The 2015 State of the Campaign Report in a nutshell

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An African farmer is linked into the financial system via her mobile phone.
In his presentation today at the Inclusive Finance India Summit New Delhi, Larry Reed featured Mapping Pathways out of Poverty: The State of the Microcredit Summit Campaign Report, 2015. The report is now available online. We will also publish the full report in French, Spanish, and Arabic in early 2016. You can also read previous reports online, just select the year of interest from the drop-down menu “Previous Reports.”

At our 2013 Microcredit Summit in the Philippines, we focused on the partnerships required to deliver financial services to those living in poverty. At our 2014 Summit in Mexico, we focused on innovations in microfinance with a demonstrated capacity to reach those in extreme poverty. This year, we use the report to explore, in more detail, our six financial “pathways.” Each pathways has a chapter, and each chapter does the following:

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World Bank report documents progress on poverty reduction and path ahead for Ethiopia

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>>Authored by Jesse Marsden, Research and Operations Manager

The World Bank released a report in January about the progress made on poverty reduction in Ethiopia between 2000 and 2011, and it described what will be needed to end extreme poverty by 2030. Given our program with MasterCard Foundation in 2014 (see this post summarizing the “Innovations in Social Protection” program) this was of particular interest to us.

The Campaign is also increasingly focused on understanding how 6 key financial inclusion pathways are showing great promise in contributing to the end of extreme poverty.

The report suggests that Ethiopia’s concerted, collaborative, and well-supported poverty reduction effort has been a success story with remarkable results. In 2000, 56 percent of the population lived below the World Bank extreme poverty line of $1.25 a day PPP. By 2011, that rate had fallen a dramatic 25 points to 31 percent of the population. It is good to see too that the Bank report also covers non-income indicators, noting that as compared to 2000, by 2011 most Ethiopians had better health, education, and living standards as well as improved life expectancy. Access to basic services improved by double (meaning electricity and water in the home).

The report notes that this rate of progress is uncommon on the continent and is second only to the rate of poverty reduction seen in Uganda over the same period. It also seems that the right places received the attention needed. That is to say that regions with higher rates of poverty saw some of the most dramatic declines, particularly citing Tigray where the Campaign visited during our field visit in 2014.

In places where dramatic growth like this takes place, one of the oft noted concerns is that the gains from improvements are being felt by a limited segment of the population (usually those who were better off already). One of the most impressive statitstics concerning the poverty reduction seen in Ethiopia is that during this period the already low inequality level was maintained.

Success factors

So what has been at the heart of this progress? The report cites a wide range of factors, accurately reflecting the multi-faceted nature of poverty reduction efforts. It is worth noting however that the report does accredit the greatest share of poverty reduction having resulted mainly from a single sector, namely the rural, self-employed, agriculture sector. While factors such as consistently good rainfall and high food prices have played a positive role, the report notes the importance of some more intentional efforts.

The Productive Safety Net Program (PSNP) launched in 2005 (and a key part of our visit in 2014) has played an important role in poverty reduction by both directly reducing poverty rates by 2 percent as well as contributing indirectly through increasing agriculture input use and thereby increasing productivity. In addition, public investment has been “central” to the government development strategy and “redistribution has been an important contributor to poverty reduction.”

Ethiopia bases public spending decisions on a central and publicly accessible Growth and Transformation Plan. This strategy places primary importance on sectors crucial to poverty reduction including food security, education, health, roads, and access to water. With this plan in place since 2005 (concurrent with the launch of PSNP) public investments in social protection, agriculture and food security, and access to basic services have been key drivers of poverty reduction in Ethiopia.

Getting to zero extreme poverty

Where do we go from here? 31 percent of the population living below the extreme poverty line is still a huge extreme poverty rate. Based on our visits with policymakers and program implementers on the ground in Ethiopia last year, it is apparent that a continued focus on maintaining and expanding the gains seen from 2000 to 2011 in poverty reduction remain a central focus of key actors in Ethiopia now 3-4 years later.

