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April 18, 2017 in Branchless Banking, Center for Financial Inclusion, Client Focus, Client Protection, Events, Financial Inclusion, Governance, Microfinance, Resources, Smart Campaign, Social Performance, Technology | Tags: 2016 Financial Inclusion Banana Skins, Al Amana, Arabic Microfinance Gateway, Avanz Capital, Banana Skins, Calmeadow Foundation, Dutch Entrepreneurial Development Bank (FMO), Fintech, FMO, Governance, IFC, Impact Investing, Jordan, MENA, Microfinance, Microfinance Gateway, Middle East and North Africa, SANABEL, Smart Certification, Universal Standards for Social Performance Management | by Center for Financial Inclusion | Leave a comment
> Posted by Miranda Beshara, Arabic Microfinance Gateway
Governance is a business imperative, and investors are willing to pay a premium for effective corporate governance. This was one of the key takeaways from the Middle East and North Africa (MENA) Governance and Strategic Leadership Seminar, held recently in Amman, Jordan. We’ve seen this stated priority of governance in the MENA microfinance market exhibited elsewhere, too. A joint IFC-Sanabel report assessing the top perceived risks facing the microfinance industry in the Arab world uncovered that the market’s stakeholders viewed weak corporate governance structures as one of the more threatening risks out of roughly 30 risk categories. Financial service providers in particular perceive this risk to be rising.
March 3, 2015 in Center for Financial Inclusion, Client Focus, Client Protection, Microfinance, Technology | Tags: Alex Counts, Bill & Melinda Gates Foundation, Brazil, Calvert Foundation, China, Ford Foundation, Global Impact Investing Network (GIIN), Grameen Foundation, Harvard Business School, Impact Investing, India, IRIS Standards, JPMorgan Social Finance, Khosla Fund, Loans, Microfinance, Microfinance Investment Vehicles, Multi-Dimensional Poverty Index, Omidyar Network, Progress out of Poverty Index, Russel Sage Foundation, United Kingdom, United States, Universal Standards for Social Performance Management | by Center for Financial Inclusion | 10 comments
> Posted by Alex Counts, President and CEO, Grameen Foundation
With increasing regularity, I hear people talking about a new concept: deploying funds to earn profit while at the same time solving complex social and environmental problems, also known as impact investing. One article that stood out for me, and in fact prompted me to write this, is “Good Investments” by Dan Morrell in the Harvard Business School Alumni Bulletin. At one point the author writes: “What impact investing really needs, all agree, are pioneers.”
Impact investing advocates can sometimes give the impression that they have “outsmarted poverty” (and other societal problems) by discovering the need for this profit-making approach, one that allows high net worth individuals to further increase their assets while also having (in the words of another impact investor quoted in the HBS article) a “fabulous social impact.”
Count me as someone who does not feel that what “impact investing” needs now are “pioneers” per se. Rather, it needs pragmatic, risk-taking, deeply curious, and disciplined people with access to funding who can work collaboratively to move an old idea forward, bearing in mind the lessons of the past and the opportunities of the present.
In fact, the actual pioneers of impact investing began laying the groundwork for this latest incarnation decades ago. Think of the Ford Foundation’s work in the 1960s to establish, legitimize, and get U.S. government policy support for Program Related Investments, the “Philanthropy at Five [Percent]” movement in nineteenth century America and England, the Russell Sage Foundation’s financing of low-income housing in New York in the early 1900s, or, in more recent times, the Calvert Foundation, just to name a few.
Or simply consider the modern microfinance industry and how an ecosystem of financing mechanisms – including dozens of “microfinance investment vehicles” (MIVs) – grew up around it in the 1990s and 2000s. Even today, according to an important study by the Global Impact Investing Network (GIIN) and JPMorgan Social Finance, close to 40 percent of impact investments are in microfinance institutions (MFIs) or funds. Microfinance is the largest single sector for receiving impact investments, and is larger than its two closest competitors combined. Clearly there are strong linkages between microfinance and impact investing, and additional opportunities for sharing lessons.
