You are currently browsing the monthly archive for December 2011.
> Posted by Holly Padgett
As a former student of Environmental Science and a strong advocate for environmental (as well as economic and social) sustainability, I am constantly striving to align my work and experiences with the precepts of sustainable development, defined by the UN World Commission on Environment and Development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
While I, and probably many others, would argue that microfinance and financial inclusion are undeniably a part of sustainable development, it is often hard to see the direct connection. For this reason, it is especially exciting when I run across an event or report that directly exemplifies the link.
For example, in the recent climate negotiations at the 2011 UN Climate Change Conference, in Durban, South Africa, several initiatives were agreed upon that support the triple bottom line (economy, society and environment) in developed and developing countries. One major decision that came out of the summit was the establishment of the Green Climate Fund, which will channel money from developed nations to developing and vulnerable communities to assist with clean energy programs and adaptations to climate change and extreme weather events. Read the rest of this entry »
> Posted by Center Staff
Book-writing is partly about voracious reading, Alex Counts reminds us on his blog, which chronicles the process of penning a book about Haitian microfinance pioneer Fonkoze.
Counts, the CEO of Grameen Foundation, most recently finished The Blue Sweater by Jacqueline Novogratz (Rodale, 2009) and The Social Entrepreneur’s Handbook by Rupert Scofield (McCraw Hill, 2011). (We previously gave a nod to Scofield’s book here on this blog. )
Counts joined other friends of Grameen Bank to set up Grameen Foundation in 1997. He was interviewed for the Center’s “Microfinance Matters” series. During his trips to Haiti, he has been meeting with microfinance industry leaders in general, and in particular with Fonkoze staff.
“Two Memoirs to Inspire and Educate Social Entrepreneurs,” his most recent post, begins:
I am returning from Istanbul, where I attended and spoke at a historic meeting of microfinance leaders from around the Arab World and from Turkey. A long layover in Amsterdam is giving me the opportunity to return to this blog while I prepare to head to Haiti via Washington and New York over the next two days. It has been a whirlwind fall for me, but my book on Fonkoze has never been far from my mind. Professor Muhammad Yunus, the founder of the Grameen Bank and my mentor, was the most recent person to ask me about it when we were driving to a university in Turkey where he gave a speech two days ago. Read the rest of this entry »
> Posted by Center Staff
A New Year for microfinance is fast approaching, and if we’ve learned anything lately, it’s that you can’t be too prepared.
MIX Market, an important tool to research and analyze MFIs, is one place to begin that preparation. You may find the MIX useful for your year-in-review — and beyond.
Below are three quick steps to get started with MIX Market, but if you want to make the most of their data and analytics for your MFI due diligence, you can register for their free webinar on Tuesday, January 10 @ 10:00am EST.
1. Contextualize Before Analyzing
MIX Market MFI profiles provide important context to help you make sense of all the available indicators and performance data. Is this MFI a regulated microfinance provider? You may want to review the legal charter and other institutional background before analyzing those efficiency or capital adequacy numbers. Does this MFI have poverty alleviation or targeting the poor as one of its development goals? Look at the profile’s social performance section before you go looking for data on poverty outreach. Read the rest of this entry »
> Posted by Holly Padgett
Since I started working with the Center for Financial Inclusion this fall, I’ve been inspired to observe the client-centered nature of the microfinance industry. For example, I recently read a report by MicroSave, an organization that focuses on market-led microfinance in Africa and Asia, which confirmed this client-centered trait. The report examines client experiences in the wake of the microfinance crisis in Andhra Pradesh.
Below are some of the findings of the report that I found most striking:
- With MFIs in Andhra Pradesh drastically reducing new lending, borrowers have been forced to seek out alternative sources for lending. In 66 percent of the research sessions MicroSave conducted, clients described the major burden of these alternative loans as the “exorbitant” interest rates. Read the rest of this entry »
> Posted by Danielle Donza
I recently attended a presentation in Boston where Dana Dakin, the founder and president of Womens Trust, a microfinance program serving women in Ghana, was asked about the impact of her program. Dakin replied that “wife beating is down,” repeating the words of the response of Victoria, a leader in the community of Pokuase, a Ghanaian town of approximately 20,000 people. The Executive Director of Womens Trust Ghana, Wilma Longdon, hypothesized that this result is due not only to that fact that their microloans are empowering women in Pokuase, but also to the way that these microloans take the pressure off men to be the sole providers for their families. Dakin admitted it is almost impossible to prove causality between the program and this outcome.
Womens Trust is a unique microfinance institution that channels all of its profits from microlending into innovative education and healthcare programming for women and their families. Its three-pronged approach to development and empowerment provides microlending, education, and healthcare services to women and girls in Pokuase. They hope this approach will be sustainable, scalable, and replicated, and so do I!
Flash forward a day and I’m meeting with another incredible woman. Jennifer John works with Criterion Ventures on its Women Effects Investments (WEI) initiative, which looks to build an ecosystem around investing in women and girls. John and her colleagues are identifying and creating new female-friendly investment opportunities and mobilizing more female investors to place their assets in vehicles that expand the seat at the table for women in social investing. WEI is looking to shape the social capital markets with a “Gender Lens” which looks at women’s access to capital, workplace equity, and how well financial products and services are tailored to the needs of women. The Gender Lens is meant to maximize the impact of investments on women and girls because WEI believes that when women are economic agents and leaders, social change accelerates and returns multiply. Read the rest of this entry »
> Posted by Beth Rhyne
As leaders of the microfinance industry in India assemble in Delhi this week for the ACCESS Microfinance India Summit, India-watchers outside the country can follow events in the sector by taking a look at the latest report from M-CRIL: “M-CRIL Microfinance Review 2011: Anatomy of a Crisis.” The executive summary is available as a stand-alone document, and it provides instructions for purchasing the entire data-drenched report.