The report says the future of poverty reduction will rest on as many different areas of work as it took to achieve the progress so far. The strategy presented seems to come down to a dual focus on increasing employment and economic opportunity in urban areas, and increasing agricultural production in rural regions. This is a very simplified presentation of a nuanced and complex set of approaches laid out in the report.

We are also encouraged by how well many of the recommendations echo what we saw on the ground in 2014 as well as what we seem to be seeing emerging as some of the key interventions for financial inclusion that will help end extreme poverty. One recommendation of particular note was for programs to move from a geographical approach for interventions (say, targeting a state or region) to one targeting a condition. The PSNP already works in this fashion as the program targets those meeting the definition of “food insecure” rather than organizing its deployment based on location.

Public works under the PSNP

Public works under the PSNP

One of the six pathways the Campaign is focused on is agricultural finance and value chain improvements. The Bank report points to the need for Ethiopia to continue strong support of agricultural production as a key driver of future poverty reductions. The PSNP program which included a public works component to increase access to irrigation and reduce arable land erosion. Additionally, the R4 program addresses weather related shocks and other agricultural risks, mentioned specifically in the report, through both avenues of response to events after they occur as well as preventative measures to mitigate the negative effects of future events.

We think it would be important for operators such as REST, one of the NGO implementers of the PSNP, to increase their activities around building the capacity of female farms managers to generate higher returns from their activities. In addition, the government should investigate how, though national-level programming, it can also support increased attention and support for female farm managers. Citing potential causes such as poor access to land or agricultural inputs, the report points out that female-managed farms produce 23 percent less than male managed farms. Ending extreme poverty will require addressing this gender discrepancy through policies that foster changes in institutional behavior and gender norms. This can be led perhaps by investigating how an add-on benefit to PSNP could be an agent for this change.

The report also supports the continuance and even growth of the use of social safety nets (such as cash transfers). It looks closely at the difference between indirect transfers via subsidies to producers of certain basic needs and direct transfers to the actual individuals. It ultimately recommends that spending on subsidies would have a great impact on poverty reduction if they were converted to direct transfers. The Campaign has pointed to greater use of technology to increase access to financial tools such as savings accounts, and groups like the Better Than Cash Alliance are also showing the power of using digital payments by governments.

Given Ethiopia’s still-limited mobile network infrastructure, making use of a digital payments platform to more accurately and cost-effectively deliver direct transfers may still be years away. However, we feel that building this infrastructure as a means to utilizing technology in its poverty reduction strategies will be important and should have received some attention in the report. Such a platform would support the report’s dual urban-rural approach since transfer programs exist both in urban and rural areas. Farmers can also receive information on market prices through mobile devices, thus enabling them to sell their products at the optimal profit. This can positively impact areas the report considers important, namely agricultural production, payment for inputs, and access to employment opportunities. We think this is an area missed by the report.

The report also places a great deal of emphasis on fostering employment in urban areas, noting that urban poverty in Addis Ababa tracks employment rates. While the report notes that employment won’t fully address urban poverty on its own, increasing such opportunities for the urban poor and self-employed is important. The report recommends decreasing the costs and barriers to migrating from rural to urban centers and supporting the entry and growth of firms who have the capacity to hire many employees.

Where the report suggests increased support will contribute to poverty reduction is in supporting self-employment in non-agricultural work. BRAC’s graduation model, one of the six pathways we recommend as a financial inclusion intervention key to ending extreme, can help. We spoke with graduates of REST’s graduation program in 2014, and it was clear to us that the program has had positive impacts. Now those anecdotes are backed up by evidence of the effectiveness of the graduation approach, not least of which are the recent set of studies published in Science a few weeks ago. They demonstrate the positive outcomes from the graduation approach, highlighting its importance as a financial inclusion pathway that is working well.

REST supports positive outcomes for its graduation participants by providing access to market research. Participants thus understand what kinds of income-generating activities have a better likelihood to succeed in their given location. Moreover, the graduation model concludes with a direct transfer that does not require a participant to choose self-employment over employment, allowing for perhaps the kind of flexibility the report might recommend — particularly in an urban setting.

