Meet RESULTS, “one of the best-kept secrets in development”

Regular, everyday Americans at the halls of congress

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>>Authored by Sabina Rogers, Communications and Relationships Manager, Microcredit Summit Campaign

In a 2013 article, New York Times opinion writer, David Bornstein, wrote that RESULTS “remains one of the best-kept secrets in development.” RESULTS (and RESULTS Educational Fund, from which the Microcredit Summit came and into which the Microcredit Summit Campaign operations have been merged) is a grassroots advocacy organization founded in 1980. It has international affiliates in the UK, Canada, Australia, France (and Belgium), Japan, Korea, and Mexico; and the RESULTS family coordinates advocacy efforts to remarkable effect.

Never heard of RESULTS? Recall the poverty measurement legislation in the mid-2000s that requires USAID to direct at least 50 percent of their microenterprise funds to those living on less than $1 a day? Legislation that also prompted the creation of USAID’s Poverty Assessment Tool? That was RESULTS and allies.

The U.N. International Year of Microcredit in 2005 and the Nobel Peace Prize for Muhammad Yunus and Grameen Bank? That was RESULTS volunteers and the Microcredit Summit Campaign lobbying year after year for consideration. (FYI: The Year of Microcredit was established by the UN in 1998, the year after the 1997 Microcredit Summit, through the efforts of the Bangladesh Ambassador to the U.N., in recognition of the Summit’s 2005 deadline.)

Maternal and child legislation that would put the U.S. on track to help end preventable maternal and child deaths globally and ensure key reforms so every dollar we invest has greater impact? RESULTS has lobbied for maternal and child health funding year in and year out for 32 years, and child death rates have plummeted from 40,000 a day in 1984 to 16,000 a day today. More recently, RESULTS helped craft the Reach Every Mother and Child Act of 2015.

Pressuring Congress to preserve the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), which are our country’s most successful anti-poverty programs for children? That was RESULTS.

Bornstein reported that World Bank President Jim Kim said, “RESULTS has such a lean and efficient model that nobody knows about them. They’re incredibly dedicated and very knowledgeable about the issues. It’s remarkable how much they’ve done and how few people have any idea about it.”

RESULTS (the 501(c)(4), non tax-deductible arm) and RESULTS Educational Fund (the 501(c)(3), tax-deductible arm) work hand-in-hand to produce cutting edge research to back up policy demands, which RESULTS volunteers take to Congress and other countries’ national parliaments, the World Bank, and bilateral donor agencies such as USAID to influence policy.

RESULTS takes on issues that are on the leading edge of policy and advocacy and brings them into the main stream.

Last year, RESULTS volunteers pushed Congress hard during the appropriations process and succeeded in reversing a total of $495 million in proposed cuts to global poverty focused programs and instead increased funding for these programs by $70 million. This in a political climate where partisanship is reaching its zenith and Congress is widely regarded as broken.

Citizens in the U.S. and all over the world have had a hand in making change through the RESULTS model for 35 years. RESULTS will soon be launching a new five-year strategic plan, and it will continue to advance an advocacy agenda in the financial inclusion space, helping to accelerate toward the end of extreme poverty by 2030.

As Larry Reed and Joanne Carter explained in their April 29th letter, “Financial inclusion and pathways out of poverty are a central part of this [strategic] plan and a critical part of reaching the 2030 goal. The powerful holistic financial inclusion model that the Campaign has been developing and driving with partners will become a centerpiece of RESULTS’ advocacy agenda on economic opportunity.”

In his acceptance speech for the Congressional Gold Medal in 2014, Muhammad Yunus credited RESULTS with having been “the most critical partner for microcredit,” as Bornstein put it. And, they were a critical partner because of the power of a 1000 volunteers raising their voice together to advocate for important policy changes. Yunus recounted a story from his early days as a PhD student in the U.S., walking the halls of Congress and recognizing the importance of citizens standing up for what they believe in.

Let’s close with this look back at a keynote address by Muhammad Yunus at the 2010 Regional Microcredit Summit in Nairobi. He tells the assembled delegates “This is the age of making ‘impossibles’ possible. It is us who decide,” he said, and it is us — citizens — who need to contribute to making change possible. Yunus exhorted us “that we can all work together rather than complaining about lousy government, saying they can’t deliver. There’s no way they can deliver — no matter what — unless we as citizens come together and do it as individuals, together.”

This is the credo upon which RESULTS is founded. RESULTS is making a difference in the world by influencing political decisions — both in the halls of your government as well as in implementing organizations — that will bring an end to poverty.

Changes ahead for the Microcredit Summit Campaign

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Dignitaries who attended the 1997 Microcredit Summit.

Dignitaries who attended the 1997 Microcredit Summit.

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>>Authored by Larry Reed, Director, Microcredit Summit Campaign

Twenty years ago Sam Daley-Harris came to our offices at Opportunity International — where I then worked — and told us of his plans to hold a Microcredit Summit. Working with Muhammad Yunus, founder of Grameen Bank and John Hatch, founder of FINCA, he would gather leaders from around the world to inform them of the important role microcredit and other financial services could play in helping people living in poverty. At the time, neither the UN nor the World Bank nor any national governments had any policies related to microfinance. Sam wanted to change that.

We were intrigued by his idea, so we started asking more about his organization. He represented a grassroots lobbying group called RESULTS, which mobilized citizen volunteers to advocate for issues related to poverty and hunger to their representatives in Congress. He told us about how, in 1990, RESULTS volunteers had held 500 candlelight vigils around the country to support the World Summit for Children.

We left the meeting excited by the prospect but not sure whether Sam was going to be able to pull off such a big event. We went back to our own agendas and didn’t give much thought to the Summit until a month or two before the event when we began to notice that all our conversations with colleagues in microfinance included discussions about the upcoming Summit. Everyone we knew was planning to go, and when we looked at the line-up of speakers, we saw why.

Sam and the RESULTS team had somehow convinced five heads of state, even more spouses of heads of state, the President of the World Bank, the Treasury Secretary, and many heads of UN agencies to speak at the first Summit in Washington. We started scrambling to figure out how we could get noticed at what was becoming the largest international event ever organized for microcredit.

The participants in the first Summit endorsed the goal of reaching 100 million of the world’s poorest families with microcredit by 2005. This became the focus of the first phase of the Microcredit Summit Campaign, expanding the use of microcredit as a development tool as widely as possible. When the Campaign first started tracking microfinance outreach in 1997, our industry was reaching 13 million borrowers, of whom 7.6 million lived in extreme poverty.

During the next nine years, according to David Roodman, the Microcredit Summit Campaign served as “a major force behind the global microfinance movement, combining savvy publicity with behind-the-scenes lobbying for funding.” After coordinated lobbying by RESULTS and their allies around the world, the UN declared 2005 to be the “International Year of Microcredit,” and the Norwegian Nobel Committee awarded its 2006 Peace Prize to Muhammad Yunus and the Grameen Bank. By 2007, the Campaign had reached its goal, reporting 155 million total microfinance borrowers, of whom 107 million were among the poorest in their countries.

