Video Corner | Shazia Abbas on microfinance creating entrepreneurs

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18th Microcredit Summit Video Corner Interview Series

Shazia Abbas, CEO of Micro Options in Pakistan, interviewed by Miranda Beshara, editor of the Arabic Microfinance Gateway.


Shazia Abbas of Micro Options (Pakistan) discusses her 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. Micro Options provides microcredit services for agriculture, livestock, and alternative energy (i.e., solar and bio-gas), combining access to capital with skills training with a focus on women and youth.

Abbas says that the Summit is a great forum and the biggest networking event for the region and globally. On her experience in Abu Dhabi, she appreciates “learning how other people are doing this work differently, and especially the opportunities we can leverage. That was wonderful. Every session is very important, and I was confused which to pick and not to pick,” Abbas adds with a chuckle. “I will definitely take some learning that I can cooperate at my organization so that we can deliver even better.”

Abbas echoes Professor Muhammad Yunus on the role of microfinance, stressing that access to capital and finance should be a fundamental human right. “If you are educated but you don’t have access to employment,” says Abbas, “you can become an entrepreneur. We provide social and economic development opportunity especially to rural areas and women.”

She continues, “We believe microcredit is directly linked and can directly impact on poverty, but implementation needs to be strategized properly. Ultimately, provision of capital and using this capital in a way that you make people entrepreneurs and make people stand on their own feet.” She concludes that this is how microfinance can “accelerate” people out of poverty.

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:

Post-MDG 2: Bringing the “last mile” children into our schools

MDG 2

Millennium Development Goals: 2015 Progress Chart
Published articles to date: Introduction | MDG 1 | MDG 2 | MDG 3 | MDG 4

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The United Nations recently issued The Millennium Development Goals Report, 2015, the latest assessment of progress towards the eight MDGs. In short, they have had mixed results. This article is part of a blog series reflecting on the MDGs and the U.N. report. These are produced in partnership with our colleagues at RESULTS (our parent organization).

MDG 2 is focused on primary school enrollment for children everywhere, including the poorest of the poor. The children of tens of millions microfinance clients may be some of the “last milers” still left behind, still excluded from primary school, and many MFIs are actively working to solve the access gap in their own corner of the world. For example, ESAF Microfinance (India) has just launched a Commitment to reach at least 2,000 children with educational programs for academic growth and value education. Fafidess (Guatemala) committed to offer education loans to their clients.


>>Authored by William C. Smith, Right to Education Index Senior Associate, RESULTS Educational Fund

Millennium Development Goal Achievements

Target 2.A: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

MDG 2 - Global out-of-school children of primary school age & Primary school net enrollment rate in sub-Saharan Africa

From The Millennium Development Goals Report, 2015

During the Millennium Development Goal (MDG) period, the world saw a huge surge in the number of students enrolled in primary school. In 2015, an estimated 91 percent of all primary age students are enrolled in primary school with the largest increases in enrollment over the 15-year period found in sub-Saharan Africa and Southern Asia.

Worldwide, this impressive expansion in access has cut the number of out-of-school children by approximately half, from 100 million in 2000 to 57 million in 2015. This is especially impressive when seen in light of the rapidly expanding growth rate of the primary-school-age population in many regions.

Although the world fell short of the MDG 2 target, the growth in enrollment over the 15-year MDG period outpaced the decade before 2000, ensuring that a greater number of children have access to the education essential to their well-being and that of the wider community. These results clearly indicate that when attention and resources are strategically directed they can make a difference.

Equity Concerns

As impressive and important as the rapid expansion from the MDG period was, there are several concerns as the world moves beyond the MDGs to the Sustainable Development Goals (SDGs, also referred to as the “Global Goals”). While MDG 2 focused on universal enrollment in primary education the education, SDG (#4) attempts to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

The general shift from access to quality makes one wonder, who will be left behind? As the SDGs move forward, emphasis on the goals last two words “for all” is essential. Unfortunately, bringing the final 9 percent of students, the last milers, into school is challenging and expensive. Recent trends suggest that as the world moves forward to address the differences in student achievement and education quality, those left behind by our inability to completely close the access gap are further disadvantaged.

