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!

Video Corner | Shamsul Haque on reducing poverty through an integrated approach

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18th Microcredit Summit Video Corner Interview Series

Shamsul Haque, executive director and CEO of Society for Development Initiatives in Bangladesh, interviewed by Miranda Beshara, editor of the Arabic Microfinance Gateway.


Shamsul Haque of Society for Development Initiatives (Bangladesh) discusses his organization, the role of microfinance to help end poverty, and the lessons learned at the 18th Microcredit Summit with Miranda Beshara, editor of the Arabic Microfinance Gateway. Haque explains that SDI’s objective is to reduce poverty in Bangladesh through an integrated approach involving components such as microcredit, education, and the environment.

Haque is attending the Summit to gain experience from people in other countries on how they providing non-financial services like health, education, and the environment. “Microfinance plus at least education and health,” Haque said. “If we combine education, health and microcredit ….they [clients] will graduate [out of poverty]. They will be a respectable people in society. That is also our objective.”

Video Corner | Tarik Sayed Harun on reducing poverty in Bangladesh

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18th Microcredit Summit Video Corner Interview Series

Tarik Sayed Harun, assistant director of the core program for COAST Trust (Coastal Association for Social Transformation) in Bangladesh, interviewed by Miranda Beshara, editor of the Arabic Microfinance Gateway.


Tarik Sayed Harun of COAST Trust (Bangladesh) discusses the role of microfinance to help end poverty and the lessons learned at the 18th Microcredit Summit with Miranda Beshara, editor of the Arabic Microfinance Gateway. Harun explains that the poverty rate in Bangladesh has been reduced by 10 percent over the past five years. He suggests that recent research showing that microfinance in Bangladesh contributes approximately 10 percent to the nation’s GDP supports his contention that microfinance has a strong role to contribute to ending poverty.

“[The 18th Microcredit Summit] is very good opportunity to learn from each other and about very good practices from around the world,” said Harun. “We are trying to learn from the good practices and to implement them in our country, my organization. Overall our one commitment is to reduce poverty, so this is a very good opportunity to learn from each other.”

Sohelia Haque: MFIs better serve the poor than traditional banks

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Sohelia Naznin Haque of Society for Development Initiatives (Bangladesh) discusses the role of microfinance to help end poverty and the lessons learned at the 18th Microcredit Summit with Miranda Beshara, editor of the Arabic Microfinance Gateway.

Haque echoed Dr. Muhammed Yunus, supporting the goals of zero poverty, zero unemployment, and financial inclusion through technological advancement. She explains how SDI reaches the poor in a way that big banks do not, going to their homes and visiting rural areas.

“We go to them, think about or listen to their demands, needs, motives, drives. According to that, we make our microfinance products and try fulfill their demands,” said Haque. “[Commercial] banks’ interest rates are too high, but our interest rates are not too high according to the demand we provide them.”

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#tbt: Clients Continue Movement above the US$1 a day Threshold

The study found that, on net, 1.8 million microcredit client households, including 9.43 million household members, crossed the $1.25 a day poverty threshold between 1990 and 2008.

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We are pleased to bring you this #ThursdayThrowback blog post, which was originally published in The State of the Microcredit Summit Campaign Report 2011. We commissioned a study to estimate the net number of microcredit client households in Bangladesh that crossed the US$1.25 a day threshold between 1990 and 2008. You can download a copy of the study from our Resource Library as well.


Authored by Sajjad Zohir, the director of the Economic Research Group; he is based in Bangladesh.

The Microcredit Summit Campaign is committed to using microfinance to powerfully contribute to the end of poverty. Its decade-long focus on client poverty measurement and progress out of poverty underscores this commitment. To this end, the Campaign continues to track progress towards its second goal to ensure that, from a starting point in 1990, 100 million of the world’s poorest families move from below US$1 a day adjusted for purchasing power parity (PPP) to above US$1 a day adjusted for PPP by 2015.

Evidence from Bangladesh

Findings from a nationwide study in Bangladesh commissioned by the Campaign shows promising results. The study, undertaken by the Bangladesh-based Economic Research Group, was administered between February and August 2009. Researchers surveyed a nationally representative sample of 4,000 Bangladeshi microcredit clients and estimated the net number of households in Bangladesh that crossed the US$1.25 a day threshold between 1990 and 2008.[1]

The study found that, on net, 1.8 million microcredit client households, including 9.43 million household members, crossed the $1.25 a day poverty threshold between 1990 and 2008. A second key issue raised in the report, seen in Figure 1 below, was that in some years a large percentage of clients left poverty, whereas, in years coinciding with the 1998 floods and the food crisis of 2008, many households, including some who where non-poor when they joined the microcredit program, slide below the $1.25 threshold.

Figure 1: Percentage of Client Households, on Net, Crossing the US$1.25 Threshold in Bangladesh

Figure 1: Percentage of Client Households, on Net, Crossing the US$1.25 Threshold in Bangladesh
Data showed that among those taking their first microcredit loan between 1990 and 2008, the following poorest client households crossed the US$1.25 threshold:

1990-1993 8.94%
1994-1997 19.83%
1998-2002 0.33%
2003-2008 1.84%

It is important to note that the findings in this report were significantly influenced by the period in which the data was collected. In 1998 Bangladesh suffered from what are often described as the most severe floods ever to hit the country. In 2008, a food crisis coupled with political instability in Bangladesh and the global economic crisis led to a general slack in economic activities. All these factors may have led to the depletion of assets that are commonly chosen as proxies to measure poverty status among the very poor in Bangladesh. This in turn may have led to under-estimation of the number of microcredit client households that may have otherwise crossed the threshold.


