#tbt: The Need for Pricing Transparency in Microfinance

Muhammad Yunus signs onto the MicroFinance Transparency. With Chuck Waterfield

Muhammad Yunus endorsese the MicroFinance Transparency (MFT). With Chuck Waterfield, MFT founder, at the 2008 Microcredit Summit in Bali.

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We are pleased to bring you this #ThursdayThrowback blog post, which was originally published in The State of the Microcredit Summit Campaign Report, 2009. This particular Box is especially relevant given the news about MFT closing down and the stakeholder meeting hosted by the Microfinance CEOs Working Group on April 21st.


>> Authored by Chuck Waterfield, the developer of Microfin, a business planning tool used by microfinance institutions worldwide, and MicroFinance Transparency (MFTransparency), which was launched at our 2008 Microcredit Summit in Bali, Indonesia.

Microfinance has long been a highly transparent industry, and rightly proud of it. Unfortunately however, the true price of microfinance loan products has never been accurately measured nor reported. For an industry born to displace the moneylenders by providing low-cost credit to the working poor, this is hard to imagine and even harder to explain.

Many countries require commercial lenders to state true product pricing using standards such as the APR (Annual Percentage Rate) formula mandated forty years ago in the US Truth-in-Lending Act. Such laws were enacted to help consumers make informed decisions regarding choosing loan products with different pricing. Currently, the same disparity that existed prior to Truth-in-Lending laws can be found in the microfinance industry. For example, a quoted interest rate of 3% per month can, depending on how this rate is applied, result in an APR between 36% and 96%, and beyond. Unfortunately, such misleading claims are commonplace in microfinance today. Why should the same principles of transparent pricing applied within the commercial finance industry not be applied to the microfinance industry?

The widely practiced non-transparent pricing in microfinance has evolved and perpetuated for two reasons. Firstly, there is no single market interest rate for micro-loans. The industry recognizes that interest rates on micro-loans must be higher than interest rates on larger commercial loans, but it is seldom recognized that there is no single “market rate” for micro-loans. In a market where all MFIs deal with the same cost structures, the smaller the micro-loan, the higher the interest rate necessary for that MFI to cover the costs of that loan and achieve sustainability. Due to the challenges of explaining why MFIs need to charge higher interest rates than the commercial sector, and to charge the highest interest rates to the poorest clients, the easiest alternative has been to use non-transparent pricing, where a quoted price is generally significantly lower than the actual price.

Secondly, once the industry began widely employing confusing product pricing, it became very difficult for MFIs to convert to transparent pricing. To do so, the MFI would advertise what appeared to be the highest price in the market, even though their true price could actually be the lowest. As a result, the vast majority of MFIs practice non-transparent pricing even though many would prefer to do otherwise.

In recent years the industry is shifting from the goal of “sustainable microfinance” to the goal of “high-profit microfinance.” When MFIs are operating in a very opaque pricing environment – where nobody knows how the price of one product compares to the price of another product – there exists the opportunity for MFIs to charge a price that results in very high profit levels. High profits generated off of the poor by charging non-transparent prices can create a bad public image for the microfinance industry and result in a strong backlash.

Given this reality, the industry has been in intensive dialogue and several initiatives are underway to address non-transparent pricing. One initiative is the “Campaign for Client Protection” that began after an April 2008 conference that produced the “Pocantico Declaration.” Transparent and fair pricing is one of the six core principles advocated in the campaign.

The second initiative is MicroFinance Transparency, a non-profit agency that will address pricing transparency through two joint activities. First, MFTransparency will collect product prices on all micro-loan products around the world and report those prices by a common, objective measurement system. Second, MFTransparency will undertake the equally important role of developing and disseminating straightforward educational material to enable microfinance stakeholders to better understand the concept and function of interest rates and product pricing.

It can be argued that an industry-wide effort towards transparent pricing is essential to the long-term survival of the microfinance industry. The mainstream public media is already reporting the interest rates typically charged in microfinance, but there is little explanation or understanding of why microfinance interest rates are higher than previously believed, nor why there is significant variation in interest rates among different institutions. What non-transparent pricing has kept hidden for years is no longer hidden. A forum for the industry must be built in order to report – in a clear, consistent and fair fashion – what actual interest rates are and why interest rates in competitive microfinance markets need to be higher than in commercial finance.

