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> Posted by Center Staff
We’re excited that the roll-out of the Smart Campaign‘s expanded Client Protection Principles (CPPs) is getting some echo in the international press. The CPPs, now numbering seven, have been enlarged to address multiple financial products and the concept of “non-discrimination.”
For a look at how the expanded CPPs are phrased in Spanish, you can check out Microdinero‘s “Vigente nueva versión para CPPs.”
If you missed the English-language announcement of the expanded CPPs, you can find the details in the press release: “The Smart Campaign Adds Seventh Client Protection Principle.”
Have you read?
The Smart Campaign: What We Were Asked at Microfinance USA
The Smart Campaign and MFTransparency Release New Tool, ‘Putting Transparency into Practice: Communicating About Pricing’
Leaders Welcome Smart Campaign Decision to Enshrine Non-Discrimination in Client Protection Principles
> Posted by Ignacio Mas
The pendulum is swinging: after a couple of decades when microfinance was equated with lending, now more and more voices are raising the savings agenda. This trend has been fed in recent times by the consistently ambiguous evidence coming out of microcredit impact studies (which is giving pause to donors), and further, by the need for local financial institutions to stabilize funding in the wake of the global financial crisis. Finally, savings appears to respond to the political backlash against what some see as usurious microcredit rates in some countries.
I’m on that bandwagon. I believe that everyone should at least have the option of self-funding their activities. If you think microcredit at a cost of 30, 60 or 90 percent spurs entrepreneurship, imagine what people could pull off if they could fund their businesses without paying (or even receiving) interest.
But I’m not encouraged by what I see. The fraction of poor people who have savings accounts in most developing countries is small, and among those with accounts, the majority have tiny savings balances. (Forget the widely reported averages; they are dominated by the top 10 percent of the distribution.) From what I have seen, the median saver in most savings institutions that serve the poor doesn’t have more than $20 or even $10 in there.
Read the rest of this entry »
> Posted by Sergio Guzmán
Consumer protection is here to stay. That’s one of the messages we can read into the recent nomination of Richard Cordray to head the US Consumer Financial Protection Bureau (CFPB).
Cordray, a former attorney general and state treasurer of Ohio, has been working at the CFPB’s enforcement division for the past six months. He’ll need to go through the confirmation process before taking over.
The nomination took place almost a year after the CFPB was established by President Barack Obama. It was also just days before many of the items in the Dodd-Frank Act — the major financial sector reform legislation that created the bureau — went into effect.
This being Washington, it is unimpressive (though not surprising) how little discussion there’s been around what the CFPB is going to do. All the talk has been about the political ramifications of the choice of whoever was appointed — and in this case, the choice of whoever was not appointed. Elizabeth Warren, a Harvard law professor and chief advocate of the creation of the agency, was not selected to head the CFPB. According to the Washington Post article “Elizabeth Warren: ‘Wicked smart’ and on her way out,” many Republicans in Congress and Wall Street lobbyists in Washington had expressed reservations because of her outspokenness and their sense that she might be too strongly anti-provider. Read the rest of this entry »
> Posted by Josh Goldstein, aka Mr. Provocative
What international development interventions truly work? I say, with absolute conviction, mine does. You say, with absolute conviction, yours does. Who to believe? Where does the truth “lie”?
The Center’s recently published report “Opportunities and Obstacles to Financial Inclusion” is highly illustrative of how hard it is for varied stakeholders to agree on what is actually true—in the case of this study, the top obstacles and opportunities to the expansion of financial services to all who need them. As Gardeva and Rhyne write, “Segmenting the survey responses by stakeholder group [providers, investors, support organizations and regulators] shows how each group’s priorities in financial inclusion align with its main interests as well as its day-to-day realities.”
This tendency to self-serving perception is hardly limited to the microfinance or even the development arena. What diet really sheds the pounds once and for all? What educational reform really improves the performance of school children? Every approach has its fervent champions. Thus, many contradictory, competing claims over efficacy and impact. Most advocates for their respective causes are not scoundrels or sociopaths but well meaning “everymen” convinced of what they say, wedded to their viewpoints, because their professional survival depends on it.
