E-Workshop Recap: Helping Clients to Prepare for their Old Age

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On June 9th, the Microcredit Summit Campaign co-hosted with the Center for Financial Inclusion (CFI) an E-Workshop focusing on financial inclusion for the elderly. This is part of their 2014 Campaign Commitment to bring greater attention to the issue of aging and financial services and to further support the inclusion of those with disabilities. HelpAge International and Micro Pension Foundation helped make it a great discussion about opportunities for organizations (specifically microfinance institutions) to help clients prepare for their old age. The conversation looked both at the supply and demand sides of financial inclusion to better understand what is happening in clients’ lives and how best to approach these issues.

Watch the session recording:

Review the panelists’ slides:

Recap of the E-Workshop

Sonja Kelly from CFI introduced the focus of the session:

“Financial services needs change throughout the lifecycle, and if a client of microfinance services reaches their old age without having developed a plan to meeting their expense needs, it will be too late. Almost all participants in our webinar reported that they knew someone who had inadequately prepared for their older age. This common issue is one that microfinance can help to address by developing longer term savings products and pensions either in-house or through partnerships.”

Eppu Mikkonen-Jeanneret, head of policy at HelpAge International, began the discussion introducing the shift in populations and subsequently labor markets, noting that there are currently about 800 million people who are over 60 around the world. In 15 years, there will be over 1.3 billion people over the age of 60, of which 60 percent will live in low- and middle-income countries.

The common perception is that the 60 percent in low- and middle-income countries either will not save for their old age or lack the capacity to do so. However, the Global Findex report, which looks at the demand side data of financial inclusion, shows otherwise. According to the report, almost 25 percent of all adults say they have saved for old age in the past year — though it is predominately happening in high-income OECD countries and in East Asia and the Pacific. “Around 40 percent of adults in these two regions reported saving for old age, a far greater share than the roughly 10 percent who reported doing so in all other regions” (The Global Findex Database 2014, page 47).

Eppu explained that 18 percent of the pyramid base reported having saved for old age and 60 percent of the top. Sonja Kelly (CFI) noted that the question now is whether they are doing so in safe and secure mechanisms.

Eppu  expanded on this issue following the session, saying,

“The world is in the middle of demographic sea change; the global population is growing older. This is a result of hugely successful development. We are healthier and better educated, we have less children and we live longer. As a result, in just 15 years the population of 60 years and over will increase from 800m to 1.3b. Far from being a developed country trend, aging is actually fastest in the low and middle income countries. Where it took the European countries over 100 years to transit to an aging population, countries like Bangladesh will do this in just a few decades. In fact, 60 percent of the 1.3 billion people will live in the developing countries.

“We know that people in developing countries continue to work into old age even though the type of work may change. Many work in the informal sector and women especially carry on providing unpaid labour at home. Yet our thinking is locked in outdated associations with people in the 60s onwards as somehow inherently, homogeneously vulnerable. It’s time we embrace the change and take action. Financial inclusion of people across the life course, facilitating social pensions, linking pensions with other financial instruments, and working closely with older women and men will help us all to adjust to the new world.”

Parul Khanna, associate director of projects for Micro Pension Foundation, continued the conversation. She noted this:

“Globally, rapid advancements in technology, telecommunications, and banking outreach have had a powerful impact on the ability of governments to deliver targeted fiscal transfers to the poor, including pension benefits to the elderly. Simultaneously, technology and telecom are reshaping financial services access and delivery, especially among low income excluded households. Most developing countries have a large young workforce, a predominantly informal labour market with modest incomes and savings capacities, a huge pension coverage gap, low banking and formal finance penetration, and limited capacity for large scale fiscal transfers.”

Parul presented their Gift-a-Pension project, which provides micropensions to low-income domestic workers, and she called on participants and readers to take action:

“Can we do something for informal workers around us…[those] who touch our lives every day? Our maids, drivers, security guards or our washerwomen? Or the guy who we buy our bread from every day? Or our barbers? That seems feasible, right?

“For example, it is possible for you to imagine going home today, and spending just a few minutes with your maid or driver to tell them about the importance of saving for old age. And then spending just 10 minutes on the internet to open their own pension account for them? If your answer is yes, then you have within you the power to gift 20 years of a dignified old age to your maid or driver. And if all did this, we could collectively, as a civil society, change the lives of 40 million domestic help forever. Which, incidentally, is more than the total population of Canada.

It took India 6 years to get 3 million low-income people to start a pension account. If each of us go home today and gift a pension to just 1 excluded person in our lives, we could reach from 3 million to 43 million by this weekend!  After all, just 10 minutes of your time can change 20 years of someone else’s life. You can be the change! Try now with Gift-a-Pension.

Thank you to all panelists for contributing to this important conversation about the importance of saving for old age and how organizations can simplify the process for their clients. We also wish to thank all participants who submitted thought-provoking questions and comments to help make the session interactive!

Related resources:

Film on the micro pension model

About Gift-A-Pension

CFI launched a Campaign Commitment in 2014! We invite you also to…

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

Voices from the Field: Beth Porter

Financial inclusion to end extreme poverty

“By reducing vulnerability to economic shocks and boosting job creation, financial inclusion can be a key driver of poverty reduction and economic growth and at the same time contribute to promoting greater equality,” explains Beth Porter, policy adviser for financial inclusion at UNCDF.

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In preparation for our 18th Microcredit Summit, the Campaign conducted a Listening Tour from December 2014 through February 2015. The Listening Tour was our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face and served two purposes. First, it was our hope to find out how our audience (you) felt about the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were most pressing and urgent.

We collected your feedback through an online survey and organized conversations with 27 leaders in the microfinance and financial inclusion sector. We heard from them on how financial inclusion can contribute to the goal of ending extreme poverty by 2030 and the role of microfinance in the post-2015 agenda. The results of this consultation will be reflected in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.

Below is a short excerpt from our conversation with Beth Porter, policy adviser for financial inclusion at the United Nations Capital Development Fund (UNCDF) in New York.

