We second that toast, Beth

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Medal of freedom Yunus_Alex Counts smiling
>>Authored by Larry Reed, Director, Microcredit Summit Campaign

Last week, Beth Rhyne posted a well-deserved tribute to Alex Counts, who recently retired as CEO of Grameen Foundation. I’d like to add to her thoughtful articulation of Alex’s contributions to microfinance and the lives of people living in poverty.

I once sat with Alex at a dinner in Dhaka that brought together many different strands of the Grameen family. Our table included several of the board members of Grameen Bank, women clients of the bank. They laughed at Alex as he talked with them in Bangla, and then let us know exactly what they thought about how the government was treating Prof. Yunus. As I watched their delighted conversation, I was struck with how it traversed so many traditional barriers of gender, age, caste, education, experience and income. It was just Alex and his friends, who were not only clients of Grameen but were also mothers, daughters, board members and business owners. He wanted to learn as much as he could from them.

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Addressing the financial needs of the most excluded

Anowara Begoum lives in Kazipara village. Anowara received a cow and goat to from BRAC through its STUP Special Targeting Ultra Poor. AusAID funds BRAC's work in Bangladesh, its estimated that BRAC works within 70,000 of Bangladesh's 86,000 villages. Photo: Conor Ashleigh for AusAID.

Anowara Begoum lives in Kazipara village. Anowara received a cow and goat to from BRAC through its STUP Special Targeting Ultra Poor. AusAID funds BRAC’s work in Bangladesh, its estimated that BRAC works within 70,000 of Bangladesh’s 86,000 villages. Photo: Conor Ashleigh for AusAID.

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The following blog post was originally published
by the Center for Financial Inclusion at Accion

>> Authored by Larry Reed, Director, the Microcredit Summit Campaign, and Jesse Marsden, Research and Operations Manager, the Microcredit Summit Campaign

In collaboration with the CFI’s process to develop the Financial Inclusion 2020 Progress Report (to be released October 1, 2015), the Microcredit Summit Campaign recently conducted interviews with microfinance leaders* around the world committed to reaching the most excluded. In this post, we share some of the insights from these conversations about how to ensure that the most invisible clients are financially included, directly drawn from the experiences of those who are doing it.

To set the stage, Luis Fernando Sanabria, general manager of Fundación Paraguaya, made this central point: “Our clients need to be the protagonists of their own development stories. Our products should be the tools they use to meet their needs and empower their aspirations.” With that reminder of the purpose of financial inclusion, we begin the discussion by asking who are the most excluded.

In each country, people living in extreme poverty (below US$1.25 a day) make up the largest segment of those excluded from the financial system. We spoke with leaders from organizations that make intentional efforts to reach this large excluded market: Fundación Paraguaya, Pro Mujer, Fonkoze, Plan Paraguay, Equitas, Grama Vidiyal, and TMSS. These organizations not only address poverty, but also a host of other dimensions that lead to exclusion, including literacy, race, gender, physical disabilities, and age. Less frequently-discussed reasons for exclusion include sexual orientation, language barriers (especially among indigenous populations), and mental or emotional health issues. In India and Bangladesh, for example, those interviewed noted that the lack of personal identification often drove exclusion, especially among women, persons with disabilities, and the socially excluded, such as transgender individuals.

In order to reach the most excluded, you have to know who they are. “Often the poorest families are invisible in their own communities,” said Steve Werlin of Fonkoze in Haiti. “When we do the wealth rankings in a community, they aren’t even mentioned.” Fonkoze takes steps to make sure that all households get included in their surveys so that the community can see who they have left out. Creating this visibility is essential. On a wider scale, in government statistics on economic activity, data on people over 65 is simply discarded or never collected.

Everyone, and every client, is unique. One of the messages of the FI2020 Progress Report is that the base of the pyramid (BoP) is not a monolithic bloc. Arjun Muralidharan of Grama Vidiyal in India noted, “You need to have a particular and unique strategy to seek out and serve these groups. This begins with deciding who you are going after. Different populations have very different problems.”

