The day after the closing of the Microcredit Summit in Merida, Mexico, conference participants were also invited to join in a day-long discussion about integrating health with microfinance. Half of the day was spent discussing a set of health indicators that are currently being tested in India, Peru, and the Philippines as part of Freedom from Hunger and the Microcredit Summit Campaign’s Health and Microfinance Alliance. Alliance data from several participating institutions was presented, with the goal of the discussion to identify the most appropriate combination of indicators to track changes in client well-being over time and identify aspects of health that can be effectively addressed by financial service providers (FSPs).

The goal of these pilots is to provide the financial services industry with a set of standardized, comparable, relevant, and reliable health indicators that they can add to the existing poverty measurements they are using to assess the impacts of their services for clients. To be most effective, these indicators must also resonate for health sector actors to promote real, active collaboration and appreciation for our respective competencies in improving health outcomes.

During the meeting, we discussed dimensions that may be missing from the short set of indicators that are currently being tested. One notable omission was identified: domestic violence.

The same week as the meeting a media frenzy about domestic violence erupted in the United States. Controversy continues to swirl around the issue, in professional sports as well as in other arenas.

Women are coming forward and sharing emotional, and often harrowing, stories of domestic violence and explaining why they stayed in these abusive relationships, even as bystanders question their sanity. The many tragic cases that have been brought to light have helped raise public awareness about domestic violence.

Women’s “empowerment” is often closely related to some health indicators and to poverty levels. As such, domestic violence, and particularly the mental health consequences of domestic violence, fits appropriately as part of a comprehensive set of health and client well-being metrics.

Within the microfinance sector, there have long been discussions about the inclusion of indicators on domestic violence that range from women’s beliefs that domestic violence is acceptable in some cases to whether she has ever been hit by a spouse or family member.

The reason for FSPs to include domestic violence indicators rests on two possible outcomes: 1) When microfinance is introduced into a household, the woman may gain financial empowerment. That empowerment could lead to more domestic violence if it proves to be a disruptive innovation that challenges the cultural norms and behaviors. 2) Microfinance might decrease violence against women, particularly in cases where violence is triggered by financial disagreements. While these two possibilities are debated, domestic violence is often an afterthought in client outcome assessments.

The meetings in Merida were a stark reminder that domestic violence is an ongoing challenge that can and should be directly and indirectly addressed by microfinance institutions.

When Freedom from Hunger was designing its “Learning Conversations” (dialogue-based, problem-solving discussions designed for illiterate women served by self-help promoting institutions) in India, one of the stories that came from a self-help group was a commitment made by the women in one community. Together, they decided that if they heard violence occurring in any one of their households, all the women would leave their huts and bang pots and pans loudly so that the abuser would be aware that others found his abuse to be deplorable. While they might not be able to step in and stop the violence directly, they could do so indirectly by bringing the abuse to light, and acknowledging it loudly.

An article posted by a CNN anchor, Christi Paul, tried to explain why women stay in abusive relationships, why men hit, and how others can help. She wrote, “Unless you’ve walked in her shoes, don’t judge her; help her. Offer her a smile. Give her encouragement. Listen in silence. Let her know you’re there when she’s ready. She doesn’t need your judgment. She needs your support. She doesn’t need your pity. She needs your prayers. She doesn’t need your ignorance. She just needs a safe place [in which] to fall.”

Women’s self-help groups often play this role, by offering a safe place in which to fall.

But what was brought to light in Mexico is that we have to measure this because as we know, what we measure, matters. If it matters, we should measure it. Domestic violence is not just an empowerment indicator, but also a mental health indicator. It would likely give us a more complete indication of a woman’s ability to make use of financial and health services for her ultimate benefit and that of her children.

Ms. Paul concludes, “Like her, you have the power, too, to say ‘this isn’t how the story is going to end.’ Ask the questions that matter. Then don’t be afraid to stand up and find some answers.”

We may not see a direct role now, but indirectly we can start by fully acknowledging, as we do with health crises, that domestic violence is a reality for women. We can then begin making stronger strides to include this dimension in our client well-being assessments and programs. At a minimum, we should stand up to find some answers. This seems to be an important beginning to do just that.

Have you read?

Savings Groups, Mobile Phones, and a New Solution for Rural Women

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In most places around the world the subject of pensions is a sore one. In 2012, for example, in looking at arguably the crème of private employers, Fortune 100 companies, only 30 offered their U.S. new hires pension plans, down from 47 in 2008. For public sector employees in the U.S. in the same year, the pension plans of 26 states were less than 70 percent funded. In lower and middle-income countries where financial security is weaker, the situation is even worse. In India, the pension system only covers roughly 12 percent of the population.

The severity of these figures is amplified when we look at demographic trends. Between 2010 and 2020, the population of older adults will almost double in middle-income countries. Worldwide over the decade, it will increase by 40 percent. By 2050, there will be roughly 1.5 billion older adults, 315 million of whom will be in India.