Footnote

[1] This study made no attempt to establish causality between microcredit and poverty alleviation. Instead, it simply estimates the change in status of microcredit client households between 1990 and 2008, when compared with their status during the time of the first loan received by any member of the household.


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#tbt: Green Energy and Green Jobs for Bangladeshi Villages

Muhammad Yunus and Queen Sofia of Spain visit a village in Bangladesh served by Grameen Bank (2007)

Muhammad Yunus and Queen Sofia of Spain visit a village in Bangladesh served by Grameen Bank (2007)

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We are pleased to bring you this #ThrowbackThursday blog post, which was originally published as a Box in the The State of the Microcredit Summit Campaign Report, 2009. Grameen Shakti (GS) announced at the end of 2012 that it had reached its first landmark of one million Solar Home Systems (SHS) installed in the rural areas of Bangladesh. In the press release, they said, “Grameen Shakti replaces millions of litres of kerosene by these 1 million SHS and reduces CO2 emission substantially. On an average, GS installs over a thousand solar home systems per day, working with a workforce of 12,000 young people. We are looking forward to witness the signpost of the next million by 2016.”


Dipal C. Barua, Managing Director, Grameen Shakti (www.gshakti.org)

The First Steps to Break the Energy Divide

Grameen Shakti (GS) was created in 1996 to reach rural people with clean, affordable energy through renewable energy technologies.

Bangladesh is rich in sunshine. That is why Grameen Shakti’s first initiative was to popularize Solar Photo Voltaic (SPV) technology. By owning a solar home system (SHS), a rural family can enjoy lights, television, radio, and can power their mobile phones. The up front costs are high, but once they are paid, there are no additional costs, load shedding, or ever increasing electricity bills. This makes a huge difference in the quality of life and income generation in a country where 80% of the people still do not have access to electricity.

A Business Model Suitable for Rural People

Government initiatives to meet the energy needs of the rural people have failed in most developing countries. Grameen Shakti, in contrast, was successful in taking the world’s most up to date technology to the rural people.

The first challenge was to acquire start-up funds and build a network to reach rural people. GS depended on soft loans and grants to start its program. GS also worked with local and international engineering institutions to recruit and train engineers to develop its in-house capacity. Currently more than 50% of GS staff are engineers and they are deployed all over Bangladesh. In addition, local technicians and users were also trained. This means local jobs, community support and efficient after-sales service at reduced costs.

The second challenge was to develop a financial and technical package suitable for rural people. Innovative application of microcredit made a SHS affordable at the same cost as kerosene while ensuring income generation and new business opportunities such as mobile phone vendors and televisions in shops. Special Packages such as a Micro-Utility Model allowed one system to be shared by many shopkeepers, linking the technology with income generation.

Initially GS engineers had to make door to door visits to demonstrate the effectiveness of the solar home systems. Once the villagers became aware of the multiple benefits of a SHS, the system sold itself.

Increased sales have decreased overhead costs which helped GS provide further credit options to the rural people. Local production of solar accessories has further reduced costs. GS reached break even point in 2002. This success drew the attention of the World Bank and other funding institutions and GS was able to source soft loans through the Infrastructure Development Company limited (IDCOL).

Future Vision: Creating 100, 000 Green Energy Entrepreneurs by 2015

Grameen Shakti also has a thriving Biogas and Improved Cooking Stoves Programs (ICS). Biogas plants are providing cooking gas, light, electricity and organic fertilizer to rural people with livestock. Poultry owners have especially benefited. They get rid of poultry wastes, reduce energy costs and earn extra income by renting biogas. ICS are popular with rural women because they can cook in smoke-free kitchens and cut their fuel cost in half. GS plans to construct 500,000 biogas plants and 10 million ICS by 2012.

To reach these goals, GS plans to create 100,000 Green Energy Entrepreneurs by 2015 and has set up 30 local Grameen Technology Centers to train rural women as technicians and entrepreneurs.

GS’s vision was to empower the rural people by giving them access to renewable energy technologies. In the next decade, GS will further this vision by creating green jobs and green businesses at the rural level to bring light, income, health and clean energy to rural people.


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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,
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“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:
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“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…

Get Inspired. Set a Goal. Make a Commitment.

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

Ultra Poor Graduation

PRA

Photo credit: BRAC

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>> Authored by Shameran Abed, Director, BRAC Microfinance Programme

Shameran Abed, BRAC’s Director of Microfinance, joined the Microfinance CEO Working Group in January. He and BRAC are welcome to additions to this collaboration. He joins the Working Group’s efforts to support the positive development of the microfinance industry and brings tremendous insigShameran Abedht into the discussion around pathways out of poverty.

This month, the results from six randomised controlled trials (RCTs), published in Science magazine highlighted a model of development that is an adaptable and exportable solution able to raise households from the worst forms of destitution and put them on to a pathway of self-reliance. The graduation approach — financial services integrated within a broader set of wrap-around services — is gaining steady recognition for its astonishing ability to transform the lives of the poorest.