Two key elements for including the most excluded populations are building trust and overcoming prejudice. Not only do the financially excluded need to become confident in their services providers’ ability to responsibly manage their money, but they often have to become comfortable participating in a society that has regularly closed its doors to them.

“Working with disenfranchised groups is hard. We need to provide extra training and services to help overcome their self-exclusion,” said Muralidharan. Grama Vidiyal provides health services and legal rights training to members of the Dalit group (formerly known as untouchables) before including them in savings and lending groups.

On the other side of the equation are financial services staff attitudes. “In order to include people with disabilities, we need to train our staff first, to get them to overcome their prejudice,” said John Alex of Equitas in India. Equitas provides disability awareness training for its staff and clients and encourages them to find people with disabilities in their communities to include in the institution’s borrowing groups. Equitas also adapted its training and application systems to be accessible for people who are blind, deaf, mute, or face other physical limitations.

Excluded groups may have financial needs that do not fit the typical cash flows of other clients. TMSS asked rural farmers in northern Bangladesh what programs the farmers felt would be best to introduce. This client-first approach led to new programs that combined loans and savings in sync with the growing season. TMSS also changed its policies and products to meet the needs of an aging population — eliminating its age limit for borrowers. The institution also provides savings services for these clients and training for the next generation of family members to make sure they will be cared for as they age.

Those excluded from financial services often face many other types of exclusion as well, leaving them with a range of constraints that they need to address:

  • Both Fonkoze and Plan Paraguay employ the Ultra Poor Graduation Model developed by BRAC that provides a combination of cash transfers, training, savings, an asset, mentoring, and access to credit.
  • Equitas works with homeless people and provides housing and financial capacity training before providing loans.
  • TMSS provides health services, financial capability training, and vocational training.

These organizations often partner with the government and others to make sure their clients have access to the range of services they need. Fundación Paraguaya uses its Poverty Stoplight monitoring system to assess its clients on a checklist of 50 items related to poverty, health, education, and employment. It uses this data to bring in government services for common areas of need. Equitas partners with local hospitals, and Grama Vidiyal works with the government health insurance system to provide for the health needs of clients.

Achieving financial inclusion requires consistent energy to attain, maintain, and measure progress. Fundación Paraguaya uses its Stoplight system to enable clients to define and measure their own achievements over time, and provides incentives to its staff based on these clients’ achievements. Equitas provides incentives to its account officers for including persons with disabilities and measures the progress of its clients along consumption and health indicators. Plan Paraguay and Fonkoze measure the success of their ultra-poor graduation programs based on the numbers of clients who “graduate,” having met a comprehensive set of indicators related to food security, income security, asset ownership, school enrollment, housing quality, etc., and having reached a level at which they can use unsubsidized financial services.

Financial inclusion has always been about going where others wouldn’t go, addressing the needs of people who were excluded because it was too hard to serve them, or too risky, or too unsustainable. The people we spoke with represent the many financial pioneers who use innovation to expand the boundaries of inclusion, reaching those assumed to be impossible to reach.

For more on addressing client needs, check out the interactive FI2020 Progress Report, launching on Thursday (10/1).

Persons interviewed for this post: Luis Fernando Sanabria, Fundación Paraguaya; Carmen Velasco, co-founder of Pro Mujer; Steve Werlin, Fonkoze, Haiti; Mariella Greco, Plan Paraguay; John Alex, Equitas, India; Arjun Muralidharan, Grama Vidiyal, India; and Munnawar Reza, TMSS, Bangladesh.

4 interventions to help victims of trauma find hope and dignity

Josh Goldstein_keynote speech

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Related reading

Register for our June 9th E-Workshop on Aging and Financial Inclusion

Lucía Urtecho Calderón, client of Financiera FAMA, sells candy and candied fruits in Mercado Carlos Roberto Huembes, Nicaragua on December 13, 2012 (Photo credit: Accion)

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How are you helping your clients to prepare for old age?

