Training the next generation of leaders in microfinance

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"Cultivating the Next Generation of Leaders" plenary
We feature an interview with Glynis Rankin, CEO of Creative Metier in the UK, in Mapping Pathways out of Poverty: The State of the Microcredit Summit Campaign Report, 2015. Rankin and her team work to ensure that the financial inclusion industry possesses the leadership and capacity to ensure long-term success. In this interview, Rankin describes a study of industry leaders to understand their perspectives on leadership qualities that Creative Metier undertook in preparation for the 17th Microcredit Summit in Mexico last year. (Registration for the 18th Microcredit Summit is now open!)

Cultivating the next generation of leadership is an important consideration for the microfinance and financial inclusion sector. We have an important role to play in achieving universal financial access by 2020 and ending extreme poverty by 2030.

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How to be disability inclusive and age friendly

Lucía Urtecho Calderón, client of Financiera FAMA, sells candy and candied fruits in Mercado Carlos Roberto Huembes, Nicaragua on December 13, 2012

Lucía Urtecho Calderón, client of Financiera FAMA, sells candy and candied fruits in Mercado Carlos Roberto Huembes, Nicaragua on December 13, 2012. Photo credit: Center for Financial Inclusion at Accion

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>>Authored by Sonja E. Kelly and Misha Dave, Center for Financial Inclusion at Accion

Almost a year ago now, the Center for Financial Inclusion at Accion launched two Campaign Commitments for further research and action on the inclusion of persons with disabilities and older people in financial services. If there is one lesson we have learned from following through on these Commitments, it is that including these populations in financial services is in some ways easier than practitioners expect it to be but, in other ways, harder than it looks.

In our research on aging and financial inclusion, one of the key insights was that financial service providers of all sizes often apply age caps on credit products. However, many institutions we talked with did not know exactly where these standards came from. Some attributed them to concerns about life expectancy of older clients, some to institutional history (“that’s just the way we do it”), some to the increase of credit portfolio insurance it would incur, and some to a perception of older people as economically dormant.

Many of these concerns can be mitigated by better research and dispelling myths about the creditworthiness of older people. Easy, right? In fact, there are some institutions that apply creative ideas to providing credit to older people. Group guarantees and automatic withdrawal payments on loans from publicly administered pensions through government partnerships are both examples of this.

However, such institutions providing credit to older people seem to be the exception rather than the rule. Worse, convincing institutions to care about this population is not easy. One institution we spoke with in India was baffled by the idea of providing credit to people over the age of 55. “But they [the older people] could die and wouldn’t pay the loan,” the product developers insisted. Doing the research and articulating the issue was the easy part — now the hard work begins of advocating on behalf of older people.

Similar attitudinal barriers exist in financial institutions for serving persons with disabilities. Let’s take stock: over one billion people around the world — 1 in 7 of us — have a disability and four-fifths live in developing countries like India. Despite this and the fact that many microfinance institutions (MFIs) claim to be dedicated to “serving the world’s financially excluded people,” less than 1 percent of their clients are persons with disabilities.

In India, disabled persons have limited or no access to formal credit and other financial products for education, housing, skills development, business, and such. In addition, insurance companies in India do not cover assistive technology like wheel chairs and hearing aids that disabled persons need to be mobile, avoid further injury to themselves, and work and live full lives. The gap between demand and supply is enormous, and this creates a dangerous hotbed for informal credit and loan sharks to exploit an already vulnerable and marginalized population, dragging them further into poverty.

Disabled persons and older people have similar physical challenges (mobility, visual, and hearing impairment) and misperceptions about their capabilities to work and run businesses. Therefore, helping to financially include one group will serve to make positive changes for the other. Whether it be through changing attitudes and perceptions or implementing universal design principles in their operations, financial institutions can better serve all clients with physical challenges by becoming disability inclusive and friendly.

Equitas_PWD_Dhanalakshmi

Dhanalakshmi was not born blind. She was badly burnt and lost her vision 23 years ago when her husband poured acid over her, her two sisters, and mother. Dhanalakshmi’s loan group has fully included her by using very simple accommodation measures like reciting the MFI pledge aloud and taking turns to assist her to attend the meeting.

Through financial inclusion of disabled persons, we see a compelling story of social inclusion can be seen at the community level. Leveraging the group-based model in microfinance, disabled persons, mostly women, receive community support and social acceptance from other group members. Dhanalakshmi, an Equitas client, exemplifies this.

