You are currently browsing the tag archive for the ‘Haiti’ tag.

> Posted by Hannah Sherman and Jeffrey Riecke, Project Associate and Communications Specialist, CFI

fi2020_antilogo1In terms of financial inclusion, Haiti has much to be excited about. That might come as a surprise as it is considered to have among the worst environments for financial inclusion efforts, at least according to the Global Microscope. In the 2015 Microscope rankings, Haiti was at the very bottom of the list. Though this 2015 score reflected great progress compared to 2014. In fact, Haiti’s score improved year-on-year more than nearly any other country. This was due in large part to the development of a national financial inclusion strategy. However, Haiti’s path forward, including the implementation of this national strategy, is less than straightforward.

Haiti is still very poor. More than three-quarters of the population lives on less than $2 a day, and about two-thirds are unemployed. According to the Global Findex, in 2014 only 19 percent of Haitians aged 15 or above had access to a bank account, compared with 51 percent across all of Latin America and the Caribbean. Nine percent of the adult population had formal savings in 2014 (compared with 14 percent regionally), and 5 percent were formal borrowers (compared with 11 percent in the region). Small and medium-sized businesses and microenterprises make up the majority of the country’s jobs, and their access to finance is extremely limited.

But in recent years, Haiti has achieved impressive advances in its policy, regulation, and enabling infrastructure. About a year ago the Banque de la République d’Haïti (BRH, the central bank) passed the national financial inclusion strategy, which was supported by the World Bank and other international organizations. Among the strategy’s priority areas are financial education and consumer protection. In July of last year, USAID and Haiti’s Office of Economic Growth and Agricultural Development announced plans to work towards expanding financial access in support of this strategy. Their effort focuses on harnessing partnerships across stakeholder types to pilot and develop interventions.

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> Posted by Bobbi Gray, Research Director, Freedom from Hunger

Known as the “hardest interview you’ll have with a client,” the interview you have with a client who is leaving is also, however, one of the most important interviews for a microfinance institution – and likely any organization or company concerned about the costs of client acquisition and retention.

The latest debates on the success of microfinance have encouraged Freedom from Hunger to dig deeper into our repertoire of “impact stories” and critically review the reasons why microfinance clients whose lives were not improving were dropping out, particularly since critics often suggest that microfinance tends to result in negative outcomes among participants.

Since 2007, Freedom from Hunger has been developing and testing an “impact story” methodology to discover client experiences that are representative of the entire clientele of an MFI or even multiple institutions, ranging from success to failure and whatever is happening in between.

Thus far, Freedom from Hunger has collected over 700 client impact stories from 25 local partners located in ten countries throughout Latin America, South Asia, and sub-Saharan Africa. Six countries were visited a second time after an interval of three or four years to re-interview the impact story participants. This is a significant effort to take qualitative interviews and conduct them with a small random selection of clients and use the information for fairly meticulous research purposes.

With these impact stories, we wanted to answer some basic questions. Why are some clients successful and why are some not? Why do some clients drop out? Are all the reasons for drop-out negative and does the drop-out result in a client being worse off than if they stayed a client? Can we tell if microfinance is to blame for their negative status? What can we do to improve?

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> Posted by Larry Reed, Director, the Microcredit Summit Campaign, and Jesse Marsden, Research and Operations Manager, the Microcredit Summit Campaign

In collaboration with the CFI’s process to develop the Financial Inclusion 2020 Progress Report, the Microcredit Summit Campaign recently conducted interviews with microfinance leaders* around the world committed to reaching the most excluded. In this post, we share some of the insights from these conversations about how to ensure that the most invisible clients are financially included, directly drawn from the experiences of those who are doing it.

To set the stage, Luis Fernando Sanabria, General Manager of Fundación Paraguaya, made this central point: “Our clients need to be the protagonists of their own development stories. Our products should be the tools they use to meet their needs and empower their aspirations.” With that reminder of the purpose of financial inclusion, we begin the discussion by asking who are the most excluded.

In each country, people living in extreme poverty (below US$1.25 a day) make up the largest segment of those excluded from the financial system. We spoke with leaders from organizations that make intentional efforts to reach this large excluded market: Fundación Paraguaya; Pro Mujer; Fonkoze; Plan Paraguay; Equitas; Grama Vidiyal; and TMSS. These organizations not only address poverty, but also a host of other dimensions that lead to exclusion, including literacy, race, gender, physical disabilities, and age. Less frequently-discussed reasons for exclusion include sexual orientation, language barriers (especially among indigenous populations), and mental or emotional health issues. In India and Bangladesh, for example, those interviewed noted that the lack of personal identification often drove exclusion, especially among women, persons with disabilities, and the socially excluded, such as transgender individuals.

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> Posted by Anne H. Hastings, Manager, Microfinance CEO Working Group

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A few weeks ago, I attended the Global Forum on Remittances and Development sponsored by the International Fund for Agricultural Development (IFAD), the European Commission, and the World Bank. Much of the meeting was focused on two critically important questions:

  1. Are or could remittances be a major driver of financial inclusion?
  2. Is it possible (and desirable) for a greater percentage of remittances to be put to productive use as opposed to consumption once the funds arrive in the hands of the recipient?