By practicing pricing transparency, a healthy and vibrant market for microcredit products can be built, providing a valuable component necessary in free markets and currently absent in microfinance – transparent, open communication about the true cost of products.

Over 100 microfinance industry stakeholders have endorsed MFTransparency. You may view the list and choose to sign up and endorse at the website.
Chuck Waterfield, Founder, MFTransparency, http://www.mftransparency.org/endorsements.

Musoni commits to help MFIs measure poverty

Pic Musoni Tablet app

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The Microcredit Summit Campaign welcomes Musoni Services as the newest Campaign Commitment maker, joining a global coalition of 56 other commitment makers working to help 100 million families lift themselves out of extreme poverty. The Microcredit Summit 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.

Musoni commits to the following by the end of 2015:

  • To integrate the PPI Scorecards into the Musoni System enabling MFIs to easily capture and analyse social performance data
  • To integrate the PPI Scorecards onto the Musoni tablet app making it possible for field officers to capture PPI data remotely, in both offline and online mode
  • To develop the core PPI Reports and add directly to the Musoni System for all MFIs to benefit
  • To encourage at least five of the MFIs using the Musoni System to start capturing PPI data, with the goal of capturing PPI data for over 50,000 entrepreneurs

Musoni commits to the following by the end of 2016:

  • To encourage at least fifteen of the MFIs using the Musoni System to start capturing PPI data, with the goal of capturing PPI data for over 150,000 entrepreneurs

Cameron Goldie-Scot, CEO of Musoni Services:

“Musoni Services is honoured to join the Microcredit Summit Campaign and excited to be part of a movement helping to lift 100 million families out of poverty. The Musoni System gives MFIs the infrastructure they need to reduce their costs, improve their efficiency and to drive financial inclusion into rural areas where the majority of the unbanked live. End-clients benefit from increased security and flexibility, and in-time lower interest rates that MFIs using the Musoni System are able to offer. At Musoni, we fundamentally believe in increasing the amount of social performance measurement in the industry, which is why we have committed to including the PPI Surveys as standard in the Musoni System. By making it as easy as possible to capture and analyse PPI data, we aim to encourage MFIs to focus more on their social impact, and also improve our understanding of the impact microfinance has on reducing poverty.”

The Campaign looks forward to welcoming this new partner in the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit in 2015.

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Musoni Services

Musoni is a microfinance software company that supports MFIs with its innovative and award-winning microfinance platform, the Musoni System. Aside from the core system functionality (clients & groups, loans & savings, reporting, and accounting), Musoni is known for pioneering new technology in microfinance in order to improve efficiency and reduce costs, including mobile money (over 2 million MMT transactions processed), SMS reminders (over 1.8 million SMS messages sent) and tablet apps (over 35,000 loans processed digitally). As a result of pioneering new technology in microfinance, over the last three years the Musoni team has won multiple awards, including the award for ‘most innovative use of technology’ at the Global Microfinance Awards (July 2011), and the Frost and Sullivan award for ‘Technology Leadership’ (August 2014). Most recently, an MFI using the Musoni System won the ‘Financial World Innovation Awards’ in London for their use of the Musoni app in Tanzania.


We invite you to join Musoni and…

Get Inspired. Set a Goal. Make a Commitment.

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

How families are creating step-by-step plans for poverty elimination

This family has used the Poverty Stoplight to self-assess their situation and needs. They will now work with Fundación Paraguaya to develop a plan to lift themselves out of poverty.

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Fundación Paraguaya declared its support for the goal of helping 100 million families lift themselves out of extreme poverty by making a Campaign Commitment at the 17th Microcredit Summit in Merida, Mexico. The Microcredit Summit Campaign recently caught up with Fundación Paraguaya to learn about the ways they are working towards the end of extreme poverty.

