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> Posted by Center Staff
Fonkoze clients dance between workshop sessions.
“What surprised me most?”
That’s the question Alex Counts asks himself about Fonkoze in his latest blog post on the Haitian MFI. The posts chronicle a larger project to complete a book about Fonkoze’s trailblazing, past and present.
Counts, the CEO of Grameen Foundation, has been traveling Haiti to talk with microfinance industry leaders in general and Fonkoze’s pioneers in particular.
Earlier this year, Counts was interviewed for the Center’s “Microfinance Matters” series. That interview looks at his roots in the industry, from the time he joined with other friends of Grameen Bank to set up Grameen Foundation in 1997.
His recent post “‘Our’ Earthquake & Eleven Surprises” touches on the recent earthquake that rattled nerves (but little more) on the United States’ East Coast. But the primary focus is on what has surprised him most about Fonkoze. Here are a few points he mentions in his post:
- Anne Hastings’ fearlessness.
- How happenings that would otherwise not be noteworthy can be catalysts in a crisis that jolt people to action.
- The very distinct karma in an organization where most of the senior staff are women.
- The new relevance of some so-called “old ideas” (about fighting global poverty) in the context of Fonkoze. Read the rest of this entry »
> Posted by Beth Rhyne
Client retention rates are a convenient quantitative indicator for microfinance institutions to track social performance. For years, practitioners assumed that high client retention indicates a healthy microcredit program. Certainly, from a business perspective, this is true. High client retention means lower administrative costs, as renewals are processed quickly and loan officers spend less time recruiting new clients. Client retention is also a positive social indicator if it signals that clients are happy with the services and get good value from borrowing. That’s why client retention is one of the quantitative indicators in the Social Performance Task Force’s draft “Universal Standards.”
But a recent review of microfinance impact literature calls this into question (Stewart R, van Rooyen C, Dickson K, Majoro M, de Wet T, “What is the impact of microfinance on poor people? A systematic review of evidence from sub-Saharan Africa,” EPPI-Centre, Social Science Research Unit, University of London, 2010). After combing through the available impact studies, the authors conclude, “The evidence from SSA [Sub-Saharan Africa] reveals a worrying trend: that the benefits of micro-credit appear to diminish – and even become negative – the longer clients are enrolled in a programme.” They contend that remaining in a microcredit program is only beneficial for clients who can use credit to increase their income (i.e., through business growth). If, however, credit is used for consumption, over time clients are likely to work their way into chronic debt dependence in which a greater share of income goes into repayment. Read the rest of this entry »
> Posted by Center Staff
Martin Connell came to microfinance and development by way of the private sector. He brought his business perspective to philanthropy, a perspective that fired his curiosity to find non-subsidized ways of serving the industrious, if poor, self-employed people in developing countries.
Connell and his wife, Linda Haynes, in 1982 founded Calmeadow, a non-profit that funded non-profit agencies helping the working poor in developing countries. While fine-tuning Calmeadow’s approach to development, he was introduced to ACCION International, an early promoter of MFIs in developing countries.
Connell shares his observations on the microfinance industry past, present, and future in the sixth installment of the “Microfinance Matters” interview series:
Martin Connell
Making Microfinance Sustainable
As a young executive, Martin Connell polished his skills in the rough and tumble world of mining exploration. He headed Conwest Exploration Company Limited, a family firm founded by his grandfather. After building Conwest and creating a business platform that successfully moved into the oil and gas field, Connell decided to do some exploration on a personal level.
Travels to Egypt, India and Bangladesh sparked his desire to promote development. In 1982, Connell and his wife, Linda Haynes, founded Calmeadow, a non-profit that funded non-profit agencies helping the working poor in developing countries…
To read more of the interview with Connell, click here.
Have you read?
Nancy Barry: Change Agent for Financial Inclusion
Martin Burt of Fundación Paraguaya: Stretching Microfinance, Narrowing Poverty
Grameen Foundation CEO Alex Counts Tackles ‘Re-engineering’ Microfinance
Pilar Ramírez, Microfinance Trailblazer
Where is Microfinance Headed? Essma Ben Hamida Interview Kicks Off ‘Microfinance Matters’ Series
Press Release (Rosita Najmi 865-310-2787, rnajmi@accion.org)
Aug 28: Financial Access at Birth (FAB) Cameo on HBO’s Entourage
Cameo by founder of Financial Access at Birth (FAB) to showcase this social and economic innovation aimed at guaranteeing that all have a chance at financial citizenship.
Washington, DC, August 26, 2011 – Entourage will host a cameo appearance by the founder of Financial Access at Birth (FAB), Bhagwan Chowdhry, on August 28 during an episode in the HBO television series’ final season. The Center for Financial Inclusion at ACCION currently hosts FAB as it prepares for pilots.
“It’s incredibly exciting to bring Entourage’s massive audience a taste of what we can accomplish with FAB, a social and economic innovation that seeks financial inclusion…one birth at a time,” said Chowdhry, a professor of Finance at UCLA’s Anderson School. “FAB presents an innovation to the delivery of financial and social services that helps us reach the “last mile” into rural areas and minimizes costs for reaching the bottom of the pyramid by using technology.”