First, a few facts to underscore why these discussions are so important:

  • In 2014 there were at least 240 million international migrants. That is a BIG number – bigger than the populations of all the countries of the world except China, India, the U.S., and Indonesia.
  • This year these migrants will send back to their countries of origin more than 440 billion U.S. dollars! This amount is more than three times the amount of foreign aid. It is estimated that $200 billion of this amount goes directly to rural areas in developing countries where the most poverty is.
  • Remittances can constitute up to 40 percent of GDP or more in some countries, often the most fragile, most conflict-ridden countries in the world.
  • Some 750 million people are estimated to receive remittances, the vast majority in developing countries. Forty percent live in rural areas.
  • The global average cost of sending this money home is 8.6 percent of the amount sent, so the potential customer benefits to cost reduction are very important. (In July 2009 the G20 set a goal of reducing the average cost from 10 percent to five percent in five years. Despite failing to achieve the objective, it recently established a new goal of three percent by 2030!)

Are remittances a driver for financial inclusion? Could they be? In a moment of frustration, Fernando Jimenez-Ontiveros, the Acting General Manager of the Multilateral Investment Fund said at the conference, “We’ve been working on these issues for some 15 years, and estimates are that 60 percent of senders and recipients still don’t even have an account! We’ve got to do better!”

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> Posted by Elisabeth Rhyne, Managing Director, CFI

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I recently attended the annual meeting of the Microfinance Network (MFN), which was hosted by the Alexandria Business Association in Alexandria, Egypt. MFN is a global network of some of the largest and leading microfinance institutions, and its annual meeting has long been known for candid and in-depth sharing of experience among the leaders of these institutions, as this post demonstrates.

Ask a microfinance CEO what’s making his or her life hard these days, and the answer is likely to be politics.

That’s hardly surprising when the speaker is Motaz Tabaa, CEO of the Alexandria Business Association (ABA), one of the largest microfinance institutions (MFIs) in Egypt. On January 28, 2011, when the occupation of Tahrir Square in Cairo held the world’s attention and led to the resignation of then-President Mubarak, it became impossible for ABA to operate. But before the week was over, staff were back on the streets, collecting and disbursing loans, and sleeping at the office to guard the cash that couldn’t be deposited in banks, which remained still closed.

Nearly every MFI in the group had a similar encounter with crisis – consider the political violence (and/or natural disaster) that has touched Uganda, Nigeria, Armenia, Mexico, Haiti, and Bangladesh in recent years. Today, Al Majmoua in Lebanon and Tamweelcom in Jordan are overwhelmed with the attempt to serve the Syrian refugees that have crossed their borders. The CEOs who have experienced such upheaval agreed about the role of MFIs in responding quickly to help clients obtain cash, keep their businesses open, and then rebuild. Given how prevalent political and natural crises are, organizations have developed protocols for responding quickly. Even while we met, Enrique Majos of Compartamos received news of a tornado in Mexico, and sent the Compartamos natural disaster team into action.

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> Posted by Elisabeth Rhyne, Managing Director, CFI

The following post was originally published on the MasterCard Center for Inclusive Growth blog.

Reaching full financial inclusion by 2020 will require supportive policies in every country around the globe. The Economist Intelligence Unit’s “Global Microscope on Financial Inclusion, 2014” assesses the policy environment for financial inclusion in 55 countries. The Microscope examines 12 policy dimensions essential for creating an inclusion-friendly regulatory and institutional framework. The rigorous model incorporates input from hundreds of policy makers and participants in the financial sector and a review of existing policies and implementation. The resulting rankings represent the best readily available source for judging the state of financial inclusion policy around the world.

What’s surprising about the 2014 Microscope results is their wide range. Out of a possible 100 points, the top scorer (Peru) received 87 while the lowest (Haiti) earned only 16. If full inclusion requires good policies, it is disappointing to learn that the median score across all countries was a mediocre 46.

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> Posted by Steven Werlin, Communications and Learning Officer, Chemen Lavi Miyò Program, Fonkoze

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A new initiative of Haiti’s Secretary of State for the Integration of Persons with Disabilities (PwDs) promises to push financial inclusion for some of the country’s most vulnerable citizens. Prior to Haiti’s catastrophic earthquake in 2010, roughly 800,000 Haitians had disabilities. An estimated 300,000 more were injured in the earthquake. The Secretary’s office is facilitating a partnership between Fonkoze, Haiti’s largest MFI, and Texas Christian University (TCU), with additional support from the Digicel Foundation, to carry out a program that offers financial and livelihood empowerment services for PwDs.

