You are currently browsing the monthly archive for January 2012.
> Posted by Lisa Hall, President & CEO of Calvert Foundation
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
In September, I had the opportunity to participate in a dialogue with more than 45 other participants as part of a roundtable hosted by ACCION’s Center for Financial Inclusion. The purpose of this new blog is to continue the conversation we started that day – and I am honored to be the first to post here.
At Calvert Foundation, we often talk about impact investing as a virtuous circle, one that creates empowerment, opportunity, and engagement by connecting investors, underprivileged individuals, and communities. This connection – to me – is the ultimate goal of financial inclusion. It’s about a connected circle of people, with mutual benefit for all the stakeholders involved, and with clients at the center. Read the rest of this entry »
Support for the Smart Campaign will allow client protection assessments, certification testing, pilot projects, and translation and dissemination of tools to foster adherence to Client Protection Principles at leading microfinance institutions.
Washington, DC, January 30, 2012 — The Smart Campaign, a global initiative to incorporate strong client protection principles across the microfinance industry, will receive support from the Multilateral Investment Fund (MIF), member of the Inter-American Development Bank (IDB) Group to help Latin American and Caribbean microfinance institutions incorporate client protection practices into their operations.
The support will work to institutionalize adherence to the Smart Campaign’s Client Protection Principles, which include appropriate product design and delivery, prevention of over-indebtedness, transparency, responsible pricing, fair and respectful treatment of clients, privacy of client data, and mechanisms for complaint resolution, in four primary ways:
- Understanding the current state of client protection practice via in-depth Client Protection Assessments of twenty microfinance institutions (MFIs);
- Changing client protection practices via pilot implementation of recommendations from the Smart Assessments;
- Piloting the certification process of ten microfinance institutions as a crucial step to raise client protection standards in the industry; and
- Making Smart Campaign tools more broadly available in Latin America through translation and dissemination of those tools and materials into Spanish and Portuguese.
“Support from the MIF comes at a critical time in the life of the Campaign and will ensure that the experience of microfinance institutions in Latin America and the Caribbean is taken into account when defining adequate standards for client protection worldwide,” said Isabelle Barrès, Smart Campaign Director. Read the rest of this entry »
> Posted by Danielle Donza
Change. People fear it, they avoid it and resist it, but ultimately change is the only constant in life. Some of the microfinance industry’s heavy hitters have weighed in recently on how they believe the industry is – or needs to be – changing.
Marguerite Robinson, Michael Chu, and Robert Christen, three microfinance industry leaders, discussed this topic at a recent MIT panel. They have all spent years in the trenches building microfinance institutions to prove to the financial industry that microfinance was worth taking seriously. But now that the industry has “cracked the capital markets,” they are advising the next generation of microfinance leaders that it is time to shake it up again. But how?
One answer is mobile and agent banking. After 40 years of building microfinance banks, it is time to move beyond them. By some estimates, as many as 2.7 billion people in developing countries are still unbanked and we are never going to reach them all unless we drastically re-think the way we deliver financial services to the poor, especially in remote rural regions. Even when microfinance clients can get to a microfinance institution (MFI), it still costs that MFI roughly US$1 per transaction. Obviously not a very cost-effective business model when clients only want to transact 50 cents. Read the rest of this entry »
> Posted by Sonja E. Kelly
The Center for Financial Inclusion at ACCION International has set an audacious commitment to build toward full financial inclusion by 2020. As part of this movement, we are starting a conversation on this blog. We look forward to what will come out of this.
In September, we began a series of roundtable discussions aimed at deepening the consensus around the steps to reach full financial inclusion by the year 2020. In each roundtable, experts from the microfinance industry consider the Center’s report on the “Opportunities and Obstacles to Financial Inclusion.” Participants include providers, investors, donors, regulators, academics, and other industry influencers.
With this post we are taking that process virtual and kicking off a blog series on financial inclusion.
We hope this series will deepen our understanding of financial inclusion, using the year 2020 as a target date to help galvanize our thinking, and exploring the implications of the Center’s definition of full financial inclusion:
Full financial inclusion is a state in which all people who can use them have access to a suite of quality financial services, provided at affordable prices, to clients who are financially capable, in a convenient manner, and with dignity for the clients. Financial services are delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, and rural populations. Read the rest of this entry »
> Posted by Danielle Donza
The stories of crises and failures in microfinance often seem to involve the same underlying problem: weak governance.
“Weathering the Storm: Lessons in Microfinance Crisis Survival from Those Who Have Been There” found that “good governance is the ultimate backstop for crisis prevention and management,” and the recent “Failures in Microfinance: Lessons Learned” concluded that, “the clearest and strongest conclusion derived from this study is that an institution’s governance structure proved to be the primary differentiating factor between those entities that overcame a crisis and those that did not.”