Anticipating reaching the goal, the Campaign entered its second phase by setting two new goals at its 2006 Global Summit in Halifax:

  1. Reaching 175 million poorest families with microfinance
  2. Helping 100 million families lift themselves out of extreme poverty

With these new goals, the Campaign began focusing not just on the number of clients, but also on how access to microfinance affects the lives of families who borrow. We stressed the importance of measuring poverty levels of clients and recording progress over time, framing micro financial services as tools to help achieve the larger goal of ending extreme poverty.

In many ways, this message has become more widely accepted. The World Bank has made ending extreme poverty by 2030 and promoting shared prosperity its two guiding goals. As a key step to achieving these goals, the Bank has also adopted a target of reaching universal financial access by 2020. The UN Sustainable Development Goals (SDGs), ratified by 193 nations this past January, have adopted the target of eradicating poverty, in all its forms, everywhere. Making a broad range of financial services available to all is one of the key targets for achieving the SDGs.

On the other hand, we have not had as much success in getting financial providers to expand service to the world’s poorest. As microfinance has grown more commercial, it has served proportionally fewer clients in extreme poverty. In fact, our numbers show that the number of borrowers living in extreme poverty has declined for each of the last three years. These trends, combined with a funding environment that has much less appetite for organizations providing public goods for microfinance, has caused us to rethink our role and structure.

In our last State of the Campaign Report, we identified Six Pathways for microfinance to reach those in extreme poverty and support their movement out of poverty. These Pathways all involve integrating financial services with other important development services, and many of them have significant connections with the work of governments.

At our most recent Summit in Abu Dhabi, our Leadership Council identified four priorities to help drive the future of our work on financial and social inclusion. These include transformative social protection and graduation programs, risk management by the poor, community-led finance, and rural development strategies. What they all share in common is the aim to help people move out and stay out of extreme poverty, addressing their unique vulnerabilities and combining public and private action to make essential services available to and affordable for those living in poverty.

We saw that our future work as the Microcredit Summit Campaign would have significant overlap with the work of our parent organization, RESULTS Educational Fund. As we called for governments and multilateral organizations to tear down the silos in their organizations to combine financial services with other developmental services like social protection, health, housing, and education, we saw that we needed to do the same thing in our own organization. Therefore, in order to strengthen our message and reduce annual recurring costs, we have decided to merge our work with that of RESULTS.

In this new structure, the Microcredit Summit Campaign will no longer operate as a standalone organization. Much of our team will be moving into positions with RESULTS, and we will continue to highlight the work carried out by innovators and leaders who design financial services that reach those in extreme poverty and that can show progress in helping families move out of poverty.

We will continue to advance the priorities of our Leadership Council, integrating them into the work RESULTS does to advocate for policies and resources to eliminate poverty through its three pillars of health, education, and economic opportunity.

Through RESULTS, we will continue to play our unique convening role. We will bring together the ever expanding community of institutions, companies, government agencies, and individuals that can provide the financial and other goods and services that address the unique needs of those living in poverty.

We now embark on the third phase of the Campaign. It will involve an advocacy agenda to link financial services to other key development services so that those living in poverty will have the resources and cash flows needed to provide for themselves, sustain the health of their families, and educate their children. We do so with the same audaciousness that Sam had when he started both RESULTS and the Microcredit Summit Campaign. We do so knowing that we will not succeed until extreme poverty no longer exists on our planet.

Read the official announcement: An Update from Joanne Carter, executive director of RESULTS and RESULTS Educational Fund, and Larry Reed, director of the Microcredit Summit Campaign

See answers to common questions (French and Spanish) that we anticipate you may have. If you have other question we didn’t think of, send an email to info@microcreditsummit.org.

Request for aid to help Ecuador recover from the earthquake

RFR

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Please find below a special message from our friends at Red Financiera Rural (RFR) in Ecuador. They are requesting our aid in dealing with the destruction of the April 16th earthquake. While immediate needs are being met, RFR is looking to the future and how their member microfinance institutions can help their clients and communities come back stronger than ever. They are asking for your help in one of three ways:

  1. Donate to RFR’s efforts to help microentrepreneurs most affected by the earthquake or provide funds to help RFR establish a credit fund to help small businesses recover.
  2. Contribute second-tier, long-term credit with preferential interest rates.
  3. Offer your advice and experiences in dealing with disaster recovery.

Address your comments, questions, and offers of support to helpecuador@rfr.org.ec.


Dear Friends:

Cordial greetings from Rural Financial Network (RFR), an organization of 50 microfinance institutions with credit serving about 1,250,000 microentrepreneurs and small producers throughout Ecuador.

As you may know, an earthquake of 7.8 degrees on the Richter scale occurred on 16 April in Ecuador, with serious consequences on the west coast. The time has mobilized the whole country to assist with aid to cities and towns affected and have received specialized brigades and support of more than 10 countries to rescue survivors, assist the wounded, provide basic goods to the population and find the bodies.

At the time of writing this letter, more than 500 people are dead, about 3,000 injured and about 1,000 missing. Today, we can say there are enough resources to attend the current needs. We expect that all the solidarity received contribute to what is necessary now. Update of the disaster can be found on the website of Ecuador’s Risk Management Secretariat.

As a National Network that brings together microfinance institutions, we are concern about what is coming in the future. The affected areas have a high percentage of the population marginalized, most of the microentrepreneurs were developing activities related to tourism, trade, services and agriculture, so a drama will take time to recover. We can cite some facts about that:

a) The buildings and road system have been damaged between 70 to 90% in cities and villages near the epicenter, and between 40-60% in other populations. There are two provinces severely affected and other two with partial destruction. An estimated 20,000 destroyed buildings at the time.

b) Thousands of microentrepreneur beneficiaries of microcredit have suffered loss of their homes (many of them part of their economic activity), losing goods, machinery, supplies and inventories. Similarly, some markets, popular shopping centers and traders areas are destroyed or they have been looted, so microentrepreneurs merchandise are lost and possibility to continue their economic activities are not possible in the short term.

c) The affected areas have an adequate number of institutions that have been serving microentrepreneurs with credit and other complementary services. We can summarize that microfinance institutions RFR members have the following information:

RFR MEMBERS – IMPACT IN THE PROVINCES OF EARTHQUAKE
MICROFINANCE INSTITUITIONS # #
Microenterpreneurs
USD. Credit
portfolio
PROVINCE: MANABÍ
Local MFI 3 19,435 42,683,826
National MFI with branches 12 77,740 170,735,302
PROVINCE: ESMERALDAS
Local MFI 0 0
National MFI with branches 4 19,082 34,463,108
PROVINCE: GUAYAS
Local MFI 2 29,111 61,370,685
National MFI with branches 10 145,556 306,853,423
PROVINCE: SANTA ELENA
Local MFI 1 2,195 5,095,943
National MFI with branches 8 17,562 40,767,544
#
Microenterpreneurs
USD. Credit
portfolio
TOTAL SERIOUSLY AFFECTED AREAS 116,257 247,882,236
TOTAL LESS AFFECTED AREAS 194,424 170,735,302

d) Microfinance institutions, because of their high social commitment, are making the necessary efforts to help the affected population, responsible for coordinating aid and donations, assembling makeshift shelters, and collaborating in all that is required. However, the big question is how to recover the economy of the small business, refinance their loans, provide additional funds for recovery, more human and psychological assistance needed by the population to resume their activities. We are expecting that local financial institutions suffer withdrawal of their deposits because people need their money now, however there are local mechanism to give assistance of funds and provide temporary liquidity.

e) In addition, MFI are asking to second-tier financiers, national and international, which in turn can refinance loans granted to the institutions of the affected area.

f) The Government is managing aid funds to multilateral agencies and cooperation to gradually restore basic services, road system and begin a rebuilding process that will take several months.

g) Despite the previous point, we know from previous local experiences in smaller scale, and from International experiences shared by friends and networks from other countries that the microenterpreneur need an additional reactivation fund to resume their economic activities. This is the only way to support a true recover plan in order to let them be self-sustainable. Additionally, we should help to seek solutions to existing microcredits. Conditions in the area are not the best for this process, however there are opportunities that can be taken with proper collaboration, because reconstruction activities could be offer possibility for microentrepreneurs if they would have some resources.

h) Finally, the aid will be concentrated in urban areas and in several cases, it will not be directed equally to marginal and rural areas of high levels of poverty. These areas have collateral effects (they can not take its production by isolation, low demand for its products by the companies or businesses affected, are not part of the housing reconstruction programs, their children are relocated to more distant schools, etc.)

For all these reasons, we went to the RFR network of friends and microfinance worldwide to request your kind cooperation in any of the following areas:

1. Financial contributions as a donation to:

  1. Contribute to help microentrepreneurs most affected by the earthquake (total loss of housing, commercial premises, inventories, machinery, isolation, low demand for their products or services, poverty, disabilities, the elderly, single mothers with young children).
  2. Establishment of a credit fund for micro business recovery (provision of raw materials, provision of equipment, repair of damaged infrastructure, change in economic activity)For these donations, which will be channeled RFR members present in the area and other specialized institutions, we provide the bank account of RFR may receive donations of any amount both individuals or organizations:
Bank Name: BANCO PICHINCHA
Bank Address: AV. AMAZONAS 4560 Y PEREIRA
Bank Phone: (+593) 2 2980 980
City: QUITO
Country: ECUADOR
SWIFT Code: PICHECEQ
Beneficiary Name: RED FINANCIERA RURAL
Beneficiary Account number: 3084625404

2. Contributions second-tier credits with preferential interest rates and long-term:

  1. Compensate for the temporary withdrawal of deposits;
  2. Promote credit lines reactivating production medium and long term;These credits can be awarded directly to the microfinance institutions or by second tier through specialized entities (public or private), for which RFR can serve as a contact and reference.

3. Information and experiences:

  1. Able to make contingency plans for microfinance institutions to enable them to define actions and strategies to overcome this moment;
  2. Organizations that provide support in these processes, resources or property donations, volunteers, donors, consulting, information dissemination, campaign design collection of funds or donations, etc.

RFR is open to sign agreements or commitments resource management and coordinate the actions required to receive the aid and to issue performance reports, accountability and audits to be the case. All the help received will be managed as an international cooperation project, with whom we have a vast experience and excellent references. Finally, a report of the entire implementation of the aid received will be issued, even with the list of microentrepreneurs and beneficiaries, as well as testimonies. RFR’s commitment will also systematize the experience so that it can serve as a reference for similar cases.

Should concerns arise or comments regarding about this information, please send it an e-mail to helpecuador@rfr.org.ec

We thank them in advance for your willingness to help or to spread this letter to persons or institutions that can help.

Best regards,

Javier Vaca Fausto Jordán
Director Ejecutivo Presidente

More ways you can help with donations.

The Ecuadorian Government invites you to donate directly:

Ecuador earthquake

Find them on Facebook

And, from CNN:

The Ecuador Red Cross has teams on the ground providing first aid and searching for survivors.

UNICEF has delivered 20,000 water purification tables to the area worst affected by the quake. UNICEF is also assessing the needs of children in the earthquake zone.

World Vision has deployed an emergency response staff to assist with aid distributions and is setting up shelters.

Samaritan’s Purse personnel are on the ground to help coordinate with churches and community officials. The groups says field hospital and medical staff will be arriving later this week.

World Food Program is providing food assistance to more than 5,000 families affected by the earthquake.

Oxfam America is focusing on providing clean water, sanitation, and hygenic products.

Save the Children is delivering emergency shelter, food, generators, and hygiene kits. It’s also providing kits for children to return to school as soon as possible.

International Medical Corps is working with local medical professionals to deploy mobile medical teams and assist damaged hospitals.

Handicap International and their emergency specialists are on the ground in Ecuador trying to get to the affected areas. They are there to provide rehabilitation services and counseling for the injured and their families.

Solicitud ayuda por terremoto en Ecuador

RFR

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Abajo encontrará un mensaje especial de nuestros amigos de la Red Financiera Rural (RFR) en Ecuador. Están solicitando nuestra ayuda para los damnificados de la destrucción del terremoto del 16 de abril. Mientras que las necesidades inmediatas se están satisfaciendo, RFR está viendo hacia el futuro y cómo sus instituciones microfinancieras integrantes pueden ayudar a que sus clientes y las comunidades regresen más fuertes que nunca. Están pidiendo su ayuda en una de tres formas:

  1. Donar a los esfuerzos de la RFR para ayudar a los microempresarios más afectadas por el terremoto o proporcionar fondos para ayudar a la RFR a establecer un fondo de crédito para ayudar a las pequeñas empresas a recuperarse.
  2. Contribuir crédito de segundo piso con tasas de interés preferenciales y de largo plazo.
  3. Ofrecer su asesoramiento y experiencia con casos de recuperación de desastres.

Dirija sus comentarios, preguntas y ofrecimientos de apoyo a helpecuador@rfr.org.ec.


Estimados amigos:

Reciban un cordial saludo de Red Financiera Rural (RFR), organización que agrupa a 50 instituciones de microfinanzas que atienden con crédito a cerca de 1,250,000 microempresarios y pequeños productores en todo el Ecuador.

Como es de su conocimiento un terremoto de 7.8 grados en la escala de Richter ha ocurrido el 16 de abril pasado en Ecuador, con graves consecuencias en la costa oeste del país. Al momento se ha movilizado el país entero para asistir con ayuda a las ciudades y poblados afectados, así como se han recibido brigadas especializadas y ayuda de más de 10 países hermanos para rescatar a sobrevivientes, asistir a los heridos, dotar de bienes básicos a la población y encontrar los cadáveres.