These findings can be contrasted with the results of six RCTs published in January by the American Economic Journal: Applied Economics, which cited limited evidence of “microcredit” transforming the lives of the poor.

In many ways, that was not surprising. There is only so much that microcredit alone can do to address a phenomenon as complex as poverty, especially within the rather short, 18-month timeframe of a research project. This partly explains the diversification most financial service providers have made into savings, microinsurance, financial education, and other models of financial inclusion that integrate different development services.

While the transformative effects of microcredit alone — or even microfinance — remain up for debate, it is now clear that access to savings and credit provided together with other wrap-around services not only provides a viable pathway out of poverty for the poor, they do so for the very poorest!

Following 30 years of work in building livelihoods for the poor, largely through microfinance and agricultural extension, BRAC learnt the hard way that we were not making effective poverty reduction gains for those most in need. We were consistently failing to reach the millions of households at the very bottom.

Classified as the “ultra poor,” this sub-segment of the extreme poor, who live on less than USD 0.80 per day, fail to meet their daily energy requirements, are chronically ill, and live on the fringes of society. In these circumstances where basic needs are unmet, microfinance alone can do little to provide a pathway out of poverty.

In 2002, BRAC developed a model designed to create livelihoods for the ultra-poor in a way that also addressed the other dimensions of abject poverty creating barriers to their development. Capitalising on our previous social safety net programme experience, BRAC’s Targeting the Ultra Poor programme (the basis of the graduation approach) combined asset transfer with livelihood development and social support.

GradBlogGraphic

For two years, clients receive an integrated package of cash stipends, an asset (such as a cow or chickens) with training, and basic healthcare. Early into the programme, clients cultivate strong savings behaviour, and learn the basics of financial management. The programme also includes a large social component: regular household visits from our staff and integration in the community.

Notably, the model in Bangladesh does integrate microcredit for some clients; 70 percent of the graduates in Bangladesh actually received their assets as “soft loans,” which they repay over the course of two years.

The results have been remarkable. Since 2002, 95 percent of the 1.4 million clients who have come through this programme have graduated from ultra-poverty. The programme is costly in one sense, because it’s grant-based and financially unsustainable, but the social returns are high and extend well beyond the end of the intervention period.  An RCT has shown that even years after members graduate, most continue to experience growth in their household income and well being.

The achievements of ultra-poor graduation are even greater because this is not a success story limited to Bangladesh. An initiative led by CGAP and the Ford Foundation sought to test the replicability of the BRAC model by piloting it in several contexts internationally.

The RCT results published in Science, which covered pilots in India, Pakistan, Ethiopia, Ghana, Honduras and Peru, show definitively that they were successful. In all six of the countries studied, all treatment households witnessed significant improvements across a range of indicators that continued beyond the end of their programmes. Today, the graduation approach is continuing to break ground with a range of other actors that include microfinance providers, multilateral agencies, NGOs (e.g. Fundacion Capital, UNHCR, Concern Worldwide) as well as governments looking to improve costly social safety net programmes that protect the poor from destitution, but fail to put them on a ladder out of poverty.

As a sector that has come under fire for failing to make conspicuous reductions in poverty, the success of ultra-poor graduation carries notable implications for the role that financial services can play in putting millions onto pathways out of extreme poverty.

One is a lesson to microfinance providers that, actually, the extreme poor can be extremely credit worthy – once the initial investment is made. Indeed, some of BRAC’s most reliable and disciplined microfinance clients are graduates from our ultra-poor programme. Microfinance institutions may not be the ones to make that investment, but they can help ensure that “graduates” of such programmes have a bridge that transitions them from ultra-poverty into mainstream microfinance.

Secondly, this model shows that financial services, when integrated within a broader set of wrap-around services, is unquestionably transformational, even for those in the most desperate forms of poverty.

Critics will likely ask, which are the most crucial elements? Is it financial access that is making wrap-around services transformational, or is it the wrap-around services that make financial access transformational?

The answer is most likely some combination of the two, but so long as this interaction is producing these results, I am satisfied in knowing that access to financial services remains a vital ingredient in the solution to extreme poverty.


Shameran Abed is the director of the BRAC microfinance programme, which serves more than five million clients in seven countries in Asia and Africa, and has total assets exceeding USD 1 billion.

Starting its work in the early 1970s, BRAC was one of the earliest known organisations to use the modern microfinance model of lending small amounts to groups of women. Working alongside several other development programmes, the success of the microfinance programme supported BRAC in its growth to be the largest development organisation in the world in terms of staff numbers.

Mr Abed also serves on the boards of BRAC Bank’s mobile financial services subsidiary, bKash, and Guardian Life Insurance. Additionally, he sits on the Microfinance Network Steering Committee and the World Economic Forum Financial Inclusion Steering Committee. Prior to joining BRAC, Mr Abed was a journalist and wrote primarily on political issues.

Mr Abed is a lawyer by training, having been made a barrister by the Honourable Society of Lincoln’s Inn in London, UK. He completed his undergraduate studies at Hamilton College in the United States, majoring in economics and minoring in political science.


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

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: Syed Hashemi

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
Learn more

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 Syed Hashemi, senior adviser for the CGAP Vulnerable Segments Initiative and professor at BRAC University in Bangladesh.

