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> 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 17th 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.
> Posted by Eric Zuehlke, Web and Communications Director, CFI
Since launching microfinance activities in 1974, BRAC has grown to become one of the world’s largest financial services providers to the poor. BRAC’s microfinance operations, which include loans and savings, serve more than 5 million clients in eight countries. In 2012, BRAC started a financial education and client protection project that aims to help clients adopt financial behaviors that facilitate their well-being. Shameran Abed, Director of the BRAC Microfinance program, recently spoke with me to discuss BRAC’s work. Prior to joining BRAC, Abed served as an editorial writer at one of Bangladesh’s main English-language daily newspapers where he wrote primarily on politics. He also serves on the Board of Directors of bKash, a mobile financial services platform in Bangladesh.
Eric: Can you talk about BRAC’s client protection work and what you learned from your project pilots in 2012 and 2013?
Shameran: We wanted to make sure that any clients coming into the BRAC microfinance program could be very well catered to. They should understand what our products are, what our terms are, what our rates are, and they should make an educated decision on whether they want to take our products. And if they do become our members then they should be treated well, treated with respect, and have access to information. I’m not saying that BRAC didn’t have all these things before two or three years ago, but we really wanted to double-down our efforts on these fronts. So that’s why we decided to do more work around client protection, client customer service, and financial education.
Eric: What do you think are the biggest risks facing microfinance clients?
Shameran: From a financial point of view, there are two or three risks that we’re particularly concerned about. One, of course, is something that’s been talked about a lot, the risk of overindebtedness. Bangladesh, although quite a mature microfinance market, is, in terms of overindebtedness, thankfully still quite low. But still I think overindebtedness is something that you always guard against because there is a lot of demand for credit and if microfinance institutions are not careful they can always have issues around overindebtedness of borrowers.
There are a lot of financial institutions nowadays that are kind of fly-by-night institutions that set up shop… Institutions that are typically unregulated. They come in, they offer products, they lure in clients, and then they disappear. I think around these issues the clients need more awareness, and these are some of the things our financial education components try to address.
> Posted by Center Staff
With so much activity in the financial inclusion sphere these days, Top Picks had plenty of great blogs to consider sharing this week. Three posts stood out to us though, covering the areas of adolescent empowerment, new biometric identification technology research, and electronic government-to-person (G2P) payments.
- Adolescent women in Uganda are improving their economic situation and are living healthier lives, thanks to BRAC Uganda’s Empowerment and Livelihood for Adolescents ELA Program. A new post on the Kiva blog shares the results from an independent impact study revealing that the ELA program is attaining significant success. The program results in a 35 percent increase in likelihood that an adolescent girl would be engaged in an income-generating activity, a 13 percent increase in condom use among sexually active participants, and an 83 percent decrease in participants’ reports of having sex unwillingly. Over 40,000 women have been reached by the program. Kiva offers loans to program participants. Read the rest of this entry »
> Posted by Henry Jackelen, Jackelen Associates
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.
We’ve always known that microcredit is not a panacea.
During the heady days of the microcredit revolution in the 1980s and 90s, I was part of a veritable village of practitioners. It was a remarkable group of driven, passionate, and often iconoclastic individuals. We lived in our own Utopia, defining and inventing the concept of social enterprise. But even then we knew that our microcredit efforts weren’t perfect.
When I first visited Bangladesh in 1983, my role was to review the Grameen and BRAC programs as part of developing a new World Bank program (which proposed what became known as the Palli Karma Shayak Foundation or PKSF, a successful Apex for MFIs). Read the rest of this entry »
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