Al momento de escribir este oficio se totalizan más de 500 muertos, cerca de 3,000 personas heridas y alrededor de 1,000 desaparecidos. Se puede decir que al momento existe organización suficiente para asistir las necesidades actuales y que la solidaridad recibida contribuye a lo que se necesita por el momento. Información actualizada del desastre la puede encontrar en la página de la Secretaría de Gestión de Riesgos www.gestionderiesgos.gob.ec/

La preocupación como Red que agrupa a instituciones de microfinanzas surge de cara al futuro, ya que las zonas afectadas tienen un alto porcentaje de población marginada, la mayoría microempresarios que vivía de actividades de turismo, comercio, servicios y agricultura, por lo que al momento se vive un drama que tomará tiempo en poder recuperarse, entre lo que podemos citar:

a). Las edificaciones y sistema vial han sufrido daños entre el 70 al 90% en los poblados cercanos al epicentro, y entre el 40-60% en poblaciones aledañas a este, siendo 2 provincias afectadas gravemente y otras 2 con destrucción parcial. Se estima al momento 20,000 edificaciones destruidas.

b). Miles de microempresarios beneficiarios de microcréditos han sufrido pérdida de sus viviendas, muchas de ellas parte de su actividad económica, perdiendo mercadería, maquinaría, insumos e inventarios. De igual forma algunos mercados, centros comerciales populares, o zonas de comerciantes están destruidas o han sido saqueadas por lo que microempresarios han perdido mercadería y su sustento diario.

c). Las zonas afectadas cuentan con un número adecuado de instituciones que han venido atendiendo a los microempresarios con crédito y otros servicios complementarios, pudiendo resumir que las instituciones de microfinanzas miembros de RFR tienen la siguiente información:

ESTADÍSTICAS MIEMBROS RFR – EN PROVINCIAS DE IMPACTO DEL TERREMOTO
INSTITUCIONES DE MICROFINANZAS No. No. Microempresarios USD. Cartera de crédito
PROVINCIA DE MANABÍ
IMF locales 3 19,435 42,683,826
IMF nacional con oficinas 12 77,740 170,735,302
PROVINCIA DE ESMERALDAS
IMF locales 0 0
IMF nacional con oficinas 4 19,082 34,463,108
PROVINCIA DE GUAYAS
IMF locales 2 29,111 61,370,685
IMF nacional con oficinas 10 145,556 306,853,423
PROVINCIA DE SANTA ELENA
IMF locales 1 2,195 5,095,943
IMF nacional con oficinas 8 17,562 40,767,544
No. Microempresarios USD. CArtera de crédito
TOTAL ZONAS MÁS AFECTADAS 116,257 247,882,236
TOTAL ZONAS MENOS AFECTADAS 194,424 170,735,302

d) Las instituciones de microfinanzas, por su alto compromiso social, están realizando los esfuerzos necesarios para ayudar a la población afectada, encargándose de coordinar ayuda y donaciones, montando albergues provisionales, y colaborando en todo lo que se requiera. Sin embargo, la gran pregunta es cómo poder reactivar la economía del microempresario, refinanciar sus créditos, proporcionar fondos adicionales para su recuperación, a más de la asistencia humana y psicológica que necesita la población para retomar sus actividades. Se prevé adicionalmente, que las instituciones financieras locales sufran retiro de sus depósitos ya que las personas necesitan su dinero en estos momentos, y se ha previsto ayuda de fondos locales que provean liquidez temporal.

e) Se está solicitando a los financistas de segundo piso, nacionales e internacionales, que puedan refinanciar a su vez los créditos otorgados a las instituciones de la zona afectada.

f) El Gobierno está gestionando fondos de ayuda ante organismos multilaterales y cooperación para poder de a poco reestablecer los servicios básicos, sistema vial e iniciar un proceso de reconstrucción que tomará varios meses.

g) A pesar del punto anterior conocemos por experiencias locales anteriores de menor escala, y por experiencias internacionales que nos han compartido instituciones y redes amigas de otros países, que el microempresario al depender exclusivamente de su negocio para la subsistencia diaria, necesita un fondo de reactivación para poder retomar sus actividades económicas que son su único ingreso para sostén de su familia. Adicionalmente se debe buscar la solución a los créditos existentes. Si bien las condiciones de la zona no son de lo mejor para este proceso, hay oportunidades que pueden tomar con la debida colaboración, ya que las propias actividades de reconstrucción ofrecen posibilidad al microempresario.

h) Finalmente, la ayuda se concentra en zonas urbanas y en varios casos se ha visto que no llegará en la misma magnitud a zonas marginales y rurales de altos niveles de pobreza que sufren efectos colaterales (no pueden sacar su producción por aislamiento, baja la demanda de sus productos por parte de las empresas o comerciantes afectados, no son parte de los programas de reconstrucción de viviendas, sus hijos son reubicados en escuelas más lejanas, etc.)

Por estas razones acudimos la red de amigos de RFR y las microfinanzas a nivel mundial para solicitar su gentil colaboración en alguno de los siguientes ámbitos:

1. Aportes financieros como donación para:

  1. Contribuir a ayudar a los microempresarios más afectados por el terremoto (pérdida total de vivienda, local comercial, inventarios, maquinaria, aislamiento, baja de la demanda de sus productos o servicios, condiciones de pobreza, discapacidades, ancianos, madres solteras con hijos pequeños).
  2. Constitución de un fondo de crédito para reactivación de negocio de microempresa (dotación de materia prima, dotación de maquinaria, reparación de daños en infraestructura, cambio de actividad económica).Para estas donaciones, que serán canalizadas a los miembros de RFR presentes en la zona y otras instituciones especializadas, ponemos a disposición la cuenta bancaria de RFR pudiendo recibir donaciones de cualquier monto tanto de personas naturales o de organizaciones:
Nombre del Banco: BANCO PICHINCHA
Dirección del Banco AV. AMAZONAS 4560 Y PEREIRA
Teléfono del Banco: (+593) 2 2980 980
Ciudad: QUITO
País: ECUADOR
Código SWIFT: PICHECEQ
Nombre del beneficiario: RED FINANCIERA RURAL
Número de cuenta del beneficiario 3084625404

2. Aportes con créditos de segundo piso con tasas de interés preferenciales y de largo plazo para:

  1. Compensar el retiro temporal de depósitos;
  2. Promover líneas de crédito de reactivación productiva de mediano y largo plazo;Estos créditos se canalizarán directamente a las instituciones de microfinanzas, o por medio de alguna entidad local, pública o privada, especializada en el tema, para lo cual RFR puede servir de contacto y referencia.

3. Información y experiencias para:

  1. Poder realizar planes de contingencia para las instituciones de microfinanzas que les permitan definir acciones y estrategias para superar este momento;
  2. De organizaciones que brinden apoyo en estos procesos, con donaciones de recursos o bienes, voluntarios, cooperantes, asesoría, difusión de información, diseño de campañas de colección de fondos o donaciones, etc.