The fifth financial inclusion intervention that the Campaign sees as key to ending extreme poverty is savings (and savings groups in particular as they are often able to reach persons banks can’t or won’t.) However, savings is markedly absent from the report. There is some discussion of addressing the ability for individuals to more easily liquidate assets such as land in order to facilitate urban migration, but little is mentioned concerning savings as a means to build an asset base and whether this can be a driver of poverty reduction in the future for Ethiopia.

We know from our visit that REST graduation participants are connected to formal savings accounts as well as financial capacity building resources to support them in making the most of those accounts. So we were surprised to see a discussion of asset building — savings in particular — so absent from the report. We think this should be an additional area of focus for poverty reduction strategies going forward.

Savings as a strategic element could be important to pursue in tandem with supporting the growth of the mobile network infrastructure since there are cost savings to be realized with providing mobile-based savings platforms. Savings incentives and programs could also be tied to the cash transfers of PSNP or the other safety net initiatives in Ethiopia. Savings accounts could become the landing point for those transfers on a future digital cash transfer platform.

Our recommendations

As a whole, we find the report extremely thorough concerning the approaches it covered and very much tied to the experience seen on the ground — as least in so far as our limited view into programs in Ethiopia from our Innovations in Social Protection program affords us. Of the six financial inclusion areas the Campaign sees as key to ending extreme poverty, three (agricultural finance and value chains, conditional and cash transfers, and the graduation approach) are mentioned in detail in the reports assessment of what will be needed to end extreme poverty in Ethiopia. We think that graduation programs can be a key response to the report’s recommendation to build opportunities for self-employment in non-agricultural activities.

Further consideration, however, should be given to the potential for digital technology platforms to play a powerful role in facilitating and improving the cash transfer programs. Though, Ethiopia will need to improve its telecommunications infrastructure to make this a possibility. Savings also has a role to play in supporting individuals’ ability to build an asset base which will help them seize opportunities and resist vulnerabilities. By linking cash transfers on digital platforms to savings accounts, this also can be an important part of Ethiopia’s financial inclusion strategies in the future.

#tbt: The 1997 Microcredit Summit, where it all began

#Tbt_14

Dignitaries who attended the 1997 Microcredit Summit.
From L-R: Tsutomu Hata, Former Prime Minister, Japan; H.E. Pascoal M. Mocumbi, Prime Minister, Mozambique; H.E. Alberto Fujimori, President, Peru; H.M. Queen Sofia, Spain; H.E. Sheikh Hasina, Prime Minister, Bangladesh; Hillary Rodham Clinton, First Lady, United States; Prof. Muhammad Yunus, Managing Director, Grameen Bank, Bangladesh; Elizabeth de Calderón Sol, First lady, El Salvador; Ana Paula dos Santos, First Lady, Angola; H.E. Dr. Siti Hasmah, First Lady, Malaysia; H.M. Queen Fabiola, Belgium.

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We are pleased to bring you this #ThrowbackThursday blog post, which was originally published in the 1997 Microcredit Summit Report. As we explore the Six Pathways in financial inclusion to end extreme poverty, we look back at the wise words leaders from around the world had to say about ending poverty. We’ve included just a few in this blog post.


Connie Evans*, President, Women’s Self-Employment Project, Council of Practitioners

Connie Evans

Connie Evans is now the president and CEO of the Association for Enterprise Opportunity

Collectively, we represent what can be a glorious future with our voices and our vision. It is a vision for a global movement whereby poor families, especially the women in those families, are joined by practitioners, CEOs, Presidents and Parliamentarians, advocates from all disciplines and walks of life, to eradicate poverty. A global movement whereby microcredit, microfinance, and microenterprise are supported and fostered.

