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> Posted by Leah Wardle
A kid named Boyie is a popular radio disk jockey in Kenya. At 19 years old, he has a nationally syndicated radio show playing daily on 21 stations and half of Kenya’s mostly low-income youth say they’ve listened to him. He’s so popular that he also stars in his own monthly comic book series, Shujaaz (“Heroes”), read by about 10 million people in the past 20 months. The ladies love him and the guys copy his dreadlocks. But someone else answers his calls, texts, and Facebook messages (which flood in by the thousands), because Boyie is a cartoon character.
A cartoon character can be more powerful than a real person when it comes to influencing the thoughts and behavior of Kenyan youth, argues Rob Burnet, director of Well Told Story, the Kenyan communications company behind Boyie and Shujaaz. He and his team are using virtual characters to reach Kenyan teenagers through comic books, radio shows, and virtual media with messages of social change. Their methods may hold creative new ideas for microfinance practitioners looking to connect with clients.
It’s something else to witness the compelling struggle of a teenage head-of-household, living in a slum, facing multiple challenges and pleading siblings, yet still setting aside a little bit each week. Now tell the story with colorful images and dramatic plots that resonate with the experience of the audience, and deliver through easily available media, and they readily absorb the messages as they follow the lives of the quirky characters.
Microfinance practitioners might take a page from Shujaaz to increase the transparency of financial information for clients. Transparency means providing full information (like detailed product terms and prices) in a way that is meaningful to the client. That means clients can absorb the information because it’s presented in their own language, and they feel comfortable with the medium. To reach this goal, Well Told Story’s model would suggest practitioners ask themselves three important questions: Read the rest of this entry »
> Posted by Rosita Najmi
The following is a continuation of an earlier blog post available here:
“Save Steady. Dream Huge.” is the tagline of San Francisco’s Kindergarten to College Program. Currently, students at nearly 40 schools (and by 2012 district-wide) automatically get a college savings account at Citibank, with an initial $50 deposit made possible by the City and County of San Francisco. The children and their families can make contributions to this deposit only account in person, by mail, or online as frequently as they like, in small or large quantities, up to $2,500 per year. Among other incentives to encourage savings is a match of the first $100 saved, and more incentives are forthcoming.
Once the student graduates from high school, s/he can apply the savings towards tuition, books, and other education-related expenses for (public or private) college, community college, graduate school, or other kinds of training programs. Foreign institutions may also be eligible. A public-private-partnership among the San Francisco Mayor’s Office, the Treasurer’s Office of Financial Empowerment, the Department of Children Youth and Families, the San Francisco Unified School District, EARN, CFED, the San Francisco Foundation, the New America Foundation and Stanford University created this head start to financial inclusion and savings.
The SallieMae Fund also has a similar program, which since 1992, has been building excitement about college in young students and already reached 70,000 students. Its Kids2College program seeks to “Open Doors to Higher Education” and starts with middle school students.
Such a head start to financial citizenship has capacity for significant long-term impact. As we wait for the conclusions and learning from the various ongoing efforts mentioned in a previous post, here are a few personal experiences that I imagine will be revealed among the studies and interventions.
A head start to financial citizenship can:
- Foster Dialogue: While conversations about money started with my mom and older siblings, they have expanded to dialogue with my friends, neighbors, parents of my friends, and now my husband. Money has become less of a taboo topic and instead, we share techniques and best-practices ranging from credit cards to taxes. Just as we would share recipes or restaurant reviews, we’ve exchanged stories about credit reports, IRAs, and student loan management. Each month, my husband and I hold budget meetings, where we review our numbers and progress towards our financial goals, responsibilities to our families, and opportunities of philanthropic giving.
- Encourage Planning: Knowing at a very young age that my parents not only lacked the financing to send me to college, but also that they would soon need an allowance of support from me spurred me to action and also managed my expectations. As a young child, I did not ask for toys and candy while waiting in line at the grocery store check-out. In middle school, I began participating in various competitions, whether speech or essay contests, to start raising money for college. In high school, I began applying for scholarships my sophomore year. Early planning and a future orientation enabled me to be (i) financially independent upon graduation from high school (ii) start sending money home at the completion of college and (iii) self-finance a year of volunteer work, my wedding, and down payment on an apartment. This would not have been possible without a head start.
- Practice Habits: I also think it made a difference for me to start my personal relationship with finance via savings instead of credit. In fact, it has resulted in an orientation toward credit, where I only considered it when necessary to finance graduate school and for a mortgage. Starting young allowed me to practice saving up toward a specific goal and instilled in me the time value of money which helps me overcome some of the biases that research in behavioral economics and the psychology of savings are revealing about barriers to saving. Starting early almost created the same affect—the same discipline—that many develop from debt.
- Enable Financial Competency: Finally, an early start enabled me to diversify the sources and types of financial education from which I benefitted. I recall attending workshops at my local library in Tennessee on budgeting; participating in webinars provided by some of the sources of my college scholarships regarding credit; reading books and blogs about investments; and joining workshops provided by my personal banks or the human resources and staff associations of my employers. Cumulatively and over time, I gained the knowledge and attitude towards financial competency. Each intervention provided new lessons, and I still have much to learn.