The pilot for the project will test a combination of Fonkoze’s Chemen Lavi Miyò (CLM) program, which translates as the pathway to a better life, and TCU professor Dawn Elliott’s More than Budgets (MTB) program. CLM is a comprehensive graduation program for the ultra poor, based on the approach developed by BRAC. It is a tailored, sequenced program that provides participants with cash installments to build businesses, productive assets (such as goats, chickens, and merchandise to sell), a savings account at Fonkoze, and regular training and confidence-building support in areas of enterprise management, health and nutrition, and life skills. Most importantly, CLM offers weekly one-on-one meetings with trained case managers. It targets the poorest families – those too poor to use traditional microfinance services. Many participants graduate from the 18 month program and go on to join a group credit program to further support their business efforts. MTB, employing a combination of education and incentives, is a personal financial training program that was developed to help poor, unbanked Texans build up savings, gain access to financial resources, and reduce financial vulnerabilities. The program has been applied in homeless shelters and with people recently released from prison.

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> Posted by Sonja Kelly, Fellow, CFI

If there’s one thing we’ve learned in taking a close look at financial inclusion efforts around the world, it’s that context matters. That’s why we are excited to be part of the team releasing the Global Microscope 2014: The Enabling Environment for Financial Inclusion. The Microscope is carried out by the Economist Intelligence Unit (EIU) with sponsorship and guidance from the Multilateral Investment Fund of the IDB, CAF, and Citi. The Microscope evaluates the environment for financial inclusion in 55 different countries and provides powerful signals to policymakers in each country on their progress. Which countries topped the list and which have the most room to grow?

We’ll tell you, but first, it’s important to know what the results mean. Each country inspected in the Microscope is assessed on 12 indicators that consider best practices in national regulatory environments and institutional support for providers serving clients at the base of the pyramid. Indicators range from government support for financial inclusion, to supervision of microfinance and other financial products, the status of credit reporting, regulations governing mobile banking and, last but not least, consumer protection.

This year is an important one in the publication’s eight year history because the focus shifted from microfinance to the environment for financial inclusion, a process that involved adapting the framework to account for today’s diversity of providers and products. What we were surprised by, however, was just how little a difference this made in the rankings. We charted last year’s results on the microfinance environment against this year’s results on the financial inclusion environment and we found a very high correlation between the two (see figure below). Environments that are enabling for microfinance are often environments that are enabling for financial inclusion. Six countries from last year’s top 10 were in this year’s top ten. Read the rest of this entry »

> Posted by Jamie M. Zimmerman, Senior Associate, Bankable Frontier Associates 

There is abundant enthusiasm for the promise of shifting social benefit payments from “cash transfers” to “e-payments for the poor.” E-payments are heralded as having great potential for advancing the effectiveness of social transfers via increased efficiency, more transparency, reduced leakage, and faster payments to recipients than antiquated cash-based options. Perhaps most significantly, electronic social transfers to the poor offer a gateway to financial inclusion for the poor. Indeed, as cash transfer social protection (G2P) and aid (D2P) programs proliferate globally, digitizing those transfers may offer the missing link to the bottom billion, the world’s poorest, most vulnerable, and most excluded populations.

However, while theory and some evidence strongly suggest that e-payments are a high leverage tool to reach the poor, new research recently released by CGAP, on behalf of the Better Than Cash Alliance, on the experiences of electronic G2P programs in low-infrastructure and low-income settings reveals that e-payments can also pose a series of risks to recipients. These risks include: loss due to agent or staff misconduct; lack of transparency and disclosure of terms and fees; lack of adequate or effective avenues for recourse and redress, and; data privacy and protection challenges.

For example, a core component of the new research – detailed in case studies written on programs in Haiti, Kenya, the Philippines, and Uganda and summarized in the CGAP Focus Note Electronic G2P Payments: Evidence from Four Lower-Income Countries – explored the recipient experience in interacting with electronic payments platforms to receive their cash transfers. It is important to keep in mind that the vast majority of recipients had no prior experience with digital financial services, and, in some cases, formal financial services at all. Here are some common quotes from recipient focus groups and interviews:
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> Posted by Deborah Drake and Andrea Horak, Vice President/Program Manager and Program Coordinator, Investing in Inclusive Finance, CFI

The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.

With good governance a top priority for investors, donors, and regulators, it’s time to ask exactly what good governance looks like. A recent debate about the Anglo-American (shareholder) versus the European (stakeholder) models of governance set out to answer that question. The Governance Working Group (GWG), a 25-member group of microfinance professionals focused on governance, hosted by CFI, sponsored a webinar to discuss the characteristics of the two models and their implications for microfinance institutions, equity funds, and clients.

Lauren Burnhill of One Planet Ventures started off the debate by describing the model of single tier governance commonly used in the U.K. and U.S. In this model, each company has a single board that includes both executive directors, who are employed by the company or have significant ties to its corporate management, and non-executive directors who have no direct relationship with the company or its management. The company CEO may serve as chair of the corporate board, in which case a great deal of power is invested in that board position. The overarching duty of the board is to protect the interests of shareholders. In this model, particular importance is given to the protection of minority shareholder rights.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.