As practitioners, we must develop — and continue to develop — programs that directly and profoundly empower people to help themselves. We must develop and manage sophisticated data information systems so that we can strategically share best practices and avoidable mistakes. We must develop human and financial resources to sustain the best programs. We must hold accountable all those responsible for the management and administration of our governments…And, most importantly, we must incorporate our clients into decision-making positions in our institutions, our communities, and our governments…

Be renewed, be assured, have courage, and let’s all be bold. Embrace the goal of the Microcredit Summit. Speak loudly and proudly of our task to reach 100 million of the world’s poorest, especially the women, with all the tools of microenterprise…Give your voice to the vision and make your commitment to the Declaration and Plan of Action.

Fawzi al-Sultan*, President, IFAD, Co-Chair, Council of International Financial Institutions

Access to even small-scale deposit and credit services, together with other productive services, can work something close to miracles. Our experience, in a variety of conditions across the developing world, underlines that the rural poor are really bankable…

We must nonetheless keep in mind not only the benefits but also the limits of microfinance as a tool…it is not enough by itself to ensure sustainable development for the rural poor. the poor equally need access to better technologies, to health and education services, to fair markets and adequate infrastructure…

Throughout our efforts, we must make sure our work addresses the real needs and priorities of the people we want to serve. We also need to be realistic about the capacity of the microfinance providers themselves…Banking with the poor requires good management ability, especially in controlling the costs of operations and in assessing risks…

And, finally, we have to make sure the financial sector as a whole is set up to support our efforts…Interest-rate structure, monetary policy, and requirements for registration and reserves can make or break microfinance providers…

To help [the Summit’s] goal, IFAD is committed to allocating up to 30 percent of its loan portfolio, or about US$ 125 million a year, to promote financial services to the poorest…

We will integrate the microfinance strategy into our overall program planning and work with others, wherever possible to further the Summit Action Plan.

*Connie Evans is now the president and CEO of the Association for Enterprise Opportunityand Fawzi al-Sultan is now a senior partner with F&N Consultancy.

Related reading

Six learning opportunities for the “Six Pathways”

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>>Authored by William Maddocks, director of the Sustainable Microfinance and Development Program (SMDP) at the University of New Hampshire’s Carsey School of Public Policy

New scrutiny has focused on what microfinance can’t do, and the evidence is growing that microfinance, de-linked from a social change paradigm, is simply another way to provide basic financial services to people historically excluded by the market. The new theme for the Microcredit Summit Campaign for 2015 of “financial inclusion to end extreme poverty” and the Six Pathways show promise in getting us there and can succeed in challenging extreme poverty if social change and equity are embedded as core values by those who fund, design, and implement these strategies.

These six pathways promoted by the Microcredit Summit Campaign touch on many of areas of the Carsey School of Public Policy’s current work. Using each pathway as a prompt, we will take a brief look at these themes and how you can get involved and learn more.

The Six Pathways

1) Mobile money linked with agent networks in low-income communities and other technological innovations

The SMDP New Hampshire Certificate 2015 in June will feature a session facilitated by Joyce Lehman, formerly with the Bill & Melinda Gates Foundation on branchless banking and the Digital Revolution. If the infographic from Kenya tells us anything (below), it’s that digital financial services are growing exponentially beyond just transfers and remittances to group savings & loans, agricultural inputs insurance, water services, off-grid lighting, and more. Come to New Hampshire, USA, this summer to learn about this exciting frontier of financial inclusion from the unique perspective of a former donor who worked on the ground floor of paving the digital finance highway.

Infographic: Kenya's journey to digital financial inclusion

Kenya’s journey to digital financial inclusion (by Simone di Castri and Lara Gidvani – July 2013)
Source: GSMA

2) Ultra-poor graduation programs

Jan Maes, who has worked in designing graduation programs with Trickle Up and other organizations, will present findings during the SMDP New Hampshire Certificate on the effectiveness and challenges of using these strategies to move the ultra-poor into self-sufficiency.