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?

Syed M Hashemi_BRAC_187x249There have been major efforts to achieve financial inclusion through developing better and more flexible products to meet client demand, using technology to lower costs and financial education to improve client money management. Far less has been happening on linking access to finance to extreme poverty eradication. In fact, few MFIs actually reach out to those in extreme poverty. Part of this is due to the singular focus on credit which is not what the poorest often need immediately. And, possibly more importantly it is the failure of the microfinance sector to work with other development sectors.

What microfinance needs to do is better understand the lives of the poorest (as distinct from “the poor”), the risks they face and the needs they have. So, savings and insurance, specially designed for this group, as well as financial education, is what is required. But, too often the poorest spend all their time with the day to day struggles for food security. And too insecure to even plan for the future. This is where the primary need is for safety nets to guarantee them basic consumption levels.

Now if microfinance was to work closely with safety nets and build on top of the food security that safety nets provide, it could assist in creating a ladder for the poorest to eventually use financial services, build sustainable livelihoods and graduate out of extreme poverty. This is the graduation model that BRAC pioneered and CGAP and Ford Foundation adapted and promoted globally.

However, it is not enough to have some models that work or some products that increase outreach. What is required is massively scaling these up so that we can indeed achieve the global goals we set out. This is where governments and policy makers are key. MFIs can only achieve so much on their own. It will ultimately be governments who have the bandwidth to make this happen, of course with MFIs and NGOs as critical strategic partners.

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

Many of the sustainable development goals will focus on building resilience of different demographic groups — children, the youth, the elderly, the disabled — as well as the extreme poor. Microfinance has a huge role in the effective design and delivery of child support grants, universal pension schemes, health insurance as a key element of universal health coverage, financing schooling and training, credit for micro and small enterprises, better transfer payment and emergency loan mechanisms, deposit services and of course partnering with graduation programs.

The Summit is an ideal platform to convene people to show case ideas and campaign for financial inclusion and the end of extreme poverty through more effective use of financial services.

Q: What are the most recent innovations and proven best practices in the field helping those living in extreme poverty? What are key themes to consider or important debate topics we need to address in the microfinance & financial inclusion sector in the coming year?

Let me highlight the key concerns moving ahead:

  1. Financial education and consumer protection.
  2. Children, the youth, the elderly, and the disabled.
  3. The environment, climate change, and the shrinking ecological reserves.

And the way forward in addressing these issues (and addressing pervasive market and government failures) is far greater collaboration with governments. We know governments can be slow and unresponsive, but ultimately, they have the budget and the constitutional obligation to increase the welfare of its citizens. We need to hold them accountable to that.
19_plenary_Going-the-extra-mile_SyedHashemi_594x345_photo credit - Vikash Kumar Photography

About BRAC University

BRAC University (BRACU) was established in 2001 building on BRAC’s experience of seeking solution to challenges posed by extreme poverty by instilling in its students a commitment to working towards national development and progress. The mission of BRAC University is to foster the national development process through the creation of a centre of excellence in higher education that is responsive to society’s needs, and able to develop creative leaders and actively contributes to learning and creation of knowledge.

Syed M. Hashemi is Professor and Chair of the Department of Economics and Social Sciences at BRAC University. Prior to that, he spent five years as founder-director of the BRAC Development Institute—a resource center for promoting research and building knowledge for addressing poverty, inequity and social injustice. Hashemi also spent nine years with CGAP at the World Bank in Washington DC, focusing on identifying pro-poor innovations and disseminating best practice lessons related to poverty outreach and impact. Hashemi was amongst the pioneers who started the Social Performance Task Force to promote a double bottom line in microfinance. He also headed a multi-country program to develop new pathways for the poorest to graduate out of food insecurity through building sustainable livelihoods. Hashemi continues to be involved with the graduation work at CGAP. Earlier, Hashemi directed the Program for Research on Poverty Alleviation at Grameen Trust and taught Development Studies at Jahangirnagar University in Bangladesh. He has a Ph.D. in Economics from the University of California at Riverside.

Click here to visit the BRAC University website.

The Capital of Pro-Poor Microfinance

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Muhammad Yunus speaks with other participants at the 17th Microcredit Summit in Mexico

Bangladesh is known as the birthplace of modern microfinance, but many people see that as an old story. What is not as widely known is that Bangladesh continues to be the capital of pro-poor microfinance, a laboratory of innovation and integration focused on reaching clients in poverty and facilitating movement out of poverty.

Here are 4 reasons why Bangladesh still leads the industry:

1. The Yunus Centre Social Business Design Lab
The Yunus Centre holds Social Business Design Labs at least once a month where people present their social business ideas to potential funders (they are live streamed and available online). The funders are various Grameen Social Business Funds, and while some of the presenters are larger social business ideas, most of the Design Lab is dedicated to the ideas of Nobin Udyokta (young entrepreneurs), who are children of Grameen clients.

Each Design Lab presenter gets 5 minutes to present his or her project and 10 minutes to answer questions from the audience. At the end, the audience is broken up into groups and each groups meets with one of the presenters for half an hour to ask more in-depth questions. At the end, the groups report on whether or not they recommend the business for investment.

By the time they get to these presentations, the business owners have all worked closely with their investors in developing their business plans and preparing to answer questions. All of the businesses were recommended for funding.