RFR se compromete a suscribir convenios o compromisos de manejo de los recursos o a coordinar las acciones que se requieran para recibir la ayuda, así como a emitir los informes de ejecución, rendición de cuentas o auditorías de ser el caso, tal como si fuera un proyecto con la cooperación internacional, con los cuales tenemos una vasta experiencia y excelentes referencias. Finalmente se emitirá un informe de toda la ejecución de la ayuda recibida, incluso con el listado de los microempresarios y personas beneficiarias, así como de testimonios. El compromiso de RFR será también sistematizar la experiencia para que pueda servir de referencia para casos similares.

En caso de que se presenten inquietudes o comentarios respecto a esta información, favor remitirla a la dirección electrónica helpecuador@rfr.org.ec

Agradeciéndoles de antemano por su predisposición a ayudar o a difundir el presente oficio a personas o instituciones que puedan ayudar, nos despedimos.

Saludos cordiales,

Javier Vaca Fausto Jordán
Director Ejecutivo Presidente

Research on Ecuador’s digital platform to be featured at 18th Microcredit Summit

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The Microcredit Summit Campaign, as part of its 6 Pathways, is helping to highlight ways that digital platforms are helping to expand financial inclusion, especially for the extreme poor. We are pleased to share with you this Executive Summary of their research.

At the 18th Microcredit Summit this research will be included in the breakout session “The Digital Revolution and Financial Inclusion.” We hope to see you there!


>> Authored by Jorge Moncayo and Marcos Reis.

Financial systems have a vital role in national economies. They provide savings, credit, payment, and risk management products to society. In this sense, inclusive financial systems — those with a high share of individuals and firms that use financial services — are especially likely to benefit poor people and other disadvantaged groups. On the contrary, poor people must rely on their limited savings to invest in their education or become entrepreneurs. In addition, small enterprises must rely on their limited earnings to pursue promising growth opportunities (Demirguc-Kunt and Klapper, 2012).

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Mifos and DreamStart team up on Commitment – And they’re looking for a partner!

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Join the Mifos Initiative and DreamStart Labs in a new, bold, and momentous initiative. They are collaborating on a joint Campaign Commitment that embodies the spirit of the 100 Million Project with its measurable approach and global outreach for the financial inclusion of the world’s extreme poor.

These two Commitment Makers will begin by providing a sample of savings groups from various countries with software to manage their financial records. Working in the lean startup method of “build-measure-learn,” they will adjust and fine-tune their software to meet the needs of the extreme poor. Not only will the software empower families and communities to become part of the formal financial services system, but more importantly, it will provide crucial data that will improve product design and the lives of the families who receive them.

BECOME PART OF THIS INITIATIVE. Mifos and DreamStart are looking for a partner to roll out this platform. The ideal partner for this project will be a highly motivated, committed organization with a global network of saving groups. The Mifos Initiative and DreamStart Labs hope to welcome this partner by the end of the month and announce this exciting new Commitment at the 18th Microcredit Summit in Abu Dhabi this March 14-17.

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New database tool can help you define and refine client outcomes

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Global Health Indicators Project
The Microcredit Summit Campaign has long been committed to promoting the uptake of measurement tools in the microfinance sector, especially the poverty measurement tools. Such tools provide MFIs the means to know for sure if they really are reaching the poorest. More recently, we have encouraged MFIs to implement these tools to track the movement of clients (hopefully) out of poverty. At the 18th Microcredit Summit next month, we have several sessions that will show participants the benefits and challenges of such tools, including the Client Outcome Performance (COPE) Indicators Database, which you’ll read about here.


>> Authored by Bobbi Gray, Freedom from Hunger

When I joined Freedom from Hunger several years back, I had the responsibility to carry on a decades-long commitment to research and evaluation. My predecessor, Barbara MkNelly, as well as my then-supervisor and president of Freedom from Hunger, Christopher Dunford, were already known for their contributions to the research efforts of the growing microfinance sector and the original set of SEEP/AIMS client assessment tools. Freedom from Hunger’s commitment to promoting easy-to-use and cost-effective tools also led to years of developing monitoring and evaluation systems for microfinance organizations that were coined as “Progress Tracking.” Fast-forward several years, and this is much better known as Social Performance Management.

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Grameen Fdn expands our knowledge on poverty measurement

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We are pleased to post an update from Grameen Foundation about the Campaign Commitment that they launched in 2014. Focused on supporting the growth of the use of a very effective poverty measurement tool, the PPI®, their Commitment also underscores the importance of using the data from tools like this in helping to improve the way we support and serve those living in poverty.

You can learn first-hand how such tools can be used, not just to prove that you are reaching the extreme poor, but to improve the services that you offer and the way you interact with the extreme poor. We are organizing a breakout session at the 18th Microcredit Summit called “Innovations in Measuring Social Impact.” Learn more and register today!


>> Authored by Julie Peachey, Grameen Foundation

In early 2014, Grameen Foundation made several commitments, as part of the Microcredit Summit Campaign’s 100 Million Project, towards achievement of the collective goal of helping 100 million families escape poverty. Our commitments focused on demonstrating use of the Progress out of Poverty Index® (PPI®) for measuring household-level poverty, because reaching and lifting people out of poverty requires knowing who is actually poor.

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Celebrate improving maternal and child health in the Philippines

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Over the past 20 years, the Philippines has enjoyed an increase in life expectancy, improved access to education and economic opportunity, and a decrease in communicable diseases. However, maternal health has lagged behind, and as 2015 draws to a close, the world will be reflecting on the Millennium Development Goals like #5, “Improve maternal health.” Three development organizations took action in 2014 to tackle this challenge and are now celebrating what has been achieved, new partnerships that have been formed, and plans for moving forward.

Freedom from Hunger and the Microcredit Summit Campaign partnered with CARD Mutually Reinforcing Institutions (CARD MRI) to implement a project called “Healthy Mothers, Healthy Babies: Kalinga kay Inay.” The project is supported by an educational grant from Johnson & Johnson and will conclude at the end of 2015.

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We second that toast, Beth

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>>Authored by Larry Reed, Director, Microcredit Summit Campaign

Last week, Beth Rhyne posted a well-deserved tribute to Alex Counts, who recently retired as CEO of Grameen Foundation. I’d like to add to her thoughtful articulation of Alex’s contributions to microfinance and the lives of people living in poverty.

I once sat with Alex at a dinner in Dhaka that brought together many different strands of the Grameen family. Our table included several of the board members of Grameen Bank, women clients of the bank. They laughed at Alex as he talked with them in Bangla, and then let us know exactly what they thought about how the government was treating Prof. Yunus. As I watched their delighted conversation, I was struck with how it traversed so many traditional barriers of gender, age, caste, education, experience and income. It was just Alex and his friends, who were not only clients of Grameen but were also mothers, daughters, board members and business owners. He wanted to learn as much as he could from them.