3) Microfinance savings and/or borrowing groups linked with health education, health financing, and health product delivery

Kathleen Stack, vice president of programs for Freedom from Hunger, will make a virtual presentation at the SMDP NH on Microfinance and Health Protection (MAHP) initiatives that they are implementing with our friends, CARD MRI in the Philippines and the Microcredit Summit Campaign, and in other locations. Read more about the project, Healthy Mothers, Healthy Babies, and how these three organizations, with the support of Johnson & Johnson, are helping address maternal and child health needs.

Photo courtesy of the Carsey School of Public Policy

Photo courtesy of the Carsey School of Public Policy

4) Agricultural value chains that reach to small-scale producers

Understanding markets is more than just knowing about products. The field of inclusive market development is moving from the linear value chain approach, to applying a systems approach that looks for, and adapts to, feedback from the system. Carsey has just launched SMDP Online and one of our first courses, “Understanding and Adapting to Complex Markets” will help practitioners understand complex adaptive systems and apply these concepts to their current work. SMDP Online course facilitator Mary Morgan, with more than 20 years of experience in development, promises a challenging and very practical learning experience for market development professionals.

5) Savings groups (aka village savings and loans associations)

One of the most promising strategies for reaching people that commercial microfinance has failed to reach are savings groups (SGs). Today more than 10 million people use SGs for saving, lending, building financial security, and social capital. Carsey has been a leader in savings groups training and learning events for several years and continues to expand opportunities to learn about this growing area of financial inclusion.

The SMDP Online will offer a blended course, “Savings Groups: Building Scale and Impact through Adaptation and Experimentation,” facilitated by Nanci Lee. This course will meet online for several months and then face-to-face in Lusaka, Zambia, during the SMDP Zambia, which occurs right before the next global gathering of SG practitioners, donors, researchers, and others at the SG 2015 conference also in Lusaka from November 10 to 12.

The lock box of a savings group in Africa

The lock box of a savings group in Africa
Photo courtesy of the Carsey School of Public Policy

6) Conditional cash transfers (CCTs) linked with mobile delivery and asset building

Reaching as many as 129 million people worldwide, CCTs work at a scale that few other anti-poverty programs can reach. Governments working with visionary partners like Fundación Capital can roll out programs that provide support, change social norms, and make a measurable impact on improving the lives of poor families. In the Dominican Republic, Fundación Capital has partnered with the Government’s ProSoli program and Banco ADOPEM and Banco Pyme BHD to connect savings groups with a CCT voucher program and bank linkages.

You can learn about this exciting pilot program by watching Jong Hyon Shin, Fundación Capital’s country project coordinator for the Dominican Republic, and her former professor (and Carsey Fellow) Jeffrey Ashe. (Watch the SEEP Network’s Taking Savings Groups on the Road Webinar Series.)

Relevant resources

E-Workshop Recap: Agricultural risk management with FAO and ILO

FAO Photo 2

Photo courtesy of FAO

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Last week, we had a in-depth conversation with Patricia Richter and Pranav Prashad of ILO and Emilio Hernandez of FAO about the risks and challenges facing small holder and subsitence farmers. The conversation delved into key tools and strategies for better delivering crucial, risk-reducing tools to those working in agriculture. Access the presentation.

We wanted to share some final thoughts from the presenters and also post here, as promised, links to the materials shown or referenced in the session.

FAO presenter Emilio Hernandez shared these materials for greater depth, saying:

We have a data base of training material FAO and its partners have developed for many years. It is a knowledge hub specifically for rural and agricultural finance.

In the database

Final insights from ILO impact studies in Ghana and China:

Insurance has a productive impact too, in addition to being a protective tool. In agriculture, studies in Ghana and China (my slide 2), have shown higher investments and outputs. In Ghana insured farmers increased investment in fertilizers (and better seeds) by 24% and increased cultivated area by over 15%. Similarly in China, insurance led to 27% higher investments in cross bred pigs among policy holders.

On the protective side, insured pastoralists (livestock insurance) in Kenya showed lower reliance on burdensome coping strategies such as “desperate” sales of livestock in case drought (down 29%). Similar results have been seen in case for indebtedness and keeping children in school / preventing them from working in fields when their health risks are covered through insurance.