- Secure a Safe and High Quality Financial Passage: I think all of these experiences are like stamps in a financial passport. They each have contributed to my personal financial citizenship, and hopefully, they will enable me to create financial inclusion and opportunities for others, whether in my personal or professional capacities. These experiences also inform why I believe in initiatives like FAB (Financial Access at Birth), which aim to challenge the process, to make us think differently about whether financial citizenship can start at birth, and how interventions like financial education can ensure a safe and quality experience.
Image credit: ACCION International
> Posted by Center Staff
The key message of the Center’s recently released “Opportunities and Obstacles to Financial Inclusion” report is – to revise Bill Clinton’s campaign slogan – “It’s the client, stupid.” The hundreds of industry leaders surveyed for the report conveyed a clear message that we must grasp client needs.
But taking the “know your client” mission to a level of greater detail, how much do we really know about clients, real and potential, in rural areas?
More to the point, are we able to understand the financial behavior of rural inhabitants in such detail that we’re able to compare it from country to country? Can we appreciate their use of the media, how they socialize, where they see their future? Are we in tune with how consumption patterns mesh with the harvest season?
To help answer some of these fundamental questions, this fall we will release a monograph on the financial behavior of the rural inhabitants of Ecuador, Colombia, Peru, Dominican Republic and Nicaragua. Read the rest of this entry »
> Posted by Center Staff
The Smart Campaign is proud to announce the launch of its first-ever e-learning course, which allows industry professionals to experience interactive simulations of a series of scenarios involving client protection and financial education in microfinance.
The course’s initial scenario takes participants to Occlo, a microfinance institution in a fictional country, which is facing troubles due to client distrust, limited staff experience, political strife, and other issues. The user is challenged to reduce the impact of these factors and improve Occlo’s situation.
The course was created to make the case for client protection and financial education, and to assist users in thinking about ways to implement the Client Protection Principles in their own organizations.
“I think the course we developed meets both of these goals, both by giving the user an opportunity to see the impact of these principles on a microfinance organization, and by exposing them to ways that they could consider implementing the principles in their own organization,” said e-learning developer Amanda Warner, who created the module in collaboration with a team from ACCION International and the Smart Campaign. Read the rest of this entry »
> Posted by Emily Leeding
When asked to write a blog post, I laughed. What in my life is possibly related to financial inclusion? And then I realized – Ozzie.
Let me set the scene – I recently purchased my first home. “STRIKING VICTORIAN ROWHOUSE- AMAZING POTENTIAL” said the ad. I was hooked. The ad did not lie, but did neglect to mention the hours upon hours one will spend scrapping paint and sanding staircases to unleash that striking Victorian-ness. Fixer-upper was an understatement, but, being a bit of do-it-yourselfer, I had forgone the more traditional contractor approach and began my new night and weekend job.
Ozzie came into my life one afternoon when I was confronted with one of those “it is too heavy for me to move” moments. Recommended by a neighbor, I quickly realized what a gem I had found in Ozzie – the all around knowledgeable handyman. Read the rest of this entry »
> Posted by Kelley Mesa
Paul Hudnut - Center Faculty Council member and co-director of Global Innovation Center for Energy, Environment and Health at Colorado State University – reflects on Elisabeth Rhyne’s January 27 New York Times op-ed on microfinance’s immitation-worthy sustainable banking practices in his post “Scaling back (or forward)?“
> Posted by Kelley Mesa
Elisabeth Rhyne’s op-ed ran in today’s New York Times “Dealbook.” A permanent link to the article may be found below.
Another View: A Local Fix for a Global Mess
Many of the participants at the World Economic Forum will be thinking about big, global solutions to the current financial mess. But should they also be thinking small?
With the conference set to begin, Elisabeth Rhyne, managing director of the Center for Financial Inclusion at Acción International, argues that the seeds of a more sustainable global finance industry might be found in microfinance, in which local lenders provide very small business loans and other financial services. Acción is a Boston-based nongovernmental organization that helps build microcredit institutions and gives them technical assistance.
Her view adds to what is bound to be a vigorous debate here in Davos about how to mend the world’s tattered financial system — and at what level the fix should be applied.
In many cases, Ms. Rhyne suggests, the creation of global financial behemoths eclipsed the kind of “relationship banking” that leads to prudent lending. Microlending, by contrast, is a highly personal business, and microlenders do not offload their loans to others after they have been made, she says, leading to a portfolio quality “that might make many mainstream bankers envious.”
We present her opinion piece, below the jump, as more grist for the mill as Davos gets under way.
Toward a “Distributed” Global Banking Grid
by Elisabeth Rhyne
by Elisabeth Rhyne
Elisabeth Rhyne
In a rather remarkable collective mea culpa, the G-20 leaders, following their emergency summit in November, issued a joint diagnosis of “the roots of the current crisis” in world financial markets:
“Market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system.”
Now that the ‘vulnerable system’ has imploded, it’s natural to seek out any seeds of sustainable reconstruction. One of the seeds is microfinance, the provision of very small business loans and other financial services to the self-employed poor worldwide. Microfinance offers Read the rest of this entry »
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