Grameen phone ladies from 2007

Grameen phone ladies from 2007

What is interesting about this process is the generational evolution it shows in the development of the businesses and the sophistication of the finances. While Grameen Bank clients mostly ran basic livelihood projects with no accounting, these businesses run by their children have accounts, business plans, and investors.

2. UDDIPAN
UDDIPAN (United Development Initiatives for Programmed Actions) works in 37 of the 64 districts in Bangladesh. They serve 450,000 microfinance clients and 2,400,000 beneficiaries.

UDDIPAN’s vision is “To build an environmentally sound society without poverty, free of exploitation, oppression, injustice and discrimination where children, women and men live with dignity and capable to exercise their rights and will have access to and participation in the mainstream socio-economic, political and cultural processes.”

UDDIPAN photo

An UDDIPAN client looks after her cows. Photo credit: UDDIPAN

Uddipan has designed programs and products around the ultra poor, green energy, people with disabilities, and Islamic self-help groups. Here are some examples:

  • After doing a study that found high levels of child malnutrition, Uddipan educated their clients to provide house-to-house training in nutrition.
  • They run a tube well and toilet program with Water.org.
  • They provide primary health care services in 4 of their branches.
  • They have organized 2,400 imams to work for peace and against human trafficking.
  • They advocate on child rights and train their clients to avoid child labor.

3. TMSS
TMSS (Thengamara Mohila Sabuj Sangha) works in 20,000 villages in the country, serving 930,000 clients (800,000 with loans and savings and the rest with only savings). In 84 of their branches, TMSS also operates a clinic staffed by nurses and community doctors.

TMSS’ microfinance unit is called Health, Education and Microfinance (HEM), since all three activities are linked together in the microfinance delivery. HEM is only one part of the 14 domains that TMSS works in. They also run hospitals, medical training schools, other technical training schools, agricultural and fisheries projects, human rights projects and climate and environmental change programs.

All told, TMSS works with 4.7 million women organized in groups. Their motto is “Family development through women’s empowerment.”

4. Palli Karma-Sahayak Foundation (PKSF)
PKSF is a government supported apex funding unit in Bangladesh. In the past, it supported groups like Grameen, BRAC, and ASA, but these groups have graduated from their funding and PKSF is now focusing in the next tier of MFIs. PKSF currently funds about 60 MFIs.

PKSF Chair Qazzi Kholiquzzamn Ahmad has been a critic of microfinance as a stand-alone activity, but a strong proponent of microfinance linked with other human development services.

Key Elements of ENRICH. Source: http://bit.ly/PKSF-AHolisticApproach

Key Elements of ENRICH, which is short for “Enhancing Resources and Increasing Capacities of Poor Households towards Elimination of their Poverty.” Source: http://bit.ly/PKSF-AHolisticApproach

Under his leadership, PKSF has not only implemented agricultural value chain projects, but also the ENRICH program, which supports MFIs to integrate education, health, nutrition, water and sanitation, energy and climate change response into their programs. Four years after its inception, “ENRICH is flourishing into a model of sustainable poverty alleviation, continually seeking solutions to ameliorate the poverty situation in Bangladesh,” according to PKSF. Learn more.

In addition, PKSF operates the PRIME program (“Programmed Initiatives for Monga Eradication”), which supports MFIs in their work with the ultra poor by addressing food insecurity and seasonal hunger. DFID has recognized the PRIME program as their most effective poverty alleviation investment.

Yunus Centre fulfills Campaign Commitment by cultivating ‘job-givers’

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The Yunus Centre has worked tirelessly to promote the philosophy of Professor Mohammad Yunus and to alleviate poverty through social entrepreneurship and turning ‘job-seekers’ into ‘job-givers’. The Yunus Centre declared its support for the goal of helping 100 million families lift themselves out of extreme poverty by announcing a Campaign Commitment at the 2013 Partnerships against Poverty Summit held last October 2013 in Manila, Philippines. The Microcredit Summit Campaign recently caught up with the Yunus Centre to learn about the progress they’ve made on their Commitment and the ways they are working towards the end of extreme poverty.


“The poor themselves can create a poverty-free world all we have to do is to free them from the chains that we have put around them.” – Professor Mohammad Yunus

Yunus

Professor Mohammad Yunus, winner of Nobel Peace Prize for his work with microfinance and founding of the Grameen Bank in Bangladesh. Image courtesy of Yunus Centre.

Founded in 2006, the Yunus Centre actively promotes and disseminates the philosophy of world-renowned microfinance leader Professor Mohammad Yunus. Professor Yunus believes we can achieve the end of poverty through microfinance and social entrepreneurship.

In October of 2013, the Yunus Centre made the Commitment to support the 100 Million Project through the following actions:

By the end of 2018:

  • Create a global social business sector serving at least 100 million poor, and providing jobs and for at least 10 million households.

In just over one year, by the end of 2014:

  • Help create, finance and expand more than 50 social businesses in at least 20 countries world-wide.
  • Create Social Business Incubator Funds, and other structures, in at least 8 countries: Albania, Bangladesh, Brazil, Colombia, Haiti, India, Tunisia and Uganda
  • Social businesses in Bangladesh will serve at least 2 million households, and employ at least 20,000 households.
  • Collect and publish relevant social-impact data for all social businesses.