The challenge of reaching the last milers is illustrated by the stagnating global enrollment rate. Between 2000 and 2007 the global primary net enrollment rate quickly increased from 83 percent to 90 percent. Over the last seven years, however, the rate moved slightly from 90 percent to 91 percent. The missing 9 percent represent 57 million primary age children out of school.

Based on estimates made in 2012, 43 percent of these 57 million children are expected to never go to school. Identifying who these children are and including them in the education system is paramount to reaching the SDGs.

The Last Milers

The last milers represent students that have yet to be included in the rapid expansion of education from the MDGs. The number of last milers are difficult to calculate as they are at times invisible to society and living in extreme poverty.

Number of out-of-school children of primary school age, selected regions, 1990-2015 (millions)

From The Millennium Development Goals Report, 2015

Surveys suggest that these remaining out-of-school children are more likely to be female, live in a rural setting, or have a disability. Students in the poorest quintile are less likely to enroll in school or complete school if they do.

For example, while 9 percent of primary age children overall are not enrolled in primary school, 22 percent of children in the poorest quintile remain out of school. And, of those who do enter primary school, nearly 35 percent of children in the poorest quintile do not complete primary school. For the poorest 20 percent of children worldwide, this means that for every child in school, his or her sibling will not complete primary school while nearly 90 percent of children in the wealthiest 20 percent move onto secondary school.

Accessing education may be increasingly challenging for children in poor families in some areas. Countries such as Kenya, Uganda, and Ghana have seen a sharp increase in private schools that price these families out of education. When national governments abdicate responsibility and see private education as a substitution for public education, the well-researched equity concerns with private education are likely to leave the last milers on the outside looking in.

In addition to the groups mentioned above, children in conflict areas and children of refugees are especially struggling to enjoy the benefits of education. For example, the conflict in Syria not only reduced the enrollment rates of children in the country, but refugees that fled Syria found education in refugee camps sparse. Estimates from refugee camps in Lebanon from 2013 place the enrollment rate of children at approximately 12 percent, a sharp contrast from the 91 percent global number.

Collective Will

Ensuring that the last milers have access to education is a challenge to our collective will. The remaining 9 percent represent those with the highest per capita cost to access. A large financing gap remains in education globally with resources moving away from improving access and away from primary education. This trend suggests that in the coming years, reaching these last milers will be challenging, at best.

The transition of funding beyond primary education is evident in the decrease in official development assistance (ODA) from European Union institutions. ODA targeting basic education has fallen from 50 percent in 2002-2004 to 43 percent in 2009-2011. Furthermore, the focus on quality over access is illustrated by two developments. New projects funded by the United Kingdom’s Department of International Development (DFID) prioritize student achievement as the primary measure for education system quality, and the World Bank has recently shift education resources to results-based financing that focuses on student literacy and numeracy.

While quality is important, the stagnating enrollment rates from the past seven years and the shift in attention and resources away from access and toward quality, makes one question whether the last milers will be left behind in the SDG era.


About the author

William C Smith

William C. Smith is a Senior Associate with RESULTS Educational Fund where he is developing the Right to Education Index (RTEI). The index will eventually provide a globally comparative alternative measure to national education quality while identifying specific target areas for countries to address. Prior to this position he completed a dual title Ph.D. in Educational Theory and Policy and Comparative International Education at The Pennsylvania State University and was a Thomas J. Alexander Fellow at the Organization for Economic Co-Operation and Development (OECD). His research addressing education’s role in international development and educator based testing for accountability has resulted in over 15 academic and policy publications. William is the editor a forthcoming book (Spring 2016) in the Oxford Studies in Comparative Education Series titled “The Global Testing Culture: Shaping Education Policy, Perspectives, and Practice.”