Dhanalakshmi was not born blind. She was badly burnt and lost her vision 23 years ago when her husband poured acid over her, her two sisters, and mother. While her sisters recovered with minor injuries, got married, and have families of their own, Dhanalakshmi lost her vision and sustained major burns on the right-hand side. Constrained by her disability, she confined herself to her home for many years.

Four years ago, Dhanalakshmi joined Equitas as a member. She took out a small loan and started her garments business, buying clothes from the wholesaler and selling them door-to-door. Dhanalakshmi’s group has fully included her by using very simple accommodation measures like reciting the MFI pledge aloud and taking turns to assist her to attend the meeting. This has given her the confidence and the ability to support herself and her mother financially. Along with economic independence, she has also been socially accepted by people around her.

Group members often help support disabled persons in their businesses, as well. For example, they may purchase raw materials, sell/distribute products, collect and repay loans on behalf of the disabled client. This inclusion is creating role models by empowering disabled persons to be economically self-sufficient while also empowering communities to break down social stigma and attitudinal barriers on what a disabled person can and cannot do.

To help further financial inclusion for persons with disabilities, CFI at Accion’s Disability Financial Inclusion Program in India has provided trainings and resources to sensitize and equip microfinance institutions to serve this marginalized and underserved population, recognizing that globally less than 1 percent of persons with disabilities are served by microfinance. The program provides disability awareness and sensitization trainings, inclusion assessments, and recommendations to make operations and processes more disability inclusive and friendly.

In the past two and half years, the program has helped sensitized three microfinance partners (Equitas, ESAF, and Annapurna Microfinance) in three states (Kerala, Tamil Nadu, and Orissa). These three MFIs have financially included more than 30,000 low-income disabled persons, including over 2000 visually impaired, a severely excluded disability segment. Last year, the program won an award for its innovation in promoting accessibility and universal design to “ensure a life of equality and dignity for disabled persons.”

This year, we are expanding to three more financial partners in four new Indian states (Karnataka, West Bengal, Jharkhand, and Uttar Pradesh). One partner organization has a network of 33 sub partners providing social and as well as financial support, spreading the seed of inclusion across India. We are also developing strategies to expand disability inclusion with our partners and other stakeholders through advocacy and awareness. We are facilitating partnerships between the financial industry and disability organizations in India, many of which provide livelihoods training, skills development, and other social supports to disabled clients. In sum, we are helping provide a strong ecosystem for sustainable financial inclusion for persons with disabilities.

We remain convinced of the value of including persons with disabilities and older people in financial services outreach. Indeed, financial inclusion is a valuable instrument to equip people with the tools they need to manage and grow their income. As we continue to pursue this goal — despite how challenging it can be at times — we eagerly look forward the day when all people who can use financial services have access to a broad range of quality financial tools.

4 interventions to help victims of trauma find hope and dignity

Josh Goldstein_keynote speech

Josh Goldstein (CFI) gives a keynote speech at the 8th Annual PCAF Pan-African Psychotrauma Conference in Nairobi, Kenya, a multidisciplinary event that focuses on psychological trauma in Africa’s war-affected societies. Photo: Josh Goldstein

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The Center for Financial Inclusion at Accion has made a Campaign Commitment to bring greater attention to the issue of aging and financial services and further support the inclusion of those with disabilities. Learn how you can join the global coalition of organizations working to help 100 million families lift themselves out of extreme poverty.

Read the full text of Josh Goldstein’s keynote speech.


>>Josh Goldstein, Vice President, Economic Citizenship & Disability Inclusion, The Center for Financial Inclusion at Accion

“Over a sixth of the world’s population has directly experienced armed conflict, torture, terrorism, sexual and gender-based violence, ethnic cleansing or genocide.”
— The Peter C. Alderman Foundation (PCAF) website

I recently attended the 8th Annual PCAF Pan-African Psychotrauma Conference in Nairobi, Kenya, a multidisciplinary event that focuses on psychological trauma in Africa’s war-affected societies. PCAF operates mental health clinics in Cambodia, Kenya, Liberia, and Uganda and conducts trainings for mental health professionals. At the conference,I was surrounded by global leaders from health care, academia, and a litany of organizations working in the mental health space.

At first blush, my placement at such an event might seem odd as my work focuses on disability inclusion for microfinance. But, I’d argue that’s more of a reflection of how society, and our industry, views mental disabilities — with reductive biases — rather than how they fit within microfinance.

