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> Posted by Joshua Goldstein, Principal Director for Economic Citizenship & Disability Inclusion, CFI

Shamsin Ahmed of BRAC in her powerful piece, “The ‘Normal’ Ones”, makes an impassioned plea for greater tolerance and more treatment options and opportunities for those who suffer from some kind of psychosocial disability (mental illness). People with psychosocial disabilities make up at least 16 percent of the population in Bangladesh, and yet less than 1 percent of the national health budget is allocated to mental health care. For those of us who work on financial inclusion, I would argue that there needs to be much greater attention directed towards poor mental health as an obstacle to achieving economic citizenship.

Originally published on bdnews24, an online Bangladeshi newspaper, here is “The ‘Normal’ Ones”.

When I was eight years old I watched an Indian movie where the mother of the hero had gone mad, possibly from trauma of being tortured or having witnessed the death of the hero’s father by the villain. And in one scene this mad mother was running around the village in her white saree, disheveled, bushy hair, and villagers were running after her with sticks and stones, calling her “pagol”. I asked my father, “Why are the people stoning her? If she is the crazy one, shouldn’t she be the one stoning them?” My father was disturbed as well as deeply moved by my question as I was told years later.

People always say those who have mental illnesses are not “normal”. It’s funny how no one thinks it’s necessary to define “normal”. I grew up knowing anyone with some sort of disability, be it psychological or physical, was “not normal”. No one said they are unable to live like everyone else. No one said they are unable to lead “normal” lives not because of their disability but because of the “dis-enabling” environment that those without mental illness, who have a say in the making of our society, create for people with mental illnesses. No one admits that those of us who have a “sound mind” have continuously shunned, isolated, and stigmatized people with mental illnesses.

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> Posted by Hillary Miller-Wise, CEO, Africa Region, Grameen Foundation

Veteran journalist Walter Cronkite once said of America’s health care system that “it is neither healthy, caring, nor a system.” Imagine what he would have thought about some of the public health care systems in the developing world.

Consider Kenya, which is now a middle-income country, due to recent rebasing of the economic calculations. Public expenditure on health care is about 6 percent of GDP, compared to 9.3 percent in OECD countries. About 33 million Kenyans – or nearly 75 percent of the population – are uninsured, of whom 70 percent live on less than $2 per day. And there is no Obamacare on the horizon.

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> Posted by Jeffrey Riecke, Communications Associate, CFI

The impact investing space is growing and benefitting an increasingly diverse array of areas including financial services, agriculture, healthcare, housing, energy, and more. Expanding too is the number of impact investing organizations incorporating impact measurement as part of their investment activities. As more players enter and the industry matures it’s even more important that the industry embraces the capture of impact data and assessment of progress against stated goals. This information validates the industry, helps investors manage investee companies, and improves investor and investee strategic decision-making. It also positions the industry to convince funders, especially new ones, to mobilize additional capital.

Last year the G8 created the Impact Measurement Working Group as part of its Social Impact Investing Taskforce. A few weeks ago the group released its “Measuring Impact” report, which includes seven guidelines for impact measurement and five case studies of how investing organizations have put the guidelines to good use. The initiative by the G8 reflects an elevated priority and the development of the industry.

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> Posted by Tyler Owens, CFI Staff

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The current era of financial services for the poor is marked by the growth of high-tech delivery mechanisms, innovative start-ups, new socially responsible investing models, and more traditional banks growing their portfolios of base-of-the-pyramid clients. Different players in increasingly crowded markets often collide in trying to win over more clients. Just one recent example is the newly public Alibaba, which has issued more than $16 billion in small loans over the last three years through its SME loan company AliFinance. The result of all this can lead one to question the role that traditional MFIs will play in the years and decades ahead. What will be their unique value proposition and how will they earn and maintain market share and the loyalty of their clients?

There is evidence that microfinance industry practitioners and stakeholders are not prioritizing questions of relevance and long-term customer retention. All too often, thinking strategically about the place of an MFI in a rapidly changing financial services landscape takes a back seat to the daily crush of competition and loan book performance. The 2014 Microfinance Banana Skins report—which is built on surveys of industry practitioners and insiders—concluded that the most urgent risks the industry faces are those of day-to-day business operations, such as credit control, competition, and management quality. The report went on to say that “longer term risks associated with the survival and evolution of the industry such as technological change, product development and funding are considered to be less urgent – and are less well defined.” It concluded that paying scant attention to long-term risks in the industry—at a crucial point in its development—may be a serious risk in itself.

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> Posted by Jeffrey Riecke, Communications Associate, CFI

Albeit a relative newcomer to microfinance, China’s market has grown rapidly in recent years. In 2012 the country had 6,000 microcredit providers, but only 25 percent had been in operation for more than three years. Today the number of providers is a few thousand higher, spanning nonprofit institutions, government programs, microcredit companies, commercial banks, rural credit cooperatives and banks, village and township banks, and P2P lenders. Even Alibaba, China’s internet giant, is involved. It has offered loans to over 230,000 micro-entrepreneurs through its AliFinance arm, launched in 2011.

Earlier this year Accion’s Channels and Technology team conducted a comprehensive assessment to determine the training and knowledge-sharing needs of the microfinance providers sustainably serving the poor in China. The assessment was carried out in partnership with the China Microfinance Institution Association, the China Association of Microfinance, and the PBC School of Finance Tsinghua, with support from the MetLife Foundation. As part of the assessment, the team compiled a landscape of the country’s microfinance institutions. Offering a snapshot of the state of the market and the challenges that lie ahead, here are some of its findings.