How you can influence global policy priorities at the World Bank (event)

RESULTS is hosting its 35th annual International Conference on Capitol Hill in Washington DC from July 18th to July 21st, featuring many leading poverty experts, activists. and policy makers.

Join us at the 2015 RESULTS International Conference in Washington, D.C., this July 18-21. Leading poverty experts, activists, policymakers, and YOU will convene for a unique conference that mixes an educational experience and advocacy opportunities around increased access to education, health, and economic opportunity. Together, we can change the world!

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In just two weeks, RESULTS Educational Fund, the parent organization of the Microcredit Summit Campaign, will celebrate its 35th anniversary with the 2015 International Conference in Washington, D.C. We invite you to join in the festivities and attend our workshop called “Partnerships to End Poverty: Health, Government, and Financial Services” on Sunday, July 19th at 4:30 – 6:00 PM. The conference will be held at the Washington Court Hotel on Capitol Hill.

Only $85 a day!

RESULTS International Conference — only $85 a day!

Attendees of the International Conference will hear from leading experts, activists, and policymakers on the challenges and solutions to ending poverty. Join World Bank President Jim Yong Kim, Senator Sherrod Brown (D-Ohio), and Nobel Peace Prize laureate Muhammad Yunus (and, of course, founder of the Grameen Bank). Find out who else will be speaking here.

The conference agenda is designed to provide the information and tools to influence policymakers — so you can deliver the message directly to your representative on Capitol Hill and policymakers at the World Bank and USAID!

The Microcredit Summit Campaign’s role at RESULTS is to lift up financial inclusion solutions designed for the world’s extreme poor, creating economic opportunities to help lift themselves out of poverty. The Campaign will be leading a workshop at the International Conference about the future of financial inclusion.

Our session, entitled Partnerships to End Poverty: Health, Government, and Financial Services,” will focus on integrated health and microfinance and linking the graduation model and conditional cash transfers (CCTs). Learn why these are key pathways to help end extreme poverty and how you can influence the global development agenda. (Read more about the six pathways.)

Sonja Kelly of the Center for Financial Inclusion at Accion will moderate a panel discussion with Olumide Elegbe of FHI 360 and our own Dr. DSK Rao and Larry Reed. Join us to develop your message and advocacy strategy around financial inclusion to end extreme poverty, and take it directly to major financial inclusion funders like the World Bank and USAID to influence their programmatic priorities in the over coming years.

About the panelists


Sonja Kelly, Fellow, CFI

Sonja Kelly is a fellow at the Center for Financial Inclusion at ACCION (@CFI_ACCION). She conducts research on supply and demand side opportunities to advance financial inclusion around the world, including income growth, demographic change, and policy shifts. Ms. Kelly is finishing her PhD at the School of International Service at American University, writing her dissertation on financial inclusion policy and regulation in low and middle income economies. Her research articulates the ways that international organizations and internal politics influence financial sector policy. She is also a consultant at the World Bank and the president of the DC chapter of Women Advancing Microfinance. Prior to joining CFI, Ms. Kelly worked in microfinance at Opportunity International.

Olumide Elegbe Olumide Elegbe, senior relationship manager at FHI 360, is a health and development expert with demonstrated results of building successful partnerships across sectors and geographies. With a focus on forging trusted, long term partnerships between the government, nonprofit and private sectors, Mr. Elegbe has a track record of brokering collaborative partnerships that drive social change by addressing health, education, sustainability and/or other development challenges. This, while delivering results and outcomes tailored to suit the needs of stakeholder individuals and organizations including market access, efficiencies in supply chain, and contribution to local GDP.

Mr. Elegbe has extensive international and cultural experience, spanning sub-Saharan Africa, Eastern and Western Europe as well as the USA. Prior to joining FHI 360, he worked as a public health specialist and a visiting lecturer in population medicine in the United Kingdom, and as technical advisor on public health programs in Nigeria.