Q: What is the role of microfinance and financial inclusion in the post-Millennium Development Goals (MDGs)/ Sustainable Development Goals (SDGs) era?

Beth Porter

Over the course of 2015, the Open Working Group, comprised of 30 member states, discussed the shape of the post-2015 agenda. The post-2015 agenda set out to build upon the Millennium Development Goals (MDGs, 2000-2015) and incorporate some of the broader global stewardship goals that came out of the Monterrey Consensus. To do so, they proposed a set of 17 goals and 169 targets (the MDGs had 8 goals with 10 targets each) to the UN General Assembly in September 2014 — a document which was adopted as a “zero draft.”

In 2015, member states began to consider the overarching vision for the Sustainable Development Goals (SDGs), examine more closely the goals and targets, set forth the means of implementation, and identify indicators. While such a large number of goals and targets are certainly unwieldy, many member states want to ensure that the SDGs are truly comprehensive and feel that further whittling them down would leave out important parts of the development agenda. So the targets are being examined to ensure that they are consistent with other global agreements and commitments and that are measurable, but the targets themselves have not, to date, been opened up for major changes or reduction in number.

Financial inclusion figures prominently amongst the targets. Financial Inclusion is achieved when individuals and enterprises have access to a wide range of financial services provided responsibly and at reasonable cost by diverse and sustainable institutions in a well-regulated environment. By reducing vulnerability to economic shocks and boosting job creation, financial inclusion can be a key driver of poverty reduction and economic growth and at the same time contribute to promoting greater equality — and, indeed, it is a target in all three of these goal areas (poverty eradication, economic growth and job creation, and reducing inequality). Financial inclusion also figures as targets under goals on food security, women’s economic empowerment, health, etc. This is consistent with financial inclusion being a means to achieving broader development goals. As a result, we hope that it will continue to be embedded in the targets under the eight goals where it is mentioned.

Q: What do you think will be needed to achieve the goal of global financial inclusion by 2020 and how can this contribute to the goal of eradicating extreme poverty by 2030?

In regard to the link between the goals of financial inclusion by 2020 and eradicating extreme poverty by 2030, let me say that while I believe that we can go far towards providing financial access by 2020, any declaration of reaching that goal will be based largely on transactional accounts. The fastest growing part of financial inclusion is in the area of payments: people using a phone to send or receive money to/from family or friends, to receive social transfer payments from governments or development organizations, or to pay bills more conveniently. Digital channels are opening up the possibilities for a large array of products and services.

But, where there will likely still be gaps by 2020 is going beyond access to usage. Providing a payment option or opening a bank account is a starting point but not enough; people must use those payment options or accounts in order to benefit from them and to be fully included financially. To drive usage, these payment services must be designed based on client needs and preferences. Furthermore, payments are just one aspect of the kinds of products and services that people want and need. They may be the entry point, but it will be critical that other products and services such as savings, credit, and insurance are layered on the payment services.

That takes us to the link between financial inclusion and eradicating extreme poverty. I am amongst the many who believe that financial inclusion is a critical factor in addressing poverty. We all know that the causes of poverty are complex, however, and the solutions are not simple either. Financial inclusion is necessary, but not sufficient, to eradicate poverty.

One of the things that we at the United Nations Capital Development Fund (UNCDF) are particularly focused on, given our mandate to work first and foremost in least developed countries (LDCs), is to look at ways that greater financial inclusion can help contribute not only to better developmental outcomes for people, but also contribute to more vibrant economies and greater availability of domestic resources.

We recognize a clear link between national financial inclusion strategies—and the ensuing implementation plans—and higher levels of financial inclusion. We believe that this in turn leads to both poverty alleviation and economic growth. As a result, we are stepping up our efforts to support the development, implementation, and monitoring of such plans through the Making Access Possible (MAP) initiative.

We have seen tremendous leverage from small amounts of “smart” overseas development assistance (ODA) and philanthropic funding used to help financial service providers (FSPs) to develop the business models that will help them meet the real needs of women and men. Such investments can help encourage private sector players move into riskier markets and demonstrate the potential of these markets to be profitable, and thereby “crowd in” domestic and South-South capital to scale up and replicate these models.

When people have convenient access to formal accounts, individuals and households of even limited means as well as micro- and small enterprises (MSMEs) will place their savings in institutions where their money is safe and accessible, as we have seen through the MicroLead initiative, amongst others. Such savings, when taken cumulatively, can then be directed into financial services that promote local markets, small-holder agriculture, MSME development, education for girls, and so on.

Q: In relation to our host region, what are the challenges and opportunities facing Africa & the Middle East in regards to microfinance and financial inclusion?

The Ebola crisis has forced a recognition that a public health crisis has many other dimensions, and one of those is related to the payments infrastructure—and, more broadly, how financial services can be relevant in the response, recovery, and rehabilitation stages in natural disasters and post-conflict situations. Given the number of countries in the region that are affected by these humanitarian crises, it is critical that governments, development organizations, and providers know when and how to use financial services to get through and beyond the crisis to secure, healthy, and productive lives. We are working on a policy guidance note on this topic, based in part on our experience supporting the Ebola response, and there are many others who are doing terrific work in this space.

An area in which Africa is leading the way globally is in mobile money. Indeed, mobile money was the major contributor to the increase of financial inclusion in Africa, according to Global FinDex. More people in Africa have phones than bank accounts. And, increasingly, mobile network operators are taking advantage of that—often in partnership with financial institutions—to offer people not only payment services, but also other products using the mobile platform. There is still much work to be done, however, to realize the promise of digital finance (i.e., mobile money and other services including the use of electronic vouchers, debit and credit cards, etc. in conjunction with ATMs, POS [point-of-sale], and other devices), but it has great potential in connecting low income and rural customers with the services that they need, not only financial services, but health, education, energy, water and many more.