Luis Fernando Sanabria: what drives their Commitment to end extreme poverty


>> By Luis Fernando Sanabria, Gerente General, Fundación Paraguaya

logo_fundacionparaguaya

This year, Fundación Paraguaya celebrates its 30-year anniversary working in microfinance and entrepreneurial education. During this time, we have seen the following economic progress of many of our clients and their families: increased income (116 percent on average), better business management practices, and increased loan amounts.

In spite of these inspiring achievements, we know that many of our clients and their families have remained poor even when they earn more money. While many clients have significantly increased their income, others hover near the official poverty line or have unstable income and lack family savings. Moreover, many of the families we work with lack modern bathrooms, live in overcrowded and unsafe housing, cook on the ground, have no access to clean water, do not vaccinate their children nor send them to school, and live in contaminated environments. Additionally, many suffer from low self-esteem, do not have entrepreneurial spirit, and are victims of domestic violence.

The above description shows us that families can be poor in many ways. Poverty, as we have come to understand, can be seen as a “grey cloud” that hinders poor families because it can so complex and overwhelming that they do not know where to start. Fundación Paraguaya has developed the Poverty Stoplight to simplify and operationalize this concept by dividing the problem of poverty into smaller pieces so that families can overcome their deprivations step-by-step. The Poverty Stoplight methodology is based on the following principles:

  1. Poverty is multidimensional.
  2. Poverty can be eliminated.
  3. Poverty affects different families in different ways.
  4. Poor people should take a participatory role in overcoming their own poverty condition instead of being simply program beneficiaries.
  5. Given that poverty is multidimensional, the involvement of multiples role players from the public and private sector as well as the civil society is needed in order to eliminate it.
Don Aníbal Borja is a client from Fundacion Paraguya

Don Aníbal Borja is a client from Fundacion Paraguya, watch his interview HERE

We have deconstructed the concept of poverty into 6 dimensions that are operationalized in 50 indicators. These dimensions are: Income and Employment, Health and Environment, Housing and Infrastructure, Education and Culture, Organization and Participation, Interiority and Motivation. In the Poverty Stoplight, all indicators have the same weight. That is, it is not an index but a dashboard, a list of items that define how poverty affects a particular family.

Families are “owners” of their poverty and therefore must accountability and an active role to overcome it. Fundación Paraguaya’s role in this process is to offer each family a “Menu of Solutions” to the different poverty indicators (goods and services), and at the same time, develop a plan based on the Influencer theory[1] to train and motivate families to solve the issues of poverty that affect them. This “Menu” defines solutions that (a) are directly provided by our organization, (b) are made available through strategic partnerships (with NGOs, government, and the private sector), and (c) originate from the social activism of each individual family.

The Poverty Stoplight methodology starts with a family self-assessment. For this, families with support from an advisor take a visual survey using software developed in partnership with Hewlett Packard. The visual survey uses pictures to illustrate different situations of poverty for each of the 50 indicators. Each family evaluates their situation and for each indicator they select the picture that better depicts their family condition. Indicators have three possible definitions (defined by 3 pictures) and define situations of extreme poverty (red), poverty (yellow) and non-poverty (green).  In addition, the software allows us to geo-tag Poverty Stoplight data, which results in a “Poverty Map” displaying how each indicators affect different families.

DSC_6492

Upon complementing the 50 indicators self-assessment, families have a better understanding of how poverty affects them: they can see how many “reds” and “yellows” they have. At the same time, they can see that family already has “blessings” or aspects in which the family is no longer poor. This is visualized by all the “greens” displayed in their Poverty Stoplight. With support from a village bank advisor, families then create a “Life Map”; that is, they identify the indicators they want to solve, and establish family’s short and long-term goals aimed at overcoming poverty (turning all indicators from red and yellow into green).

The Poverty Stoplight approach has been applied in different settings. In addition to its microfinance clients, Fundación Paraguaya has applied this methodology with its 400 employees during the past three years. As a result, 35 businesses and private industries in Paraguay are using the Poverty Stoplight in order to better understand their employees’ situation and help their families overcome poverty. Moreover, the Government of Paraguay’s Central Department[2] has started a pilot project at a marginalized neighborhood, which is being followed by the Government of Villa Hayes Department.[3] At an international level, organizations from 18 different countries have launched pilot projects using the Poverty Stoplight methodology in Tanzania, India, South Africa, Uganda, Nigeria, Dominican Republic, Colombia, Guatemala, and others.