Mr. Elegbe holds a Master’s Degree in Public Health with a minor in Health Services Management from the London School of Hygiene & Tropical Medicine in the United Kingdom.

Dr. D.S.K. Rao, Regional Director for Asia-Pacific, Microcredit Summit Campaign

Dr. DSK Rao has been the regional director for the Asia-Pacific region with the Microcredit Summit Campaign since 2000. The Campaign draws heavily on his wide experience and familiarity with the sector while organizing the regional and global summits. Dr. Rao has conducted scores of workshops and trainings on tools for practitioners in Asia to track poverty and other social outcomes including the Cashpor Household Index, Poverty Wealth Ranking, and the Progress out of Poverty Index. Dr. Rao is presently implementing a Johnson & Johnson-funded project for integrating health with microfinance in India, in collaboration with Freedom from Hunger. He has co-authored two books on microfinance: The New Middlewomen and Development and Divinity and Dharma.

Larry Reed, Director, Microcredit Summit Campaign

Larry Reed has headed up the Microcredit Summit Campaign (@MicroCredSummit) since taking over the reins from founder, Sam Daley-Harris in 2011. Mr. Reed has co-authored the annual State of the Campaign Report for the last 5 years. He has worked for more than 25 years in designing, supporting, and leading activities and organizations that empower poor people to transform their lives and their communities. For the majority of that time, Reed worked with Opportunity International, including five years as their Africa regional director and eight years as the first CEO of the Opportunity International Network.


Our workshop will be held on Sunday, July 19th
from 4:30 – 6:00 PM
.

To attend the workshop and the International Conference, email IC2015[at]results.org
or register online

Daily registration is only $85.

RESULTS is an international movement of grassroots advocates raising their voices to end poverty. Through government program and policy advocacy, RESULTS staff and its massive network of grassroots activists help to address the root causes of poverty: lack of access to medical care, education, and opportunity to move up the economic ladder. Click here to read more about RESULTS.


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

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:

Grama Vidiyal commits to expanding health services to clients

Read the press release announcing Grama Vidiyal’s Campaign Commitment
Read their Commitment letter
Photo courtesy of Grama Vidiyal

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The Microcredit Summit Campaign welcomes Grama Vidiyal, a major Indian microfinance institution (MFI), as the 55th organization to make a Campaign Commitment, joining a global coalition working to help 100 million families lift themselves out of extreme poverty.

Grama Vidiyal commits to expand its financial and non-financial services to the following number of clients in the financial year 2015-2016:

  • Provide an additional 150,000 clients with financial services in FY15
  • Help 1,050,000 community members through Grama Vidiyal’s empowerment program.
  • Organize 720 health camps for clients, screening 300,000 members.
  • Provide 10,000 clients with discounted consultation/treatment in partner hospitals.
  • Provide health education to 80,000 client families (or community).
  • Give access to health related products and medicines to 150,000 clients.
  • Help 800,000 clients with the Free Meals program.
  • Install 1,000 household toilet connections and 4,000 water tap connections.
  • Establish 80 Community Knowledge Centers, engaging 30 poor students each (a total of 2,400 students), to motivate learning basic math and English.
  • Help 500,000 clients with the Health Service and Development Program that provides sanitary napkins for women.
  • Use the Progress out of Poverty Index to measure the poverty level of 35,000 clients.

Sathianathan Devaraj, chairman and managing director of Grama Vidiyal, explains the importance of microfinance as a means to financial inclusionhealth:

“Microfinance is a very important tool for financial inclusion, which provides financial services for poor entrepreneurs and small businesses lacking access to formal banking and related services. Microfinance creates a window for the poor where they can access quality financial services such as credit, savings, insurance etc., without inhibition. A double bottom line approach with the right balance of fiscal performance and positive social impact is key to the microfinance’s success. Formal banks identified and promoted bankable people, but microfinance introduced and proved that even the poor are trustworthy and bankable.”