We believe — and particularly at the Better Than Cash Alliance and the Mobile Money for the Poor initiative — that taking an “ecosystem approach” to digital finance will be essential to realizing that promise. Such an approach involves policymakers and regulators, the various providers of digital financial services, as well as retailers and others in the acceptance networks, and it requires the support of development partners and must take as its starting point the wants and needs and capabilities of the consumer. We are encouraged to see such approaches start to take root in a number of countries in the region.

Related reading

About the United Nations Capital Development Fund

The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 48 Least Developed Countries (LDCs). UNCDF uses its capital mandate to help LDCs pursue inclusive growth. UNCDF uses “smart” Official Development Assistance (ODA) to unlock and leverage public and private domestic resources; it promotes financial inclusion, including through digital finance, as a key enabler of poverty reduction and inclusive growth; and it demonstrates how localizing finance outside the capital cities can accelerate growth in local economies, promote sustainable and climate resilient infrastructure development, and empower local communities. Using capital grants, loans, and credit enhancements, UNCDF tests financial models in inclusive finance and local development finance; de-risks” the local investment space; and proves concept, paving the way for larger and more risk-averse investors to come in and scale up.

About Beth Porter

Beth Porter has over 20 years of experience in microfinance and organizational development in 30 countries in Africa, Asia, and Latin America. As a policy adviser at the UNCDF, Beth provides policy guidance and support to the global team on financial inclusion. She previously launched and directed the YFS-Link initiative at Making Cents International to build the capabilities of financial services providers and youth-serving organizations in youth-inclusive financial services.

At Freedom from Hunger, Beth led program strategy and managed delivery of integrated microfinance services to 1.2 million women and their families in 16 countries. She has provided technical assistance and training in strategic and business planning, product design, and organizational effectiveness and operational efficiency, and is experienced in program appraisal, design and evaluation. In addition, Beth is on the boards of the SEEP Network, the Bolivian MFI CRECER, the SMART Campaign in Microfinance, Child and Youth Finance International, and was a founder of Women Advancing Microfinance (WAM)-International and past Chair of WAM-Northern California.

Visit the UNCDF website: http://www.uncdf.org/

Building resilience for the world’s poor: The $1.50 challenge

Jeff Ashe_savings group women count money

Savings group women count money
Photo courtesy of Jeffrey Ashe

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Savings groups (aka village savings and loans associations)

>> Authored by Jeffrey Ashe, Fellow, Carsey school of Public Policy, University of New Hampshire; Research Fellow: Global Development and the Environment, Tufts University

I read the recent World Bank News Flash entitled “International Funding for Financial Inclusion” [1]. In 2013 a total of $31 billion was invested in financial institution building, but what if just the grant proportion if this amount, $2.9 billion, was invested in training savings groups?

  • 200 million of the world’s poor (equal to all the microfinance borrowers today) would have a safe and convenient place to save and easy access to small loans (@$15 per group member).
  • There would be 10 million new savings groups in place in 2 million villages and many thousands of slum communities (@ 4 groups with 80 savings group members per village of 1,000 inhabitants).
  • These groups would mobilize and largely distribute $10 billion every year of which 30 percent ($3 billion) would be the profits from lending to members (@ $1,000 distributed per group of 20 per year) without outside funding.

This is possible since savings groups are able to:

  • Reach those that microfinance is not designed to reach profitably. Even the most motivated micro-lender cannot make money on $0.50 savings deposits and $30 loans.
  • Require a fraction of the staff. Saving for Change in Mali, a joint venture of Oxfam America, Freedom from Hunger, and Stromme Foundation, reached 450,000 women organized into 19,000 groups with 209 trainers. To reach the same number, a typical microfinance institution (MFI) would require a permanent staff of 1,500 [2]. Only a handful of trainers are monitoring Saving for Change groups in Mali today, with few signs that the groups are faltering.
  • Be promoted by local NGOs. Savings group promoters introduce a simple structure while the groups do the creative work of saving, lending, collecting, and record-keeping.
  • Virally self-replicate. The leaders of established groups train new ones at no additional cost.
  • Be profitable for very poor people. When the fund is divided at the end of each cycle, members receive on average $1.38 for each dollar saved [3].
  • Survive independently. A panel study of 331 groups in 6 countries over 5 years indicates a 90% survival rate [4].
  • Serve as a platform for other development inputs. Members launch their own projects, and disciplined groups with financial clout serve as platforms for government and NGO development initiatives and linkages to financial institutions.
  • Promote societal change. In Guatemala, savings groups banded together to elect women mayors. In El Salvador, ex-trainers are assuming roles in municipal governments.

Jeff Ashe_In their Own Hands_book coverWhat is the potential outcome? A randomized controlled trial and anthropological study of savings groups in Mali [5] funded by the Bill & Melinda Gates Foundation found that when only 40 percent of the eligible women had joined groups, there was a village wide (not only group member) effect. The findings included the following:

  • Reduction in chronic hunger with the greatest reduction among the poorest.
  • Increased assets, largely in the form of livestock that could be cashed in when money is scarce.
  • A one-third increase in savings from all sources, including traditional savings clubs (ROSCAS).
  • The substantial word-of-mouth spread of the methodology at no cost to the program.
  • Increased social capital.

Simply stated, the grant funding from a single year of financing financial inclusion could be translated into a modest increase in resilience for 2 billion of the world’s poorest at a cost of one dollar per villager: 2 million villages @ 1,000 inhabitants per village.

Savings groups work because they catalyze the capacity of the poor to achieve their own financial inclusion when provided a simple structure and a bit of training to do so. They represent a crucial component of a strategy for financial inclusion that also includes savings, credit, insurance through institutions, programs targeting the ultra-poor, and conditional cash transfers. This, in addition to the informal means the poor have long used to manage their finances.

Related resources


[1] Estelle Lahaye and Edlira Dashi, “Spotlight on International Funders’ Commitments to Financial Inclusion“. CGAP, 25 March 2014.

[2] David Roodman, Due Diligence: An Impertinent Inquiry into Microfinance. 2011

[3] SAVIX panel study of 331 randomly selected groups. http://savingsgroups.com/

[4] Ibid.

