition of financial capability, but to remember that clients will – and should – define financial capability as they see it, in line with their own reality.
More recently, Monique and Guy have been doing financial diaries research with users of mobile money in Kenya and Malawi. Monique’s latest lesson for me, which comes out of that work, is that product designers who want to attract savers should pay more attention to when people can put money aside, and not get so hung up on why they want to do so. This observation also came out of research on rural residents in Latin America by Jacqueline Urquizo.
In moving on from Microfinance Opportunities, Monique has left in place an organization that occupies a unique and influential place in the financial inclusion world. She’ll now be free to do research on her own, without worrying about management and fundraising, and that’s a good thing. I’m looking forward to my next opportunity to learn something important from her.
For more information on CFI’s Financial Inclusion 2020 campaign, sign up for updates here.
Image Credit: Microfinance Opportunities
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November 1, 2012 at 11:18 am
John Gitau
Dear Elisabeth,
Thank you for bringing to our attention Dr. Cohen’s break taking. I wouldn’t have words powerful enough to describe Monique and her contribution to research and financial education. She initiated the Global Financial Education curriculum(GFEP) curriculum so ideal for teaching financial education in collaboration with Citi -Foundation and Freedom from Hunger. I owe my financial education training to GFEP and it is from its endowment that I have the courage to contribute in this debate.
I still do not understand why it is so difficult for many people in the financial capability field to understand that it all starts and ends with customer. Monique never got tired to emphasize that and we have learned so much from her. Most importantly, her indomitable and voracious pursuit for financial improvement for the poor is legendary.
It is comforting that Monique will be somewhere within the vicinity and will rise to the occasion as and when we her students will need her support.
Monique, I bet for the ten years you never got time to yourself as you worked so hard for the worlds poor, researching on what can work for them and developing products that would help them improve their material lots. Now, you have our permission to take a break, gather energy and do what you feel gives you the most fulfillment. We know Guy. He is very capable and you have worked with him very closely lately. Welcome to the driver’s seat Dr. Stuart.
November 1, 2012 at 12:54 pm
Chris Dunford
Well said Beth and John! My tribute to Monique focuses on the “ahead of the curve” influence of Monique’s thoughtful leadership of the AIMS Project (made possible by Beth’s thoughtful leadership of USAID’s MED Office during the 1990s). Consider this quote on p. 101 of the March 2000 paper by Jennefer Sebstad and Monique Cohen—this was the capstone to the 1990s AIMS Project:
“The use of loans to smooth incomes and the resulting impact on reducing the variability of consumption suggest the positive impact of microcredit on reducing the vulnerability of client households, but not necessarily their income poverty.”
Reducing vulnerability but not necessarily their income poverty. The quote goes on:
“One explanation for greater impacts on vulnerability, … , is that there are many channels through which microcredit can reduce vulnerability, but fewer channels through which it can single-handedly reduce poverty.”
In short, a lot of people use microfinance to reduce their vulnerability (i.e., manage risk of) consumption interruptions and financial shocks for their households. Enterprise investment can be seen as just one of a suite of tools that people use to reduce their vulnerability. However, unlike other risk management tools, investment in microenterprise can have the happy consequence of actually raising total household income, as well as smoothing income through the year as part of a diverse portfolio of revenue streams (“trickles” to be more accurate). As we’ve seen in “Portfolios of the Poor” and “Poor Economics,” most households are not counting on this poverty-reduction effect of microenterprise investment; they just do business as one of several ways (or “channels”) to keep the wolves of hunger and ill health at bay, to clothe and shelter themselves, and to have a little enjoyment in their lives, too. Call this poverty alleviation—reducing the uncertainties and stress of being poor. Not so many are using microfinance in a way that will raise them from the ranks of the poor—poverty reduction—because there just aren’t that many opportunities for thriving enterprise in the absence of robust local economic development.
It is notable that this quote from Jennefer’s and Monique’s excellent paper was written 12 years ago, well before the recent round of RCTs, financial diaries, and research syntheses came to much the same conclusions (based on a firmer evidence base, of course). We’ve known this truth about microfinance for some time now, but the dominant microfinance theory of change has been slow to yield to a more comprehensive theory of change that is in sync with the full range of motivations of the poor to use microfinance services.
So what would be this more comprehensive theory of change? Try this on for size (with most of its wording from page 93 of the Sebstad and Cohen paper):
People from poor households tap microfinance services to smooth consumption and build assets to protect against risks ahead of time and cope with shocks and economic stress events after they occur—leading to poverty alleviation.
Most of us would have been happy to hang up our spurs after getting it so right. But of course Monique went on to get a lot more right … and no doubt will continue to think one step or two ahead of the rest of us. Just by really listening to those we call the poor. What a concept!
November 1, 2012 at 12:19 pm
Laura Foose, Social Performance Task Force
The Social Performance Task Force has benefitted tremendously from Monique’s ground-breaking work and from her consistent, unfaltering focus on the client.