Yunus Centre Campaign Commitment Outlook: Achieving the 2014 Benchmarks   

The Yunus Centre has achieved outstanding progress since announcing its Campaign Commitment in 2013.

The Yunus Centre has met its 2013 benchmark of creating, financing and expanding more than 50 social businesses.

As of May 2014, the Yunus Centre has helped launch more than 100 new social businesses in Bangladesh. Recently the Yunus Centre introduced a new initiative called nobin udyoktas(‘new entrepreneurs’ in Bangladeshi) which is aimed primarily at the children of Grameen Bank borrowers and intends to turn them from ‘job seekers’ into ‘job creators’. Every month the Yunus Centre hosts a social business design lab which is a platform for entrepreneurs to present their social business designs in front of experienced business executives and social activists. Initial successes have helped the Yunus Centre to gain momentum in encouraging youth to make their own destiny through social business ventures. The Centre projects that it will reach 200 new social businesses by the end of 2014.

However work remains to be done. The Yunus Centre committed to create, finance, and expand more than 50 social businesses in 20 countries worldwide. They have achieved remarkable success in Bangladesh, but what about the rest of the world? So far Yunus Social Business (YSB) has launched social businesses in Colombia, Costa Rica, Tunisia, Haiti and Albania.As an example, in Colombia, the Yunus Centre partnered with McCain Foods to launch Campo Vivo, a social business that will benefit farmers living in poverty by aiding them in the production and commercialization of potatoes, carrots and peas. The Yunus Centre has made great progress towards achieving the first goal of its Commitment; nonetheless, expanding social businesses into other countries will remain a priority as they seek to reach their target of 20.

Yunus Centre has achieved its goal of creating Social Business Incubator Funds in eight countries.

Yunus Centre launched Social Business Incubator Funds in Bangladesh, Brazil, Colombia, Haiti, Albania, Tunisia, Uganda and India since 2013. The goal of these incubator funds is to provide start-up investment for social businesses when traditional banks may not be willing to invest. The funds are designed to be financially sustainable at $13.5 to $20.5 million and can be expected to invest in approximately 6 new social businesses each year. Some of the incubator funds are already providing services to entrepreneurs.

Although the Yunus Centre has made considerable progress towards achieving its Commitment, it has not yet been able to quantify its impact.

In October of 2013, the Yunus Centre boldly committed to helping social businesses serve 2 million households and employ 20,000 households. Because most of the social businesses are start-up enterprises, they are in the process of developing their market and scaling up their operations. Therefore, it is difficult to estimate exactly how many households the social businesses are currently serving. The number is undoubtedly increasing as new social businesses are generated across Bangladesh. Once the Yunus Centre better determines how many households are being served and employed by social businesses in Bangladesh, it will publish the information on socialbusinesspedia.com. After a social business has been operational for a few years and it becomes feasible to measure its impact, the Yunus Centre publishes all relevant social impact data on Social Business Pedia.

Grameen Veolia

Grameen-Veolia Water Ltd. Image courtesy of Yunus Centre.


Join us in Mexico for the 17th Microcredit Summit this September 3-5. Professor Yunus will be a keynote speaker in addition to moderating workshops on social business and youth employment. http://17microcreditsummit.org/


Turning Social Businesses into a Poverty Elimination Tool 

One example of a social business pioneered by the Yunus Foundation is Grameen-Veolia Water Ltd. Although water supply is abundant in Bangladesh, much of the groundwater is contaminated with arsenic for geological reasons. Grameen Healthcare Services partnered with Veolia Water to provide clean water and distribute it to a vast network of rural villages. The joint venture has been established according to the social business principals advocated by the Yunus Centre.

One example of a social business pioneered by the Yunus Foundation is Grameen-Veolia Water Ltd. Although water supply is abundant in Bangladesh, much of the groundwater is contaminated with arsenic for geological reasons. Grameen Healthcare Services partnered with Veolia Water to provide clean water and distribute it to a vast network of rural villages. The joint venture has been established according to the social business principals advocated by the Yunus Centre.

The Yunus Centre views its Campaign Commitment as an integral part of the achieving its mission and helping lift 100 million families out of extreme poverty. The Commitment contributes in two ways to the goal: 1) new services are being introduced to the next generation of microfinance stakeholders, and 2) the ‘nobin udyokta’ initiative is providing equity financing for social businesses to create a generation of ‘job givers’ instead of ‘job seekers’. Professor Yunus shared his enthusiasm for the progress the Yunus Centre has made towards achieving its Commitment stating, “We are excited about new possible openings, especially social business gaining momentum in many countries. It’s a starting point for a global movement.”

Through these efforts the Yunus Centre is making large contributions to the 100 Million Goal. Standing alongside the Campaign’s coalition of actors who have stated their Campaign Commitment, the Yunus Centre is helping make the end of extreme poverty possible and achievable.


Join Yunus Centre and State your Campaign Commitment

Join Yunus Centre in the global coalition 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

Learn more about the Microcredit Summit Campaign: http://www.microcreditsummit.org/

Graduating Families out of Ultra-Poverty (E-Workshop Recap)

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Due to technical difficulties, the webinar recording function started late. We apologize for this inconvenience and have made a summary and the presenter’s slides available to you.

