ESAF Microfinance commits to comprehensive services for clients

ESAF Microfinance trains community health workers and organizes health fairs for their clients and poor communities. Photo courtesy of ESAF Microfinance
— Read the press release announcing ESAF Microfinance’s Campaign Commitment
— Read their Commitment letter

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The Microcredit Summit Campaign welcomes ESAF Microfinance as the 57th organization to make a Campaign Commitment. ESAF joins a global coalition to help 100 million families lift themselves out of extreme poverty. ESAF will help support their clients in uplifting themselves from poverty by providing them with education, training, and support services.

ESAF and the Campaign strongly believe that microfinance services should be complemented by education, training, and other supporting programs that help poor families battle chronic poverty and social exclusion. For example, in partnership with the Campaign, ESAF trained community health workers (Arogya Mithras in Hindi) to provide health education and front-line screening services for non-communicable diseases to poor communities. You can learn about that project in “Integrating Health with Microfinance: Community Health Workers in Action.”

For the financial year 2015-2016, ESAF Microfinance aims to reach out to new clients through its products and services, committing to the following:

  1. To offer microfinance services to 200,000 new clients through expanding the geographic reach in some of the backward states of Chattisgarh, Jharkhand, West Bengal, and Bihar.
  2. To increase the reach of financial services to an additional 10% of clients, making it to a total of 50% of clients who belong to socially backward communities/tribes (scheduled castes and scheduled tribes as per government of India)
  3. To offer livelihood support services to at least 10,000 clients who shall be in a position to contribute to the income of their household.
  4. To measure the poverty levels of 200,000 clients using PPI.
  5. To offer financial literacy training to at least 50,000 clients.
  6. To offer health education and awareness sessions to at least 50,000 clients and to offer health check-up services to benefit at least 5,000 clients.
  7. To offer financial and non-financial services to at least 3,000 PWD (persons with disabilities) clients.
  8. To offer women’s leadership and empowerment programs to benefit at least 50,000 clients.
  9. To reach at least 2,000 children through educational programs for academic growth and value education.
  10. Educate at least 50,000 clients on environment protection and use of clean energy products.

Chairman and managing director, K. Paul Thomas, explains why their commitment includes a number or programs addressing multiple aspects of the client’s life such as health:

“ESAF’s vision and mission very clearly emphasize on holistic transformation of its poor clients,” he said, “and, we are convinced this cannot be achieved unless their health issues are addressed.”

ESAF Microfinance is one of the premier microfinance institutions in India today, particularly in Kerala, effectively empowering 750,000 members through 160 dedicated branches. The founder of ESAF ventured into microfinance in 1995, by organizing self-sustainable groups, to alleviate poverty and generate employment. Since then, ESAF has grown by leaps and bounds in the microfinance sector, promoting microfinance as a viable, sustainable, and effective means for creating jobs and reducing poverty.

Read the Commitment Letter from ESAF Microfinance.

The Microcredit Summit Campaign looks forward to welcoming our new partners to the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit. The Campaign’s 100 Million Project is building a movement among financial service stakeholders committed to helping to end extreme poverty through: public statements of commitment to action, expanding practices to reliably measure movement out of extreme poverty, and promoting innovations and best practices to accelerate movement out of poverty.


We invite you to join ESAF Microfinance and…

Get Inspired. Set a Goal. Make a Commitment.

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

The Puzzle of Poverty: Embera Puru Edition

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>>Authored by Kristin Smith, Program Intern for the 100 Million Project

jjjjJust a few weeks before joining the Microcredit Summit Campaign team, I traveled with Global Brigades to teach financial literacy workshops and provide microenterprise consulting to small business owners in an indigenous community in Panama.

The program, founded in 2003, sends university students from the United States and select European countries on a series of brigades to Panama, Honduras, Nicaragua, and Ghana to “strengthen the health and economic development of communities” by meeting a certain aspect of their “holistic model.” Learn more.

Their holistic model attempts to assess and address the most dire needs of developing communities in an intentionally sequenced process to help them achieve a state of sustainable self-sufficiency.

Panama holistic model

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Under the holistic model developed specifically for Panama, the process begins with Global Brigades employees researching the region and evaluating the community through a process of “integrated community development” to understand its most pressing needs.

Initially, the program sends medical and dental brigades — passionate volunteers working to mobilize positive social change — to the communities to provide mobile medical and dental clinics. Community banks are then established by a group of community members with guidance from Global Brigades staff to encourage saving for health needs and emergencies. Once established, the community banks begin distributing loans to community members for environmental projects and new business developments.

My brigade, composed of my colleagues from the University of California-Berkeley and others from Arizona State University, was excited to complete the Global Brigades puzzle (that is, the holistic model). Our role was to teach financial literacy and perform business consultations in the community of Embera Puru.

Embera Puru is an indigenous community of some 250 individuals in the Darien Province. Located in Eastern Panama near the Colombian border. Embera Puru is an Embera community, one of the largest indigenous groups in Panama and Colombia. The community members’ main source of income is agriculture, producing crops such as plantains, yucca, rice, and otoe (a local root vegetable), and creating artisan handicrafts.

With guidance from Global Brigades, the community established a caja rural (community bank) to encourage savings and loan making within the community. Embera Peru’s caja now has 21 members with 21 active savings accounts, but there are still many among the 266 inhabitants without this means to save.

Comparable to a savings group, a caja rural is a group of men and women who pool their funds to create a solid financial base, providing savings and loan services for themselves and for the entire community. Despite the initial contributions of Global Brigades, the caja is entirely owned and operated by members of the community.

