New report calls for scale-up of financial services “pathways” to help end extreme poverty


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The Microcredit Summit Campaign released our 17th annual survey of the global microfinance industry Wednesday at the Inclusive Finance India Summit held in New Delhi, India. Larry Reed featured the publication, Mapping Pathways out of Poverty: The State of the Microcredit Summit Campaign Report, 2015, in his presentation on Wednesday to attendees of India’s premier financial inclusion conference.

What does the 2015 report say about the data?
According to our annual survey, the global microfinance community reached 211 million borrowers as of December 31, 2013, and 114 million of them were living in extreme poverty (households living on less than $1.90 per day, PPP).

What this means is that, while the microfinance community provided loans to the most clients since we began tracking this number in 1997, the number of poorest clients fell for the third straight year. This is concerning.

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The 2015 State of the Campaign Report in a nutshell


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An African farmer is linked into the financial system via her mobile phone.
In his presentation today at the Inclusive Finance India Summit New Delhi, Larry Reed featured Mapping Pathways out of Poverty: The State of the Microcredit Summit Campaign Report, 2015. The report is now available online. We will also publish the full report in French, Spanish, and Arabic in early 2016. You can also read previous reports online, just select the year of interest from the drop-down menu “Previous Reports.”

At our 2013 Microcredit Summit in the Philippines, we focused on the partnerships required to deliver financial services to those living in poverty. At our 2014 Summit in Mexico, we focused on innovations in microfinance with a demonstrated capacity to reach those in extreme poverty. This year, we use the report to explore, in more detail, our six financial “pathways.” Each pathways has a chapter, and each chapter does the following:

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Where’s the Map? Another sneak peek!


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John Snow mapped out London's cholera epidemic in the 1850s. This helped my make connections between seemingly unrelated unrelated
“A map does not just chart, it unlocks and formulates meaning; it forms bridges between here and there, between disparate ideas that we did not know were previously connected.”
— Reif Larsen, The Selected Works of T.S. Spivet

How does BRAC, the world’s largest non-governmental organization (NGO), develop pathways out of poverty for the poorest people in a village? They begin with a map. As you see in the photo on the cover of this report, they bring the village together and start drawing maps in the dirt, identifying each household, market, business, and place of worship. They then ask the help of the community to identify the poorest households, marking each one on the map. Their work begins with those households.

This painstaking, household-by-household approach of identifying the excluded and locating them within their community and context represents the next step that we need to take to achieve a new set of ambitious global development goals.

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Sneak peek of the 2015 State of the Campaign Report


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The map on the right illustrates the prevalence of below $1.90 per day poverty in rural areas. Source: Adapted from World Bank Data (online), 2015, "Rural Population (% of total population),"; and ibid., "Poverty gap at $1.90 a day (PPP 2011) (%),"
The World Bank and the United Nations have both set their sights on ending extreme poverty by the year 2030. The Bank has also set a concomitant target of universal financial access by 2020 as a major contributor to ending extreme poverty. Our assessment, after reviewing the contributions that microfinance institutions and other financial providers have made toward these two goals, is this: if financial services are meant to play an important part in bringing an end to extreme poverty, we will not come close to reaching it.

Microfinance has demonstrated the viability of providing financial services to people in poverty and technological advances have drastically reduced the cost of providing financial services. But, we still do not see widespread adoption of financial services among the largest groups of those that still need to be reached: those living in extreme poverty.

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Resilience: Moving Past the “Scramble to Survive”


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Excerpts from a review of the 2014 State of the Campaign Report published by NextBillion. EspañolFrançais Continue reading

A sneak peek of “Resilience: The State of the Microcredit Summit Campaign Report, 2014”

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Join us for the launch event of the 2014 State of the Campaign Report on Thursday, June 19 (3-5 PM) at Busboys and Poets on 14th Street. Click here to learn more. RSVP now!

CARD Bank member clients in Tacloban meet with CARD accounts officer 75 days after typhoon Yolanda tore through the Philippines, destroying homes, robbing businesses, and taking lives.

The Center meeting in Tacloban of member clients and the CARD accounts officer started promptly at 8:00 AM. The roll call, though, showed that this meeting was not the same as most of those that came before. One man attended to represent his wife, who had recently died. Several absent members had left the city and would not return for a while. A few had not yet moved back to the barangay from the evacuation center and, due to the limited transportation, had trouble getting to the meeting on time.

Seventy-five days after typhoon Yolanda tore through the Philippines, destroying homes, robbing businesses, and taking lives, CARD’s member clients at the Center meeting were not interested in talking about their savings or loan payments. They spoke of fleeing their homes as water rushed in, able only to grab their children as they fled with just the clothes on their backs. They talked of neighbors who thought that their stronger cement homes would protect them—neighbors who perished when the storm surge rose too fast for them to get out.

