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> Posted by Anne H. Hastings, Manager, Microfinance CEO Working Group
Global Forum Venue: The Lancaster London
As I traveled to London to attend the FI2020 Global Forum, my mind was filled with many thoughts. First was excitement that I had been invited to attend when I was still very much a microfinance practitioner. I was still in the process of adjusting after 17 years living in Haiti struggling to build an institution that would be a model of a client-centric, double bottom line microfinance institution (MFI) committed first and foremost to reaching the very poorest people in Haiti and providing them a pathway to a better life. For me, this meant providing them with a full range of financial and social services. My commitment to these clients had been solidified through my years in Haiti but also by my service on the Smart Campaign Steering Committee and the Board of the Social Performance Task Force and more recently by my role as a practitioner advisor to Truelift.
But now that I was in the plane and on my way, I had taken on a new role: Manager of the Microfinance CEO Working Group, a collaborative effort of the CEOs of eight pioneering global microfinance networks – Accion, FINCA, Freedom From Hunger, Grameen Foundation, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking – all dedicated to advocating for more responsible microfinance practices and to instituting the highest standards of performance within their own MFIs. These eight CEOs represent 250 MFIs in 70 countries, serving some 40 million families. Suddenly I had been boosted from deep concerns about the future of poverty in one tiny country of 9.5 million to a preoccupation with the future of MFIs worldwide.
The Forum was a beautiful reflection of the often chaotic financial services marketplace of today where traditional banks, telecoms, retail stores, donors, investors, policymakers, regulators, and MFIs often collide in seeking to capture new markets. In attendance were the CEOs of institutions like Citi and MasterCard, along with several former Governors of Central Banks, technology innovators like the CEO of bKash, executives of insurance companies like MetLife and Swiss Re, Managing Directors of investment companies like Wolfensohn Fund Management, experts in alternative data systems like Cignifi. There were times when I thought maybe I had actually entered the wrong conference! Who were all these people, and what did they have to do with the future of microfinance?
> Posted by Alex Counts, President and CEO, Grameen Foundation
The Financial Inclusion 2020 Global Forum was a remarkable and historic convening. I was honored to have been invited to attend and co-facilitate an “ideas to action” roundtable about one of the five parts of the Roadmap to Financial Inclusion .
Immediately after the event I reached out to Elisabeth Rhyne to understand how I could help build on the groundwork laid at the conference. She suggested I write a blog post about my experience. My immediate reaction was that commenting on such a wide-ranging and successful effort was a bit daunting. But I felt it was worth a try.
Dissecting the Term “Financial Inclusion”
I will admit that I have warmed slowly to the language of financial inclusion and financial capability. Are these just new buzzwords for time-tested concepts? (And if so, why use them?) Let’s assume they are new concepts. If so, financial inclusion feels like more of a means than an end. For me, the end is the reduction of poverty and the empowerment of low-income women – so why not focus on those? If having a poor or even middle-class person simply open their first “no frills” bank account is considered a step towards financial inclusion, regardless of how useful or helpful that bank account is, is this banner a lackluster one to rally under? Further, it is not clear to me that the provision of quality financial services through informal financial institutions (however defined) is being properly valued in the financial inclusion agenda. Finally, does making “financial capability” something of a prerequisite for people accessing formal financial services effectively let financial institutions off the hook for meeting clients where they are and designing appropriate products for them?
While my apprehension about these concepts has not entirely dissipated, I emerged from the Global Forum feeling that this campaign for full financial inclusion, at least as defined by CFI, is evolving as a powerful rallying point for a diverse coalition of providers, regulators, technologists, researchers, and activists. The notion of full inclusion is essential. I now see financial capability as a concept that defines the end state when financial education (through whatever means) is done effectively. The Forum probably had a similar impact on many others – helping them travel from a place of confusion or even wariness towards strong alignment and shared purpose.
> Posted by Center Staff
The Financial Inclusion 2020 Global Forum is a few days away! Kicking off with side sessions this Sunday the 27th on persons with disabilities and the Microfinance CEO Working Group, the landmark event for expanding global financial inclusion is almost here.
Taking place on October 28-30 in London, the event will convene approximately 300 leaders in financial inclusion, spanning sectors and industries, in a collaborative environment where they can map the action agenda for achieving financial inclusion by the year 2020. Participants include key players from the financial sector, technology providers and the corporate sector, international non-profits, and public policymakers. For the full list of attendees, click here.