Someone must be wrong. Everyone can’t have “God on their side.”
Competing institutional priorities and agendas between organizations or, indeed, within different divisions of the same organization, almost ineluctably lead Team X and Team Y to different versions of reality (competing belief systems). Recently, a new biography of one of the pre-eminent physicists of the twentieth century, Richard Feynman, crystallized in my mind this stubborn and vexing feature of human affairs that slows down communal progress in countless ways.
Illustrative of Feynman’s relentless pursuit of the facts is the role he played in investigating the Challenger Space Shuttle disaster of 1986, which resulted in the death of all the astronauts on board. As Freeman Dyson writes in the July 14th issue of the New York Review of Books, Feynman was told radically different narratives about the accident by the key teams working on Challenger: “the engineers and the managers, who lived in separate worlds and did not communicate with each other. The engineers lived in the world of technical facts; the managers lived in the world of political dogmas.” One example: the engineers estimated the risk of catastrophe at 1 in 100 missions; the managers at 1 in 100,000, a shocking disparity. The engineers, Feynman reported later to the public had it right. Read the rest of this entry »
> Posted by Center Staff
Iliamene Joseph Madam Jean Marc (left) and Linda Boucard.
Grameen Foundation CEO Alex Counts’ book on Fonkoze continues to take shape. He is blogging his journey through Haiti’s landscape, taking notes on the thoughts and memories of many leaders of the country’s microfinance industry.
Counts, whose work is outlined in an interview for our “Microfinance Matters” series, worked with other Grameen Bank allies to set up Grameen Foundation in 1997.
His most recent post, “An Avalanche of Material (Including Repressed Memories),” finds him talking to more leaders:
I have learned so much about Fonkoze‘s journey over the last three days that I hardly know where to start with this blog.
On Wednesday, I returned to Marigot and re-interviewed Iliamene with the assistance of Linda Boucard (who continued the interview while I had to take a call about my “day job” with Grameen Foundation that I formally remain on sabbatical from until August 1). I learned a lot more about her toughness, her humble origins, and shuffling between households in Marigot and Port-au-Prince before settling into a productive life as a wife, mother, community leader and entrepreneur. (She became even more productive after joining Fonkoze.) But due to a series of miscommunications, we had less time with her than we otherwise could have. Thankfully, Linda agreed to return in the weeks ahead to go deeper, since her story has real depth and complements Mariyn Bayonet’s tale well.
Read the rest of this entry »
> Posted by Center Staff
PRESS RELEASE
The Smart Campaign Adds Seventh Client Protection Principle
Client Protection Principles modified to embrace wider product array and non-discrimination principle
Washington, DC, July 20, 2011 — The microfinance industry’s Client Protection Principles (CPPs) are now seven. They have been expanded to address multiple financial products and the concept of “non-discrimination.”
Beginning in late 2010, the Smart Campaign’s “Evolution of the Principles” task force made up of representatives from financial service providers, investors and support organizations, initiated an in-depth examination of the existing CPPs to ensure they accurately reflect the mission of the Campaign and its growing endorser community. The task force recognized that in their initial form the principles focused strongly on credit, and did not specifically address the full range of financial services. In addition, the task force felt that it was important to include the concept of “non-discrimination” in the principles, noting that MFIs should avoid discrimination in client selection and treatment e.g. on the basis of gender, ethnic origin, religion, or disability. Specifically, Principle #2 – Transparent and Responsible Pricing – has become two principles: Transparency and Responsible Pricing and Principles #3 and 4 have been merged into one principle: Fair and respectful treatment of clients. Read the rest of this entry »
> Posted by Center Staff
We are excited to welcome Susy Cheston as Senior Advisor at the Center for Financial Inclusion, where she will develop, oversee, and contribute directly to the Financial Inclusion 2020 campaign.
She previously served as Senior Director for Water, Sanitation & Hygiene; Agriculture; and Economic Development for World Vision. In that position she oversaw a team providing technical assistance, program management, and new business development for WASH, agriculture, economic development, shelter, and climate change.