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microPension Foundation to advance pension and social security inclusion

Micro Pension Foundation co-hosts a financial counselling session at Sullimula Paniya tribal village (India). Photo courtesy of Micro Pension Foundation — Read the press release announcing Micro Pension Fondation’s Campaign Commitment (the link connects to the ESAF press release) — Read their Commitment letter (the link connects to the ESAF letter) —Watch the recording of the E-workshop co-hosted with the Center for Financial Inclusion, Micro Pension Foundation and HelpAge International, (hyperlink https://www.youtube.com/watch?v=gFzTaAlc7To)

microPension Foundation co-hosts a financial counseling session at Sullimula Paniya tribal village (India). Photo courtesy of microPension Foundation
Read the press release announcing microPension Foundation’s Campaign Commitment
Read their Commitment letter
Watch the recording of the E-workshop co-hosted with the Center for Financial Inclusion, Micro Pension Foundation and HelpAge International

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The Microcredit Summit Campaign welcomes microPension Foundation (mPF) as the 58th organization to make a Campaign Commitment. mPF commits to provide an integrated, contributions-led micropension solutions for 25,000 domestic help workers in India and work to further social security inclusion for low-income informal sector workers. With this Commitment, mPF joins a global coalition to help 100 million families lift themselves out of extreme poverty.

The non-profit mPF is a specialized pension and social security inclusion R&D hub established in 2012 through an inception grant from VISA, Inc. mPF develops, field-tests, and mainstreams innovative and scalable technology-led solutions to enable secure, convenient, and affordable access to contributory pension and social security programs by low-income unbanked workers.

microPension Foundation joins our coalition and commits to the following:

  • By encouraging mass-scale civil society action to achieve pension and social security inclusion by motivating P2P action using the first global e-commerce social security platform titled “gift-a-pension.” This web-platform enables middle and upper-middle income households to enroll their domestic help (cooks, drivers, maids, guards) for an integrated pension, insurance, and micropayment solution through the Internet.
    Employers use electronic financial literacy tools (FAQs, animations, films, calculators) to explain pension and social security concepts and product features to their home help. Domestic help who do not have a bank account are provided a bank-issued prepaid card for channeling periodic micropension contributions to regulated pension funds and life insurers.
    By December 2016, the microPension Foundation will aim to achieve coverage of 25,000 domestic help employed by middle and upper-middle income households in India. The microPension Foundation will also identify and work with like-minded institutions in other developing countries to implement the Gift-a-Pension platform in other countries.
  • The microPension Foundation will collaborate with a specialized social security solutions enterprise to launch a new social security gateway named microPension-in-a-Box (mPIB). This gateway will enable governments, regulators, multilateral and bilateral aid agencies, MFIs, cooperatives, NGOs, and social enterprises more generally to offer an integrated social security program based on portable, individual pension and insurance accounts to their citizens, clients, or beneficiaries.
    With the Microcredit Summit Campaign, the microPension Foundation and the new solutions enterprise will launch a global road-show in mid-2016 to show-case the mPIB solution to Campaign partners and to build a global partnership-led implementation network.

gift a pension photo_275x338mPF will encourage, enable, and assist Campaign partners and other stakeholders to launch integrated, contributions-based micropension and microinsurance programs for low income excluded individuals. With this strategy, mPF seeks to multiply the impact of the social security inclusion effort and create a global micro-social security marketplace which will enable low-income, informal sector workers to achieve a secure and dignified old age through thrift and self-help.

Executive Director of Micro Pension Foundation, Parul Khanna, explains why they are committing with the Microcredit Summit Campaign:

“We are extremely excited about the huge potential global impact of the Microcredit Summit Campaign and are delighted to be a partner in this process. The mPF team is committed to work closely with the Campaign and fellow partners in the coming years to empower and enable low-income excluded women to achieve a financially secure and dignified old age.”

Read the Commitment Letter from Micro Pension Foundation.

The Microcredit Summit Campaign looks forward to welcoming our newest partners to the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit. The 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.


We invite you to join microPension Foundation and…

Get Inspired. Set a Goal. Make a Commitment.

Join the movement to help 100 million families lift themselves out of extreme poverty:

Rating progress toward financial inclusion on a scale of 1 to 10

fi2020 progress report homepage2

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The Microcredit Summit Campaign is delighted to support CFI’s efforts to track the progress of the Financial Inclusion 2020 project. In contribution to the “Financial Inclusion 2020 Progress Report,” we recently conducted a series of interviews with microfinance leaders around the world who are committed to reaching the most marginalized. Read “Addressing the financial needs of the most excluded” to hear directly from practitioners engaged in this work. Elisabeth Rhyne believes you will be both astonished by the progress and daunted by the gaps that remain” in financial inclusion. Read her post below and visit the interactive Progress Report website to take part in this financial inclusion diagnosis.


The following blog post was originally published
by the Center for Financial Inclusion at Accion

>>Authored by Elisabeth Rhyne, Managing Director, Center for Financial Inclusion

Today the Center for Financial Inclusion (CFI) is proud to launch the Financial Inclusion 2020 Progress Report, an interactive website that portrays the recent progress and unmet challenges on the path to global financial inclusion.

When we began the FI2020 project in 2011, we hoped to create a sense of both urgency and possibility. We believed that enabling everyone in the world to gain access to quality financial services was a goal of major development significance. We also saw that with many active players and the promise that digitization would enable many more people to be reached at lower cost, it was no longer simply wishful thinking to call for full inclusion within a reasonable timeframe. Global financial inclusion had entered the realm of the possible.

Today, in 2015, we are both astonished by the progress and daunted by the gaps that remain. Global Findex data shows 700 million new accounts in the three years from 2011 to 2014, reducing the number of unbanked worldwide from 2.5 to 2 billion. National governments have created ambitious financial inclusion strategies, the FinTech industry is exploding with $12 billion in global investments in 2014 alone, and the World Bank has a plan for reaching universal financial access to transaction accounts by 2020.

Our quantitative review, By the Numbers revealed that if the current trajectory of expansion in accounts continues, many countries will achieve full account access by 2020. The rails are being laid at a rapid rate, and there is great momentum toward universal access. But access to an account is not the same thing as financial inclusion, and progress toward meaningful financial inclusion, in which people actively use a full range of services, is lagging. The passengers — customers — are often still waiting at the station for services that take them where they want to go.

With assurance of great momentum around access, CFI believes that the time is right to turn greater attention to quality and value for the customer, which are the genuine heart of financial inclusion. In the Progress Report, you will find a recurring concern with the customer side of the equation. Meeting the customer challenge requires everyone — national policymakers, regulators, financial service providers of all types, non-profits, and global bodies — to step up. The challenges range from protecting consumers in the digital age, to building financial capability, to creating services that enable customers to meet important life goals.