For more on this, see http://www.impactinsurance.org/publications/rp35.

Resources from ILO include:

Additional ILO Rural Capacity Building tools:

Title of product Description Type
Empowering rural communities through financial inclusion Policy brief on financial inclusion for rural communities. Policy advise
Protecting the Poor: A Microinsurance compendium. Vol. II Contains chapters on climate change, next-generation index insurance for smallholder farmers, livestock insurance. Knowledge product
Making insurance work for microfinance institutions: a technical guide to developing microinsurancePathways towards greater impact: Better microinsurance models, products and processes for MFIs Guide for MFI managers on the design and operation of basic insurance products. Introduces fundamental insurance concepts, outlines the prerequisites needed for an MFI and describes the key features of five types of insurance products.Based on the experiences of innovative microfinance institutions (MFIs), it is clear that they can provide risk-management services that are valuable for clients and MFIs alike. The paper provides a comprehensive review of the challenges and successes of MFIs and offers ten key recommendations. Knowledge product
Financial Education: Trainers’ Manuals A series of training materials designed to teach vulnerable groups – including women and men in poverty, families with working children, youth and migrant workers – financial knowledge and management skills. Training Tool
Making Microfinance Work: Rural Microfinance A chapter and stand-alone course (in development) in the MFI management training programme “Making Microfinance Work: Managing Product Diversification” Training Tool
Village Banking and the Ledger Guide Practical tool for strengthening village banks as a means of giving poor women and men in rural and often remote areas access to financial services (savings and credit), social empowerment and a higher quality of life. Training Tool
Rural Academy: Decent Work in the Rural Economy 2-week training event with a 3-day elective on rural finance. Training Course

The 2015 Listening Tour: Mapping pathways for ending extreme poverty

Photo credit: by Geoff (originally posted to Flickr as Pilgrim’s path) [CC BY 2.0], via Wikimedia Commons

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“Wars of nations are fought to change maps. But wars of poverty are fought to map change.”
— Muhammad Ali

After the success of Generation Next: Innovation in Microfinance, our 17th Microcredit Summit (Mexico in 2014), the Microcredit Summit Campaign conducted a Listening Tour to identify how this next generation could contribute to ending extreme poverty (those living on less than $1.25 a day) by 2030. The theme that emerges from this consultation will be reflected across the Campaign: in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.

With the post-2015 development agenda under negotiation, the financial inclusion and microfinance sectors have an opportunity to assess our role in shaping the international development framework and reflect on the impact we can have on the lives of millions of the world´s extreme poor. Our Listening Tour was the first step in surveying our coalition of partners to see what our role in this endeavor should be.

The Listening Tour was our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face and served two purposes. First, it was our hope to find out how our audience (you) felt about the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were most pressing and urgent.

We collected your feedback through an online survey where we received 151 responses from participants from around the world representing practitioners, advocates and support organizations, funders, investors, policymakers, and regulators. We also conducted phone interviews with 27 leaders in the microfinance and financial inclusion sectors. Below are some key findings from our Listening Tour calls and survey.

A client of Fundacíon Capital wiht her daughter Photo credit: Fundacíon Capital

A client of Fundacíon Capital wiht her daughter

Photo credit: Fundacíon Capital

1. Ending extreme poverty.

Our members believe that our main objective should be to end extreme poverty, but they acknowledge that microfinance and financial inclusion actors need to be mobilized around this objective. We need to take a leadership role in re-focusing the microfinance sector on a pro-poor mission and helping the microfinance community build confidence in a system that protects and benefits those who we serve. In order to accomplish this, we need to galvanize new visionaries and champions for the movement.

2. Universal financial access, financial inclusion, and ending extreme poverty.

The strategy for achieving both universal financial access by 2020 and the 2030 goal must be clear, and clear linkages should be created between these two goals. In addition, we need to clarify the definition of financial inclusion, especially in how it relates to ending extreme poverty. We cannot get to full financial inclusion unless inclusive financial systems are created that serve the extreme poor.

