>>Authored by William Maddocks, director of the Sustainable Microfinance and Development Program (SMDP) at the University of New Hampshire’s Carsey School of Public Policy
New scrutiny has focused on what microfinance can’t do, and the evidence is growing that microfinance, de-linked from a social change paradigm, is simply another way to provide basic financial services to people historically excluded by the market. The new theme for the Microcredit Summit Campaign for 2015 of “financial inclusion to end extreme poverty” and the Six Pathways show promise in getting us there and can succeed in challenging extreme poverty if social change and equity are embedded as core values by those who fund, design, and implement these strategies.
These six pathways promoted by the Microcredit Summit Campaign touch on many of areas of the Carsey School of Public Policy’s current work. Using each pathway as a prompt, we will take a brief look at these themes and how you can get involved and learn more.
The Six Pathways
1) Mobile money linked with agent networks in low-income communities and other technological innovations
The SMDP New Hampshire Certificate 2015 in June will feature a session facilitated by Joyce Lehman, formerly with the Bill & Melinda Gates Foundation on branchless banking and the Digital Revolution. If the infographic from Kenya tells us anything (below), it’s that digital financial services are growing exponentially beyond just transfers and remittances to group savings & loans, agricultural inputs insurance, water services, off-grid lighting, and more. Come to New Hampshire, USA, this summer to learn about this exciting frontier of financial inclusion from the unique perspective of a former donor who worked on the ground floor of paving the digital finance highway.
Kenya’s journey to digital financial inclusion (by Simone di Castri and Lara Gidvani – July 2013)
2) Ultra-poor graduation programs
Jan Maes, who has worked in designing graduation programs with Trickle Up and other organizations, will present findings during the SMDP New Hampshire Certificate on the effectiveness and challenges of using these strategies to move the ultra-poor into self-sufficiency.
3) Microfinance savings and/or borrowing groups linked with health education, health financing, and health product delivery
Kathleen Stack, vice president of programs for Freedom from Hunger, will make a virtual presentation at the SMDP NH on Microfinance and Health Protection (MAHP) initiatives that they are implementing with our friends, CARD MRI in the Philippines and the Microcredit Summit Campaign, and in other locations. Read more about the project, Healthy Mothers, Healthy Babies, and how these three organizations, with the support of Johnson & Johnson, are helping address maternal and child health needs.
Photo courtesy of the Carsey School of Public Policy
4) Agricultural value chains that reach to small-scale producers
Understanding markets is more than just knowing about products. The field of inclusive market development is moving from the linear value chain approach, to applying a systems approach that looks for, and adapts to, feedback from the system. Carsey has just launched SMDP Online and one of our first courses, “Understanding and Adapting to Complex Markets” will help practitioners understand complex adaptive systems and apply these concepts to their current work. SMDP Online course facilitator Mary Morgan, with more than 20 years of experience in development, promises a challenging and very practical learning experience for market development professionals.
5) Savings groups (aka village savings and loans associations)
One of the most promising strategies for reaching people that commercial microfinance has failed to reach are savings groups (SGs). Today more than 10 million people use SGs for saving, lending, building financial security, and social capital. Carsey has been a leader in savings groups training and learning events for several years and continues to expand opportunities to learn about this growing area of financial inclusion.
The SMDP Online will offer a blended course, “Savings Groups: Building Scale and Impact through Adaptation and Experimentation,” facilitated by Nanci Lee. This course will meet online for several months and then face-to-face in Lusaka, Zambia, during the SMDP Zambia, which occurs right before the next global gathering of SG practitioners, donors, researchers, and others at the SG 2015 conference also in Lusaka from November 10 to 12.
The lock box of a savings group in Africa
Photo courtesy of the Carsey School of Public Policy
6) Conditional cash transfers (CCTs) linked with mobile delivery and asset building
Reaching as many as 129 million people worldwide, CCTs work at a scale that few other anti-poverty programs can reach. Governments working with visionary partners like Fundación Capital can roll out programs that provide support, change social norms, and make a measurable impact on improving the lives of poor families. In the Dominican Republic, Fundación Capital has partnered with the Government’s ProSoli program and Banco ADOPEM and Banco Pyme BHD to connect savings groups with a CCT voucher program and bank linkages.
You can learn about this exciting pilot program by watching Jong Hyon Shin, Fundación Capital’s country project coordinator for the Dominican Republic, and her former professor (and Carsey Fellow) Jeffrey Ashe. (Watch the SEEP Network’s Taking Savings Groups on the Road Webinar Series.)