The Forum agenda includes an assortment of session types, with a number of opportunities for participant engagement. In one roundtable breakout session, participants will discuss how to take the Roadmap recommendations from ideas to action, identifying priorities for implementation. Other sessions include a Forum-opening discussion on factors that put financial inclusion by 2020 within reach, a plenary on mobile money and spurring innovation, a presentation on the forthcoming CFI report Opportunities & Obstacles in Peru, and a fireside chat and Q&A with Ajay Banga and Michael Schlein, CEO’s of MasterCard and Accion. For the full agenda, click here.
Along with Banga and Schlein, Forum speakers include Cherie Blair, Founder of the Cherie Blair Foundation for Women, Aigboje Aig-Imoukhuede, CEO of Access Bank, Nick Hughes, Founder of M-PESA and M-KOPA, Duvvuri Subbarao, former Governor of the Reserve Bank of India, and Bindu Ananth, President of IMFR Trust. For the full speakers list, which includes a handful of newly confirmed speakers, click here.
> Posted by Anne Hastings, Manager, Microfinance CEO Working Group
The CEOs of eight leading global microfinance networks – Accion, FINCA, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking – made six significant commitments at the Microcredit Summit Campaign’s Partnerships Against Poverty Summit last week in Manila. These eight CEOs make up the Microfinance CEO Working Group. Together they represent more than 250 retail microfinance institutions in 70 countries globally and provide financial and often non-financial services to more than 40 million families.
Here are the commitments:
1. Client Protection: Encourage all affiliates to progress toward Smart Campaign certification and be on a pathway toward certification by the end of 2014.
2. Pricing Transparency: Motivate our affiliates to commit to pricing transparency and integrity by agreeing to publish their pricing data using standard methodologies, such as those developed by MicroFinance Transparency, in order to allow investors and clients to make informed decisions.
3. Social Performance: Promote the Social Performance Task Force’s Universal Standards for Social Performance Management among our affiliates and commit to supporting their compliance.
> Posted by Center Staff
After months of planning, the Financial Inclusion 2020 Global Forum, October 28-30 in London, is coming into view. We’ve shared a few rounds of Forum updates here on the blog over the past weeks (see here and here), and we’re happy to report that more exciting new speakers have been confirmed, and more side sessions have cropped up. Here are the new speakers:
- Luis Gallegos, Permanent Representative of Ecuador to the U.N. Office at Geneva
- Bill Sheedy, Global Executive, Corporate Strategy, M&A, Government Relations and Europe, Visa, Inc.
- Edward Effah, Managing Director, Fidelity Bank
- Alexia Latortue, Assistant Deputy Secretary for International Development Policy, U.S. Treasury
- Carlos Lopez Moctezuma, Global Director for Financial Inclusion, BBVA
- Jean-Claude Masangu, Former Governor, Banque Centrale du Congo
- Bindu Ananth, President, IMFR Trust
- Nachiket Mor, Chair, Reserve Bank of India Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households
- Tony Goland, Director, McKinsey & Company
- Isaac Awuondo, Group Managing Director, CBA
- Gino Picasso, CEO, GloboKasNet
Complimenting the core agenda, there are a number of side sessions convening before and after the Forum. As we’ve mentioned, there will be two special side meetings on financial inclusion for persons with disabilities held before the Forum, the evening of October 27 and the morning of October 28. The event of the 28th, which is open to Forum participants and the public, is a panel of international experts that includes Luis Gallegos.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
Global loan portfolio growth in developing countries slowed in 2011; total number of clients in developing countries shrank slightly in 2011 but increased in Africa and Latin America; and various initiatives aimed at ensuring socially responsible practices have received commitments on industry-wide standards and frameworks over the past few years. These are some of the takeaways from this year’s Microfinance Barometer, an annual report produced by Convergences 2015 that offers a global overview of microfinance activity. The report series shares recent industry figures and trends, and highlights best practices across stakeholder groups.
This year’s report explores microfinance activity in developing and developed countries, and examines mobile money, capacity building, responsible investing, client protection, and social performance management, among other pertinent topics. The report also features an article from Deutsche Bank’s Asad Mahmood on microfinance and ethics, a feature on Accion Texas Inc., which manages the largest microloan portfolio in the United States, and a call to endorse the Global Appeal for Responsible Microfinance. Other key findings include:
- Global loan portfolio in developing countries totaled $US 78 billion in 2011, with portfolio growth slowing to 15 percent compared to 25 percent in 2009
- Activity in developing countries remained concentrated in 2011, as the leading 100 institutions represented 80 percent of the total lending portfolio and 75 percent of borrowers
- Client outreach in developing countries totaled 94 million in 2011, reflecting a 3 percent decrease since 2009
- Still affected by the Andhra Pradesh crisis and subsequent shutdowns of activity, in 2011 client outreach decreased by 10 percent in South Asia and by 20 percent in India
- Client outreach increased by 15 percent in both Africa and Latin America in 2011
- Local funding continues to drive the developing-country sector through increasing deposits and borrowings
- In 2011, 54 percent of institutions in developing countries provided both credit and savings, while 26 percent offered insurance products, and 54 percent offered non-financial services Read the rest of this entry »
> Posted by Meghan Greene, Manager, Microfinance CEO Working Group
Last June, at the annual Social Performance Task Force meeting in Jordan, the members of the Microfinance CEO Working Group and their lead social performance directors announced their plan to conduct the first large-scale analysis of the Universal Standards for Social Performance Management (USSPM) in practice, a process we called “beta testing.” You may recall our blog post about the plan last summer.
