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> Posted by the Steering Committee of Truelift
Institutions built upon a promise of poverty alleviation must be motivated and supported to make good on that promise. This continues to be the goal and promise of Truelift, even as we depend more than ever on volunteer leadership and support for Truelift’s journey toward greater transparency and accountability in pro-poor development. Before looking to the future, let’s review where we’ve been.
Among the diverse, and mostly complementary, objectives sought by financial inclusion and social enterprise efforts, poverty alleviation has been by far the most important and the most widely adopted objective, whether in the minds of practitioners, supporters, or the general public. Yet this objective challenges our collective ability to be clear about our intended destination and to show that we are on the right path toward it. It is even more difficult to show how far along this path we have come and how far we have yet to go. How do we motivate and support transparency and accountability for practitioners who claim to pursue poverty alleviation and for those who support them?
> Posted by Hema Bansal, India Director, the Smart Campaign
As a child growing up in India, I was always intrigued by stories from Myanmar, but disturbed by conflicts that it had witnessed. Not knowing much about the country, as an adult I still had an innate desire to visit. On May 7th and 8th, I attended the Responsible Finance Seminar, organized by Entrepreneurs du Monde (EDM), held in Myanmar’s city of Yangon. I was completely awed by the mystical peace of the city, I was also impressed by the demonstrations of support at the seminar for instilling client protection in Myanmar’s microfinance industry. It’s a great opportunity for a young market to secure responsible practices from its outset.
Myanmar, the second-largest country in Southeast Asia, remains one of its poorest. Decades of isolation have severely affected its development. In terms of financial inclusion, a large proportion of the population in Myanmar relies on informal lenders. The formal sector only serves about 20 percent of the population, largely because of the existing financial institutions’ limited capability.
In May 2011, President Thein Sein publicly recognized microfinance as a means of development by enabling local and foreign investors to establish fully privately-owned MFIs. Since the rationalization of licensing in Myanmar, around 110 MFIs have been registered. Deposit-taking institutions have been allowed to set-up shop rather easily due to low minimum capital requirements and the absence of separate prudential regulations from non-deposit-taking institutions, such as rules pertaining to reporting standards and portfolio quality management.
> Posted by Jeffrey Riecke, Communications Associate, CFI
As you’re here on the CFI Blog, you’re likely familiar with microfinance. But was this the case back when you were in school? It’s April, which means we’re amidst the Month of Microfinance (MoMF), a student-led movement spotlighting microfinance and bridging the gap between students and the sector. This year’s MoMF spans activities engaging students, MFIs, and key industry players, including Kiva, the SEEP Network, and Truelift, supporting access to quality financial services for all and engaging the next generation of microfinance professionals.
Microfinance is increasingly taught in schools, but not everyone has access to a course. The Month of Microfinance offers students a platform to learn about the industry and in turn easily spread the word through their networks. For students looking to organize activities on campus, the MoMF team provides the resources to screen a movie, set-up informative displays, organize fundraisers, and spearhead guest speaker events. A number of MoMF contests conducive to online media conversation are underway. Kiva U, Citi Microfinance, and AboutMicrofinance are hosting a student video competition and an essay competition prompting participants to explore the topics of poverty alleviation, profit management, technology innovation, and gender equality.
> 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.
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