February 6, 2015 in Branchless Banking, Center for Financial Inclusion, Client Focus, Financial Inclusion, Financial Inclusion for Persons with Disabilities, Mapping the Invisible Market, Microfinance, Policy, Savings, Smart Campaign, Social Performance, Technology, Youth and Financial Inclusion | Tags: Credit, Customer Centricity, Dean Karlan, Disability Inclusion, FINCA, For-Profits, Freedom From Hunger, Government Regulation, Health, Microcredit, Microfinance, Non-Profits, Policy, Rupert Scofield, Savings Groups, Self-Regulation, Smart Certification, Stanford Social Innovation Review, The Guardian, The Smart Campaign, Truelift, Universal Standards for Social Performance Management, Youth Inclusion | by Center for Financial Inclusion | 1 comment
> Posted by Bobbi Gray, Research and Evaluation Specialist, and Kathleen Stack, Vice President, Programs, Freedom from Hunger
Recently, Dean Karlan published an article in the Stanford Social Innovation Review titled “The Next Stage of Financial Inclusion.” The key points of his article are that while non-profits led the way in developing microcredit for the poor and started the movement for financial inclusion, for-profit companies have increasingly found it worth their while to offer financial services for the base of the pyramid. The entrance of new players to the market, Karlan offers, is a testament to the success of the early microfinance-focused non-profits. However, Karlan suggests that non-profits still have an important role in continuing to innovate in the financial services space. We agree. This is particularly true for extending financial services to people that banks still consider unprofitable: “the too rural, the too poor and the too young.” We would add disabled populations and the “too old.”
On the Pathway to Responsible Microfinance: An Update on the Microfinance CEO Working Group’s Progress
August 19, 2014 in Center for Financial Inclusion | Tags: ACCION International, Certification, Client Protection, FINCA International, Freedom From Hunger, Grameen Foundation, MicroCinance Transparency, Microcredit Summit Campaign, Microfinance, Microfinance CEO Working Group, Opportunity International, Overindebtedness, Pricing Transparency, Pro Mujer, Responsible Microfinance, Smart Campaign, Social Performance, Social Performance Task Force, Universal Standards for Social Performance Management, Vision Fund, Women's World Banking | by Center for Financial Inclusion | Leave a comment
> Posted by Anne Hastings and Tyler Owens, Microfinance CEO Working Group
The following post was originally published on the Microcredit Summit Campaign’s blog, 100millionideas.org.
Since its inception in the spring of 2011, the Microfinance CEO Working Group has worked diligently and collaboratively to define the concept of Responsible Microfinance around the globe and lead by example to try to fulfill this vision. It has focused on three key pillars on which Responsible Microfinance is built: client protection, pricing transparency, and social performance management. A responsible microfinance institution (MFI) is one that, at a minimum:
- Does all in its power to protect its clients from harm;
- Is transparent about fees and interest rates; and
- Implements best practices in social performance management including monitoring effectiveness in achieving desired client level outcomes.
An MFI can achieve this by complying with the industry-developed standards of the Smart Campaign, MicroFinance Transparency, and the Social Performance Task Force, known as the Universal Standards for Social Performance Management.
The Working Group is a collaborative effort of the CEOs of Accion International, FINCA International, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, VisionFund, and Women’s World Banking. At the Microcredit Summit in Manila in October 2013, the Working Group publicly encouraged its collective 224 affiliated MFIs around the globe to embrace Responsible Microfinance by sharing a list of commitments. Since making those commitments, the group has made significant headway toward strengthening each one of the pillars of Responsible Microfinance.
December 20, 2013 in Center for Financial Inclusion, Client Focus, Client Protection, Microfinance, Microfinance CEO Working Group, Resources, Social Performance, Women and Financial Inclusion | Tags: Client Protection Certification, Gender Performance Initiative, Smart Campaign, Universal Standards for Social Performance Management, Women, Women's World Banking | by Center for Financial Inclusion | 2 comments
> Posted by Jaclyn Berfond, Senior Associate, Network Engagement, Women’s World Banking
Women have long been the face of microfinance, a fact reflected by the mission and goals of the institutions that serve them. According to the Microfinance Information Exchange (MIX), most microfinance institutions (MFIs) claim to target women (74 percent) and just over half declare women’s empowerment or gender equality as an objective.