Grama Vidiyal is one of the largest Indian microfinance institutions, serving one million clients over 5 Indian states. Their objective is to focus on eradication of poverty and improving the standard of living of downtrodden women.

Read Campaign Commitment letter from Grama Vidiyal.

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 Grama Vidiyal and…

Get Inspired. Set a Goal. Make a Commitment.

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

CRECER Commitment focuses on women and movement above national poverty line

A female client from CRECER is managing her financial assets. Read the press release about CRECER’s Commitment, which focuses on women and movement above national poverty line
Photo courtesy of CRECER Bolivia

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The Microcredit Summit Campaign welcomes CRECER Bolivia as the 53rd Campaign Commitment maker, joining a global coalition working to help 100 million families lift themselves out of extreme poverty. A press release was issued on the Campaign website. CRECER was one of some 200 attendees that visited the Commitment Café during the 17th Microcredit Summit in Mexico last September to write on the Commitment Wall. (Read more about that.)

In their Commitment, Crédito con Educación Rural (CRECER) commits to support the Campaign’s goal in the following ways:

  • Continue to prioritize services for female clients: CRECER has 152,000 clients and will grow 3 percent per year to reach 166,000 clients by the end of 2017 while maintaining a rate of 80 percent women clients.
  • Clients in rural areas: Maintain a rate of 56 percent of total clients living in rural areas.
  • Strengthen financial education targeted towards women: By the end of 2015, have 75,000 female clients attend financial education events.
  • Support cervical cancer prevention: By the end of 2015, 25 percent of female clients will be receiving preventive screening each year, and it is expected that approximately 32,000 will benefit from this screening by the end of 2015.
  • Improve the quality of life: Of CRECER’s 152,000 clients, at least 65 percent live on less than double Bolivia’s poverty line ($2 per person per day), which is to say they live on less than $4 per day per person, while 41 percent are below the national poverty line. Our goal is that 10 percent of clients who are currently below the national poverty line raise their incomes from less than $2 to at least $4 per day, thus surpassing the poverty line. This process will be monitored with the Progress out of Poverty Index (PPI).

José Auad, CEO of CRECER, explains why they have joined the Microcredit Summit Campaign and this global coalition:

“Being a part of the Campaign…coincides with CRECER’s institutional philosophy. We are mindful of the responsibility that this signifies, as well as the responsibility we take on through the Commitment, for our fight against poverty began more than 25 years ago. We focus on a very vulnerable population, such as women in rural areas who, while truly experiencing poverty, are heroines in their daily struggle. We are convinced that by joining efforts and taking action…, we will reach the great goal of helping 100 million families around the world.”

CRECER is a development financial institution that provides financial and educational services to low-income women in Peru, in order to improve their quality of life and their families. It was founded in 1999 and its mission is to provide excellence and warmth with integrated financial products development services to improve the quality of life preferably women and their families. Read CRECER’s Campaign Commitment letter.

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 CRECER and…

Get Inspired. Set a Goal. Make a Commitment.

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

Ian Radcliffe Discusses “Using Technology to Make Savings Accessible for People in Poverty”

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SOCR 2014_front-cover_EN_270x348

Read the report today!

The 2014 State of the Campaign Report features various actors in the microfinance sector that are taking steps towards helping their clients lift themselves out of poverty.

In this interview with Ian Radcliffe, director of World Savings Banks Institute, talks to DSK Rao from the Microcredit Summit Campaign about how the poor can benefit from technology. Ian also talks about how MFIs can benefit from advances in technology to serve the needs of poor people living in remote areas. Below is a summary of the key points from the interview. 