Our institution aims at achieving financial inclusion of poor families with the soul purpose that they overcome poverty. Using the Poverty Stoplight methodology, 20,000 families have overcome income poverty, and 2,000 families have overcome multidimensional poverty as measured by the 50 indicators over the past 3 years.

With the Microcredit Summit Campaign, we are committed to reach 125,000 families in the next three years, contributing to a total of 30,000 families that overcome income poverty and a total of 9,000 families that overcome multidimensional poverty in all 50 indicators in Paraguay.

Every family has all of the accumulated potential needed to overcome poverty. Our role as a microfinance institution is to develop appropriate methodologies to unleash that potential. The Poverty Stoplight is our way of “rubbing the magic lamp” to liberate the energy trapped within each family to overcome poverty.

The same family from the top of the article has gone through the Stoplight process and now their situation is much improved.

The same family from the top of the article has gone through the Stoplight process and now their situation is much improved.

[1] Influencer Theory, developed by https://www.vitalsmarts.com

[2] Regional Government, Paraguay

[3] Regional Government, Paraguay

To learn more about Fundacion Paraguaya, click here.


Join Fundación Paraguaya in stating YOUR Campaign Commitment!


Más que inclusión financiera, eliminación de pobreza

Este año Fundación Paraguaya cumple 30 años trabajando en programas de emprendedurismo y microfinanzas. Durante este tiempo, hemos visto el progreso económico de muchos de nuestros clientes; como aumentaban sus ingresos (en promedio, 116%!), administraban mejor sus negocios e incrementaban los montos de préstamos solicitados.

Sin embargo, muchos de ellos siguen siendo pobres! Aunque aumentaron sus ingresos significativamente, muchos no superan la línea de pobreza nacional, o sus ingresos son inestables o no tienen ahorros. Muchos siguen careciendo de baño moderno, viven hacinados y en viviendas inseguras, cocinan en el suelo, no tienen acceso a agua potable, no vacunan a sus hijos, no los educan y viven en un medio ambiente inapropiado. Muchos sufren de baja autoestima, no tienen espíritu emprendedor, y sufren de violencia doméstica.

Muchas maneras de ser pobre. La pobreza es como una “nube gris” que aplasta a las familias pobres, pues es tan compleja que las mismas no saben por donde empezar!. Fundación Paraguaya ha desarrollado el Semáforo de Eliminación de Pobreza para simplificar y operativizar el concepto y dividirlo en “pedacitos” de manera que las familias puedan resolver sus carencias paso a paso.

La metodología, se basa en las siguientes premisas: 1) la pobreza es multidimensional, 2) la pobreza puede ser eliminada, 3) la pobreza afecta de manera distinta a cada familia, 4) la familia debe ser protagonista en su salida de pobreza, 5) se debe involucrar a la mayor cantidad posible de actores para que contribuyan a eliminar la pobreza: familias, ONGs, gobiernos, empresa privada.

Hemos dividido el concepto de pobreza en 6 dimensiones, operativizadas por 50 indicadores. Las dimensiones son Ingresos y Empleo, Educación y Cultura, Vivienda e Infraestructura, Salud y Medio Ambiente, Organización y Participación e Interioridad y Motivación. Todos los indicadores tienen el mismo peso: no se trata de un índice sino mas bien de un listado de ítems que definen la pobreza.

Las familias son las “dueñas de su pobreza” y quienes deben superarla. El rol de la Fundación es poner a disposición de las mismas un “Menú” de soluciones a los indicadores de pobreza (bienes y servicios) y desarrollar un Plan de Influencia Positiva[4] para capacitar y motivar a las familias. Este “menú” contiene soluciones (a) proveídas directamente por la institución, (b) a través de alianzas (gobiernos, ONGs., empresas privadas), o (c) mediante el activismo social de las mismas familias.

