Webinar recap: Is it too late for microfinance to be pro poor?

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On April 21st, the Microcredit Summit Campaign co-hosted with Uplift a webinar discussion focusing on the promise that graduation holds for sustainably reaching the ultra-poor. Our featured speakers were Debasish Ray Chaudhuri, CEO of Bandhan Konnagar in India, Rachel Proefke, a research associate with BRAC Uganda, Mark Daniels, the Philippines director for Opportunity International, and Allison Duncan, CEO of Amplifier Strategies and founder of Uplift. Anne Hastings, a global advocate with Uplift, moderated the webinar.

The conversation looked closely at the experiences that each of the three practitioners on the panel have had in implementing the program as well as the global advocacy message supporting the graduation approach being delivered by Uplift and its allies.

We hope you will get engaged with this promising avenue for reaching those living in ultra-poverty and be inspired by the potential it holds for helping microfinance institutions to reconnect to their original purpose. Some final thoughts from speakers on the webinar follow.

Anne Hastings noted,

We weren’t really able to address in depth how a pro-poor MFI, struggling for sustainability in a competitive, regulated environment can attain sustainability while operating the graduation program. In the models we saw, the institution was either an NGO or a regulated MFI that had formed a non-profit foundation for the graduation program and perhaps the delivery of other non-financial services. We shouldn’t be surprised or embarrassed that donor funding may still be needed, but partnerships with government safety net programs and other NGOs can also be very helpful in paying for the program. As the 6 RCTs funded by the Ford Foundation concluded, “Although more can be learned about how to optimize the design and implementation of the program, we establish that a multifaceted approach to increasing income and well-being for the ultra-poor is sustainable and cost-effective.” (Science Magazine, 15 May 2015, Vol 348 Issue 6236, p. 772.)

Rachel Profke added,

I think the point that I would stress, which we begun to address in the discussion, is the importance of finding the right partner for the implementation of components that an MFI does not have the core capacity to implement. While BRAC is able to leverage both microfinance and additional programming in the areas that we operate all programs, this is not always the case for us or other MFIs that will be interested in implementing graduation programming. Often, MFIs can provide the scale in identifying communities and in providing financial services, but linkages with implementing partners providing similar programming is fundamental to ensuring best practices in programming — as Mark highlighted. However, aside from NGO implementers, governments are often running existing programming that can be leveraged not only in identifying beneficiaries through such channels as social protection programming but also in providing some components through existing service provision, in terms of health or extension services. We find it helpful to look at what is already at place — and at scale — through government programs is useful, as we have done in Tanzania. This is also useful as we think about scaling because, apart from donor buy-in, governments offer larger potential through larger budgets and capacity.

Thank you to all panelists for contributing to this important conversation about the importance of the graduation approach. We also wish to thank all participants who submitted thought-provoking questions and comments to help make the session a very lively and interactive discussion!

Couldn’t join us? Watch the session recording!

New Partnerships against Poverty: Health and Financial Services

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When hundreds of millions of women like Alpana can enjoy health, savings, good work, and a sense of achievement and security for their families, we will know that our job is done EspañolFrançais Continue reading

A Comprehensive Approach to Helping the Poor Lift Themselves out of Poverty

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Partnerships against Poverty Summit Banner with logos

Going the Extra Mile: From Safety Nets to Pathways out of Poverty
Track: Partnerships Targeting the Vulnerable
Date: Thursday, October 10th
Time: 9:00 – 10:30 AM

Going the Extra Mile_Picture _Roshaneh Zafar_288x360

Roshaneh Zafar, Managing Director, Kashf Foundation

Partnerships between financial institutions, governments, and social welfare programs are essential for empowering the extreme poor reduce vulnerability and gain self-sufficiency. Moderating the 2013 Partnerships against Poverty Summit plenary session “Going the Extra Mile: From Safety Nets to Pathways out of Poverty,” Roshaneh Zafar of the Kashf Foundation (Pakistan) noted that “poverty is a complex matter. We need multiple solutions, we need synergy, we need leverageability, we need scalability; and we all need to work together and do much more.”

The discussion opened with Department of Social Welfare and Development (DSWD) of the Philippines Secretary Corazon “Dinky” Juliano-Soliman, who told of their “convergence strategy,” a means to help beneficiaries graduate and stay out poverty through conditional cash transfer (CCT) community-driven development and sustainable livelihoods converging. Through this program, they also partner with microfinance institutions to provide credit to clients that need larger loans than DSWD provides (10,000 pesos, or approximately $230).

Juan Borga (Inter-American Development Bank) and Secretary Soliman

Juan Borga (Inter-American Development Bank) and Secretary Soliman

Juan Borga of the Inter-American Development Bank shared their efforts toward poverty reduction. Working mostly with conditional cash transfer (CCT) programs, they are trying to create a system that creates a relationship between the recipients of the CCTs to the financial institutions so that they will have “the right instruments [to save] and the right incentives to do it.” Commonly, “the financial institutions are not really providing them with the right products they’d like to have.”

Nelly Otieno of CARE International in Kenya and Yves Moury of Fundación Capital (Colombia) highlighted the necessity of building assets through methods such as savings groups and CCTs in order to create pathways out of poverty and to prevent long term dependence on financial programs.

Moury, in particular, stressed the importance of asset building and capacity building as a catalyst to spur sustainability and self-sufficiency–and thus an exit strategy for the implementers. According to Moury, “Linking savings and CCTs has been just like putting wheels on suitcases—a powerful combination.”

The speakers agreed that health insurance, mobile phones, identification cards, social protection, and bank accounts, working in tandem, greatly help to supplement financial inclusion initiatives and create pathways out of poverty.

Syed Hashemi,  CS Ghosh, and Nelly Otieno

Syed Hashemi, CS Ghosh, and Nelly Otieno

Syed Hashemi of BRAC Development Institute (Bangladesh) spoke about incorporating governments into exit strategies that allow clients to protect their assets and take advantage of new opportunities. He emphasized that, “through national governments, we can come up with an integrated, holistic, national social protection system that combines CCTs with graduation programs so we can collectively achieve this commitment of eradicating extreme poverty by 2030.”

Hashemi also touched on the cost-effectiveness of social protection policies that include safety nets and offer self-employment because, although graduation programs that include extremely intense monitoring and coaching have been seen to have an initially higher cost, they require a shorter timeline.

Innovative methods of providing health services to the poor are equally crucial to comprehensively reducing the amount of individuals living in extreme poverty. Chandra Shekhar Ghosh of Bandhan (India) stated, “Poverty is a complex syndrome. It is not only possible to eliminate poverty through credit support to the poor.”

23_plenary_audience(4)_MarciaMetcalfe+CarmenVelasco+JohnHatch_400x300_photo credit - Vikash Kumar

(Photo credit: Vikash Kumar Photography)

Organizations and government institutions working toward eliminating poverty must implement additional services beyond credit, including social, health, and educational programs that target the underlying causes of poverty beyond financial inclusion.

Overall, the plenary constructively critiqued the current successes, challenges, and future opportunities in the effort to create the pathways the extreme poor can take advantage of to lift themselves out of poverty.

However, the speakers recognized that the road ahead is difficult. As Secretary Soliman stated, “We hesitate to say graduation or exit because poverty is very complex. The notion of graduation gives the impression that we are done. But with poverty you can never be done, and that’s why we call it transition.

Watch the full video of this plenary