World Savings Bank Institute (WSBI)The World Savings Bank Institute (WSBI) is a trade association that represents the interests of savings and retail banks in 90 countries around the world. The types of member banks range from very large banks, such as Wells Fargo, to very small banks in rural areas in developing countries. WSBI focuses on institutional relations, business platform, and training and consultancy.


The poor have been saving for decades if not centuries. They’ve been doing it through local savings cooperatives, and savings clubs, and things like that. In fact, the poor are, in some ways, probably more sophisticated in financial dealings than people from wealthier countries because they’re forced to by their need. They’re quite creative and I think this has really come out with some of the diaries works that has been done in many countries.
— Ian Radcliffe


Using technology to promote savings among the poor:

Reaching Deeper_Ian Radcliffe_233x326

Ian Radcliffe speaking at the 2013 Summit.

Member banks of WSBI in developing countries have been gravitating more towards using technology, simply because it is becoming more accessible and part of the global trend. With more research and technology available, WSBI’s member banks have been able to find that countries that are truly living in poverty with people living below a $1 a day can only afford to put in about 60 cents a month in terms of bank charges. This means that to be able to afford banking services, people living in poverty need low prices. Through technology is how banks are able to get the outreach beyond urban areas but also into rural areas in a way that is feasible.

The WSBI has done studies to see how populations cluster and where people gather. For example, in East Africa there are dense populations in Kampala and other urban cities, but in Southwest Africa populations become more loosely spread in rural areas. WSBI conducted research to see how far people are actually willing to walk to deposit money. In their research WSBI found that the maximum distance that people will walk is about 2 km. They found that there were not many agents in the 2km radius that people are able to get to easily. However, their research also found that when people started to receive money through mobile phones people were willing to walk more to receive that money. Therefore, in Kenya, because of the way people cluster there, mobile networks are able to reach about 85% of the population, including those living in remote areas, compared to without mobile networks banking services only reached 60% of the population.

Check out the “Going Digital” infographic to see this concept visualized.


Register for the 17th Microcredit Summit today!

Join us in Mexico for the 17th Microcredit Summit this September 3-5 where savings will take an important place in the agenda.

The future of technology and mobile phones:

Radcliffe believes that we are just at the beginning of the next stage of mobile banking. First, he pictures mobile banking going to scale. He says that the sector is still in the process of raising awareness that one can actually price aggressively low to make it affordable and feasible for poor people and one can actually make more revenue by doing so.  Mobile technology is giving the sector the opportunity to go to scale and have a strong outreach. Radcliffe foresees having a central bank in the urban areas which then partners with MFIs in the more rural areas which then has their networks with agents and mobile networks, forming a sort of ecosystem. This will allow the sector to have a better and stronger outreach.


Learn more

 

Commitment and creativity in reaching the poorest in remote areas

Gallery

Lea en español *** Lisez en français The Microcredit Summit Campaign would like to thank everyone who participated in the Virtual Conference on May 2, 3, and 4 entitled “Extending the Conversation on Reaching the Poorest: Another look at the … Continue reading