El programa se inicia con una autoevaluación de las familias para lo cual utilizan un software (desarrollado con HP) que emplea fotografías para ilustrar los 50 indicadores de pobreza. Cada familia se autoevalúa (en cada indicador) como pobre extremo (Rojo), pobre no extremo (Amarillo) o no pobre (verde). El software permite georeferenciar la información, lo que nos proporciona un mapa de la pobreza, indicador por indicador, familia por familia.

Una vez que se ha autoevaluado en los 50 indicadores, cada familia sabe en que consiste su pobreza: cuantos y cuales rojos y amarillo tiene. Pero también sabe cuales son sus bendiciones: cuantos y cuales verde tiene. Con la ayuda de su asesora de crédito, la familia construye su Mapa de Vida; es decir establece sus metas para el año y para los subsiguientes y las acciones que tomará para transformar sus amarillos y rojos en verdes.

El Semáforo de Eliminación de Pobreza ya esta siendo utilizado en otros ámbitos. La Fundación lleva tres años implementándolo con sus propios colaboradores (400), pero además otras 35 empresas e industrias privadas en Paraguay están utilizando la metodología para lograr que sus empleados superen la pobreza. Además, la Gobernación del Departamento Central[5] ha iniciado un piloto en un barrio marginal y la Gobernación de Presidente Hayes[6] está próxima a hacerlo. Finalmente, organizaciones de 18 países han iniciado proyectos piloto de implementación de la metodología (Tanzania, India, Sudáfrica, Uganda, Nigeria, Rca. Dominicana, Colombia, Guatemala, entre otros).

Nuestra institución apunta a lograr la inclusión financiera de familias pobres con el único objetivo de que esta estas superen la pobreza. Mediante la metodología del Semáforo de Eliminación de Pobreza en los últimos 3 años hemos logrado que 20.000 familias superen la pobreza de ingresos y que 2.000 superen la pobreza multidimensional.

Nuestro compromiso con la Cumbre del Microcrédito es alcanzar 125.000 familias en los próximos 3 años y lograr que 30.000 superen la pobreza de ingresos y 9.000 superen la pobreza multidimensional.

Todas las familias tienen el potencial que se necesita para superar su propia pobreza. Nuestro rol como organizaciones de Microfinanzas es desarrollar la metodología apropiada para liberar este potencial. El Semáforo de Eliminación de Pobreza es nuestra manera de “frotar la lámpara mágica” para liberar la energía que cada familia tiene atrapada.

[4] Teoría de Influencia Positiva, desarrollada por https://www.vitalsmarts.com
[5] Gobierno Regional, Paraguay
[6] Gobierno Regional, Paraguay

Join us for an E-Workshop on Open Source Technology and Financial Inclusion

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The Mifos Initiative is co-hosting with the Microcredit Summit Campaign the next E-Workshop on February 19th, sharing insights on “open” technology platforms. The Mifos Initiative announced a Campaign Commitment in 2015 to promote poverty measurement tools through integrating them into their cloud-based core banking system.

The E-Workshop will include a demo of the Progress out of Poverty Index (PPI) in the Mifox X platform. REGISTER TODAY!

As organizations around the world embrace digital financial services for the poor, the entire sector must embrace open platforms, open standards, and interoperability in order to reach the 2.5 billion people who remain unbanked. “Open” is the key for organizations to be able to customize a common software platform.

Leaders of the Mifos Initiative will introduce the world’s first fully “open” technology platform for financial services providers (Mifos X Platform). Learn how using open systems and standards as a common foundation can lead to reaching more of the world’s poorest.

Join us on Thursday, February 19th at 11:00 AM (GMT-5) for an E-Workshop webinar titled “Using Open Source Technology to Expand Financial Inclusion”

SPEAKERS
Craig Chelius
Executive Director (Moderator)
Cameron Goldie-Scot
CEO
Markus Geiss
Software Developer

Join us for this exciting discussion to gain a deeper understanding of the Mifos X Platform and hear from partners who are using it about their challenges, gains, and the practical applications!