BRAC client

Image courtesy of BRAC


Webinar resources


Larry Reed, director of the Microcredit Summit Campaign, moderated an engaging discussion about the Graduation Model pioneered by BRAC, an international development organization based in Bangladesh, that included Sadna Samaranayake (Program Manager of the Ultra-Poor Graduation Program at BRAC USA), Carine Roenen (Executive Director of Fonkoze in Haiti) and Raymond Serios (Special Projects Manager at Negros Women for Tomorrow Foundation).

Sadna Samaranayake, BRAC Ultra-Poor Graduation Program

Sadna opened by describing BRAC’s Ultra-Poor Graduation Approach which targets ultra-poor households and follows a process of focused interventions carefully sequenced to “graduate” households out of ultra-poverty. While the World Bank uses the $1.25 per day income threshold to define extreme poverty, BRAC understands the ultra-poor as those in the bottom half of earnings among those below the $1.25 a day line.

Sadna explained that the first step in the process to graduating households from ultra-poverty is to carefully target and select families for program participation. This requires community mapping and wealth ranking exercises to determine which community members are in the most need.

Once chosen to participate in the program, clients receive a transfer of productive assets and a cash stipend. Sadna explained that productive assets can be livestock, seeds for planting, or small goods for enterprise. The cash stipend allows clients flexibility to start improving their livelihood while beginning to generate an income from the productive assets.

Next the clients receive training and they start to generate an income for themselves. As time progresses, clients are encouraged to save money and are given access to appropriate health care. Ultimately, the objective of the graduation approach is to ensure that all families are better integrated into the social fabric of the community and are generating enough sustainable income to conquer ultra-poverty.

Graduation occurs over a period of 24 months when households achieve set economic and social goals including not having a reported food deficit in the past year, having multiple sources of income, owning livestock/poultry, having a sanitary latrine and clean drinking water, having cash savings and school age children attending school. Over the past 12 years, BRAC has graduated 1.4 million people, mainly in Bangladesh and has committed to graduating 250,000 more families by the end of 2016.

Carine Roenen, Fonkoze

Carine followed by illustrating the challenges of implementing a graduation model in Haiti. The Fokonze approach is an adaptation of the BRAC model with slight changes for the context for working in Haiti. Fonkoze has reached 62,735 clients with loans, and graduated 2,900 clients from ultra-poverty. Currently, Fokonze is hoping to expand its outreach in Haiti to graduate more households out of ultra-poverty.

Raymond Serios, Negros Women for Tomorrow

Raymond used his opportunity to interview both Sadna and Carine about the process of implementing a graduation model in his context in the Philippines. Raymond inquired about how BRAC and Fonkoze choose productive assets with the households. Carine responded that it depends on the skills of the client and should be something that she is already familiar with or willing to learn.

Larry then moderated a discussion among the panelists based on questions submitted by webinar participants. Some of the questions focused on monitoring and evaluation processes to track progress toward graduation. Others touched similarly on impact in the long term. It was a lively discussion that included an optional time extension after the official schedule ended to continue discussions. (See all the questions and comments in the webinar chat.)


We would like to thank all of the panelists and all of the participants who attended the webinar and participated via the chat and Q&A functions. We invite you to comment on this post to continue the discussion about the graduation model and further share ideas.

We also invite you to explore the links below to the recording of the webinar, presentations from BRAC and Fokonze, as well as the Robin Burgess report about the impact of the graduation model program on employment choices.

We hope you will join us for our next e-workshop “Instilling Confidence in Poverty Measurement: The New PPI Certification” on Tuesday, June 24th at 10:00 AM (EDT/GMT-4) and featuring panelists Frank Ballard (Grameen Foundation), Analí Oda Salcedo (Planet Rating), and Chiara Pescatori (MicroFinanza Rating).

Webinar Resources:


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. Are you Committed?  Find out how to share your Commitment to the end of extreme poverty.

Sign onto the Declaration in Support of the Independence of Grameen Bank

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Full Financial Inclusion for Social Change

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Building the Ecosystem for Financial Inclusion while Protecting Clients
Track: Partnerships Building a National Ecosystem
Date:  Wednesday, October 9th
Time:  2:30 – 4:00 PM

Building Ecosystems_Sipho Moyo_297x346

Dr. Sipho S. Moyo, Africa Director, The ONE Campaign

Artfully moderated by Dr. Sipho Moyo of the ONE Campaign, the plenary session “Building the Ecosystem for Financial Inclusion while Protecting Clients” at the 2013 Partnerships against Poverty Summit highlighted the advancement of the Maya Declaration in select developing countries.

The Maya Declaration, the first of its kind, is a commitment by developing countries to make significant progress in financial inclusion. This plenary session showcased the progress the Philippines, India, and Bangladesh have made thus far and the role policy makers play in bringing about full financial inclusion.

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Sung-Ah Lee, Director, Strategy and Network Development, Alliance for Financial Inclusion

Sung-Ah Lee of the Alliance for Financial Inclusion kicked off the plenary session by giving the current empirical evidence on the status of financial inclusion globally as well as the evidence of the contributions this inclusion makes towards poverty alleviation and business sector stimulation.

