Friday happy hour reading! Come on, you know you’re going to be talking shop at happy hour anyway.
Below is a round up of this week’s microfinance (and other development) news. We thank our colleagues for the wonderful work they do in advancing our knowledge of best practices and innovations, as well as challenging us all to remain true to our social mission.
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Peru Plans To Give FREE Solar Power To Its Poorest Residents
July 23, 2013 | Huffington Post
Peru has initiated a program that will provide more than 2 million of its poorest residents with electricity. “This program is aimed at the poorest people, those who lack access to electric lighting and still use oil lamps, spending their own resources to pay for fuels that harm their health,” Energy and Mining Minister Jorge Merino said.
Highlights from the article:
- 1,601 solar panels have been installed in the Contumaza province.
- Phase one will reportedly power 126 impoverished communities; phase two will provide 500,000 households, about 2 million people, with free electricity.
- The goal is to bring electricity to 95% of Peru by program end in 2016; currently only 66% of the population has access to electricity.
- The total cost will be $200 million, but each household will pay nothing.
Watch this video from Practical Action showing how lives have changed since electricity came to their home via a solar panel, installed with the help of Practical Action.
La Guía del Portal: Recomendaciones de mitad de año (The Gateway Guide: Mid-Year Review 2013)
July 23, 2013 | Portal de Microfinanzas
For the second week in a row, we’re delighted to share the results of a mid-year review of publications on the Microfinance Gateway — this time on the Spanish-language Portal de Microfinanzas.
A report we wrote in collaboration with Freedom from Hunger and the Center for Health Market Innovations and which was released earlier this year online and in a series of events in Bolivia, Ecuador, and Peru. Integrated Health and Microfinance: Harnessing the Strengths of Two Sectors to Improve Health and Alleviate Poverty in the Andes — State of the Field of Integrated Health and Microfinance in Bolivia, Ecuador, and Peru, 2012 is currently the third most popular publication on the Portal! (And Vulnerability is #2!)
Also topping the chart are Tendencias 2007 – 2012 del mercado microfinanciero en América Latina y el Caribe (#1) by the MIX and FOMIN; ¿Por qué las personas no compran microseguros y qué podemos hacer al respecto? (#5) by the Microinsurance Innovation Facility; and La era de las microfinanzas: Destruyendo las economías desde abajo (#11) by Milford Bateman.
Microfinance: A Poverty Lens on Financial Inclusion
2013 | Grameen Foundation India & EDA Rural Systems Private Limited
Summary provided by the Microfinance Gateway
This report looks at the poverty profile of microfinance clients in the state of Karnataka. The study included data from nine MFIs with 65% of microfinance portfolio in the state.
Using the Progress out of Poverty Index (PPI), a poverty measurement tool, the study used empirical and statistically derived data to discuss factors that can influence outreach to the poor including regulations. Microfinance providers can improve outreach to the poor if the practitioners, regulator, and other stakeholder create an enabling environment.
Demanding Inclusion – Do the Financially Excluded Feel Excluded?
July 24, 2013 | Center for Financial Inclusion
Posted by Ignacio Mas and Kim Wilson, Independent Consultant and Fellow, Center for Emerging Market Enterprises and the Feinstein International Center, Tufts University
Excerpted from the Center for Financial Inclusion
…First of all: do the excluded really feel excluded? Many people certainly feel excluded from banks. They’re aware that banks don’t concern themselves much with the needs of the ordinary person, and they’ve often been made to feel unwelcome in banking halls. Poor people everywhere rationalize that with a simple dictum: banks are not for people like us.
But even if they feel excluded from banks, do they feel excluded from finance? Hardly, and to see that, just ask them about any life circumstance in which they needed money. You’re much more likely to get a story of resourcefulness than of helplessness. By force of need, they’ve developed the skill of scanning their assets, prospective income sources, and social relationships in order to pick which they are going to liquefy in some way in a situation of need. They’ll ask for help from a friend, borrow from the store, pawn a jewel, ask for an advance from an employer, delay buying some business inventory, suspend contributions to some personal or collective savings plan…
But which is better—formal or informal—is not just a matter of product or contractual design: bank products will remain meaningless as long as banks and ordinary people don’t care for each other.
Excerpted from CGAP
…Indonesia is renowned for its large scale microfinance sector, led by BRI, a range of commercial banks and over 60,000 MFIs reaching more than 50 million people. Despite this progress, the 2011 Global Financial Inclusion Index still finds only 19.6% of the population have formal accounts. Indonesia has approximately one hundred million people who cannot, or do not, access financial services of any kind across a vast and diverse economy.
The past six months have finally seen exciting regulatory change in Indonesia which may well break the deadlock around growth in both emoney and branchless banking. In December 2012, new regulation was passed allowing full encashment of person to person (P2P) transfers on electronic wallets at agents. The Regulation on Funds Transfer also allows cash payment points to provide a cash-out service without requiring an individual funds transfer license per agent. While wallet sizes remain relatively constrained, MNOs are now moving aggressively to build agent networks and refocus efforts around their ewallet functionality.
In early May 2013, Bank Indonesia also released long-awaited guidelines for banks and mobile network operators to outsource some banking operations to agents, known as “UPLK”s (Unit Perantara Layanan Keuangan) or Financial Intermediary Service Units. The guidelines are expected to pave the way for full regulations to be released by December 2013. Five banks and three mobile network operators will engage in pilots, kicking off late May to early July. A wide range of banks are also waiting to see what the final regulations include before launching initiatives of their own.