Alia Farhat: Microfinance serving Syrian refugees in Lebanon


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Alia Farhat of Al Majmoua (Lebanon) discusses her organization, the role of microfinance to help end poverty — in particular with the Syrian refugee crisis — and the lessons learned at the 18th Microcredit Summit with Miranda Beshara, editor of the Arabic Microfinance Gateway.

Al Majmoua was founded in 1994 and is the leading microfinance organization in Lebanon, managing a portfolio of US $52 million. She believes that microfinance is part of the value chain to end poverty and that MFIs need to provide more than just finance to end poverty. Al Majmoua offers microinsurance and savings products as well as to entrepreneurship and financial literacy training.

Farhat describes how Al Majmoua, which means “the group,” has evolved from its group lending origins to its current work with refugees. Lebanon, a population of only 4.5 million, has seen an influx of 1.3 million Syrian refugees over the last three years. “We needed to do something” to help, she explains, so they started with non-financial services to women and youth such as vocational and entrepreneurship training.

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Bdour Alhyari: Enabling the poor to participate in development


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18th Microcredit Summit Video Corner Interview Series

Bdour Alhyari, business development manager for Microfund for Women in Jordan, interviewed by Miranda Beshara, editor of the Arabic Microfinance Gateway.

Bdour Alhyari of Microfund for Women (Jordan) talks with Miranda Beshara, editor of the Arabic Microfinance Gateway, at the 18th Microcredit Summit. Microfund for Women launched a Campaign Commitment in 2015. Commitments are specific, measurable, and time-bound actions organizations take to support the Campaign goal to help 100 Million families lift themselves out of extreme poverty. “It is in our mission to enable and empower women at so many levels,” says Alhyari. “We thought we need to be part of this Campaign and commit to act, encourage others to commit to act.” (Learn more here.)

Microfinance plays “a great role” to help end poverty, says Alyhari, because it enables the financially excluded to gain access to the financial system. “Eighty percent [of the world’s population] are not allowed to access finance. Microfinance provides them with financial resources to enable them to participate in the development of societies, of communities. They [beneficiaries and clients] take the money. They create businesses, they continue their learning, their education, to enable them to be part of the development cycle. Gradually this will help to better livelihoods.”

Finally, Alhyari reflects on her time at the 18th Microcredit Summit. “The Summit has brought so many different expertise from different parts of the world,” she says. “We have shown our experience in microinsurance [and], providing the caregiver program, and we heard about other examples in microinsurance, green energy, and so many other topics, [such as] youth. It was a good platform to have this exchange to look at the expertise of each other and learn from it.”

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Reflections from the 2013 Summit: Press Conference; Expanding Value Chains to Include the Poor

The key question in this workshop session was how to help include the poor in value chains; poor producers are generally too small to transact directly with large buyers. This exclusion leads to the poor selling to small poor buyers which reduces prices and decreases value for the poor producers. This problem is most exacerbated in agriculture, livestock and other perishables. In the absence of proper storage facilities – i.e. cold storage facilities and/or proper transport facilities, low-income producers are forced to sell as they produce which may not be the most favorable keeping in view price fluctuations.

Multiple examples from numerous organizations were shared in this session that aimed to address just this conundrum – how to help poor farmers and other micro-entrepreneurs better integrate in value chains. This essentially requires the establishment of a national enabling environment through linkages of small producers to specialized organization at each step of the value-chain.

The Jollibee Foundation shared its investment into and organization of onion farmers cooperatives which helps increase prices for farmers up to 75% more than they would be able to without the value chain. Jollibee Foods requires a steady supply of onions for its ‘secret recipe’ but unfortunately onions are only grown once in the year in the Philippines. While larger farmers can store these onions in proper storage facilities, smaller farmers need to sell the onion as soon as they harvest them. Naturally this reduces profit margins for small farmers. Jollibee Foundation has helped organize farmers into cooperatives by ensuring purchase of onions grown by the farmer cooperatives. As a consequence of this steady and confirmed demand, MFIs give loans to the small farmers to help them form these cooperatives. Through these cooperatives, a win-win situation emerges wherein the farmers earn better prices for their onions and Jollibee is assured a steady and fresh supply of onions.

Another value chain development project for small farmers that was featured was cashew nut processing through NABARD in India. NABARD has been able to secure a direct buyer for processed cashew nuts in Wal-Mart USA as a result of which it has been able to help small farmers form into a production cooperative. The production cooperative is trained and supported in replacing manual techniques such as breaking the shell by hand with using machines to do the same. Moreover NABARD has also introduced drying machines and trained the farmers on techniques of how to grade the quality of the cashew nuts processed. NABARD also involves the local governmental agriculture officer that helps with monitoring and trainings aspects at various steps along the value-chain. As a result of this value chain, poor farmers have been able to earn much fairer prices and have been able to register themselves as production cooperatives.

The main crux of the session was that there are multiple ways in which Financial Institutions; especially MFIs can support value chain development in small/poor farmers. The process needs creativity, an enabling regulatory environment, willing partners, and involvement of multiple stakeholders!