[5] Karlan, Dean, Jonathan Morduch, Mamadou Baro. “Final Impact Evaluation of the Saving for Change Program in Mali, 2009-2012“. Innovations in Poverty Action, Bureau for Applied Research in Anthropology (BARA), University of Arizona, April 2013.

Tackling poverty by combining saving, training, and microcredit

Martha Kimuyu Kinai, 68, started a woman's group when she was 18. She has 4 grandchildren and teaches her community how to make charcoal clay using wood charcoal and soil mixture. Martha is an example in Mumandu 15kms from Machakos near Nairobi, and has learned more business skills from Hand in Hand training.

Martha Kimuyu Kinai, 68, started a woman’s group when she was 18. She has 4 grandchildren and teaches her community how to make charcoal clay using wood charcoal and soil mixture. Martha is an example in Mumandu 15kms from Machakos near Nairobi, and has learned more business skills from Hand in Hand training.
Photo courtesy of Georgina Goodwin for Hand in Hand International

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>> Authored by Josefine Lindänge, CEO of Hand in Hand International

Decades of microcredit have shown us that while it is a powerful tool in the arsenal of international development it is not, as the World Bank Forum on microcredit in February made clear, a magic bullet to tackle poverty. Over the years there have been many studies into the effects of microcredit, most recently by Innovations for Poverty Action (IPA) and The Abdul Latif Jameel Poverty Action Lab (J-PAL) which concluded that small, short-term loans generally do not lead to increased income (American Economics Association). But, is this a reason for the sector to discard microloans all together?

On the contrary. At Hand in Hand, our experience in the field has taught us that access to finance is vital in the fight against poverty. But on its own, it will not transform a microenterprise from loss to profit nor will it transform a small scale farmer eking out a living on a small plot of land into a micro-entrepreneur. In order to achieve our ambitious objectives we need to understand our clients, as the World Bank Forum in February highlighted.

Microcredit is more effective when supported by non-financial services like financial and business training.

We have been providing a package of business training and credit to more than one million people in some of the world’s most deprived countries since 2003. As a result, they have created 1.4 million micro-enterprises which provide jobs and incomes for 2 million people.

Of course millions of microentrepreneurs already exist in the informal economy where, the World Bank (World Development report 2013, page 48) estimates, more than 3 billion people are working, nearly half of whom work in farming, small household businesses, or in casual/seasonal day labor, earning a poorly paid and often vulnerable living. Rather than seeing this as a problem, we should ask ourselves what these people need to establish or transform their small, unprofitable enterprises into thriving businesses.

The power of microcredit +

Of course, combining group savings and skills training with microcredit is not unique. But most NGOs focus just on one or two of these elements. At Hand in Hand we combine all three and even add a fourth by connecting entrepreneurs to larger markets.

Firstly, we create community groups who support each other, save together, and learn together. Then we train the group members to discover and develop small businesses that make use of their skills and potential; the training includes bookkeeping, profit and loss, creating a basic business plan and marketing. Members have to complete these first two steps before we provide access to microcredit. Finally, we help scale up their businesses by facilitating access to larger markets and advising on the production of higher value products rather than commodities.

Zacharie Itegekaharmde, a mobile phone agent (Kayonza District, Rwanda)

Zacharie Itegekaharmde, a mobile phone agent (Kayonza District, Rwanda)
Photo courtesy of Hand in Hand International

We work with our members for up to three years, and it is only after they have completed all the training modules, can demonstrate high attendance rates at meetings, good repayment on internal lending, a required level of savings, and submission of a solid and approved business plan that they qualify for credit — either from our own microfinance facilities or from partners.

Saving: the key to financial success

There are two dimensions within our program to facilitate financial inclusion: access to savings and then access to credit.

Saving is an important component of financial education and one many in the developed world take for granted. But, the question is, do the poor have any “spare” money to save? Surely that is exactly why they need microcredit?

Among the many entrepreneurs I have met and talked to over the years, saving is always mentioned as the most important skill they have learned. The change to spending what they need and saving the rest for “a rainy day” is transformative and, I think, best explained by one of our successful entrepreneurs in Rwanda, Rahabu: “You know what it is like. You go to the market because you need salt. But when you are there, you see some nice tomatoes so you buy those as well. I don’t do that anymore. I have learnt to buy what I need and save what is left.”

Rahabu Mukampenda, Retailer, Rwanda.
Photo courtesy of Georgina Goodwin for Hand in Hand International

Our members start out in saving groups before receiving microloans. The savings enables them to buy the first stock, equipment, animals, or crops they need to get their microenterprise off the ground. Once they have met all the requirements I mentioned earlier, then they are able to apply for microcredit. The credit history they have built up as members and within the internal saving-loan-repayment system of our savings groups is crucial to securing that first microloan.

Group members wishing to borrow from the group savings fund are required to present a basic business plan to the group. It is then up to the group to decide whether or not to invest, how much to invest, and what the rate of return should be, which demonstrates a clear understanding of some fairly complicated financial transactions, auguring well for future debt repayments.

Members are selected for credit or linked to microfinance institutions (MFIs) when they meet the criteria I have described and we are confident they are fully prepared to take on the risk of a loan because our training focuses on the meaning of debt, importance of repayment, as well as the opportunities presented by a loan. Although we do not recommend particular MFIs to our members, we do make them aware of the various financial institutions or banks that exist, their different requirements, and what to look for or avoid. Since 2003, we have overseen the dispersal of more than US $240 million in microloans.

These partnerships with microfinance institutions are essential for our microentrepreneurs to take the next step on their journey. An independent review of our work in India in 2012 found that over 95 percent of loans were used for productive purposes and the repayment rate is 99.8 percent.

In short then, a symbiotic approach between access to finance and non-financial services like Hand in Hand’s support is needed to tackle the root cause of poverty.

About the author

JosefineJosefine began her career at the United Nations Department for Economic and Social Affairs, Finance for Development section. After working a number of years in the private sector, she joined Hand in Hand in 2008. Josefine played a decisive role in establishing Hand in Hand Eastern Africa, and was promoted to Chief Operating Officer of Hand in Hand International in 2011. She holds a B.Sc. and M.Sc. in Development Economics and International Economics from Lund University in Sweden and studied strategic leadership for microfinance at Harvard Business School.