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> Posted by Martin Burt, Executive Director, Fundación Paraguaya & Teach A Man To Fish

The following post was originally published on the World Economic Forum blog. 

If we’re aiming to not simply alleviate poverty but eliminate it altogether, we need to understand its causes. But we also need to know what non-poverty looks like.

Until recently, this has not been easy. Now, technological innovation is helping us achieve things that were once impossible, and the effects are far-reaching.

At Fundación Paraguaya, we have developed a methodology called Poverty Stoplight. To assess levels of poverty, we show people a series of three photographs and ask them to choose the one that best describes their situation. We do this in each of 50 “critical indicators,” such as access to water, levels of nutrition, dental care, and so on. These pictures are color-coded to represent degrees of poverty: red is critical, yellow is poor, and green is non-poor.

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> Posted by Jeffrey Riecke, Communications Associate, CFI

New World Bank analysis indicates that along with the already devastating loss of life, the Ebola outbreak could cause “potentially catastrophic” economic effects on West African countries, especially in the three hardest hit. According to the analysis, Liberia’s GDP could fall by 12 percent, Sierra Leone’s by 9 percent, and Guinea’s by 2 percent.

Efforts to contain the epidemic are fueling much of the economic slowdown, like the closings of businesses, transportation infrastructure, and critical air and sea links with other nations. As mentioned in a post on this site a few weeks ago, microfinance institutions are being affected, too.

Between 80 and 90 percent of the economic losses suffered from Ebola are related to containment behavior, a dynamic consistent with recent SARS and H1N1 outbreaks. A lower supply of available workers – due to employee illness, death, and caregiving – is a smaller factor. At the same time, health systems are collapsing under the onslaught of the epidemic, leaving those with other serious illnesses unable to receive treatment. These conditions cause shortages, panicked buying, and speculation, which lead to rises in food prices and inflation. Economic life in the affected areas was already extremely tough to begin with. In Liberia, Sierra Leone, and Guinea, more than 50 percent of the population lives below the poverty line.

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> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI

Shakespeare asked, “What’s in a name? That which we call a rose by any other name would smell as sweet.” Having recently married and changed my last name, I can attest that there is a refreshing feeling that comes with a new name and clean slate. It is an opportunity to leave the past in the past and start anew.

Starting fresh with a new name must be especially freeing if the past was not a sweet smelling rose. According to a recent report, the Bank of Ghana (BoG) is cracking down on MFIs that repeatedly change their names to cover their tracks after they have duped members of the public. Raymond Amanfu, the Head of Other Financial Institutions Department of the Bank of Ghana reports, “Every day, I get at least five applications from companies wanting to change their names….Quite a number of them are actually messed up and want to clean up by changing their name.”

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> Posted by Sonja E. Kelly, Fellow, CFI

In most places around the world the subject of pensions is a sore one. In 2012, for example, in looking at arguably the crème of private employers, Fortune 100 companies, only 30 offered their U.S. new hires pension plans, down from 47 in 2008. For public sector employees in the U.S. in the same year, the pension plans of 26 states were less than 70 percent funded. In lower and middle-income countries where financial security is weaker, the situation is even worse. In India, the pension system only covers roughly 12 percent of the population.

The severity of these figures is amplified when we look at demographic trends. Between 2010 and 2020, the population of older adults will almost double in middle-income countries. Worldwide over the decade, it will increase by 40 percent. By 2050, there will be roughly 1.5 billion older adults, 315 million of whom will be in India.

Aging presents unique challenges and opportunities to the financial inclusion industry. During a session at the Microcredit Summit in Merida, Mexico a few weeks ago, five panelists met to discuss this topic. John Hatch (FINCA), Pilar Contreras (HelpAge), Caroline van Dullemen (World Granny), Reynold Walter (REDCAMIF), and myself all acknowledged the demographic reality—as populations age, if countries have not helped their societies and economies to prepare, they will face a global train wreck in the form of older people without adequate means of support and support systems that are overwhelmed. Financial inclusion can and should play a unique role in helping both individuals and whole countries mitigate risks.

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> Posted by Lisa Kienzle, Director, Mobile Financial Services, Grameen Foundation

The following post was originally published on the ImpactX blog of the Huffington Post.

Women participating in paper prototyping for new mobile app in Uganda

Women are the backbone of the household in Africa — they manage the home, care for the children, are responsible for education and healthcare, and contribute to the household’s livelihood. Helping women helps the entire family. However, women continue to lag men in participating in the formal economy, including accessing financial services.

The Problem: The Poor — Especially Women — Are Excluded From Financial Services.

For the rural poor — especially women — accessing formal financial services is nearly impossible. Few have formal identification needed to open an account; others lack a stable job or collateral needed for a loan. Often bank branches are far from a rural village, making the trip to deposit or borrow funds too expensive and time-consuming.

Many of the rural poor have taken up an approach to support saving and borrowing by forming Village Savings and Loan Associations (VSLAs). Under this approach, 25-30 members of a community form a group. This group meets weekly and saves a fixed amount — at times, as little as 20 cents a week. The savings are lent out to members as loans. All money not lent out is stored by the group treasurer in a metal box secured with three locks and three keys, which are held by three separate key holders. It is, as some group members call it, the “Village Bank.”

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Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.
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