Aging presents unique challenges and opportunities to the financial inclusion industry. During a session at the Microcredit Summit in Merida, Mexico a few weeks ago, five panelists met to discuss this topic. John Hatch (FINCA), Pilar Contreras (HelpAge), Caroline van Dullemen (World Granny), Reynold Walter (REDCAMIF), and myself all acknowledged the demographic reality—as populations age, if countries have not helped their societies and economies to prepare, they will face a global train wreck in the form of older people without adequate means of support and support systems that are overwhelmed. Financial inclusion can and should play a unique role in helping both individuals and whole countries mitigate risks.

Aging is an issue for everyone. We watch those in their older years – hoping to one day reach that life stage if we aren’t there already – as they manage their income and expenses, paying for health care, continued living expenses, and sometimes even supporting their families. As Hatch demonstrates in his own life, “retirement” doesn’t necessarily mean that older adults stop working, though even in the case where incomes continue, there are still barriers to their accessing financial services. Largely, financial services available to help people either in the aging process or in their older years are either inadequate or non-existent.

Globally, four out of five older adults lack any form of pension, especially if they are at the base of the pyramid. In most lower-income countries, public pension systems are inadequate to secure minimum financial security. Hatch, who has been in the financial inclusion space since its microfinance beginnings, lamented that he has seen only a handful of programs or initiatives that are specifically geared toward the needs of older adults.

In the case of India, there’s a clear opportunity in MFIs offering micropensions. In 2009, India’s National Pension System extended beyond public employees to also encompass private workers. The majority of companies in the private sector with at least 20 staff were then required by law to take part in an employee-contribution/employer-matching savings and investment plan. However, according to statistics from the Indian Ministry of Labor and Employment, as of 2011 only 26 million people worked in the organized public and private sectors in India. The 433 million Indians then working at small organizations or through informal means weren’t covered by the law.

Albeit few, there are micropension success stories. Walter celebrated the successful conclusion of a five-year pilot micropension program through REDCAMIF. Implemented across Latin America through a network of microfinance institutions, the pension program proved that there is a demand, a use, and feasibility for micropensions in Latin America. With the successful conclusion of this program, Walter is launching a formal program, building on the success he has found over the past five years. Most microfinance institutions and organizations around the world, van Dullemen noted, must undergo a paradigm shift, adopting views of older adults as wise, experienced, and still productive members of their families and communities.

Micropensions are critical to addressing the issue of income security. In most parts of the world, older adults are not likely to have the resources to stop working. The income streams that older adults rely on often come from a variety of places, including work, assets already owned, and family. These sources are often informal.

The varied income strategies that older adults employ have implications for their financial services needs, especially since their expenses may be unpredictable. Along with pensions, savings and credit may be important for making sure that there are not significant income gaps. Insurance is critical to mitigating financial shocks, especially those related to health.

I was encouraged to remember that as early as 60 years ago, the world was convinced that customers at the base of the pyramid were unworthy of or unable to use financial services. The very fact that over 900 people from 75 countries were gathered in Merida, Mexico to discuss microfinance is evidence that we have overcome this myth. Perhaps the Microcredit Summit can put its formidable awareness-raising strengths to work proving that older adults are also deserving of financial services and capable of using them.

Have you read?

Microfinance as a Tool for Active Aging

Aging and Financial Services: With and Without Employment

The Microcredit Summits’ Commitment to Improving Lives

> Posted by Center Staff

This edition of top picks features posts highlighting discussions at the 17th Microcredit Summit, how the Ebola crisis is affecting microfinance in West Africa, and new statistics on the continued growth of the mobile money industry worldwide.

The 17^th Microcredit Summit, this year’s iteration of the Microcredit Summit Campaign’s annual conference, is underway this week in Merida, Mexico. For those of us not in attendance, the Campaign is live streaming the sessions online. NextBillion is also sharing the experience through blog posts, including one published yesterday providing a report-back on day one of the event. The post offers insights from the day, including notable quotes from keynote speeches and panel presentations, and themes that emerged across sessions.

A recent post on the Kiva blog details how the devastating Ebola crisis is affecting Kiva field partners working in the West Africa region. Kiva operates in two of the countries hardest hit by the crisis, Liberia and Sierra Leone, where national state of emergencies have been declared and many banks, businesses, and schools have been closed. Kiva partners deciding whether to lessen loan repayment structures or grant forgiveness is being held on a case-by-case basis. Risk of loan delinquency or default is with the Kiva lender, not field partners, so institutions and their clients are not vulnerable. Some Kiva partners including BRAC Sierra Leone and BRAC Liberia have suspended operations for at least a month.