Relevant Resources

MicroLoan Foundation commits to reach the poorest women

Photo courtesy of MicroLoan Foundation

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The Microcredit Summit Campaign welcomes MicroLoan Foundation as the newest Campaign Commitment maker, joining a global coalition of 51 other commitment makers working to help 100 million families lift themselves out of extreme poverty. The Microcredit Summit Campaign’s 100 Million Project is building a movement among financial service stakeholders committed to helping to end extreme poverty through: public statements of commitment to action, expanding practices to reliably measure movement out of extreme poverty, and promoting innovations and best practices to accelerate movement out of poverty.

“At the MicroLoan Foundation,” said Peter Ryan, founder and CEO, “we’re committed to ongoing innovation and learning in our mission to reach the poorest women and enable them to move out of poverty. This project is all about responding to client needs with products and services that enable them to overcome difficulties and improve their standard of living.”

MicroLoan Foundation’s mission is to work with the poorest women and enable them and their families to move out of poverty. MicroLoan Foundation commits by the end of 2016, to successfully complete a pilot program in two Malawi branches and one Zambia branch involving 2,700 clients enabling improved client outcomes due to the following:

  • Streamlined products which meet the needs of the poorest clients (living under $1.25/day) as well as more experienced business women who wish to grow their business
  • Improved access to savings for emergencies and planned costs
  • Improved support to vulnerable clients including formal rescheduling of loans
  • Standardization of pre-disbursement and follow up training using adult learning methodologies

Daniella Hawkins, social performance manager, explains their intent:

“MicroLoan Foundation’s mission is to work with the poorest women and enable them and their families to move out of poverty. As early as 2010 when we started using the Progress out of Poverty Index (PPI) in Malawi, we realised that we could be reaching poorer clients, those living under $1.25/day. We therefore designed a pro-poor loan product which improved our poverty outreach dramatically: data from 2011 showed that 74.6% of clients accessing this pro-poor loan product were under the $1.25/day poverty line, compared to 51.7% of our clients on average. This learning has informed our current pilot, which integrates the pro-poor loan product into a suite of our other products, streamlining our services and allowing clients on different loans in the same group. This will ensure that poorer clients with less business experience learn from our more experienced clients.

Clients who are not able to save ahead of receiving their first loan will qualify for this pro-poor loan. The importance of saving is highlighted to all our clients, and all will be encouraged to save if they want to receive a larger loan, but clients on the pro-poor product will not need to save as much in order to access a loan size increase. Increases are strictly limited to ensure that clients are not over-indebted, and at any sign that any clients are experiencing problems making repayments or savings, a one-on-one meeting with their loan officer will take place so that s/he understands the problem and can facilitate the appropriate supportive response. Clients who have had problems making repayments and/or savings are identified as vulnerable and will not be eligible for a loan size increase.”

Here are the different products offered by MicroLoan Foundation:

  1. Level 1, which is aimed at clients living on less than $1.25/day and/or clients who have never done business: the pro-poor loan product with fewer savings requirements; small loan sizes (maximum first loan is $25).
  2. Level 2, which is aimed at slightly better off clients and/or clients who have done business before: slightly larger starting loan sizes (maximum first loan is $90) and higher savings requirements for clients who want to increase their loan sizes in the next loan cycle.
  3. Level 3, which is aimed at clients with slightly larger, more established businesses: larger loan sizes than Level 2 (initial loan upon graduation to this level is $180) and the option for clients to repay on a monthly basis; the same savings requirements as Level 2 for clients who wish to increase their loan sizes next loan cycle.

The Campaign looks forward to welcoming this new partner in the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit in 2015.


MicroLoan Foundation

MicroLoan Foundation (MLF) helps some of the poorest women in the world feed their families, send their children to school, and pay for life saving medicines. By providing small loans (on average £60) and ongoing business training and support, MLF empowers women in rural Malawi and Zambia to set up self-sustainable businesses. The profits from these businesses enable the women to work themselves and their families out of poverty.

We invite you to join MicroLoan Foundation and…

Get Inspired. Set a Goal. Make a Commitment.

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

Voices from the Field: William Derban

Pathways: financial inclusion to end extreme poverty | Find out what we heard from the industry in this year’s Listening Tour

We’ll be bringing you articles throughout April that reflect the results of this year’s Listening Tour
Photo credit: by Geoff (originally posted to Flickr as Pilgrim’s path) [CC BY 2.0], via Wikimedia Commons

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April is the Month of MicrofinanceLearn more

April is the Month of Microfinance
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In preparation for our 18th Microcredit Summit, the Campaign conducted a Listening Tour from December 2014 through February 2015. The Listening Tour served two purposes. First, it was our hope to find out how our audience (you) felt about the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were at the top of everyone’s mind.

The Listening Tour is our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face. We collected your feedback through an online survey and organized conversations with 27 leaders in the microfinance and financial inclusion sector. We heard from them on how financial inclusion can contribute to the goal of ending extreme poverty by 2030 and the role of microfinance in the post-2015 agenda. The results of this consultation will be reflected in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.

Below is a short excerpt from our conversation with Dr. William Derban, director of financial inclusion (CSR & PMO) at Fidelity Bank in Ghana.

Q: What do you think will be needed to achieve the goal of global financial inclusion by 2020 and how can this contribute to the goal of eradicating extreme poverty by 2030?

William DerbanGovernments are trying to create a good environment, and while MFIs and SACCOs have stepped in to fill a gap, it seems banks have been left out. We need to include them [banks], looking at this not as corporate social responsibility, but as an opportunity for businesses to expand their client base and a responsibility that they have to the people. The key question is, “How can microfinance and the financial inclusion sector better partner with banks and help improve their by creating linkages?” This should not be about competition, but a way that we can collaborate to provide financial services that they [clients] can graduate into as part of this value-chain of financial services.

