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With under 40 days to go, the 17th Microcredit Summit is rapidly approaching. CFI’s Josh Goldstein will be speaking during a plenary session focused on new innovations for microfinance and other financial inclusion interventions to more effectively reach the excluded. With the theme “Generation Next: Innovations in Microfinance,” this should be a great opportunity to explore what is on the horizon to achieve full financial inclusion. In this post, Josh discusses industry context surrounding the Summit, and what he hopes he and those in attendance will be able to take away from the event.
I am a sometime skeptic about the proliferation of microfinance conferences, but the upcoming Microcredit Summit in Merida, Mexico seems particularly important and timely. Personally, I am very excited about it. (In the spirit of full disclosure, I should add that I will be a speaker, and of course piqued vanity can certainly lead to bias, but I don’t suspect this is the case here.)
> Posted by Fernando Botelho, Founder, F123 Consulting
Microfinance institutions (MFIs) may not be aware of tools and resources at their disposal that can make it easier for them to work with persons with disabilities (PWDs) as clients or staff. A new tool launched a few weeks ago attempts to close this gap, “Inclusion of Persons with Disabilities in Microfinance through Organizational Learning and the Strategic Use of Low-Cost Technologies.” This tool is part of the Framework for Disability Inclusion toolkit produced by CFI through work with Fundación Paraguaya and others.
The new tool provides concrete guidance for selecting appropriate technologies, forming partnerships with disability-related organizations, and incorporating disability inclusion throughout an organization. It was developed by myself and my organization, F123 Consulting, inspired by our work with the staff of Fundación Paraguaya, to make their organization more disability inclusive.
For example, free and open source assistive technologies can be used by organizations that have an interest in ensuring that operational and financial viability are maintained. In that regard, it’s important to take advantage of the many available low-cost, high performing technologies, and to adapt instead of replace existing processes whenever possible. Managers don’t have to roll their eyes and fret about cost. Small modifications to already existing systems can often make MFIs accessible to staff and clients with disabilities. And the best part is that some of these modifications are free!
> Posted by Joshua Goldstein, Principal Director for Economic Citizenship & Disability Inclusion, CFI
Over the last two years, the Center for Financial Inclusion has worked to develop a series of tools and trainings (a how-to guide) for MFIs that have decided to become disability inclusive but don’t know how to do so.
Through our strategic partnership with Handicap International, Fundación Paraguaya, and the Smart Campaign, we have now completed a comprehensive toolkit. And today, we are pleased to announce that we are making these tools and trainings available to the industry in English, Spanish, and French on the Persons with Disabilities (PWD) page on the CFI website. Everything is open source and available to any MFI or other financial services provider that wishes to use the tools.
The Center made inclusion of PWD an institutional priority because at 15 percent of the global population, PWD represent a very large vulnerable minority, and are largely unbanked – no more than 0.5 percent of current MFI clients worldwide are PWD.
In its Responsible Treatment of Clients principle, the Smart Campaign emphasizes the importance of non-discrimination. As the Smart Campaign’s principles evolve, MFIs are encouraged to broaden their scope of services to minorities like PWD and promote equal opportunity to financial services.
The Convention on the Rights of Persons with Disabilities (2006) stipulates in Article 27 on Work and Employment that countries that have ratified the treaty must level the playing field so that persons with disabilities have an equal right to employment. The Center’s White Paper “A New Financial Access Frontier: People with Disabilities” made the case for disability inclusion, drawing on the approaches used around the world to guide implementation of the Convention. Now we present the industry with practical implementation guidelines for those institutions seeking to close the financial inclusion gap for persons with disabilities.
> Posted by Luis Fernando Sanabria, Gerente General, Fundación Paraguaya
Imagine a school in a developing country where… Students get a high-quality, practical education while learning to run competitive small-scale enterprises. Students learn by doing, earning, and saving. Students graduate with the entrepreneurial and life skills they need to make a decent living and overcome poverty. And school enterprises generate the resources needed to ensure their school’s long-term financial sustainability.
This school is not a dream. It is called the San Francisco Agricultural School, and it is located in the town of Cerrito, Paraguay.