Join our next Campaign Commitment E-Workshop to learn about providing micropensions


JOIN US…
Tuesday, June 9th
at 10:00 AM (GMT-4)

…for the E-WORKSHOP
“Helping Clients Prepare for Old Age”


The Microcredit Summit Campaign is proud to present the next installment in our Campaign Commitment E-Workshops Series. Co-hosted with the Center for Financial Inclusion, which launched a Campaign Commitment in 2014, this E-Workshop will focus on helping clients to prepare for old age, including through providing micropensions.

The issue of aging is a new global reality, given increasing life expectancy, shrinking family sizes, and better health systems. Today, the microfinance community has the opportunity to be a leader in addressing this issue, helping people to prepare for their older years and providing financial services for older people. The Center for Financial Inclusion recently published a report titled Aging and Financial Inclusion: An Opportunity addressing the issue and identifying priority actions for financial service providers that will be presented during the E-Workshop.

Presenting Organizations
Center for Financial Inclusion
Sonja Kelly
Micro Pension Foundation
Parul Khanna
Helpage logo Help Age International
Eppu Mikkonen-Jeanneret

This webinar will be conducted in English. We will live-tweet using the hashtag #Commit100M in English, Spanish, Arabic and French.


The Center for Financial Inclusion launched a Campaign Commitment! 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:

Truelift’s progress and what the future holds

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A message from the Truelift Steering Committee was posted on the Center for Financial Inclusion blog on January 21st, “Truelift’s Progress and Future in Pursuit of Transparency and Accountability in Poverty Alleviation Efforts.” The message opens with the pronouncement that defines what Truelift is all about: “Institutions built upon a promise of poverty alleviation must be motivated and supported to make good on that promise.”

Formerly known by the name of The Seal of Excellence for for Poverty Outreach and Transformation in Microfinance, Truelift officially launched in 2011. It emerged through the coordinated action of leaders in the global microfinance community who were catalyzed the Microcredit Summit Campaign early in 2010. We have been and will continued to be strong supporters of Truelift.

Now, however, Truelift’s resources have diminished to the point where they must depend on volunteer staff and committee members to maintain access to the Truelift information, tool, and services. The Microcredit Summit Campaign is committed to helping maintain what Truelift has already built, and together, we seeking new funding to regain momentum.

In the meantime, practitioners and others can continue to access the Truelift information and tool through our website and to receive responses to questions/queries about use of the tool and interpretation of results. Self-assessments as well as external assessments by rating agencies remain viable options.

We invite you to read the entire message from the Steering Committee and learn more about Truelift’s progress and future in pursuit of transparency and accountability in poverty alleviation efforts.

www.truelift.org

Domestic Violence and Microfinance: What Is Our Role as Financial Service Providers?

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Originally posted on Center for Financial Inclusion blog:
> Posted by Bobbi Gray, Research and Evaluation Specialist, Freedom from Hunger Embed from Getty Images The day after the closing of the Microcredit Summit in Merida, Mexico, conference participants were also invited…

The Microcredit Summits’ Commitment to Improving Lives

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Originally posted on Center for Financial Inclusion blog:
With under 40 days to go, the 17th Microcredit Summit is rapidly approaching. CFI’s Josh Goldstein will be speaking during a plenary session focused on new innovations for microfinance and other financial inclusion…

News Round-up

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A special UN report on post-2015 agenda, measures from the World Bank to accelerate progress on malnutrition, and research on how VSLAs affect the well-being of children.Español Français Continue reading

Last Week’s News

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Read our round up of last week’s microfinance news: A Financially Capable Consumer Could Be Your Best Customer, The Future of Provider Ecosystems for Financial Inclusion, How to Build Successful BOP Business Models, and more! Continue reading

Last Week’s News

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A round up of last week’s microfinance news: tests for credit bubbles, a challenge to the “old way” of thinking about microfinance, promising BoP business models in Latin America, and another paper about mbanking. Continue reading