Q: In relation to our host region, what are the challenges and opportunities facing Africa & the Middle East in regards to microfinance and financial inclusion?

We need more awareness and campaigning of the issues especially in the countries most affected by poverty. In Africa, there is a lack of awareness among the poor about the benefits of having formal financial services. There is a need for financial education so that they understand what impact this can really have on their lives. People need to understand that this is not about financial services for the sake of it, but that a bank account can help you manage your finances and it can serve as a safe place to save for your child’s educations and this can all help you live a better life. In this way, financial education can create empowerment and change.

Q: What are key themes to consider or important debate topics we need to address in the microfinance & financial inclusion sector in the coming year?

Innovation is key! We cannot get to full financial inclusion without technology, but we need to actually develop new ideas and not just replicate what may have worked in one specific country or environment. When innovating in mobile technology, we cannot just work with telecommunications companies but need to include mobile phone manufacturers, app developers, and retail shops. We must find a way to ensure that the public is educated on new innovations and make sure they learn how to use this new technology.

We also need to find ways to scale down or “bank downwards” where banks work on a model that works for the poor. However, we need to create the appropriate partnership in order to do this. Banks can decide to “scale down” [i.e., target poorer populations], but if they do it by themselves, there are certain services they won’t be able to provide.

Related resources

About Fidelity Bank

Corporate social responsibility (CSR) lies at the heart of the vision and mission of Fidelity Bank, Ghana’s largest private indigenous bank. Since inception, CSR at Fidelity has mostly focused on philanthropic endeavors, but now, as a bank that is consolidating its world class status, it has become imperative to align our CSR with our corporate strategy, allowing us to leverage our collective expertise and resources for maximum impact.

Under the theme “Building Lives through Finance,” Fidelity’s CSR work is being led by the director for financial inclusion and CSR, Dr. William Derban. Dr. Derban’s areas of focus are microfinance, payment services, and running the first agency banking service in the country. He is also responsible for aligning the Bank’s corporate responsibility strategy to its core business strategy. In the past 14 years, he has focused on providing sustainable, market based, financial services to the unbanked within the financial industry in Africa, Europe, and the Middle East. Dr. Derban earned his doctorate in Microfinance and Development Finance from the Nottingham Business School, UK. He provides lectures on sustainability and financial inclusion and is also a passionate speaker at various conferences on development across Africa, the Middle East, and Europe. Prior to working for Fidelity Bank, Dr. Derban was the head of community relations with Barclays Africa and Emerging Markets where he managed the community investment strategy across 14 countries in Africa, the Middle East, and Asia. Subsequently, he led the strategy of downscaling to informal groups with a £10m project working with savings groups across Africa, Asia, and Latin America with CARE international and Plan. In addition to financial inclusion, he has established successful projects on youth entrepreneurship, preventative health, clean energy solutions, female empowerment, and integrated rural development programs.

Learn more about Fidelity Bank.

E-workshop Takeaways: “How to Build Savings Groups and Other Breakthroughs in Financial Inclusion”

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As part of their 2014 Campaign Commitment, Carsey School of Public Policy co-hosted a learning event on Thursday, December 11th with us to share the value of starting and scaling up savings groups. William Maddocks (Carsey School of Public Policy) facilitated an engaging discussion, featuring Jong-Hyon Shin (Fundación Capital in the  Dominican Republic), and Jeffrey Ashe (The Carsey School of Public Policy).

We would like to thank the panelists as well as the E-workshop attendees, especially those who participated to the Q&A session. We invite you to comment on this post to continue the discussion about savings groups and other breakthroughs financial inclusion. Please click on the links below to explore the session content.


Listen to the E-Workshop RECORDING

Have a look at the E-Workshop SLIDES

Review the E-Workshop QUESTIONS

Savings groups picture Eworkshop

A savings group replication agent trains a new group. She is using the all-oral curriculum which makes it possible for communities with low or no literacy levels to create and run a savings group with complete autonomy.

Summary of the E-Workshop

The E-workshop focused on two main issues:

  1. A 2-hour training method to create new savings groups
  2. The link between savings groups and conditional cash transfers.

Jong-Hyon presented her own experience in the Dominican Republic, and Jeff talked about the takeaways from his research in West Africa.

The live discussion with participants also touched on a wide range of topics, including the benefits and challenges of youth savings groups, the role of religious institutions in supporting the savings group movement, and the benefits of bank linkages for both the commercial banks and savings groups members. Check out the full recording of the session available here.

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A youth savings group in Mali. Photo courtesy of Jeffrey Ashe.

 Takeaways from the panelists


Jong-Hyon Shin (Fundación Capital) : Group quality: 2 hour vs classic VSLA?

Without doubt, the groups trained by classical VSLA enjoy higher quality than the groups trained in 2 hours. There are 2-hour groups saving as much as the conventional groups, but it is true that the group quality is not even, while the conventional groups demonstrate rather consistent performance. 2-hour training can get the groups to start saving, but it’s not enough to build a strong group. I believe that a group should have at least 3-5 subsequent monitoring visits in its first cycle. This is why I am working with PROSOLI, Dominican Republic’s CCTs, in which the group members will have a periodic visits from their trainers. Another measure to complement 2-hour training is to pay attention to the selection of members. When the members are sufficiently interested, and there is a mutual trust within the group, chances for subsequent intervention drops dramatically. In sum, it is ideal to have groups trained by costly and labor intensive conventional methodology, but if we are to achieve the scale, simple training may not be an undesirable option.