“Solutions to poverty do not have to be as complicated as the problems they aim to solve,” said Doug Ellin, Executive Producer of Entourage. “I imagine among the million viewers of Entourage, there are others who also have good ideas. Hopefully, they, like Bhagwan Chowdhry, have the courage to share their vision and collaborate with others to connect their ideas to action to benefit us all.” Read the rest of this entry »
> Posted by Alex Fiorillo, COO, MFTransparency
Policymakers in Colombia have been cautiously moving toward a transparency-based approach to pricing for microfinance, reducing their traditional reliance on interest rate caps. Important legislation in 2009 and 2010 appears to be having a positive effect, as Asobancaria, the Colombian Banking Association, asserts in a recent article. Asobancaria notes that since the changes, the number of microcredit loans offered continues to increase.
We at MFTransparency are also pleased with the initial results. We urge the government to focus on simple, straight-forward regulation to ensure that financial service providers understand and apply the law in a clear and consistent manner.
Progress Toward Transparency
The Colombian government took steps to consolidate and enhance consumer protection and pricing transparency in the commercial and microfinance sectors through Law 1328 of 2009. This law sets out strict regulations regarding the minimum information to be provided to prospective borrowers, the prohibition of abusive clauses, and an effective mechanism to deal with complaints. It also provides sanctions for abusive practices. Read the rest of this entry »
> Posted by Center Staff
The Financial Access at Birth (FAB) Campaign will be featured on HBO’s television series Entourage through a cameo appearance by its founder, Bhagwan Chowdhry, on August 28.
Stay tuned for more details!
Have you read?
Paganucci Fellows Work to Boost Financial Access at Birth
What’s ‘A FAB Idea’? Financial Access at Birth, Says ‘The Economist‘
Microfinance Gateway Covers ‘Youth and Money: Planting the Seed for Success’
> Posted by Yvonne Chen
Editor’s note: This is one of the CFI blog’s all-time most popular posts. We thought we’d put it front and center once more, in order to make it more visible to new readers who might be stocking their bookshelves.
Looking for a new book to read? The Browser’s recent interview with microfinance expert Stuart Rutherford gives us his top five on the subject of “The Poor and Their Money”:
- The Economics of Microfinance by Jonathan Morduch and Beatriz Armendáriz
- Mainstreaming Microfinance: How Lending Began, Grew, and Came of Age in Bolivia by Elisabeth Rhyne
- Women at the Centre: Grameen Bank Borrowers After One Decade by Helen Todd
- A Fine Balance by Rohinton Mistry
- Small, Short and Unsecured: Informal Rural Finance in India by F J A (Fritz) Bouman
Known for his expertise in understanding how the poor manage their money, Rutherford has himself published some of today’s go-to references on this topic, including The Poor and their Money and Portfolios of the Poor. The five books listed above were chosen by him not only for their impact on his work, but also for their ability to place the client at the center of our conceptualization of microfinance. This is important because as Rutherford himself explains, “microfinance has to find a way to adapt itself to the enormous complexity found in the lives of poor people, and not the other way around.”
Order your own copy of Elisabeth Rhyne’s Mainstreaming Microfinance: How Lending Began Grew and Came of Age in Bolivia today.
Have you read?
‘More Than Good Intentions’ by Dean Karlan and Jacob Appel – Book Review by Guy Stuart
‘Dead Aid: Why Aid is Not Working & How There is a Better Way for Africa’ by Dambisa Moyo – Book Review by Kanika Metre
> Posted by Center Staff
This week’s “best” of the blogosphere includes good news from Haiti, not-so-clear news from DFID, new data from India, and potentially good news for social entrepreneurs interested in corporate capital.
- Jonathan Morduch fears that the DFID study “will add confusion to a conversation that’s already muddled” by failing to make clear the critical difference between “proving that something doesn’t work” and “not being able to prove that it works.” Microfinance, of course, is the “it” Morduch discusses in his post “Disproving and Confusing” on the Financial Access Initiative blog.
- “[M]obile money is well on its way to fulfilling the promise of being a ‘legacy of the earthquake’,” Greta Greathouse writes in her post “Mobile Money Moving Rapidly Ahead in Haiti”. As this technology makes inroads, she observes on the CGAP Technology and Microfinance blog, “donors in Haiti are increasingly interested in transforming many of their ongoing ‘non-emergency’ programs and payments to these platforms.”
- “The world’s largest corporations are awash with cash,” notes ClearlySo CEO Rod Schwartz in his piece “Corporate Capital for Social Enterprises” on Social Edge. While sizing up the significant potential upsides to acquiring corporate money, Schwartz also asks “Is securing corporate capital a dangerous step down a slippery slope, imperiling social and ethical missions?” Read the rest of this entry »
> 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
Opportunity International‘s blog recently posted “What We’re Reading: Top 10 Blogs About Microfinance and Poverty Eradication.”
It’s great to find this blog there, in the company of CGAP’s Microfinance Blog, Nicholas Kristof‘s New York Times columns, Grameen Foundation’s Creating a World Without Poverty blog, and the Wall Street Journal‘s India Real Time blog.
Check out the rest of their top 10 list by clicking here, and it’s worth glancing over the entire Opportunity Blog. Recent posts have cast an eye on Tanzania, expanding client access through technology and innovative products, and Opportunity’s Banking on Africa Campaign.
Image credit: C. Thure
Have you read?
13 Key Institutions in Microfinance Industry Sign Open Letter Supporting Muhammad Yunus
Industry Experts Testify on the State of Global Microfinance
Campaign for Client Protection in Microfinance Announced at the Clinton Global Initiative
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