In 2003, the San Francisco Agricultural School adopted a unique approach to education: it set its sights on becoming a financially self-sufficient agricultural school. This model, developed by Fundación Paraguaya, gives low-income students primarily from rural areas the opportunity to get a high-quality, relevant secondary education while learning practical technical and business skills. To achieve these goals, financially self-sufficient schools teach students to operate real businesses, with the goal of generating enough income for schools to become financially self-sustaining.
Schools following the financially self-sufficient school model use a “learning by doing, selling, and earning” methodology, through which students get hands-on experience running their school’s microenterprises, marketing the goods and services produced, and saving in student cooperatives. Students spend half their time in the classroom and half in practical activities in school enterprises, learning not only how to produce efficiently but also how to package, sell, and market their products to meet demand. The schools are generally managed by principals with business backgrounds who coach subject teachers in entrepreneurship and business management.
> Posted by Jimena Vallejos, Project Coordinator, Fundación Paraguaya
Non-discrimination is embedded in the fifth Client Protection Principle, Fair and Respectful Treatment of Clients. A microfinance institution (MFI) may work, knowingly or not, with clients that have particular disabilities or conditions. In order for MFIs to operate without discrimination, it’s essential that they are inclusive of persons with disabilities and that they offer services that account for these clients’ unique needs. Fundación Paraguaya (FP) is an MFI that operates in Asunción, Paraguay and employs an impressive non-discrimination policy and code of ethics, fully taking into account those with disabilities and physical conditions. These documents can be viewed on the Smart Campaign website:
Fundación Paraguaya and CFI are working together on a specific project, “Non-Discrimination: Making Microfinance Institutions Disability Inclusive and Smart Campaign Certifiable,” establishing and testing guidelines for a model comprehensive non-discrimination policy. As part of the project, Thomas Meriaux and Caroline Cervera from Handicap International are currently visiting Fundación Paraguaya to provide trainings on disability inclusion for clients and employees at the MFI. We recently spoke with Thomas about his visit, and he told us about an incident that brought it all home.
> Posted by Center Staff
How does the idea of “measuring microfinance impact” play out on the ground?
Aurélie Dagneaux takes a close look at this question through the lens of her observations of Fundación Paraguaya. She’s been visiting there as part of the ACCION International Ambassadors. She and the other Ambassadors have been deployed around the globe to gain insight into the state of the industry. Their blog is here; you can even subscribe.
Dagneaux’s post “Measuring Microfinance Impact” begins:
As ACCION Ambassadors, our mission is to document the impact of microfinance.
Let me share with you what my first week in Fundación Paraguaya taught me. I’ll shed a light on some other experiences I had in other places as a microfinance consultant.
“Fundación en Acción”
For our readers already familiar with the Fundación, I’ll be brief on what they do.
Fundación Paraguay is a 25-years old NGO, conducting 3 main programs: microfinance, self-sustainable agricultural schools, and youth business education. I’ll only discuss here the microfinance part. I will even narrow it only to its village banking part (making the bulk of clients: 70%). The village banking consists of women committees of 10-15 entrepreneurs each. There are over 2,000 committees, representing 32,000 clients. Women receive loans, starting from 100,000 Guarani’s ($25), up to 1,200,000 Guarani’s ($300) after a few loan cycles. FP also provides them with training (ranging from financial and business education, increasing your sales, business plans to interpersonal relations). Women are required to save money in order to educate them to do so. Unfortunately that’s not a service of the Fundación itself, as it is not a regulated bank enable to take savings, but a NGO.
Last year, Fundación Paraguay – like many organizations maturing – started feeling the need to measure their impact on client’s lives and to document it. Read the rest of this entry »
> Posted by Center Staff
It’s great when the Center’s articles are echoed around the Web, and especially when someone else takes the time to translate them. In this case, we’re particularly grateful to the Portal de Microfinanzas, an affiliate of the Microfinance Gateway, for posting a Spanish version of our “Microfinance Matters” interview with Martin Burt.
Burt, who created the microfinance NGO Fundación Paraguaya (FP) in 1985, is one of a score of industry leaders from around the globe who’ve appeared in the Center’s ongoing “Microfinance Matters” series. Other leaders in that spotlight include Grameen Foundation President Alex Counts, CONFIE Holding Chair Pilar Ramírez, Enda Inter-Arabe Executive Director Essma Ben Hamida, and Enterprise Solutions to Poverty founder and head Nancy Barry.