Jeff Ashe (Author of In Their Own Hands: how Savings Groups are revolutionizing development)

Two and a half billion people worldwide need a better way to save and borrow. Savings groups provide an alternative, safe and convenient place to save and easy access to small loans; an approach to mitigating poverty that is uniquely scalable because it is based on catalyzing the capacity of people to mobilize their own resources with only transitory outside help. The cost: a dollar per person and trending downward as what is learned in one village spreads virally to neighboring villages. Within ten years, savings groups with 100 million members could improve the lot of the poor in a million villages, at a cost of less than one percent of what these countries will receive in foreign aid. The extraordinary growth, success and durability of savings groups are due to following these principles:

  • Start with a vision of scale and design for viral replication – multiple groups in thousands of villages in a single country
  • Less is more, and the simpler the better
  • Build on what is already in place
  • Be sustainable – 89% of groups worldwide are saving and lending without outside support
  • No giveaways – giveaways keep control in our hands, not theirs
  • Keep costs low – the problems of poverty are vast
  • Insist on local control, the key to building skills and lowering costs.
  • Embrace learning and innovation

Are savings groups the silver bullet for eradicating poverty? No development effort can deliver on that promise – but savings groups are perhaps the best and most practical place to begin. The strategy of savings groups is based on an awareness that good ideas spread as they always have: through talking with neighbors and helping one another. We will judge ourselves successful when development passes from our hands to theirs.

SfC Savings Groups Mali (June 2010)

The map of the Savings for Change (SfC) program shows the rapid expansion of savings groups in Mali over the last 6 years. Red dots are groups 5-6 years, yellow is 3-4 years, and green are groups only 1-2 years old. SfC is a program run in partnership by Oxfam America and Freedom from Hunger.

To learn more about savings groups, we invite you to read Jeff’s book (In Their Own Hands) and Jong’s blog.

E-Workshops are hosted by the 100 Million Project of the Microcredit Summit Campaign and strive to feature the work of organizations who have announced Campaign Commitments to take specific, measurable and time-bound actions that demonstrate their commitment to the end of extreme poverty. 

Join Fundación Capital and the Carsey School of Public Policy in the global coalition to help 100 million families lift themselves out of extreme poverty. State your Campaign Commitment today by contacting us at mycommitment@microcreditsummit.org.

Providing a Safety Net to Ten Million People


Richard Leftley, CEO of MicroEnsure, writes about the experiences that helped lead to the development of a safety net for the most vulnerable and how far they have come in fulfilling their Commitment to the Campaign.

- Image courtesy of MicroEnsure

Image courtesy of MicroEnsure

Join us in Mexico for the 17th Microcredit Summit in Mexico this September 3-5.

Richard Leftley will be joined from leaders in the microinsurance sub-sector for a workshop on microinsurance.


Over the years many of the microfinance leaders that I have met have told me of that one chance interaction that changed the course of their lives and resulted in them embarking on a journey to help millions of people be transformed and lifted out of poverty.

My moment was in the summer of 2001 in a village in Northern Zambia; one of the ladies I was talking to had become frustrated by my ignorance as to why she had experienced such a seeming boom and bust in her fortunes. From among her few possessions she produced a child’s Chutes & Ladders board and she explained that she was just trying to work her way out of poverty. She had succeeded earlier in her life having lived in an apartment in the capital and driven a car, but here she was back in the village with seemingly nothing to her name.

She explained that the microfinance loans she received helped accelerate her out of poverty like the ladders in the game, but then she looked at me and explained that no one was there when disaster struck causing her to slide back into poverty just as the chutes in the game return you to your starting place. What is today MicroEnsure was founded a few months later in partnership with the team at Opportunity International.

Twelve years later it is a real pleasure to make a Campaign Commitment to join with other microfinance leaders to help lift 100 million people out of extreme poverty; our contribution will be to provide a safety net to 10 million people in 15 countries so that they do not slip back following the death of a breadwinner, sickness of a child or following a natural disaster.

At the beginning of 2014 when we made this Commitment MicroEnsure was serving just 4 million people, but I am pleased to report that by the end of May we had enrolled 8.2 million customers (a growth of over 200%) and we are well on our way to matching or even exceeding our commitment by the end of the first quarter 2015. This rapid growth has come not only from our MFI partners but most significantly from the mobile network operators that we have partnered with in Africa and Asia some of which are signing up in excess of 250,000 new clients each and every week.

The breakthrough in working with telco’s (telecommunications providers) came when we stopped trying to sell insurance through them but instead realised that we could dramatically affect customer loyalty to the telco; let me explain. You see, none of us wake up wanting to buy insurance and if you are poor the idea of a product that you may need at some time months or years from now really makes no sense in the present.

However we know that our clients do wake up worried about what would happen if their husband died, their kids got sick, or a disaster struck. We also knew that telco’s are suffering from low customer loyalty with most subscribers using multiple SIM cards to make prepaid calls. We simply combined answering clients’ fear with the need of the telco’s for increased loyalty and in doing so we convinced the telco to give their loyal subscribers free insurance in return for spending more airtime on their network. The subscribers were happy to do so because their fears were being addressed for free in return for simply making more of their calls on one network. Everyone wins.

Interestingly we have also used this same idea to significantly drive the mobilisation of deposits in MFIs across Africa. Most deposit accounts have tiny balances that are loss-making for the MFI yet we know that the poor save money in a myriad of ways. It just seemed obvious to us that offering interest to depositors was simply not attractive enough to give customers a reason to choose the bank over  informal savings mechanisms. So we tried giving away free insurance if you saved.  As you saved more – $50, $60, $70 – you earned more free insurance coverage. We were delighted to see 200% increases in deposit rates clustered around these targets.

Achieving our goals will not be simple. We continue to rely upon partnership in order to provide our services and we are always on the lookout for MFIs, telco’s and others that provide services to the mass market. We would love to hear from anyone who wants to join with us on this mission. This kind of rapid growth also requires capital and we were delighted to announce last month that AXA and Sanlam Insurance Companies joined Opportunity, IFC, Omidyar Network and Telenor as investors in MicroEnsure bringing together key strategic partnerships with the funds required to continue scaling.

I often dream of returning to that village to find the Chutes & Ladders lady. I have no idea what I would say to her, but I would love the chance to simply say thanks for starting us out on this journey. I wonder if she knows she was the spark that has helped 10 million people like her find a safety net against the chutes they find along their own journeys out of poverty?