After presenting the data and evidence, Lee moved to expressing how policy plays a key role in catalyzing full financial inclusion. The policy environment not only creates avenues for access to financial services by the poor, but also creates favorable environments for microfinance providers to expand their services. Rather than leaving the sector to market forces, regulation is advocated to not only give confidence and security in the business but can also mitigate risks in the sector such as over-indebtedness.

Lee gives us much hope for the future, as she closed her statements with a note on holding countries to their commitments in reaching the poorest with financial services, a feat that cannot be achieved without effective partners and collaborators. In this way, the Maya Declaration can become a reality.

Dr. B.S. Suran of the National Bank for Agriculture and Rural Development in India presented a moral argument for financial inclusion—that it has been proven to better clients’ standard of living. He spoke about financial inclusion creating social change, touching on the importance of providing financial literacy training. While financial literacy education may change the way the poor interact with the financial world, he argued it may also change the way the poor interact with the rest of society. “We need financial inclusion in a place like India that is very socially stratified.”

Ecosystems for Financial Inclusion_Picture_591x211The presentation was then turned over to Pia Roman-Tayag of the Central Bank of the Philippines, who introduced some hard hitting points about the geography of this problem as well as some possible solutions.

Building on Dr. Suran’s argument about stratification was Tayag’s data on the geographic stratification of banking institutions; in the Philippines, as in many nations, they are the most concentrated in urban areas. This is especially an issue where physical infrastructure is underdeveloped, but there is a solution to the limited access points: mobile technology.

Tayag told the assembly that even though 15% of the Filipino population does not have access to financial services, the mobile phone penetration rate is 140%, meaning that most of the rural poor can feasibly start savings accounts and even gain access to credit. Innovations such as mobile technology can catalyze low cost solutions to bringing about full financial inclusion. This is especially pertinent to Tayag as she insisted that financial inclusion means “access for all.” (Learn more about mobile technology.)

Finally, Abdul Karim of Palli Karma-Sahayak Foundation, brought forth the evidence of financial inclusion in Bangladesh and their success of having achieved the 2nd highest rating of access to financial services in South Asia.

15_plenary_audience(3)_600x429_photo credit - Vikash Kumar

The audience listen intently to this session–and inspired some with their own questions. (Photo credit: Vikash Kumar Photography)

Karim emphasized the importance of serving clients in agriculture, the source of many poor family livelihoods, with not only financial services but also capacity building for both the farmers and the institutions serving these small agriculturalists. They face unique challenges and thus have unique opportunities to service this cohort.

With initiatives such as the Maya Declaration, countries are working together to provide favorable policy and regulatory environments that can achieve the goal of full financial inclusion and poverty alleviation. Using these high-level partnerships and sharing best practices, countries not only can provide the favorable environment to the sector’s development but also shield clients from harmful practices and over-indebtedness by implementing accountability and regulatory structures.

Dr. Moyo concluded the plenary session by stating that “financial inclusion is an idea whose time is now.”

Watch the full video of this plenary

Reflections from the 2013 Summit: An Interview with the “Father of Microfinance” – Dr. Yunus

The much anticipated talk with Dr. Yunus was the key highlight of the opening session at the Partnerships against Poverty 2013. Dr. Yunus began microfinance in Bangladesh around 37 years back, starting initially as a lender to the poor, then becoming a guarantor to enable the poor to borrow from banks, and then finally setting up an institution to provide access to finance to the poor. Dr Yunus shared that, in his experience, women were better borrowers for credit but the microfinance-women nexus is something he had to try hard to forge. In the beginning, his aim was to service at least 50% women but even getting to 50% was a daunting task- it took Grameen Bank 6 years to achieve this milestone. Today, 97% of Grameen Bank clients are women. Dr Yunus shared that when women borrowed there was a greater impact on household development as compared to when men borrowed money. Moreover, as women were more focused on ensuring that their children develop, they invested much more on their future. Dr. Yunus believes that the success the women borrowers of Grameen Bank have played a major role in the success of Grameen Bank.

Dr. Yunus stressed on the importance of creating entrepreneurs and said that the inability to create entrepreneurs is one of the biggest failings of the conventional financial service providers. He shared that all human beings are entrepreneurs but the role of the MFIs is to help clients unleash that entrepreneur that exists within themselves. Moreover, Dr. Yunus shared the concept of the social businesses, which according to him are non-dividend companies set up to solve human problems using creative capacity to address the problems being addressed. He shared that youth unemployment is a big problem in Bangladesh (as in many other parts of the world) but it can be addressed through social business – he shared the concept of the Youth Entrepreneur Fund which launches the youth into entrepreneurship. The entrepreneur gets an interest free loan which he/she has to return in 3 years. He said the basic difference between a social business and philanthropy is that in the former the money comes back while in the latter money doesn’t come back. Dr Yunus further added that being able to catalyze change is the biggest benefit of social businesses – while making money makes you happy, making others happy makes you ‘superhappy’.

Dr Yunus ended his talk with the message that “we will make it”, he was referring primarily to the Millennium Development Goals (MGDs). He shared with a lot of pride that Bangladesh had actually halved poverty in 2013 (2 years before the deadline for the 1st MGD), and is poised to meet all 8 MGDs by the year 2015. He said that Bangladesh had been deemed a ‘basket case’, but if Bangladesh can do it so can other countries! He urged all delegates to ensure that 2015 ends with meeting the MGDs!