This webinar will be conducted in English. For our Spanish-speaking colleagues, the Portal de Microfinanzas (@Portal_MF) will be live-tweeting in Spanish the key points addressed by the speakers.


Follow this e-workshop and the Campaign’s 100 Million Project:

Learn about the 100 Million Project Project and Campaign Commitments.

The Mifos Initiative Commits to Expand Use of Poverty Measurement Tools

Photo courtesy of the Mifos Initiative

Microfinance clients around the world will benefit from Mifos Initiative’s Campaign Commitment
Photo courtesy of the Mifos Initiative

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The Microcredit Summit Campaign welcomes the Mifos Initiative as the newest Campaign Commitment maker, joining a global coalition of 56 other commitment makers working to help 100 million families lift themselves out of extreme poverty. The Microcredit Summit 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.

MIFOS LogoCraig Chelius, executive director of the Mifos Initiative, views the 100 Million Project as a way to contribute to ending extreme poverty by committing to fully integrating the Progress out of Poverty Index (PPI) into the open source Mifos X Platform for Financial Inclusion. “The Mifos Initiative produces a transformative impact that dramatically expands the reach and scale of financial inclusion providers via a free and open source cloud-based core banking system. Providing financial services to the poor is a proven method to help permanently end poverty and to that end, we are thrilled to partner with the Microcredit Summit Campaign and to publish our 2015 commitment.”

The Mifos Initiative commits to the following by the end of 2015:

Ensure that the PPI and other social performance management frameworks can be captured and analyzed as an integral part of the client workflow in the Mifos X platform:

  • PPI Integration – Full integration of the Progress out of Poverty Index within the Mifos X platform with support for capturing the Progress out of Poverty Index scorecards for all 56 countries within our cloud-based Mifos X Community App.
  • PPI Reports – Develop and release 5 standard reports which contain the most relevant and high-value analysis of the PPI data captured in Mifos X.

Ensure that social performance management (SPM) is a focus of our community and we provide the resources and education to help our customers adopt SPM through our partner channel:

  • PPI Adoption – Commit to ensuring at least 6 customers on the Mifos X platform are implementing the PPI as part of their social performance management strategy.
  • PPI Training – Commit to getting at least three of our Mifos Certified Partners trained and registered as PPI trainers listed on the Grameen Foundation directory of trainers.

The Mifos Initiative commits to the following by the end of 2016:

  • Support capturing PPI scorecard data via mobile forms on Android-based smartphones through our Mifos X Android app.
  • Complete the development of our Client Impact Portal with drill-down and roll-up social performance management data including the PPI.

The Campaign looks forward to welcoming this new partner in the global coalition and sharing their progress towards the Commitment achievement at the 18th Microcredit Summit in 2015.

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The Microcredit Summit Campaign
The Microcredit Summit Campaign (the “Campaign”), a project of RESULTS Educational  Fund, is the largest global network of institutions and individuals involved in microfinance and is committed to two important goals: 1) reaching 175 million of the world’s poorest families with microfinance and 2) helping 100 million families lift themselves out of extreme poverty. The 100 Million Project, focusing on Goal 2, was launched in response to World Bank President Jim Yong Kim’s call to end extreme poverty by 2030 and in recognition that full financial inclusion can only be achieved by targeting the extreme poor. The coalition of Campaign members announcing Commitments is aimed at motivating microfinance stakeholders to provide products and services that reach the extreme poor and facilitate their movement out of poverty.

The Mifos Initiative
The Mifos Initiative is a US-based non-profit that stewards the development of the open source Mifos X Platform for Financial Inclusion and its global ecosystem of volunteers and donors, technology partners, and client financial institutions. Its mission is to empower financial institutions in developing countries to bring affordable, responsible financial services to the nearly 3 billion people on the planet who currently do not have formal access.

Contact Information
Sabina Rogers
Microcredit Summit Campaign
rogers[at]microcreditsummit.org
+1 (202) 637-9600


Join the Mifos Initiative in stating YOUR Campaign Commitment!