After a year of work, we’re ready to share our results, as detailed in the new working paper, “Insights from ‘Beta Testing’ the Universal Standards for Social Performance Management.”
As many of you know, the Universal Standards for Social Performance Management are a set of 99 “Essential Practices,” organized into six sections:
- Section 1: Define and Monitor Social Goals
- Section 2: Ensure Board, Management, and Employee Commitment to Social Goals
- Section 3: Treat Clients Responsibly (Essentially tracking the Smart Campaign)
- Section 4: Design Products, Services, Delivery Models, and Channels that Meet Clients’ Needs and Preferences
- Section 5: Treat Employees Responsibly
- Section 6: Balance Financial and Social Performance
The Universal Standards are considered applicable to all double bottom line microfinance institutions, and meeting the Standards signifies that an institution has strong social performance management practices. Clearly, implementing all 99 Essential Practices requires careful thought, planning, and execution, but we wanted to learn more about the process of translating the Standards into action. We partnered with more than 20 MFIs to work to answer a number of questions, including: Read the rest of this entry »
> Posted by Mary Ellen Iskenderian and Rupert Scofield, Co-Chairs of the Microfinance CEO Working Group
As co-chairs of the Microfinance CEO Working Group, we are pleased to share with you a joint statement from the Working Group in support of the recently announced Smart Campaign Client Protection Certification Program. Certification will offer public recognition for institutions that meet adequate standards of care in appropriately protecting microfinance clients, as verified by an independent evaluation. It marks a clear step forward in ensuring the microfinance industry puts the treatment of its clients first.
Since we began meeting in early 2011, many of the Working Group’s discussions have focused on the fundamental question of what the microfinance industry requires to flourish in the future. We believe that client protection is central to the answer. It is common sense – and good business practice – that a fair and respectful relationship with clients is required to develop trust, reduce risk, and serve them appropriately. As leaders of FINCA and Women’s World Banking, we are especially concerned with the fair treatment of women clients, the traditional backbone of the microfinance industry, who are often more vulnerable to exploitation.
> Posted by Mary Jo Kochendorfer, Manager, Social Performance Management Center, Grameen Foundation
Mary Jo Kochendorfer, on right, at AFMIN Annual Conference in Uganda.
This post by Mary Jo Kochendorfer was originally published on the Progress out of Poverty blog. Progress out of Poverty is an initiative of the Grameen Foundation that assists microfinance institutions and other organizations measure and track the poverty levels of groups and individuals, and in turn better manage their programs.
This past summer, the microfinance industry recently celebrated a milestone when the Social Performance Task Force (SPTF) released the Universal Standards of Social Performance Management (USSPM) after a worldwide consensus-building effort. After much work and collaboration, the microfinance industry, by way of the SPTF, came together and put forth standards which outline the best practices for monitoring and managing social performance. The SPTF defines social performance as “the effective translation of an institution’s social mission into practice in line with accepted social values.” Following the SPTF annual meeting back in June, regional microfinance networks have also prioritized social performance in their agendas.
Last month, the Africa Microfinance Network (AFMIN) hosted its annual conference in Kampala, Uganda to discuss “the State-of-the-Practice of Social Performance Management in Africa.” While there, I participated in a panel on Poverty Measurement Tools along with colleagues from Caurie-Microfinance, VisionFund International and CGAP.
> Posted by Meghan Greene, Manager, CFI
Today, in front of the 3,000 attendees of the Convergences 2015 World Forum in Paris, microfinance leaders unveiled the “Global Appeal for Responsible Microfinance,” a landmark document that urges all microfinance stakeholders to take concerted action to ensure a strong and principled microfinance industry.
Over the past several years, the microfinance industry has made significant strides in advancing responsible practices that protect and appropriately serve clients. However, a more united, deliberate effort needs to be taken by stakeholders at all levels – including microfinance professionals, investors, and policymakers – to ensure the continued success of the industry. To that end, the Global Appeal asks signatories to outline their plans for improving their own practices – making measurable, time-bound commitments on how they will contribute to a responsible sector. Signatories are called to announce their plans by the end of December 2013.
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