As you read the Progress Report you will see just how many players are actively pursuing these goals in innovative ways all over the world. We cite and celebrate dozens of examples. Nevertheless, we find that in many areas, such as financial capability, the level of effort is not yet commensurate with the challenge at hand, and large shifts are called for, both in deployment of resources and in assignment of roles and responsibilities. For example, we find that meaningful financial inclusion requires providers to take on greater responsibility for customer value.

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In the Progress Report, we present our assessment of progress toward global financial inclusion through the lens of five topics that will shape its future: Financial Capability, Addressing Customer Needs, Technology, Credit Reporting and Data Analytics, and Consumer Protection. The report provides a qualitative and interactive assessment of who is doing what, as a companion piece to By the Numbers. The FI2020 Progress Report celebrates the most significant accomplishments, and highlights the gaps that create the agenda for the coming years.

Aside from the content of the Progress Report, we are excited to share with you the format for its presentation. Rather than producing a traditional document, the report takes the form of an interactive website, which allows you to move from topic to topic according to your own interest, and which allows us to bring you many specific examples and graphic illustrations in sidebars throughout the report. We hope you enjoy the format. (If you prefer a traditional PDF, that is also available.)

To provoke a conversation, we have rated progress in each area on a scale of 1 and 10, and we explain why we chose that score. We invite you to use the interactive feature on the website to cast your own vote and compare your scores to ours. Go ahead, disagree with us! While we stand behind the research and analysis that went into our ratings, they are — of course! — our own, and they reflect a global look, which may vary greatly from one region or country to another.

Most of all, consider with us the ways to close the gaps so that each of the scores rises to 10. That’s the point of this exercise, after all: to diagnose where we are today in order to work toward a future of full, meaningful financial inclusion.

Mourning the passing of a microfinance pioneer: Dr. Harihar Dev Pant

HD Pant_karobar Daily

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>>Authored by Dr. D.S.K. Rao, Regional Director for Asia-Pacific

We learned recently that a great friend of the Microcredit Summit Campaign died of lung cancer earlier this month. Dr. Harihar Dev Pant, a pioneer of microfinance in Nepal, started his career in microfinance as a deputy director in the Nepal Rastra Bank (NRB, the country’s central bank), and went on to found one of the largest microfinance banks in Nepal, Nirdhan Utthan Bank Ltd. He was its chairman and CEO till near the end.

A quote from Muhammad Yunus: “Dr. Pant was such a magnificent human being. What a life of total dedication to the cause of the poor he lived. We all mourn his untimely death.”As the deputy governor of the central bank, Dr. Pant laid the foundation for microcredit in Nepal. Dr. Pant was greatly influenced by Prof. Muhammad Yunus (to the right) and was indoctrinated by the Nobel laureate into microfinance.

As the deputy governor he was responsible in creating five rural banks in Nepal specializing in microcredit operations and following the Grameen Bank lending methodology. Dr. Pant was the founder-chairman of the first two Grameen Bikas Banks in Nepal: Purbanchal Grameen Bikas Bank and Sudur Paschimanchal Grameen Bikas Bank. After his retirement from the central bank, he created Nirdhan Utthan Bank, which grew rapidly to become one of the largest MFIs in the country.

Dr. Pant was also a great friend of Microcredit Summit Campaign. He attended all of the Summits in the early years and acted as a panelist many times in plenaries and workshop sessions. His latest contribution was at the Global Microcredit Summit 2011 in Spain. He shared how his staff managed to reach remote, mountainous areas of Nepal, and how Nirdhan manages to balance the necessity of being profitable and meeting their social mission.

Dr. D.S.K. Rao

Dr. D.S.K. Rao

Whenever I visited Nepal in 2000s, Dr. Pant extended full cooperation. He introduced me to the promoters of all the major MFIs in the country and helped me to develop a rapport with them. He also helped in organizing workshops, participated with microfinance stakeholders, particularly practitioners.

Dr. Pant was very keen that Nirdhan, the bank he promoted, have a strong poverty focus. He commenced the service by offering loans of Rs.3,000 to Rs.5,000 ($28-47) to underprivileged women to run microenterprises. Dr. Pant also showed a keen interest in qualitative poverty measurement tools, such as the CASHPOR Housing Index and poverty wealth ranking, and he introduced them in his bank. He was deeply concerned that microfinance too, like formal banks, may be missing the really poor households. He gave much more importance to depth of poverty outreach over scaling up the program through reckless financing.

Dr. Pant keenly followed the progress of microfinance in Asia, particularly in South Asia. One could speak to him on any subject, ranging from banking, finance, economics, culture, and, of course, politics. Such was his passion towards microfinance that despite severe setbacks to his health in the last couple of years, Dr. Pant continued his active involvement with the sector.

Dr. Pant had been suffering from lung cancer for the last seven months. He was diagnosed in February and received treatment at Rajiv Gandhi Super Speciality Hospital in New Delhi, India. Dr-PantLately, he underwent treatment at Nepal Cancer Hospital and Research Centre, Lalitpur. He passed away at his residence in Anamnagar, Kathmandu on September 8th.

Pant was the father figure of microfinance in Nepal. A kind and jovial person. Deep condolences to his family.

May his soul rest in peace.


Additional words of remembrance

“When the Microcredit Summit Campaign was launched 18 years ago, I found it quite remarkable that a high ranking Central Bank official in any country had so fully embraced microfinance for the very poor. But that is what Dr. HD Pant had done and it was an honor to have his wisdom and commitment contribute to the success of the Summits that followed. I hope his family and friends find some solace in the greatness of his achievements.”
— Sam Daley-Harris, Founder, Microcredit Summit Campaign; and CEO, Center for Citizen Empowerment and Transformation (CCET)

Shankar Man Shrestha“He was a good friend and served the microfinance sector with devotion and dedication. While I focused in the eastern region of Nepal, Dr. Pant worked in the western region in the districts of Rupandehi, Kapilbastu and Nawalparasi. We competed and also complemented each other. Dr. Pant was an honest and hardworking man, wholly committed towards his work for the poor. It is very sad to lose a colleague and friend of many years.”
— Shankar Man Shrestha, Chairman, Centre for Self-help Development; and former CEO, Rural Microfinance Development Centre Ltd.

ESAF Microfinance commits to comprehensive services for clients

ESAF Microfinance trains community health workers and organizes health fairs for their clients and poor communities. Photo courtesy of ESAF Microfinance
— Read the press release announcing ESAF Microfinance’s Campaign Commitment
— Read their Commitment letter

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The Microcredit Summit Campaign welcomes ESAF Microfinance as the 57th organization to make a Campaign Commitment. ESAF joins a global coalition to help 100 million families lift themselves out of extreme poverty. ESAF will help support their clients in uplifting themselves from poverty by providing them with education, training, and support services.

ESAF and the Campaign strongly believe that microfinance services should be complemented by education, training, and other supporting programs that help poor families battle chronic poverty and social exclusion. For example, in partnership with the Campaign, ESAF trained community health workers (Arogya Mithras in Hindi) to provide health education and front-line screening services for non-communicable diseases to poor communities. You can learn about that project in “Integrating Health with Microfinance: Community Health Workers in Action.”