Burt started out with the idea of zeroing in on the problem of chronic unemployment in his homeland’s urban slums and rural areas. FP grew to be one of Latin America’s best-performing microfinance institutions, and today it serves 70,000 clients, most below the poverty line. FP was the first development NGO in Paraguay and the country’s first microenterprise program.
To read the entire “Microfinance Matters” interview with Martin Burt in Spanish, please click “Fundación Paraguaya: Expandiendo las microfinanzas, reduciendo la pobreza.” To check out the English version, you can click “Martin Burt & Fundación Paraguaya: Stretching Microfinance, Narrowing Poverty.”
Have you read?
> Posted by Center Staff
From China to Paraguay, ACCION International’s Ambassadors are blogging from the field. Their dedicated blog is a great view of microfinance from roughly 5-6 feet, instead of the frequent bird’s-eye view from 30,000′. We’ll be cross-posting, but it’s also a good idea to consider subscribing.
We recently showcased Jason Loughnane‘s post on Akiba’s new loans via a program that bears a passing resemblance to Energy Links. This time around, we’re excited to share “The Classroom Beneath the Tree,” Leah Vinton‘s take on financial literacy as promoted by Fundación Paraguaya.
Vinton’s June 14 post starts out:
2,700 women by December. If Fundación Paraguaya has their way, they will reach 2,700 women with enhanced financial literacy training in order to reach the even larger Fundación goal of assisting more than 6,000 women to increase their incomes enough to surpass the poverty line by the end of December. No small task.
> Posted by Michelle Romeu
En su artículo más reciente en el blog Huffington Post, Elisabeth Rhyne explora los esfuerzos de Martin Burt, fundador y director de la Fundación Paraguaya, para lograr sacar a cada uno de sus clientes de la pobreza al utilizar las garantías grupales que se utilizan en los préstamos de microfinanzas. Al permitir a los clientes evaluar el progreso de cada cual, ha logrado darles herramientas para cambiar sus vidas de una manera innovadora.
Por: Elisabeth Rhyne
Mientras académicos de prestigiosas universidades de la Costa Este de los Estados Unidos están desarrollando metodologías para medir el impacto de las microfinanzas en la pobreza – y llegando a resultados modestos, Martín Burt fundador y director de la Fundación Paraguaya, está dando un importante salto en este sentido. No contento con medir o siquiera aliviar la pobreza, Burt cree que puede lograr que todos los clientes salgan de la pobreza. ¿Cuál es su secreto? Buscar movilizar la energía de los clientes.
Martín Burt es un pionero de las microfinanzas. En 1985 fundó la Fundación Paraguaya como una organización que otorga préstamos a microempresarios afiliada a ACCION International, y logró que esta fuera reconocida como una de las mejores organizaciones de microfinanzas (incluyendo un premio a la mejor institución de microfinanzas del Banco Interamericano de Desarrollo en el 2004). Luego de un corto lapsus en la política – un periodo como Alcalde de Asunción – Burt regresó a la Fundación Paraguaya con un amplio enfoque social en un momento en donde las microfinanzas estaban centrándose exclusivamente en servicios financieros.
Burt afirma que la contribución más importante de las microfinanzas al desarrollo, no es tanto lo que puede ofrecer, sino como operan. Las microfinanzas han demostrado que las instituciones que atienden a los pobres deben ser financieramente auto-sostenibles para poder lograr tener permanencia y escala, dos calidades necesarias para lograr tener un impacto significativo en la pobreza global. Igual de importante es la manera como las instituciones de microfinanzas tratan a sus clientes – las personas de bajos ingresos. Son tratados como personas capaces, que pueden ser sus propios agentes de cambio. Son apoyados en sus propios esfuerzos por lograr una mejor vida – la auto-ayuda y no la caridad. Burt ha aplicado esta filosofía al desarrollar una escuela (secundaria) agrícola auto sostenible, brindando educación a jóvenes de familias de escasos recursos en una zona rural de Paraguay. La escuela opera sin subsidios externos, financiada únicamente a través de la venta de productos cultivados y procesados en la escuela por los estudiantes. Read the rest of this entry »