I had the privilege of presenting a keynote to the attendees. I discussed whether it’s possible for trauma patients who have gone through a successful course treatment that includes counseling, medication, and livelihood trainings to become clients of microfinance institutions (MFI) and build small-sized enterprises. Immediately below is an abridged version of my speech, with the complete text linked at the end.

Can MFIs help victims of trauma find hope and dignity through self-employment?

Josh Goldstein_keynote speech_portAs a post-traumatic stress disorder (PTSD) survivor myself from the U.S., who received treatment, I believe with all my heart that in a just society poor people with mental health challenges should get the help they need so they can flourish as human beings. Unfortunately, in the international development world I come from, this great cause is barely on the radar — in spite of the fact that reaching the most destitute is at the urgent core of all international development work. Indeed, I share your outrage at the paucity of funding and support for community mental health from governments and foundations.

But, why self-employment for those with mental health issues like PTSD? Why not go find a job and work for a business that provides a regular paycheck? Isn’t that easier and more secure? Of course it is. Most clients of MFIs are what we call “necessity entrepreneurs” and would rather have such jobs than start their own businesses. But, the sobering reality of limited formal sector employment opportunities across Africa makes finding such jobs for persons with physical disabilities, let alone psychosocial disabilities, even more challenging than it would be otherwise. Even in my country, the United States, unemployment of persons with disabilities in the formal workplace remains unconscionably high.

But are such financial products like credit or savings a good idea for someone with PTSD? For example, would the effort to save or borrow money bring greater stress? There is no easy answer based on my cursory review of the very limited research studies to date — the results are ambiguous and prove nothing conclusive one way or the other. What we do know, thanks to PCAF Uganda Program Director Dorothy Kizza, is that relapsing back into mental illness is often caused by a lack of employment. So, on balance, the stress of not working may be equally or more stressful than paying back a working capital loan which at least holds the promise of a more hopeful future. My own hunch is that the answer will only be decided on a case-by-case basis and so no generalization is really possible.

What seems beyond doubt, as Crick Lund, a professor at the University of South Africa and CEO of PRIME, a consortium of research institutions and ministries of health, has written, “is [the] growing international evidence that mental ill health and poverty interact in a negative cycle. This cycle increases the risk of mental illness among people who live in poverty and increases the likelihood that those living with mental illness will drift into or remain in poverty.” A big-picture study from the Harvard School of Public Health and the World Economic Forum estimates that the cumulative global impact of mental disorders in terms of lost economic output will amount to US$16.3 trillion between 2011 and 2030.

I am happy to say that the Center for Financial Inclusion (CFI) and its allied partners working on disability inclusion have begun to demonstrate significant success in including persons with physical disabilities in microfinance in Bangladesh, Ecuador, India, Nigeria, Paraguay, and Uganda, and I hope we can expand this initiative to include persons with mental health issues.

However, achieving the progress needed to financially include people with physical disabilities is not the same as that of including people with mental health issues. Persons with psychosocial disabilities in Africa and in many other places in the world are, in the words of Nigerian healthcare advocate Ifesinanchi Sam-Emurwa, “doubly stigmatized” for having a disability and for that disability being a mental one.

And, to paraphrase remarks by Columbia University psychiatrist Dr. Evaristo Akerele, who spoke this past June at the only mental health session on psychosocial disabilities at the U.N. Conference of State Parties annual disability conference: The person with mental health issues is blamed for bringing what psychiatrists call depression, or anxiety, on themselves. Beliefs such as that God is upset with them, that drug use is to blame, that witchcraft is at work, are all common. In most places, the term “depression” is not culturally acceptable or even understood; there is not an accepted and shared nomenclature for describing mental suffering.

An interesting example of how this “double stigma” plays out also comes from Nigeria, in the financial services arena. The Central Bank of Nigeria recently earmarked US$20 million to financial service providers to make loans to persons with disabilities — a great step forward. But, it explicitly excluded persons with mental health disabilities as recipients of these loans.

So, what can be done to improve the situation? I want to suggest five of the biggest challenges we face and interventions that I believe we can undertake together to answer these challenges and improve the livelihood possibilities of persons with psychosocial disabilities. I hope this will form the beginning of an action plan.

Challenge 1: How can the staff of an MFI with no training in psychology even begin to identify clients with mental health issues if there are no common, agreed on terms of reference for describing distressed states of mind? How do we sensitize staff to work with this client segment?