Big commitments are all well and good, but if we are going to espouse the importance of serving low-income women, we must be able to hold ourselves accountable. How do we do that?
For many years now, the microfinance industry has focused on financial performance, with sustainability and later profitability driving outreach. In the wake of crisis – often the consequence of rapid growth – the industry has re-focused on social performance, getting back to the basics of ensuring that financial institutions adhere to their mission of serving low-income clients. We strongly believe that there must be a balance between financial and social performance, and that in order to achieve either, the industry must take a good look at their clients – still predominantly women. By truly analyzing this client base, MFIs can both build the business case for serving women, and ensure that they are serving these women well. This is gender performance.
In 2011, Women’s World Banking launched the Gender Performance Initiative (GPI) to develop a framework that defines what it means to serve women and measures how effectively MFIs do so. We wanted to establish a set of indicators that would enable MFIs to consider not only how many women they serve, but how they can enhance their understanding of customers to tailor products, marketing strategies and delivery channels to meet women’s needs. The initiative also set out to demonstrate the benefits of financial inclusion for women and their households, as well as the benefits of gender diversity among staff, management, and board.
Developing the indicators. There is no easy place to start when it comes to measuring performance, and we wanted to be sure that the metrics we chose would truly tell us whether an institution was serving women well. First and foremost, we needed to start with the right questions, in the areas that matter most to women. Beyond outreach, we looked at product design and diversity, service quality, and client protection, as women have specific life-cycle needs and goals that must be considered. For example, women may need a convenient and confidential way to save for children’s education expenses, or an insurance product that offers cash benefits for hospitalization to cover lost income from time away from their business (and includes maternal health coverage). We also looked at the diversity of staff and management, because we believe that in order to be the best place for women customers, a microfinance institution should be a place that welcomes women employees and women leaders. Finally, we wanted to understand how serving women clients contributes to institutional financial sustainability, as well as outcomes for clients.
November 7, 2013 in Branchless Banking, Center for Financial Inclusion, Client Focus, Events, Financial Education, Financial Inclusion 2020, Microfinance CEO Working Group, Social Performance, Technology, Women and Financial Inclusion | Tags: Alex Counts, Financial Capability, Financial Inclusion 2020, Global Forum, Grameen Foundation, Microcredit Summit Campaign, Microfinance CEO Working Group, Mobile Money, Truelift, Universal Standards for Social Performance Management, Women | by Center for Financial Inclusion | 7 comments
> 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.
October 17, 2013 in Center for Financial Inclusion, Client Protection, Events, Financial Inclusion, Microfinance, Microfinance CEO Working Group | Tags: Accion, Certification, FINCA, Freedom From Hunger, Global Appeal for Responsible Microfinance, Grameen Foundation, Microcredit Summit Campaign, Microfinance, Microfinance CEO Working Group, MicroFinance Transparency, Opportunity International, Partnerships against Poverty, Pro Mujer, Smart Campaign, Social Performance Task Force, Universal Standards for Social Performance Management, VisionFund International, Women's World Banking | by Center for Financial Inclusion | 1 comment
> Posted by Anne Hastings, Manager, Microfinance CEO Working Group
The CEOs of eight leading global microfinance networks – Accion, FINCA, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking – made six significant commitments at the Microcredit Summit Campaign’s Partnerships Against Poverty Summit last week in Manila. These eight CEOs make up the Microfinance CEO Working Group. Together they represent more than 250 retail microfinance institutions in 70 countries globally and provide financial and often non-financial services to more than 40 million families.
Here are the commitments:
1. Client Protection: Encourage all affiliates to progress toward Smart Campaign certification and be on a pathway toward certification by the end of 2014.
2. Pricing Transparency: Motivate our affiliates to commit to pricing transparency and integrity by agreeing to publish their pricing data using standard methodologies, such as those developed by MicroFinance Transparency, in order to allow investors and clients to make informed decisions.
3. Social Performance: Promote the Social Performance Task Force’s Universal Standards for Social Performance Management among our affiliates and commit to supporting their compliance.