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> Posted by Jeffrey Riecke, Communications Associate, CFI
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Last month Larry Reed, Director of the Microcredit Summit Campaign, attended the International Summit of Productive Inclusion in Guayaquil, a conference focused on financial inclusion for one of the world’s most underserved populations: persons with disabilities. The event was organized by Ecuador’s Office of the Vice President, whose leadership has been seminal in advancing disability inclusion in Ecuador and around the world. I caught up with Larry to learn more about the event and the Microcredit Summit Campaign’s efforts to support persons with disabilities living in extreme poverty.
1. The event included diverse stakeholders and topics related to financial inclusion for persons with disabilities. Did anything in particular stand out to you?
The first thing that impressed me was just how big it was. Over 2,000 people attended the event, and it was also live-streamed. The 2,000 people were not only a diverse group in terms of sector, but also in how they related to persons with disabilities. And the interesting thing was that about half the people in the audience were either people with disabilities or caregivers for people with disabilities. The event included a fair where people could buy things made by people with disabilities. Even the food stands for lunches were all run by people with disabilities. It was an event that actually practiced what it preached.
The event aimed to further the work of Ecuador’s previous vice president on inclusion for people with disabilities and extend it into the financial sector. They’ve done a lot of work in Ecuador to get people with disabilities included. For example, there’s a law that says for any company over 25 employees, 4 percent of its employees must be people with disabilities. But, because there are not very many large companies in Ecuador, that law results in employment for only a small portion of the population that has disabilities. The government sees a need for self-employment and small businesses run by people with disabilities. And to advance that they need to have the financial sector providing services that help promote business start-up and growth.
> Posted by Larry Reed, Director, Microcredit Summit Campaign
Why does the Microcredit Summit Campaign wholeheartedly support the goal of “Finance for All by 2020?” Because we see it as an important step in reaching the larger goal of ending extreme poverty by 2030.
From October 9 to 11 we held the Microcredit Summit in Manila on the theme “Partnerships against Poverty.” Delegates of the Summit drafted and approved the Partnerships against Poverty Summit Declaration, listing the principles that we will follow to insure that microfinance works as a worthy partner in the movement to end extreme poverty. The opening commitment of the declaration states:
First, we commit to putting the extreme poor first. Their voices must be heard in our movement, and they must be full participants in the process of improving their lives and our services. They are not only our clients, but also our biggest resource.
To better reach and serve the poorest and most vulnerable populations, we will ensure that we include women, children, the elderly, the disabled, refugees, the LGBT communities and members of cultural and religious minorities.
Achieving “Finance for All” means that we must develop financial products and services that meet the needs of the poorest and most vulnerable populations. The organizations partnering with the Microcredit Summit Campaign have committed themselves to work with governments, mobile network operators, payment providers, and others to help design and test these products.
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process and highlights findings from “Mapping the Invisible Market.”
Excerpts from a conversation between Susy Cheston, Center for Financial Inclusion, and Larry Reed, Director of the Microcredit Summit Campaign. Susy writes:
Hi Larry,
Visa hosted a terrific webinar to launch the Financial Inclusion 2020 campaign a couple of weeks ago, and we promised to answer some of the questions we didn’t get to in our blog. Number one question: What’s the difference between microfinance and financial inclusion? I thought I would take a stab at that one, after having started in “microenterprise development” in 1991, progressed to “microcredit” in the mid-90’s, then “microfinance” in the late 90’s, and now heading up the Financial Inclusion 2020 campaign. I’ve always thought that “microfinance” is the heart and soul of “financial inclusion,” as microfinance pioneered a transformative vision of reaching poor people who had previously been excluded from financial services. Yet that original vision has now exploded with at least five “P’s”:
- New products beyond the original enterprise credit, to encompass all forms of credit, savings, insurance, and payments
- New populations, both upmarket and downmarket of the populations traditionally reached by microfinance, and including new groups microfinance has largely ignored, such as persons with disabilities and the elderly
- New platforms, using digital technologies to connect with people at more times and places
- New providers—not just traditional microfinance institutions, but a range of private and not-for-profit providers, with governments kicking in some helpful impetus through G2P transfers
- All facilitated by new policies.
The easiest thing to say is that microfinance covers a certain segment of the excluded market with targeted products, while financial inclusion looks at everyone who is excluded and the full range of services they need.
> Posted by Larry Reed, Director, Microcredit Summit Campaign
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 questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
Does the ambition of the Center for Financial Inclusion’s (CFI) Financial Inclusion 2020 initiative include reaching people with little income who live in remote places—places far from urban centers with their financial institutions and communications hubs? That’s what the website says; it states that (emphasis mine): Read the rest of this entry »
> Posted by Beth Rhyne
Everyone agrees that microfinance products should be priced responsibly. Coming up with a standard of what can be considered “responsible” is unfortunately much more difficult. As a tool to spark in-depth discussion on this topical issue, The Smart Campaign is releasing: “Responsible Pricing: The State of the Practice”, a draft discussion paper prepared by Larry Reed with assistance from MicroFinance Transparency.
The paper investigates the main approaches to defining and/or achieving responsible pricing, including RoE limitations, interest caps, comparative transparency, and promoting competition. Prices are influenced by a wide range of factors such as country context, loan size, profit levels, efficiency and outreach, all of which must be taken into account before determining whether an MFI prices responsibly. One thing is clear, however. A comparative transparency approach – providing full information about institutions in their own market context – can allow observers to apply their own judgments. While not setting a standard per se, comparative transparency can pave the way to benchmark practitioners according to relevant dimensions and spotlight those who appear out of line.
The Smart Campaign encourages discussion throughout the industry on this issue, and urges you to find or create forums for talking about it with your colleagues. We would also like to hear from you!! Share your comments now in the space below or send an email to .
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