Breaking the Stovepipe Syndrome to Reach the Extreme Poor

The following is re-posted with permission from Microlinks’s blog. Click here to see the original. You can also watch a screencast of the March 21 After Hours seminar and a post-seminar interviews with panelists Jaya Sarkar (Trickle Up) and Jan Maes (The SEEP Network). 
This blog post was written by Carine Roenen of Fonkoze and Sabina Rogers and Bridget Dougherty of the Microcredit Summit Campaign who attended the recent After Hours Seminar, “Lessons Learned From Sequenced, Integrated Strategies of Economic Strengthening of the Poorest.”
“Economic strengthening” is all about breaking with the “microenterprise myth” that everyone, even the ultra poor, can start a business—that all they need is a loan. Building on a deeper understanding of the idiosyncrasies that characterize extreme poverty, organizations have developed promising interventions that incorporate “push” strategies that help build assets for those who cannot make ends meet and “pull” strategies to bring the excluded into the system.
During USAID’s Microlinks After Hours Seminar “Lessons Learned From Sequenced, Integrated Strategies of Economic Strengthening of the Poorest” on March 21, 2012, Aude de Montesquiou (CGAP), Jaya Sarkar (Trickle Up), and Jan Maes (The SEEP Network) presented integrated strategies that aim to meet the needs of the ultra poor so that they can negotiate their way out of poverty.
Understanding ultra-poor populations and developing appropriate interventions
“A household in extreme poverty is in a state of bankruptcy—not capable of covering its minimum expenditures for daily survival—and the sequenced strategies we are discussing today are very similar to remedies used for bankruptcies:  cash injection to pay for most critical needs followed by debt reduction and asset (re)building.” – Jan Maes, The SEEP Network
pull quote reading being ultra poor should become unacceptableTo overcome the roadblocks of the past, organizations promoting the economic rights of the poorest realize that they need to better understand who their clients are and what their psychological, social and economic characteristics are. De Montesquiou explained that many among the extreme poor lack what is necessary to be successful entrepreneurs, such as confidence, knowledge, assets, and tools. Maes stressed that, even among the extreme poor, we need to recognize that there is a wide range between “destitute” and “struggling to make ends meet.” We need to look at the causes of their poverty and the nature and degree of their vulnerability. By understanding this nuance, we can design appropriate activities, programs, and services that integrate the right components (e.g. asset transfers, handholding, and financial services) with the proper sequencing to address these vulnerabilities.
From pilots to proof-of-concept
Organizations participating in the CGAP Ford Foundation Graduation Program are testing this model of integration and sequencing. De Montesquiou presented qualitative and monitoring results for Fonkoze, their partner MFI in Haiti. The Fonkoze Foundation developed its Chemen Lavi Miyò (CLM), or “Pathway to a Better Life,” program to provide a multipronged livelihood protection and promotion service to carefully target ultra-poor women in rural Haiti. Specifically, CLM provided the women with assets for entrepreneurial use, enterprise training, health services through Partners in Health, housing support, a consumption stipend, and social links with village elites—all facilitated by the close support of a CLM case manager.  This push strategy decreased food insecurity among participants by over 50%. Severe wasting among CLM children decreased from 13% to 4% and Personal Potential Index (PPI) scores show 16% of participants passed the $1/day line. After 18 months, more than 90% of the participants were ready to participate in Fonkoze’s regular microfinance program. Thanks to support from the MasterCard FoundationConcern Worldwide, the Haitian Timoun Foundation, and Fondation Kanpe, the program has now been scaled up to include more than 2,000 families.
In her presentation, Jaya Sarkar described Trickle Up’s challenge as “struggling to make our initiatives more effective” and adapting a series of interventions in their graduation pilot in India. Since 2009, the graduation model has been Trickle Up’s standard approach in India. Now, they are mainstreaming learning into the rest of the organization by effectively using the push strategy developed through the pilot project to learn about the ultra poor and better designing pull strategies through other programs. When Trickle Up moved from the pilot phase to proof-of-concept, they shifted their focus, putting an emphasis on self-help groups (SHGs). They found, as Sarkar described, impact in unexpected areas. In particular, they found that groups were taking collective action. SHGs in Mali were creating a social safety net for members and creating access to financial services for non-members in their community, thus enlarging the population that directly benefited from the intervention. In India, they found SHGs are taking action on social issues, improving public shared space, and advocating on behalf of others for better service from banks.
Call to action
“What do the ultra poor need?” asked Jan Maes. That is the key question, and to figure this out, integrated strategies will be needed to learn from a variety of sectors such as microfinance, social safety nets, market development, protection and promotion, women rights, and others.  The STEP UP Initiative from The SEEP Network aims to connect these silos of practice, breaking the “stovepipe syndrome,” to enable multidisciplinary learning. Maes encourages practitioners to join STEP UP to enhance discussion on these issues.