E-Workshop Takeaways: “Are you serving women well? Using the GPIs”

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Learn how the Gender Performance Indicators can help you improve outreach and service to women EspañolFrançais Continue reading

Join us for an E-Workshop on Gender Performance on Tuesday, Nov 11th

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Learn how the Gender Performance Indicators will help you track and improve gender performance. Continue reading

Concrete Steps to Managing Social Performance: SPTF’s Campaign Commitment

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Learn about SPTF’s progress on their 2013 Commitment as well as how they are working towards the end of extreme poverty EspañolFrançais Continue reading

Red Financiera Rural (RFR) in Ecuador makes a Campaign Commitment

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Summary: The Microcredit Summit Campaign welcomes Red Financiera Rural (Rural Finance Network) as the newest Campaign Commitment member, joining a global coalition to help 100 million families lift themselves out of extreme poverty. Read the full Press Release

RFR - Commitment Letter

Javier Vaca, Excutive Director of RFR, displays the signed Campaign Commitment letter.

Red Financiera Rural (RFR) is the leading microfinance network in Ecuador. RFR supports microfinance institutions that serve the most vulnerable members of society. Currently RFR works with 46 member organizations across Ecuador to design innovative products and solutions for clients of their member microfinance institutions. RFR promotes best practices in financial transparency and reporting social outcomes in the sector. RFR’s innovative program to set up Social Responsibility Systems among its member institutions earned it the distinction of being a finalist for the European Microfinance Award in 2008. It is this innovative and social drive that makes RFR a well-respected microfinance organization today.

“At RFR we have supported the Microcredit Summit Campaign since we were founded in 2000. We are very pleased that our member institutions contribute to the goal of reaching people living in poverty with financial services, especially the most vulnerable including women and farmers. And we are convinced that with the dedication of our 46 members, through continuous learning, development of new methodologies and efficient management at a social and financial level, we contribute every day to a greater number of Ecuadorians being able to move out of poverty on their own accord, being agents of their own development.Javier Vaca, Executive Director, Red Financiera Rural


Some key excerpts of Red Financiera Rural’s Campaign Commitment:

  • We will expand to include 3 more member institutions by the end of 2014.
  • In 2014, we will develop innovative microfinance products based on the results of the institution survey that addresses the needs of the clients and institutions. These needs include rural credit, credit with value chains, rural savings, microinsurance, and microfranchises.
  • By the end of 2014, we will increase the coverage of institutions participating in Finance Education Programs from 8 members serving 2,700 clients, to 12 members.
  • By the end of 2014, we will implement Social Performance Management tools in 20 institutions. Among these, we will implement 4 SPI, 2 Smart evaluations, and 2 with the Truelift tool.
  • By the end of 2014, we will implement these products in at least 8 institutions.

Read the RFR Commitment Letter (in Spanish – for English read here)


Join Red Financiera Rural and State your Campaign Commitment

Join us in the global coalition to help 100 million families lift themselves out of poverty – state your Campaign Commitment at mycommitment@microcreditsummit.org

Need additional guidance in formulating your own Campaign Commitment? Refer to our Commitment Development Toolkit.

Be social with us on Facebook and Twitter (@MicroCredSummit) using the hashtags #Commit100M and #100MGoal

 

Towards Excellence in SPM: Opportunity International’s Strategy & Commitment

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Opportunity shared with us their SPM strategy and their unique Social Performance Dashboard. Learn also about their updates from the Commitment announced in 2013. Español Français Continue reading

Helping Pro-Poor Organizations Keep True to their Missions: SPTF’s Campaign Commitment Update

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From Intent to Action: Resources to Pursue Responsible Inclusive Finance

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Dina Pons of Incofin IM, the moderator of the workshop, “Responsible, client-centric practices at every level, and demonstrated commitment to fulfilling its mission,” started the presentation with the following description of Responsible Inclusive Finance:

Every institution along the value chain of “responsible inclusive finance” – whether socially or financially motivated – employs responsible, client-centric practices at every level of its business and demonstrates commitment to fulfilling its mission.

Read the summary of proceedings for this workshop.

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