3. Defining roles.

It’s unclear what role each stakeholder plays in achieving these goals. Our challenge is to create a unified voice in support of this agenda among a diverse group of microfinance stakeholders, who sometimes have divergent priorities. How do we design a strategy and create a sense of responsibility to provide the appropriate products and services that help people move out of poverty?

4. Pushing innovation while maintaining client protection.

Innovation is key, and technology will need play an important role in reaching full financial inclusion. The microfinance community tends to copy successful ideas but hesitates when it comes to new methodologies. While we need to do away with this risk-averse culture when it comes to innovation, we need to make sure there is adequate regulation and client protection practices in place where our clients could be vulnerable.

Organizations that made a Campaign Commitment are recognized on stage at the 17th Microcredit Summit in Mexico.

Organizations that made a Campaign Commitment are recognized on stage at the 17th Microcredit Summit in Mexico.

5. Financial inclusion to end extreme poverty: six pathways.

Finally, we saw an emphasis on six topics that we have framed as our “pathways out of poverty;” these are financial inclusion strategies that reach people living in extreme poverty and facilitates their movement out of poverty:

  • Mobile money linked with agent networks in low-income communities (for example)
  • Agricultural value chains that reach to small scale producers (for example)
  • Savings groups (aka village savings and loans associations) (for example)
  • Conditional cash transfers linked with mobile delivery and asset building (for example)
  • Ultra-poor graduation programs (for example)
  • Microfinance savings and/or borrowing groups linked with health education, health financing, and health product delivery (for example)
Dignitaries who attended the 1997 Microcredit Summit.

Dignitaries who attended the 1997 Microcredit Summit. From L-R: Tsutomu Hata, Former Prime Minister, Japan; H.E. Pascoal M. Mocumbi, Prime Minister, Mozambique; H.E. Alberto Fujimori, President, Peru; H.M. Queen Sofia, Spain; H.E. Sheikh Hasina, Prime Minister, Bangladesh; Hillary Rodham Clinton, First Lady, United States; Prof. Muhammad Yunus, Managing Director, Grameen Bank, Bangladesh; Elizabeth de Calderón Sol, First lady, El Salvador; Ana Paula dos Santos, First Lady, Angola; H.E. Dr. Siti Hasmah, First Lady, Malaysia; H.M. Queen Fabiola, Belgium.

Let’s take a quick ride down memory lane. In February 1997, we convened the first Microcredit Summit in Washington, D.C., bringing together more than 2,900 delegates from 137 countries. This event resulted in the Declaration and Plan of Action in which Summit delegates promised to work towards making the Campaign a “global effort to restore control to people over their own lives and destinies” [1]. Since 1997, the Microcredit Summit Campaign has been leading, supporting, and guiding the microfinance field to address failures in reaching the extreme poor.

Jump forward to 2015. We still have a lot of work to do, but the will of our community to map out a better future together is evident. This is a time for change and transformation in the global development sector, and we must be bold in setting our goals.

We have taken it upon ourselves to make sure that the microfinance and financial inclusion movement is included as a tool in ending extreme poverty by 2030. Financial inclusion needs to serve the bigger purpose of helping people in poverty mitigate vulnerability, build resilience, and take advantage of opportunity. But, to reach the ambitious goal of ending extreme poverty by 2030, we need to draw a map of how to get there. We need to show how digital payments, savings groups, conditional cash transfers, agricultural value chains, and graduation programs intersect with other sectors like health, education, housing, and nutrition to build pathways out of poverty. We must map out pathways for how these different interventions, stakeholders, and initiatives can work together to achieve our shared goal.

We share responsibility for promoting microfinance and financial inclusion practices that put clients at the center and show progress toward poverty eradication. At the World Bank’s 2015 Spring Meetings, the Campaign made a commitment to support the World Bank Group’s goal to reach universal financial access by 2020 (UFA2020). Through our commitment, we have joined a global coalition of partners that includes Visa, Mandiri, the State Bank of India, the World Council of Credit Unions, WSBI, the Microfinance CEO Working Group (a group of 10 international microfinance networks), Telenor, Ooredoo, Equity Bank, and Bandhan.