For those of us who work on responsible finance issues, we are delighted to see the microfinance industry’s “new focus” on the client – if only we’d all been there 15 years ago when Monique was. It has taken us a while to catch up to her. Monique has been steadfast in her attention to the client, always articulate about why a client focus serves the industry as a whole, and ever creative in the products and services she has designed with and for clients.
November 1, 2012 at 1:14 pm
Kate Druschel Griffin
I consider myself lucky indeed to be counted among those who consider Monique both a wise mentor and a good friend. She has become the little voice inside many of us – as we struggle with day to day decisions about product design and delivery, operations, fundraising, and life’s hectic demands – reminding us to use the right yardstick: “Is it right by the clients? Is it in line with their own realities?” Thanks, Beth and Chris, for so astutely reminding us of Monique’s on-going, forward-looking contributions to the field. I’m looking forward to her next chapter.
And thank you, Monique, for your perseverance and dogged insistence that we always, always, listen.
November 2, 2012 at 3:57 am
jennifer isern
Monique has been teaching me useful lessons from her gold standard impact analyses in the 1990s, to her natural progression to client listening and product design, and over the past years to financial awareness. Monique offers independent thinking, unwavering focus on clients, perseverence, practical approach, and a great sense of humor to everything she does. Chris is so right in saying Monique’s work has been ahead of the curve, with each turn she has taken! I’ve been truly inspired when she launched MFOpportunity and as Monique has built her team into such a valued organization. May Guy and the MFO team continue this trajectory and grow from strength to strength. I’m looking forward to seeing Monique’s next steps–and wish her all my best. Thanks to Beth for catalyzing this tribute to Monique, who has influenced our global community’s work in profound ways.
November 1, 2012 at 6:01 pm
Richard Rosenberg
During 30 years in the development racket, I’ve had occasional doubts about how much I was helping poor people, but there was never any doubt that my job let me hang out with extraordinary people. Monique has been one of the best. Besides, she’s a lot of fun to argue with.
November 1, 2012 at 7:35 pm
Alexia Latortue, CGAP
AIMS was and continues to be a key compass in the work I do every day, and I am so thankful to Monique for this. Monique’s body of work – or at the very least these eloquent testimonials – should be required reading for anyone serious about serving poor people well. That is why, when CGAP launched an initiative on Clients at the Center, we asked Monique to serve on our advisory group and are thrilled that she continues in this role.
Monique has always been ahead of the times. Others have already mentioned this. So I will stress that what impresses me so about Monique is that she continually moves forward, shares her knowledge, and is curious about new approaches. The core of her message has not changed…but her mind and heart remain agile and open to new ways to share her message and to achieve her goals. As others have “discovered” truths Monique has long known, she has welcomed us and is generous in letting us revel in our newly found understanding of the importance of consumption smoothing and risk management. And she has also learned from others, and very early on embraced the potential of technology and did some ground breaking work on branchless banking customer adoption. Her work on financial capability may have started in the classroom but has embraced many more approaches over time.
Monique’s simple yet powerful conviction that we have to start with the people we seek to serve is infectious. And she has tirelessly advocated for this without ever sounding preachy or patronizing. Perhaps that is the secret to Monique – she was never part of one school of thought or one camp or another. She simply always is in the clients’ corner. And that, my friends, is timeless. Thank you, Monique, and we look forward to a continued collaboration.
November 2, 2012 at 9:06 am
Anita campion
I would like to acknowledge and thank Monique for her many contributions to international development. She has helped to raise awareness and understanding related to poverty alleviation, measurement and financial inclusion. Her work at Microfinance Opportunities has been extremely valuable, showing the value and importance of building low income people’s financial literacy and management. My firm, AZMJ (www.azmj.org), is applying the many lessons learned to our new work on the Peru Cocoa Alliance, in which we will be building financial literacy and management skills of agricultural producers in areas where coca had been formerly grown. Our local financial partners see the value in this and the other assistance provided and so are actually contributing cash and in-kind support to support these efforts . This is only possible because of the efforts of Monique and others in demonstrating that financial education is not just a public good, but a worthwhile financial investment.
November 2, 2012 at 9:54 am
Paul Rippey
I’ve always look forward to talking with Monique because the conversations I have with her today are the conversations I’ll be having with everyone else in five years.
November 2, 2012 at 6:05 pm
Susy Cheston
I’ve never had a quick call or a quick meeting with Monique. She is incapable of making facile comments and invariably thinks of much deeper issues than the ones I bring to the table, such that I’ve learned to wait for the “one more thing” she brings up at what I had thought was the end of the conversation. Monique, for always questioning, always going deeper, always seeking the most essential truth–thank you!
December 5, 2012 at 7:21 pm
Beth Porter
Monique, as it as been amply noted, is a woman ahead of her time. Her focus has long been on the client–what she wants, what she needs, how she can make the most of it, and what difference it makes in her life and her business and to her family. Monique has long been an inspiration to me and to many of us, and I trust that leaving MFO in the talented hands of Guy will just free her up to inspire us anew.