It is relatively easy to determine a baseline of the numbers of persons with physical disabilities who are clients, by asking medically non-invasive questions (or just through observation) about their state of wellness. Unless a person with mental health issues self-discloses, it is impossible to know if they are suffering from a depressive, anxiety, or other disorder.

Intervention: Volunteers from the mental disability space, like attendees of these annual PCAF Conferences,can help financial service providers design survey questions that allow MFI staff to get a better count of current clients with mental health issues. These volunteers along with PTSD survivors themselves can help sensitize MFI staff on how to best reach out to persons with mental health disabilities. They can connect MFIs with community mental health leaders and, in particular, patient advocates. These learnings can then be incorporated into the Framework for Disability Inclusion so that a set of best practices can be developed and shared with MFIs from around the world.

Challenge 2: Access and support for basic capital and business training for persons with psychosocial disabilities is largely lacking.

Intervention: Connect PCAF graduates, and those of other mental health clinics that include business training, to microfinance providers, credit unions, self-help savings groups, and otherproviders offering group-based financial services as well as enterprise-building support to professionalize the business training and operations of the clinic patients. The natural intermediary to make first contact with the MFI or other provider might be the PCAF social worker, during their weekly or monthly follow up outreach to former PCAF patients in their villages, homes,and workplaces.

Just as CFI identified two or three institutions in India that were eager to do a pilot to include persons with disabilities in their programs, we can work to identify two or three MFIs in the PCAF countries of Cambodia, Kenya, Liberia, and Uganda who want to be leaders in including persons with psychosocial disabilities in credit and/or savings groups. Success is promising here since a portion of PCAF livelihood trainings are done in groups,suggesting that the transition to group lending methodologies could prove to be quite natural and comfortable.

Challenge 3: The United Nations (U.N.) does not do enough to recognize the importance of mental health disabilities — when it comes to collecting good statistics, when it comes to prioritizing it as a Sustainable Development Goal to reduce extreme poverty, when it comes to seeing therapeutic intervention as a significant part of the Constitution on the Rights of Persons with Disabilities treaty.

Intervention: Those working in this field and other interested parties should lobby the Washington Group on Disability Statistics (the U.N. body charged with disability statistics) to include a specific question on mental health in its so-called “short set” of questions that it provides to governments that do censuses and disability surveys. Similarly, while they’re still being shaped, pressure should be applied to modify the Sustainable Development Goals to include much stronger language on mental health.

Finally, there must be concerted lobbying by PCAF, and others, to ensure that in implementing the articles of the U.N. Convention on the Rights of Persons with Disabilities, the right to receive treatment for mental health ills gets equal billing with assuring the right to vote and enjoy equal protection before the law. If this does not happen, it will be much harder for mental health practitioners to obtain funding from governments and foundations to expand their community mental health programs — something critically important in countries like Burundi that have only one psychiatrist in the whole country!

Challenge 4: To create a new set of global standards and indicators for microfinance institutions and other financial service providers to follow that will establish the importance of and offer guidance on serving PTSD survivors and other persons with psychosocial disabilities.

Intervention: The CFI will work collaboratively to push the microfinance industry-wide standard-setters to add mental health indicators. With the help of key industry standard-setting groups, I believe that we can help to break down the attitudinal barriers that keep persons with psychosocial disabilities in extreme poverty unbanked and stigmatized. For example, I am delighted to announce that the Poverty Stoplight has offered to take the lead in creating a mental health indicator for its assessment tool. The Poverty Stoplight set of indicators, pioneered by Fundación Paraguaya and now used around the world, sees poverty as multidimensional and have developed a tool that allows the poor to measure their own poverty, broken down into different categories. Adding a mental health indicator could be a source of data that could be used not only by MFIs but by local community mental health leaders and other public health providers.

Freedom from Hunger in conjunction with the Microcredit Summit Campaign has just published a new guide called “Healthy, Wealthy, and Wise: How Microfinance Can Track the Health of Clients,” in which they share experiences in selecting and pilot-testing health indicators among four MFIs. The researchers asked questions around six health indicators: food security and nutrition, preventive health care, poverty, curative health care, sanitation and safe water, and attitudes. The results demonstrated the added value of health indicators when combined with poverty measurement in helping MFIs understand client well-being. Their “theory of change” is that with greater financial resources, the clients will be able to meet their essential needs as outlined above — like having cleaning water or improved nutrition. I have consulted with the guide’s author, Bobbi Gray, and she is very willing to work with us to see if we can help her develop a seventh indicator around mental health — which is great news.