We know that the hardest part of reaching UFA2020 will be to ensure that financial services reach those living in extreme poverty, and the Microcredit Summit Campaign will work with its reporting institutions to help them expand their outreach by at least 53 million of the world’s poorest families, bringing the overall total of the world’s poorest families reached by microfinance to 175 million by 2020.

UFA2020 will be a stepping stone to achieving the post-2015 development agenda, and the Campaign will document what is being done well and disseminate those lessons far and wide through the State of the Campaign Report and our Microcredit Summits. The 18th Microcredit Summit will be an opportunity to learn about these six pathways and engage in a thoughtful discussion around the role each of us plays.

We invite you to join us and take part in leading this movement; start by organizing a breakout session for the 18th Microcredit Summit and making a Campaign Commitment. Submit your breakout session proposal for the 18th Microcredit Summit, and use our platform to inform our community about what you are doing to contribute to our common mission. You can also join our own coalition of Campaign Commitment makers by announcing specific, measurable, and time-bound actions that you will take to support our goal of helping 100 million families lift themselves out of extreme poverty. This is a key step in reaching the end of extreme poverty by 2030, and by focusing on our six pathways, we can design a better future and create a map of opportunity.

Financial inclusion to end extreme poverty

Related resources

Sources

Declaration and Plan of Action. Microcredit Summit Campaign. February 1997, Washington, D.C. http://www.microcreditsummit.org/resource/58/the-microcredit-summit-declaration-plan.html

Microcredit Summit Campaign joins World Bank’s financial inclusion efforts

Global Findex database, World Bank, Washington, DC.
http://www.worldbank.org/en/programs/globalfindex

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The Microcredit Summit Campaign issued a press release today announcing our commitment to Universal Financial Access by 2020. The Campaign joins the World Bank Group and a their coalition of partners — including MasterCard, Visa, Mandiri, the State Bank of India, Equity Bank, and Bandhan — in making a commitments to accelerate universal financial access. Financial access and inclusion are stepping stones to achieving the end of extreme poverty by 2030.

The Campaign will work with its reporting institutions to help them expand their outreach by at least 53 million of the world’s poorest families, bringing the overall total of the world’s poorest families reached by microfinance to 175 million by 2020. Read the full press release.

This commitment was announced on April 17th in Washington, D.C., at the World Bank Group’s Spring Meetings.

Related resources

Join our next E-Workshop on agricultural risk management with FAO and ILO

FAO Photo 2

Photo courtesy of FAO

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Pathway

Agricultural value chains that reach to small scale producers


Join our next Campaign Commitment E-Workshop!

Agricultural Risk Management:
Innovations you should know about

April 21, 2015 | 10 AM (GMT-4)

The Microcredit Summit Campaign is proud to present the next installment in our Campaign Commitment E-Workshops Series. The UN’s Food and Agricultural Organization (FAO) and the International Labour Organization (ILO) will lead you through a discussion into new tools for understanding and mitigating the many and varied risks facing smallholder farmer.

Both FAO and ILO launched Campaign Commitments in 2014. We look forward to learning about their accomplishments on these fronts and where they are breaking new ground. Hear about how ILO and FAO are identifying key areas of service gaps and other challenges facing smallholder and substance farmers, be introduced to ILO’s 4-dimensional risk mitigation tool, and learn about the ways non-financial services are working to support reducing vulnerability.

JOIN US…
Tuesday, April 21st
10:00 AM (GMT-4)

…for the E-WORKSHOP
“Agricultural Risk Management: Innovations you should know about”

This webinar will be conducted in English. We will live-tweet using the hashtag #Commit100M in English, Spanish, and French.

Presenting Organizations
International Labour Organization
Food and Agricultural Organization
Microcredit Summit Campaign

ILO and FAO both launched Campaign Commitments! We invite you also to…

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