From 1992 through 2010, Susy served in various positions within Opportunity International, most recently as Senior Vice President for Policy. Susy lived in Costa Rica and El Salvador in the early 1990s, where she launched the pilot project of Opportunity’s Women’s Opportunity Fund. Her work in refining a group lending model now called Trust Groups in El Salvador led to Opportunity’s adoption of Trust Groups as its primary lending methodology. That model is now serving over a million clients worldwide. Susy also served as Senior Vice President for Policy & Research for the Opportunity International Network, focusing on client impact assessment, gender issues, integration of AIDS programs, environmental linkages, and other ways to increase impact, outreach, and financial sustainability. Read the rest of this entry »
> Posted by Center Staff
What is client training and how is it done?
Pamela Chang, one of the ACCION International Ambassadors currently offering a blog’s-eye-view of microfinance around the world, poses this question in her first-hand observations of Fundación Paraguaya’s training program.
Chang’s insights follow those of Stephen Matthew Lee, Jason Loughnane, and Leah Vinton, all Ambassadors whose posts we’ve featured in recent weeks. If you want these posts straight from the source, the Ambassadors blog is also available via subscribing.
The July 17 post by Chang, “Thinking About Client Training – Again” begins:
I see recurring themes as I read the Ambassadors’ posts. Credit officers are microfinance heros, and knowledge is power. I want to look at the question of training; what is it? how to do it?
I learned of a two-day Fundación Paraguaya training program when I visited Gloria, the president of the Comite San Antonio. This rural committee is in Mallorquin, some 60km outside of Ciudad del Este. The day was beautiful and I jumped at the chance to escape the dust and fumes of the city for a day in the tranquil countryside.
Comite San Antonio comprises 17 women with a variety of businesses. I had met the group on a previous visit with the asesora, but this was a personal visit. Miriam and Cynthia, sisters and mathematicians, joined us. Cynthia is not a committee member and Miriam is a hairdresser (a popular undertaking); both are single, in their mid-20′s, and attending university. Cynthia hopes to be a math professor.
> Posted by Michelle Romeu
This week’s blogosphere features question marks over India’s legislative landscape, tourists and their relationship to microfinance, and new ideas for boosting women’s economic power.
- In his blog, David Roodman analyzes India’s new draft microfinance bill, highlighting key points and pondering its potential consequences.
- Alleviating poverty through tourism? Kiva’s blog explores the links between microfinance and sustainable tourism in countries such as Mexico and Peru.
- The Financial Access Initiative blog features an interview with Dean Karlan, who recently co-authored More Than Good Intentions: How a New Economics is Helping to Solve Global Poverty along with Jacob Appel. (Also check out Guy Stuart’s book review on this blog.) Read the rest of this entry »
> Posted by Andrea Shettle, Program Manager, Global Disability Rights Library
Achieving financial independence is challenging enough for most of the world’s poorest citizens. When you also face persistent dehumanization from your neighbors and even your own family, escaping poverty becomes even harder. Men and, particularly, women with disabilities in many developing countries confront this challenge daily.
As an example, women with disabilities tell us they want to be included in microfinance programs so that they, too, can work hard, build a business, and support their families. But banks and non-governmental organizations (NGOs) often refuse to include them in microcredit projects. Bankers assume they are begging and turn them away without listening to their proposals. NGOs say that disability is “not their priority” and fail to recognize that people with disabilities need the same services that their other clients need, too. Meanwhile, even relatives may fail to recognize the personhood of a woman with disabilities and may exclude her from conversation and family activities. Neighbors may speak of them by referring to their disability rather than their name. For example, they may speak of “the cripple,” and not “my neighbor, María.” Can access to knowledge change this trend of dehumanization and financial exclusion for both women and men with disabilities?
The Global Disability Rights Library (GDRL) team believes that the answer is “yes.” The GDRL project is a joint initiative of the U.S. International Council on Disabilities (USICD) where I work and our partner organization, the WiderNet project at the University of Iowa, with funding support from USAID. Read the rest of this entry »
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