My conclusion is that self-employment can offer dignity and hope to persons recovering from mental illness. And, that like persons with physical disabilities, many can make excellent clients. I think it is worth exploring how we can do more to connect to PTSD survivors with MFIs and other financial service providers to open their doors to PCAF clients and those of other clinics. At the very least, this initiative will help fight stigma and bring down attitudinal barriers. Let us see what works and what sticks. It is certainly worth a try.

Read the full text of Josh Goldstein’s keynote speech.


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We, the participants in the Partnerships against Poverty Summit, state collectively and enthusiastically, that:

EXTREME POVERTY CAN AND WILL BE ENDED BY THE YEAR 2030!

To reach this goal, we declare the following four commitments:

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More from the Financial Inclusion 2020 launch: answering questions from webinar participants about technology. The #2013Summit – “Partnerships against Poverty” – will have a track on digital partnerships. October 9-11 in the Philippines. REGISTRATION IS NOW OPEN — http://partnershipsagainstpoverty.org/

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Financial Inclusion 2020 Blog Series banner imageThe Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process, and highlights findings from “Mapping the Invisible Market.

A good webinar yields more questions than there is time to answer, and the Financial Inclusion 2020 launch webinar was a case in point. Participants asked some excellent questions we couldn’t address during the webinar, so we are now following up on some of the questions about technology. For answers, we turned to Loretta Michaels, who facilitates our FI2020 Technology Working Group.

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New Study Highlights U.S. Small and ‘Micro’ Businesses as Engines for Job Creation

–But are the poorest of the poor being served by and benefiting from microfinance in the US?–
Key study findings of a new report called “U.S. Microfinance: Small Loans, Big Results” (from Accion, Opportunity Fund, and the Aspen Institute) include:
1) *Microloans contribute to strong, sustainable small businesses.* Of small businesses financed in 2010, 97 percent reported that they were still in business in 2011.
2) *Microloans contribute to increases in small business owner take-home pay and business revenue.* 32 percent of small business owners surveyed reported an increase in owner’s draw and 36 percent indicated an increase in overall business revenue
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Helping Haiti Recover

The world is mobilizing to address the massive earthquake that hit Haiti on Tuesday, dealing a horrific blow to the poorest nation in the Western Hemisphere. The reported epicenter of the earthquake is a highly populated area known to house many of Port-au-Prince’s poorest families. The International Red Cross estimates that one-third of the island nation’s 9 million people have been displaced by the earthquake and many thousands are dead.

This disaster requires both immediate emergency relief and longer term rebuilding efforts. Microfinance will play a crucial role in the financing needs that inevitably arise from this type of catastrophe as Haitians look to rebuild their country.

Please Donate Today

Below are microfinance organizations participating directly in relief and recovery work among earthquake victims in Haiti. Click on the organization link below to donate:

ACCION INTERNATIONAL

FINCA INTERNATIONAL

GRAMEEN FOUNDATION

Below are other organizations that include microfinance as a part of their work in Haiti, and are currently focused on providing immediate humanitarian assistance:

ADVENTIST DEVELOPMENT AND RELIEF AGENCY

CARE

CATHOLIC RELIEF SERVICES 

HABITAT FOR HUMANITY

WORLD RELIEF

WORLD VISION

María Otero Confirmed as US Under Secretary of State for Democracy and Global Affairs

The MCS is thrilled by Mrs. Otero’s nomination. As CEO of ACCION since 2000, Mrs. Otero directed an expansion of the organization, from serving 460,000 micro entrepreneurs with micro loans and technical assistance to over 3.7 million, through a portfolio that has grown from $274 million to nearly $3.6 billion. She has been a great advocate of microfinance in her books and has she spoke throughout the world on issues of microfinance, women and poverty alleviation.

In her final message as CEO of ACCION International, Mrs.Otero wrote:

Microfinance is not a silver bullet. Consumer protection, fair lending, acceptable profits and capital-market investment all remain critical, complex issues that warrant deep consideration and thoughtful debate.

We believe she will be a great asset to this administration and wish her the best as she now continues on with her mission of reinforcing democracy world wild from the Office of the Under Secretary for Democracy and Global Affairs!

Read full article by Robert Kropp