Sharing an update on the mobile money landscape since February’s State of the Industry Report, a new post on the GSMA MMU blog gives a run-down of new service deployments, market competition, and the impact of mobile money on financial inclusion. Eighty-eight markets now have at least one live mobile money service targeting unbanked communities. Since February, services have deployed in new country markets including Romania, Sudan, and Panama. Up from 27 markets last December, there are now 33 markets globally that have three or more live mobile money services.

Image credit: Ianf

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I am a sometime skeptic about the proliferation of microfinance conferences, but the upcoming Microcredit Summit in Merida, Mexico seems particularly important and timely. Personally, I am very excited about it. (In the spirit of full disclosure, I should add that I will be a speaker, and of course piqued vanity can certainly lead to bias, but I don’t suspect this is the case here.)

After reading the recently-released 2014 Microfinance Banana Skins report, which I think is excellent, I couldn’t help but come away with the feeling that the practitioners, regulators, and investors who listed the 19 risks confronting microfinance, leading with overindebtedness, missed a most important risk. Not that the risks like poor governance, overindebtedness, and staff competence that are enumerated in the report are not incredibly important; they certainly are. But I would argue that a failure of vision for a better world is the mother of all risks and that without vision, stagnation and decline inevitably set in.

I believe that financial services that MFIs provide are instrumental in helping the poor have better lives, but I also believe that they should never be seen as an end in to themselves. The Microcredit Summit Campaign shares this client-centric outlook. While sustainability and profitability are certainly important measures of an MFI’s success, it is of precious little importance if the poor client, “the end user” does not achieve a better quality of life – or at least have a chance for such.

Of course I am well aware that the advent of randomized control trials (RCTs) as discussed in the new Banana Skins eviscerated some of the triumphalist claims of the 1990’s and 2000’s of microfinance as the sine qua non of poverty alleviation tools. The extravagant claims of some in the industry do us no favors when they boast of “lifting millions of people out of poverty,” or putting “poverty in a museum,” as Muhammad Yunus once proclaimed. But as one of the RCT doyennes Esther Duflo (of the Poverty Action Lab at MIT) says, this does not mean that microfinance is not making an important difference in the lives of the poor.

Indeed, if poverty is made more bearable, if children of our clients have slightly better prospects than their parents, that is an achievement to shout about from the rooftops. Incremental change, not utopian change, is still change and is far better than sitting on our hands doing nothing. We live in an imperfect world and very few reforms in any realm lead to conclusive slam dunks – whether it’s in education, health delivery, or poverty reduction.

But back to why I am enthusiastic about the upcoming Microcredit Summit. To put it simply, more than any other microfinance conference I know of it keeps the idealism of the industry’s founding mothers and fathers alive. It is not afraid of having a vision for a better world and holding microfinance practitioners accountable as change agents.

Indeed, at the 2013 Summit in Manila the Campaign asked for Campaign Commitments from attendees to improve the lives of the poor in some concrete, tangible way. In line with the mission of the Campaign and the Summits, commitments declared the ways that the attending institutions and organizations would help 100 million families lift themselves out of extreme poverty and thereby make a major step forward in ending poverty by 2030.

For our part, the Center for Financial Inclusion committed to publishing a series of disability inclusion tools and trainings, developed with our strategic partners Fundación Paraguaya and Handicap International, for use by MFIs around the world. We also committed to customizing the Center’s Roadmap for Disability Inclusion for the Indian MFI market, implementing it at three MFI partners, and then disseminating these findings around India.

We have taken this commitment seriously and are doing our best to fulfill it by the end of the calendar year.

Other commitments included:

• Microfinance Council of the Philippines: By 2014, conduct and capacitate the Council’s members on social audit and client protection tools including standards on social performance management.
• BRAC Tanzania: By the end of 2014, double the number of both clubs and participants in the Empowerment and Livelihood for Adolescents program from 180 clubs reaching 7,600 girls to 360 clubs reaching 14,800 girls.
• The Arab Gulf Program for Development (AGFUND): Open an AGFUND bank in the Sudan by the end of 2013, as well as two new AGFUND banks in Palestine and the Philippines by the end of 2014.

If the Summits’ rhetoric sometimes seems a little grandiose, I personally quibble with the language of “lifting themselves out of extreme poverty,” as you might guess. Though to me this is a venial not mortal sin. What would a mortal sin be? Being so weighed down by cynicism that a dream for a better world becomes a subject of quiet irony or outright derision.

The Microcredit Summit Campaign reminds all of us that the success of our MFIs is ultimately measured by whether they extend responsible financial services to more of the unbanked so that they have a chance to improve their lives. It is the wellbeing of the client that must always come first. If we lose sight of that, we might as well go out of business.

Click here to learn more about the plenary session “Reaching the Excluded” and other topics presented at the Summit.

Have you read?

To End Extreme Poverty? Focus on Integrated Services

Microfinance CEOs Make Six Major Commitments at 2013 Partnerships Against Poverty Summit

The Financial Inclusion 2020 Global Forum: A Letter to Microfinance Institutions