In the “Weathering the Storm” case study of “FuegoNord,” an MFI in Lagos, Nigeria closed in 2010 partly because it tied up large amounts of capital in illiquid assets. Yet the management of the MFI invested a large chunk of newly raised equity in three expensive branch buildings without getting the board’s approval. Read the rest of this entry »
> Posted by Holly Padgett
In my opinion, blogs provide a great way to stay involved and up-to-date with current discussions about topics of interest. However, if you ever feel bombarded with information (and how does anyone have time to follow all the interesting blogs?), I understand. After all, at last count, Technorati was tracking over 100 million blogs.
With the idea of zeroing in on some of the most valuable resources out there, I recently took on the quite extensive project of creating a visual map of blogs related to financial inclusion. I started with three relevant blogs and mapped connecting blogs (based on blogrolls) to get a better idea of the blog community surrounding CFI. While the map was definitely not exhaustive, it was very informative.
If you’re interested in blogs related to financial inclusion and international development, I hope this post will act as a good resource.
Here’s a short list of blogs I uncovered that I, personally, find very interesting (this list is also not exhaustive – there are so many other great blogs I could add):
- David Roodman’s Microfinance Open Book Blog – This blog was an important part of the creation of Roodman’s new book Due Diligence (which looks incredibly interesting). Now that the book has been released, I hope he will continue to blog on relevant issues.
- Creating a World Without Poverty – This blog, by Grameen Foundation, discusses microfinance, financial inclusion, and the foundation’s initiatives, and gives a great overview of some of the toughest problems facing the world’s poor. Read the rest of this entry »
> Posted by Meghan Greene
Jean-Philippe de Schrevel of BlueOrchard had this to say about the Microfinance CEO Working Group’s just-released “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance.”
Dear colleagues,
We have read your letter “Road Map for the Microfinance Industry.” We fully share your vision and commitments.
We too have endorsed all of these initiatives (Smart Campaign, MFTransparency) and we are participating actively in the Social Performance Task Force, to which we have offered feedback on the universal standards for social performance. Not only have we backed these initiatives, we are advocating for further endorsement by MFIs and other microfinance stakeholders. Read the rest of this entry »
> Posted by Ignacio Mas and Claire Alexandre
A policymaker’s dilemma: how to pursue a policy of access to a bank account for everyone, while at the same time erecting regulatory barriers to the opening of those accounts to prevent their misuse. It’s like pushing the accelerator and putting on the brakes at the same time. This is not to belittle law enforcement concerns, chiefly the need to prevent or detect money laundering. But as we argued in a previous blog post, neither financial inclusion nor law enforcement are well served by keeping the bulk of the population away from modern digital — and hence, inherently more traceable — payment systems.
These objectives can be easily reconciled by making account opening trivially easy at first, and tightening the requirements for documentation and record-keeping progressively as the accounts become larger and more active. With this approach, everyone wins. New-to-banking customers can learn about how to use the account before they are asked to submit to onerous Know Your Customer (KYC) obligations. Banks don’t need to put in place costly KYC processes for customers that are not yet profitable. And law enforcement agencies can get relevant information on accounts commensurate with the risks involved. Read the rest of this entry »
> Posted by Meghan Greene
Coordinating in an unprecedented way, a group of eight microfinance CEOs from leading organizations has just issued a “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance.” The Microfinance CEO Working Group is a collaborative effort by the CEOs of a number of pioneering microfinance organizations, including ACCION, FINCA, Freedom from Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking. The Center for Financial Inclusion currently serves as secretariat for the Working Group.
The Road Map outlines the Working Group members’ vision for the positive evolution of the microfinance field and underscores their commitment to raising industry standards, starting with their own. Central to this vision is the Working Group’s support for three initiatives that are laying the groundwork for a more responsible, client-focused and transformative industry: the Smart Campaign, MicroFinance Transparency, and the Social Performance Task Force’s universal standards for social performance management. Read the rest of this entry »
> Posted by Charlotte Connors
The Smart Campaign Certification Task Force needs the help of all Campaign endorsers!
The comment period on the Client Protection Certification Program has been extended through the end of February 2012, as it is crucial to include the voice of endorsers in the development of this program. The full proposal has also been translated into French and Spanish in order to receive feedback from diverse stakeholder groups. With this input, the task force hopes to confirm the assumptions, refine the process, and pilot test the proposed adequate standards for client protection. Read the rest of this entry »
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