For the financial year 2015-2016, ESAF Microfinance aims to reach out to new clients through its products and services, committing to the following:

  1. To offer microfinance services to 200,000 new clients through expanding the geographic reach in some of the backward states of Chattisgarh, Jharkhand, West Bengal, and Bihar.
  2. To increase the reach of financial services to an additional 10% of clients, making it to a total of 50% of clients who belong to socially backward communities/tribes (scheduled castes and scheduled tribes as per government of India)
  3. To offer livelihood support services to at least 10,000 clients who shall be in a position to contribute to the income of their household.
  4. To measure the poverty levels of 200,000 clients using PPI.
  5. To offer financial literacy training to at least 50,000 clients.
  6. To offer health education and awareness sessions to at least 50,000 clients and to offer health check-up services to benefit at least 5,000 clients.
  7. To offer financial and non-financial services to at least 3,000 PWD (persons with disabilities) clients.
  8. To offer women’s leadership and empowerment programs to benefit at least 50,000 clients.
  9. To reach at least 2,000 children through educational programs for academic growth and value education.
  10. Educate at least 50,000 clients on environment protection and use of clean energy products.

Chairman and managing director, K. Paul Thomas, explains why their commitment includes a number or programs addressing multiple aspects of the client’s life such as health:

“ESAF’s vision and mission very clearly emphasize on holistic transformation of its poor clients,” he said, “and, we are convinced this cannot be achieved unless their health issues are addressed.”

ESAF Microfinance is one of the premier microfinance institutions in India today, particularly in Kerala, effectively empowering 750,000 members through 160 dedicated branches. The founder of ESAF ventured into microfinance in 1995, by organizing self-sustainable groups, to alleviate poverty and generate employment. Since then, ESAF has grown by leaps and bounds in the microfinance sector, promoting microfinance as a viable, sustainable, and effective means for creating jobs and reducing poverty.

Read the Commitment Letter from ESAF Microfinance.

The Microcredit Summit Campaign looks forward to welcoming our new partners to the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit. The 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.


We invite you to join ESAF Microfinance and…

Get Inspired. Set a Goal. Make a Commitment.

Join the movement to help 100 million families lift themselves out of extreme poverty:

Financing healthcare in new middle income countries: Lessons from Kenya

Release of "Who Pays for Progress?"

Report authors Steve Lewis and Evelyn Kibuchi presented their findings on the report, Who Pays for Progress? at the Third Financing for Development Conference in July. They were joined by representatives from the World Bank and other global organizations as well as Yvonne Chaka Chaka, UNICEF Ambassador and Princess of Africa Foundation. Photo credit: Steve Lewis/RESULTS UK

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>>Authored by Theo Fievet, State of the Campaign Report Intern

A step to climb

Despite economic growth over the last decade, healthcare outcomes in Kenya remain weak. Rates of maternal mortality and stunting among children have barely changed…

— World Bank, Financial Report (Kenya), June 2014

Is a vibrant, fast-growing economy enough to improve the performance of the public health sector? A case study in Kenya published recently by RESULTS UK and partners KANCO and WACI shows that the correlation between economic growth and public health is not simple, nor automatic. Even though Kenya’s growth in recent years averaged 6 percent per annum, 25 percent of the population still lacks quality healthcare.

Kenya’s improved economic performance helped the country cross the line separating low-income countries (LIC) from lower-middle-income countries (LMIC), and this shift in status has a considerable impact on Kenya’s situation on the international stage. Kenya’s new standing as a MIC threatens its income from international aid and donations. The country faces a contradictory situation: while its economic position has improved, the country’s health sector remains typical of an LIC. For example, only 28 percent of infants are fully immunized.

The Government of Kenya is working to on a plan for universal health coverage (UHC), providing all citizens with the health services they need and saving them from financial hardship. According to the World Bank, Kenya’s rate of “out-of-pocket” expenditures (the amount paid by the patient’s household) was greater than 50 percent. For poor families, this often means selling business assets or pulling their children out of school. Kenya’s challenge is to figure out how to revolutionize a health system to include even the poorest Kenyans, while international aid possibly decreases in the coming years.

In the report, Who Pays for Progress?, the authors (Steve Lewis and Evelyn Kibuchi) suggest that a balance between domestic resource mobilization (DRM, otherwise known as taxes) and official development assistance (ODA) will be the way toward a sustainable and independent healthcare system.

Alliance of public funders

RESULTS UK argues in the report that cooperation between internal (domestic) and external (international) actors is necessary since both solutions have inconveniences that the other can counterbalance.

ODA could and has declined and follows unpredictable trends. Australia, for example, decided to cut 70 percent of its aid for developing countries. International aid institutions such as the World Bank and GAVI (the Vaccine Alliance) have a variety of complex criteria from which it is difficult to determine what will be the final aid amount disbursed. Furthermore, relying on DRM instead of ODA provides greater maneuverability for countries because ODA is often conditional and subject to donor priorities. Kenya cannot risk being totally dependent on the varying ODA and its requirements.

On the other hand, ODA that is earmarked for healthcare comes with direction on how to be spent; it is thus a way to assure funding is provided for health services. Tax income, meanwhile, may be siphoned off for debt repayment or subject to a lack of political will or a lack of trust in health sector efficiency. Furthermore, while DRM currently accounts for 55 percent of Kenya’s budget, it covers only a fraction of many of the country’s healthcare needs.

Finding the most sustainable way to finance UHC

In the medium-term, ODA may fall faster than Kenya is able to increase tax revenue. In 2012, Kenya collected 15.9 percent of their GDP in tax revenue (World Bank data). According to the UNDP, this number needs to increase to 20 percent to smooth the transition from a donor- and tax revenue-financed health sector to a tax revenue- and loan-financed health sector. This is a sustainably financed health sector.

The report recommends tax reforms that combat illicit financial flows in order to a) facilitate predictability of tax income and prioritization; b) create a sense of participation to appear responsible to donor nations, which will then be obligated and/or encouraged to continue their aid; and c) gain recognition in the international finance markets for replacing grants with loans.

In the shorter term, responsible health spending (regarding the implementation of UHC) requires that ODA has to be invested in a profitable way. Investment could occur directly in some key aspect of the health sector regarding maternal health, delivery or child nutrition, as “every dollar invested in nutrition to reduce stunting yields a benefit of more than $16” [1]. Investment could also take place indirectly, for example, to reform and modernize Kenya’s tax system, as “an OECD pilot project in Kenya found that every $1 invested in tax administration, $1,650 was returned” [2].

The report concludes that Kenya should work toward a tax system suitable to an LMIC country. Kenya is not unique in its transition from an LIC to an LMIC, and this report can easily be adapted to other countries that fall in between these two categories. A close look at this group of countries would benefit other countries who are on the way to being in the same position between LIC and MIC.

Read the full report.

Footnotes

[1] “Who Pays for Progress?” page 13

[2] Page 30


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