Because the indigenous communities of Panama are predominantly closed economies, community groups eschew money from the outside and make weekly savings deposits into the community bank to begin their work. Group members manage the fund themselves, make decisions about who can receive loans and under what terms, and hold each other accountable for loan repayment.

As part of our business consultation work, we met with representatives from the community’s “Environmental Committee,” a group of farmers producing beyond self-sufficiency for distribution within the community, to ask simple questions to best understand the level of business assistance they needed.

The president of this group, a man by the name of Marcelino, also happens to be the treasurer of the caja rural, as well as a community teacher. Through conversation with Marcelino, we learned that his bookkeeping records won their bank a prize for “Caja with the best bookkeeping management” at a board of directors microfinance workshop in Panama City.

Analyzing the business’s books and records, we found a very thorough system and were stumped on how else to proceed with our consultation. (Aside from our recommendation that they include an inventory management system in preparation for increased production.) Not long into our conversation with these experienced committee leaders about potential business obstacles, we found ourselves confronted with an irritated committee leader and community elder who expressed his frustration with the focus of our questions and our work.

He argued that the group’s record-keeping strategies were highly insignificant in comparison to the group’s utter lack of inventory. It turns out that there was a community water shortage resulting from a collapsed well and a series of unfinished agricultural projects throughout the farm.

“Money,” he said. “We need your help on the farm, we need more crops, and we need money.” My observation was that the present infrastructure severely lacked sufficient capital to support a self-interacting and self-sustaining community.

As I sit now at my desk here in Washington, D.C., far removed from this man and his community, I face the internal debate of whether our work and efforts in microfinance are indeed meeting the direst needs of these people. My short time in Panama reinforced my understanding that development is a puzzle that we do not always equip ourselves to solve. Regardless of the practicality of the services we were working to provide, if other pieces of the complex puzzle are not fully in place, the outcomes in general are undermined.

Increased financial access serves as the window of opportunity for many entrepreneurs throughout the developing world, but without the proper environment and sufficient infrastructure, access to money is rather trivial.

Prioritizing the views, aspirations, and goals of clients or other program beneficiaries is critical as well. As economist William Easterly often argues, no matter how well-intentioned our efforts, without proper feedback from those receiving the assistance, how are we to measure the effectiveness and progress of our efforts? Under my interpretation, Global Brigades was not responsive to the needs and aspirations of its clients.

While the Embera Puru puzzle remains unsolved because the other pieces were never correctly and fully placed, I am glad to know that the industry and many of its institutions are making great strides towards increased attention to feedback from clients and beneficiaries as well as accountability of institutions to deliver on their objectives. Despite the puzzle’s sheer complexity, we have all the pieces and the ability to work with the poor to solve it.

I encourage Global Brigades to join the Microcredit Summit Campaign in making a specific, measurable, and time-bound Commitment on their efforts to end extreme poverty.

Related reading

Equitas commits to improve focus on clients and service coverage

Read the press release announcing Equitas’ Campaign Commitment
Read their Commitment letter
Photo courtesy of Equitas

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The Microcredit Summit Campaign welcomes Equitas, a major Indian microfinance institution (MFI), as the 56th organization to make a Campaign Commitment, joining a global coalition working to help 100 million families lift themselves out of extreme poverty.

Equitas is committing to expand its financial services and non-financial services to the following number of clients in the financial year 2015-2016 :

  • Provide 1.5 million clients with financial services.
  • Cover 70,000 clients under the food security program.
  • Cover 50,000 clients under the health education program.
  • Screen the health of 850,000 clients.
  • Partner hospitals will provide 3,000 Equitas clients discounted consultation/ treatment.
  • Use the Progress out of Poverty Index to measure the poverty level of 1.5 million clients.
  • Provide financial support to 3,000 disabled women.
  • Rehabilitate 200 homeless pavement dwellers.
  • Screen, educate, and track the health of 3,500 students in the 6 schools run by Equitas Trust.
  • Provide gainful employment to 15,000 unemployed youth.
  • Train 50,000 women in new skills to increase their income.

P.N. Vasudevan, founder and managing director of Equitas Micro Finance India P. Ltd., explains their mission and how they support the well-being of their clients:

“When we founded Equitas in 2007, we wanted to create an MFI which would be a global benchmark in fairness and transparency, two facets sadly missing from most of the MFIs globally.  Equitas is a Latin word meaning ‘Equitable,’ which means fair and transparent, and this philosophy is woven into every action of Equitas.  Equitas had started lending at 25.5% in 2007 (at a time when the other MFI rates were in the high thirties) and after 4 years, Reserve Bank of India capped the lending rate for MFIs in India at 26%! The Equitas Ecosystem Model is designed to support the well-being of our clients by providing financial and non financial services with a clear focus to address a large spectrum of their requirements in the field of health, education, skill development, food security during emergencies, placement for unemployed youth and many more.”

Equitas is an NBFC MFI with headquarters at Chennai, India, and operations in eight states, namely Tamil Nadu, Pondy, Karnataka, Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, and Chattisgarh. Equitas has about 2.8 million active borrowers as of 31st March, 2015. Along with financial services, Equitas is also promoting several non-financial services aiming at holistic development of their clients and their families.

Read Commitment Letter from Equitas.

The Microcredit Summit Campaign looks forward to welcoming our new partners to the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit. The Campaign’s 100 Million Project is building a movement among financial service stakeholders committed to helping to end extreme poverty through: public statements of commitment to action, expanding practices to reliably measure movement out of extreme poverty, and promoting innovations and best practices to accelerate movement out of poverty.


We invite you to join Equitas and…

Get Inspired. Set a Goal. Make a Commitment.

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

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