They recounted harrowing hours huddled on a hillside, shivering in the rain and hiding behind rocks, as the 300 kilometer-per-hour winds felled trees and turned debris into missiles. They shared the empty feeling of returning to their neighborhood eight hours later and finding everything gone, with massive tanker ships driven onto the land where their houses had stood. And so began their scramble to survive, to find shelter and food, and to hope that outsiders would bring help soon. “We need rice and water (and yams),” they wrote in large letters in English on one of the stranded ships for the international aid organizations to see. Below it they wrote in their own dialect, “Don’t put trash here, this is our neighborhood.”

For a few days, they survived in an abandoned cement home in their neighborhood that still had a few rooms standing until aid agencies reached them and told them where evacuation centers were set up, offering food and cash-for-work programs. Some moved to these centers, while others went to family living far enough away to not be so badly affected by the storm.

They worked together cleaning their city, removing debris and dead bodies from the streets so that emergency workers could do their jobs. And, they used the relief supplies and the money they earned to restart their businesses, knowing that they would need money to start rebuilding. Those with food shared with those who had little. Those with shelter provided housing for those with none.

All of the member clients mentioned their surprise that their accounts officer had looked for them and found them. He visited the evacuation centers and the homes of relatives to locate each client. He explained when the Center meetings would begin again and where they could get the emergency rice, sardines, and vaccines that CARD provided to help them survive until they could start providing for themselves again. To those who had lost a spouse or children, he reviewed the simplified process for making claims, reminding them that CARD would maintain its 1-3-5 day payment-processing system[1] once it could bring in cash to make the disbursements.

A CARD Bank client

Slowly, they began reestablishing their businesses, buying a few extra items at inflated prices to sell in their sari-sari stores[2]. They purchased rice seed to replant their fields because Yolanda hit just as the last crop had been harvested and set to dry. Many had started to rebuild their homes, while trying to run their business on the side. CARD also joined other microfinance organizations to provide teams of medical volunteers, nurses, doctors, and therapists to help clients with the physical and psychological traumas they sustained from the storm.

Today’s discussion at the Center meeting focused on the “calamity loans” that CARD offered to its clients who survived Yolanda. The accounts officer carefully explained the terms: 6- or 12-month repayment periods with a 1-month grace allowance, lower interest rate, and weekly payments. The women immediately probed for more details.

What if they did not have enough to make full payments at the end of the grace period?
Partial payments would be accepted.

Would they be required to maintain a savings balance with this loan?

How much could they get?
Up to PHP 10,000 (Philippine pesos), or USD 220.

Could they use the loan for their businesses or was it only for rebuilding their homes?
They could use it for anything they needed to get back on their feet, including their businesses.

The women huddled together, calculating what they could afford and what they could do with the money. “We like this loan,” they told the accounts officer, “and most of us will take it. But we think you should call it a rebuilding loan rather than a calamity loan. We don’t want to be treated like victims.”[3]

Later that afternoon, a line of people filled the lobby of the CARD offices and continued out the door, doubling back on itself three or four times until it reached the street. People waited patiently to receive their calamity loans. The doors of the office officially closed at 2:00 PM, but the staff let all those still in line outside come inside. After 9:00 PM, the staff made the last disbursement for the day and then began to quickly total the sums and balance the books, hoping to finish and get home by 10:00 PM.

In the 2013 State of the Campaign Report, we wrote about the vulnerability of people living in poverty. Living with little margin, they often suffer most when the economy fails, war erupts, or disaster strikes. Yet this experience with calamity can build resilience, as CARD’s clients in Tacloban demonstrate so clearly. A few weeks after the most devastating storm to ever hit land, the people there are rebuilding, stocking up their store inventories, selling to and buying from their neighbors, and sharing what little they have with those still in need. They pool the relief that has made it to them, turning it into assets they can use to reconstruct their community.

This response to Typhoon Yolanda also shows the transformational impact that a financial institution can have when it focuses first on getting clients back on their feet, rather than concentrating on recoveries and write-offs. CARD was the first financial institution to bring cash back into Tacloban. By injecting a mix of capital and care, they helped give their clients the hope, energy, and resources to get moving again. And CARD was not alone in this. Microfinance institutions (MFIs) in other parts of the Philippines provided similar supportive programs that included loan moratoriums, food and medical aid, quick insurance payouts, and new capital for rebuilding. This type of assistance has sped the recovery of Tacloban, where every neighborhood is busy with people working to rebuild their homes and businesses, while also taking care of everyday tasks, like washing their clothes and cooking their food. They suffered unimaginable losses, but working together, they have found the strength to get back on their feet and start over.

Note: For the purpose of this report and the Summit’s 19-year fulfillment campaign, any mention of “microcredit” refers to programs that provide credit for self-employment and other financial and business services (including savings and technical assistance) to very poor persons

[1] CARD’s 1-3-5 payment policy is a pledge that guarantees payment for a claim within one day of the presentation of the required documentation, with payment provided no later than the fifth day from when a claim was filed.

[2] A sari-sari store, from the Tagalog word meaning “variety,” is a convenience store found in the Philippines.

[3] All interview excerpts and direct quotes not cited in the text are from interviews carried out by the Microcredit Summit Campaign.

Photo credits: Larry Reed for the Microcredit Summit Campaign