The Microcredit Summit Campaign welcomes MicroLoan Foundation as the newest Campaign Commitment maker, joining a global coalition of 51 other commitment makers working to help 100 million families lift themselves out of extreme poverty. The Microcredit Summit Campaign’s 100 Million Project is building a movement among financial service stakeholders committed to helping to end extreme poverty through: public statements of commitment to action, expanding practices to reliably measure movement out of extreme poverty, and promoting innovations and best practices to accelerate movement out of poverty.
“At the MicroLoan Foundation,” said Peter Ryan, founder and CEO, “we’re committed to ongoing innovation and learning in our mission to reach the poorest women and enable them to move out of poverty. This project is all about responding to client needs with products and services that enable them to overcome difficulties and improve their standard of living.”
MicroLoan Foundation’s mission is to work with the poorest women and enable them and their families to move out of poverty. MicroLoan Foundation commits by the end of 2016, to successfully complete a pilot program in two Malawi branches and one Zambia branch involving 2,700 clients enabling improved client outcomes due to the following:
- Streamlined products which meet the needs of the poorest clients (living under $1.25/day) as well as more experienced business women who wish to grow their business
- Improved access to savings for emergencies and planned costs
- Improved support to vulnerable clients including formal rescheduling of loans
- Standardization of pre-disbursement and follow up training using adult learning methodologies
Daniella Hawkins, social performance manager, explains their intent:
“MicroLoan Foundation’s mission is to work with the poorest women and enable them and their families to move out of poverty. As early as 2010 when we started using the Progress out of Poverty Index (PPI) in Malawi, we realised that we could be reaching poorer clients, those living under $1.25/day. We therefore designed a pro-poor loan product which improved our poverty outreach dramatically: data from 2011 showed that 74.6% of clients accessing this pro-poor loan product were under the $1.25/day poverty line, compared to 51.7% of our clients on average. This learning has informed our current pilot, which integrates the pro-poor loan product into a suite of our other products, streamlining our services and allowing clients on different loans in the same group. This will ensure that poorer clients with less business experience learn from our more experienced clients.
Clients who are not able to save ahead of receiving their first loan will qualify for this pro-poor loan. The importance of saving is highlighted to all our clients, and all will be encouraged to save if they want to receive a larger loan, but clients on the pro-poor product will not need to save as much in order to access a loan size increase. Increases are strictly limited to ensure that clients are not over-indebted, and at any sign that any clients are experiencing problems making repayments or savings, a one-on-one meeting with their loan officer will take place so that s/he understands the problem and can facilitate the appropriate supportive response. Clients who have had problems making repayments and/or savings are identified as vulnerable and will not be eligible for a loan size increase.”
Here are the different products offered by MicroLoan Foundation:
- Level 1, which is aimed at clients living on less than $1.25/day and/or clients who have never done business: the pro-poor loan product with fewer savings requirements; small loan sizes (maximum first loan is $25).
- Level 2, which is aimed at slightly better off clients and/or clients who have done business before: slightly larger starting loan sizes (maximum first loan is $90) and higher savings requirements for clients who want to increase their loan sizes in the next loan cycle.
- Level 3, which is aimed at clients with slightly larger, more established businesses: larger loan sizes than Level 2 (initial loan upon graduation to this level is $180) and the option for clients to repay on a monthly basis; the same savings requirements as Level 2 for clients who wish to increase their loan sizes next loan cycle.
The Campaign looks forward to welcoming this new partner in the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit in 2015.
MicroLoan Foundation (MLF) helps some of the poorest women in the world feed their families, send their children to school, and pay for life saving medicines. By providing small loans (on average £60) and ongoing business training and support, MLF empowers women in rural Malawi and Zambia to set up self-sustainable businesses. The profits from these businesses enable the women to work themselves and their families out of poverty.
We invite you to join MicroLoan Foundation and…
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Join the movement to help 100 million families lift themselves out of extreme poverty:
- State your Campaign Commitment by filling out the Online Commitment Form or by contacting us at mycommitment[at]microcreditsummit.org
- Need inspiration or additional guidance in formulating your own Campaign Commitment? Refer to our Commitment Development Toolkit or look at all Campaign Commitments
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