MicroEnsure announced their Campaign Commitment as:

  • MicroEnsure commits to reach 10 million clients with insurance services by the end of the first quarter of 2015.
  • MicroEnsure commits to expand its current reach into 15 countries by launching work in 5 new countries by the end of the first quarter of 2015

Join MicroEnsure and State your Campaign Commitment

Join MicroEnsure in the global coalition to help 100 million families lift themselves out of poverty – state your Campaign Commitment at mycommitment@microcreditsummit.org

Need additional guidance in formulating your own Campaign Commitment? Refer to our Commitment Development Toolkit.

Be social with us on Facebook and Twitter (@MicroCredSummit) using the hashtags #Commit100M and #100MGoal

MicroEnsure to Expand Services to New Clients and Countries – Latest Campaign Commitment


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MicroEnsure releases a Campaign Commitment! Español Français Continue reading

Résumés de l’actualité globale au sujet de la Journée Internationale de la Femme


“Je suis fière du modèle de société tunisienne où la femme est traitée en égale à l’homme et y a vu un héritage heureux de dames qui ont beaucoup donné à la Tunisie à l’instar des reines phéniciennes, berbères ou encore arabes”, a déclaré à cette occasion la présidente du SNJT Mme Néjiba Hamrouni. Continue reading

A Round-up of International Women’s Day Stories across the Globe


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The continued dominance of political life in Africa by men is not good for men, it’s not good for women and it’s not good for the continent. Thankfully, this is a situation that is beginning to change… Continue reading

Institutional Action Plan Raffle Winner: WAGES Togo


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Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters! Women and Associations for Gain both Economic and Social (WAGES) began its activities in 1994 as a project of Care International Initiative in Togo. It’s goal was to … Continue reading

Institutional Action Plan Raffle Winner: RIFIDEC


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Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters: RIFIDEC, Regroupement des Institutions du Système de Financement Décentralisé du Congo RIFIDEC supports microfinance in DRC RIFIDEC, the consortium of decentralized finance system in Congo, was created … Continue reading

Accelerate Ghana’s Economy

Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters, Accelerate Ghana’s Economy of Ghana!

Submit your IAP to be included in the next Raffle
(download the IAP | submit your completed IAP)



Accelerate Ghana’s Economy (AGE) works as an NGO, helping convert the creativity and passion of prospective micro entrepreneurs into sustainable businesses. With business training and ongoing support, clients can supplement their income and even support themselves full-time in their new businesses. In the end, AGE hopes to bring economic revitalization to Ghana by helping reduce poverty and lower the unemployment rate.


Africa is the only continent yet to attain significant development progress in multiple areas. The technological progress attained in the 21st Century can be either utilized to bridge this gap or can cause Africa to be left further behind the rest of the world. The WOMEN EMPOWERMENT PROGRAMME (WEP) aims to reach the women of Ghana, who make up over 50% of the population. Accelerate Ghana’s Economy believes that neglecting women in any developmental agenda for Ghana will have serious consequences. Although a small scale operation, WEP is the only women-oriented program with government support.

WEP aims to create employment, hoping to access development through the sustainable transformation of lives. The typical AGE client does not know how to create and maintain a successful business. These clients work long hours for little more than minimum wage and, with minimal education, have little opportunity to obtain a better life. With the AGE business training course, clients are surrounded by other supportive members from the savings and loan banks, who share the drive to achieve financial independence and exercise their creativity in a way that they cannot do at their day jobs. The business trainer gives practical information to the class as well as a sense of empowerment by showing the students how small businesses are started every day across the country.

Institutional Action Plan Raffle Winner: LIFCE (Liberia)

Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters, Liberia Initiative for Community Empowerment (LIFCE)of Liberia!

LIFCE’s Vision, Mission and Principles

Vision: A world where every woman, man and child leads a healthy, fulfilling life of self-reliance and dignity.

Mission: To end hunger and poverty by pioneering sustainable, grassroots, women-centered strategies and advocating for their widespread adoption in communities throughout the country.

Principles: Through our work to end hunger and poverty, we have recognized these ten principles as being fundamental to The LIFCE Microcredit Project. We challenge ourselves to ensure that each of our strategies builds on these principles.

1. Human Dignity
2. Gender Equality
3. Empowerment
4. Leverage
5. Interconnectedness
6. Sustainability
7. Social Transformation
8. Holistic Approach
9. Decentralization
10. Transformative Leadership
LIFCE’s Microfinance Work in Liberia

LIFCE’s Microfinance Program is implemented in two phases: (1) direct credit (approximately three to four months and/or six months to one year); and (2) rural credit agency.

The ultimate objective of the Microfinance Program in each community center is to have the facility gain government recognition to operate as a licensed Rural Credit Agency, owned entirely by community members and managed by a majority female board. The Rural Credit Agency then serves as a center that provides the entire community with sustainable access to savings and credit facilities.

The program consists of the following components:

1. Training

Trainings build the capacity of rural partners to increase and manage income. Anyone interested in participating in the Microfinance Program must first attend a LIFCE’s Vision, Commitment and Action Workshop to learn about LIFCE’s principles and methodology. These are required training sessions prior to receiving credit (group dynamics, project identification, basic business management, credit management and functional literacy classes). Either before accessing their loan or during repayment, partners must also participate in health trainings, on topics such as nutrition, hygiene, HIV/AIDS prevention and family planning.

2. Savings

Partners are required to save in order to participate in the program. This sensitizes them to the importance and benefits of savings and instills a savings’ culture in the community. When partners save, they mitigate risk and create a more secure future. A minimum savings deposit of 10 percent of the applied loan principal is required as savings prior to accessing credit.

3. Credit

Credit provides partners with the capital to realize their business aspirations and generate income. Loans are only disbursed to solidarity groups of 5-15 people, relying on the concept of group solidarity to mitigate risk. Group meetings become forums where members can voice and address common concerns and make decisions toward collective action on issues from education to clean water. All credit obligations elsewhere must be repaid before applying for a loan with the Liberia Initiative for Community Empowerment Microcredit Program. Another precondition is that all partners must enroll their children, girls as well as boys, in school.