For me, the best parts of the report are the numbers that help dimension the sector and its crisis, as well as its no-holds-barred approach to stating conclusions. Here is a small sampling:
On the role of microfinance in India: “Microfinance is now established as a significant component of the financial system in the country and its contribution to financial inclusion continues to rival, if not exceed, that of the rural banking system.” “With 31.8 million borrower accounts the size of the microfinance sector more than matches significant parts of the Indian financial system in terms of the number of citizens affected. This number is more than three times the number of micro‐credit accounts serviced by the Regional Rural Banks and is greater even than the total number of such micro‐accounts held by the commercial banks.” Read the rest of this entry »
> Posted by Anita Gardeva
Participants in the 2009 HBS-ACCION Course on Strategic Leadership in Microfinance
It’s an exciting yet demanding time for microfinance leaders. As the industry matures, leaders have to make clear-headed decisions to steer their institution in the right direction.
The Harvard Business School (HBS) and ACCION are working together to make those decisions easier. The HBS-ACCION Program on Strategic Leadership for Microfinance connects microfinance executives with some of the world’s most experienced professors in leadership and strategy for social enterprises.
As this executive education program enters its seventh year, we’re happy to announce that the application process for 2012 is open. The 2012 program is scheduled to take place April 9th-14th at the Harvard Business School campus in Boston.
In the past six years, the HBS-ACCION Program has been attended by over 100 executives from some of the world’s most prominent MFIs, including the Grameen Bank, SKS, MiBanco, BRI, Compartamos, and Equity Bank. Read the rest of this entry »
> Posted by Susy Cheston
Kiosk in Costa Rica where Prisoner Hope goods, including backpacks, can be purchased.
My new backpack is fashionably gray, well made, and just a little different from the norm. What really makes it work for me, though, is the story behind it.
I found the backpack at a beautifully appointed kiosk in an upscale shopping mall in Costa Rica. It was only after being tipped off by the enthusiastic sales clerk that I noticed the subtle “Prisoner Hope” imprint on the flap. It turned out that the kiosk was full of bags, briefcases, wallets, and the like — all made by Costa Rican prisoners who had been set up in microenterprises. The 45 prisoners who work through this project send their income home to their families, and have the promise of a livelihood after their release. This partnership between the private sector and the government of Costa Rica seeks to reduce the recidivism rate and “transform those who are ‘deprived of liberty’ into ‘micro-entrepreneurs.’” I was sold.
Run a quick search on prisons and microfinance, and you come up short. You’ll see that in 2008, Kiva promoted loans to clients of FAPE in Guatemala—including women in prison who ran microenterprises. In 2005, the Bidar District Central Cooperative Bank in India sent members of its microcredit department to train women inmates in the tailoring business. And in 2009 the government of Algeria had ambitious plans when launching a microenterprise program targeted to reach 4,000 prisoners. Read the rest of this entry »
> Posted by Rosita Najmi
Ólafur R. Grímsson (President of Iceland), Rajendra Pachauri (Chair of the Nobel Peace Prize-winning Intergovernmental Panel on Climate Change), and Bhaghwan Chowdhry (Founder, Financial Access at Birth) (l-r) present at PopTech 2011.
Planning a vacation or how to spend your professional development budget? I could not more highly recommend an investment of time and resources than PopTech’s next gathering. You can think of it as a luxurious intellectual cruise, where you consume delicious visions for the future, innovations to improve lives, arts to stimulate the mind and heart, and fellow passengers with whom to dream — and more importantly, take on future adventures and paths of service.
FAB was honored to be a participant in PopTech 2011. You can get a sense of what this gathering is like by viewing this recording and this follow-up written interview. Namely, PopTech convenes an eclectic mix of thought leaders and visionaries and invites them to share their ideas and progress towards realizing them through a number of activities, including 20-minute presentations. These are not the typical PowerPoint-filled plenary presentations or panels to which you’re accustomed at other conferences. The day FAB was on stage, for example, examined the themes of rebalancing, reframing, restoring and researching; presentations were made by a family historian, a Nobel Prize winner, a space suit developer, and a president. The same day, an iPad app was launched; a funky band played; and we met a slew of impressive young scientists and innovators. The experience was truly a cynicism evaporator. Read the rest of this entry »
> Posted by Siddhartha Chowdri
The Indian Parliament is bogged down with critical legislation on foreign direct investment, anti-corruption and food security. The Micro Finance Institutions Bill is low on the priority list, behind at least 30 other bills. Many microfinance industry players were concerned that uncertainty around the norms for MFIs would continue indefinitely.
Officials at the Reserve Bank of India (RBI) decided not to keep waiting for Parliament to pass a bill on microfinance (the first of which was introduced in 2007). On December 2, 2011 the RBI created a new category of non-banking financial company (NBFC) called the NBFC-MFI.
This bold step goes a long way towards giving the microfinance industry in India the legitimacy it has sought for more than a decade. Much of the credit for the RBI’s expediency in moving this forward should go to the team at MFIN and Sa-Dhan for their relentless efforts and representations to the RBI.
The requirements for an NBFC to qualify as an NBFC-MFI are in large part defined by the Malegam Committee report circulated in January 2010. However, there remain some significant concerns that one hopes will be addressed as these regulations and guidelines evolve:
- The NBFC-MFI is only a microcredit institution. Financially excluded clients will have to look to other types of institutions (or individuals) to fulfil their other critical financial service needs. Read the rest of this entry »
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