#tbt: Green Energy and Green Jobs for Bangladeshi Villages

Muhammad Yunus and Queen Sofia of Spain visit a village in Bangladesh served by Grameen Bank (2007)

Muhammad Yunus and Queen Sofia of Spain visit a village in Bangladesh served by Grameen Bank (2007)

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We are pleased to bring you this #ThrowbackThursday blog post, which was originally published as a Box in the The State of the Microcredit Summit Campaign Report, 2009. Grameen Shakti (GS) announced at the end of 2012 that it had reached its first landmark of one million Solar Home Systems (SHS) installed in the rural areas of Bangladesh. In the press release, they said, “Grameen Shakti replaces millions of litres of kerosene by these 1 million SHS and reduces CO2 emission substantially. On an average, GS installs over a thousand solar home systems per day, working with a workforce of 12,000 young people. We are looking forward to witness the signpost of the next million by 2016.”


Dipal C. Barua, Managing Director, Grameen Shakti (www.gshakti.org)

The First Steps to Break the Energy Divide

Grameen Shakti (GS) was created in 1996 to reach rural people with clean, affordable energy through renewable energy technologies.

Bangladesh is rich in sunshine. That is why Grameen Shakti’s first initiative was to popularize Solar Photo Voltaic (SPV) technology. By owning a solar home system (SHS), a rural family can enjoy lights, television, radio, and can power their mobile phones. The up front costs are high, but once they are paid, there are no additional costs, load shedding, or ever increasing electricity bills. This makes a huge difference in the quality of life and income generation in a country where 80% of the people still do not have access to electricity.

A Business Model Suitable for Rural People

Government initiatives to meet the energy needs of the rural people have failed in most developing countries. Grameen Shakti, in contrast, was successful in taking the world’s most up to date technology to the rural people.

The first challenge was to acquire start-up funds and build a network to reach rural people. GS depended on soft loans and grants to start its program. GS also worked with local and international engineering institutions to recruit and train engineers to develop its in-house capacity. Currently more than 50% of GS staff are engineers and they are deployed all over Bangladesh. In addition, local technicians and users were also trained. This means local jobs, community support and efficient after-sales service at reduced costs.

The second challenge was to develop a financial and technical package suitable for rural people. Innovative application of microcredit made a SHS affordable at the same cost as kerosene while ensuring income generation and new business opportunities such as mobile phone vendors and televisions in shops. Special Packages such as a Micro-Utility Model allowed one system to be shared by many shopkeepers, linking the technology with income generation.

Initially GS engineers had to make door to door visits to demonstrate the effectiveness of the solar home systems. Once the villagers became aware of the multiple benefits of a SHS, the system sold itself.

Increased sales have decreased overhead costs which helped GS provide further credit options to the rural people. Local production of solar accessories has further reduced costs. GS reached break even point in 2002. This success drew the attention of the World Bank and other funding institutions and GS was able to source soft loans through the Infrastructure Development Company limited (IDCOL).

Future Vision: Creating 100, 000 Green Energy Entrepreneurs by 2015

Grameen Shakti also has a thriving Biogas and Improved Cooking Stoves Programs (ICS). Biogas plants are providing cooking gas, light, electricity and organic fertilizer to rural people with livestock. Poultry owners have especially benefited. They get rid of poultry wastes, reduce energy costs and earn extra income by renting biogas. ICS are popular with rural women because they can cook in smoke-free kitchens and cut their fuel cost in half. GS plans to construct 500,000 biogas plants and 10 million ICS by 2012.

To reach these goals, GS plans to create 100,000 Green Energy Entrepreneurs by 2015 and has set up 30 local Grameen Technology Centers to train rural women as technicians and entrepreneurs.

GS’s vision was to empower the rural people by giving them access to renewable energy technologies. In the next decade, GS will further this vision by creating green jobs and green businesses at the rural level to bring light, income, health and clean energy to rural people.


Related reading

#tbt: The 1997 Microcredit Summit, where it all began

#Tbt_14

Dignitaries who attended the 1997 Microcredit Summit.
From L-R: Tsutomu Hata, Former Prime Minister, Japan; H.E. Pascoal M. Mocumbi, Prime Minister, Mozambique; H.E. Alberto Fujimori, President, Peru; H.M. Queen Sofia, Spain; H.E. Sheikh Hasina, Prime Minister, Bangladesh; Hillary Rodham Clinton, First Lady, United States; Prof. Muhammad Yunus, Managing Director, Grameen Bank, Bangladesh; Elizabeth de Calderón Sol, First lady, El Salvador; Ana Paula dos Santos, First Lady, Angola; H.E. Dr. Siti Hasmah, First Lady, Malaysia; H.M. Queen Fabiola, Belgium.

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We are pleased to bring you this #ThrowbackThursday blog post, which was originally published in the 1997 Microcredit Summit Report. As we explore the Six Pathways in financial inclusion to end extreme poverty, we look back at the wise words leaders from around the world had to say about ending poverty. We’ve included just a few in this blog post.


Connie Evans*, President, Women’s Self-Employment Project, Council of Practitioners

Connie Evans

Connie Evans is now the president and CEO of the Association for Enterprise Opportunity

Collectively, we represent what can be a glorious future with our voices and our vision. It is a vision for a global movement whereby poor families, especially the women in those families, are joined by practitioners, CEOs, Presidents and Parliamentarians, advocates from all disciplines and walks of life, to eradicate poverty. A global movement whereby microcredit, microfinance, and microenterprise are supported and fostered.

As practitioners, we must develop — and continue to develop — programs that directly and profoundly empower people to help themselves. We must develop and manage sophisticated data information systems so that we can strategically share best practices and avoidable mistakes. We must develop human and financial resources to sustain the best programs. We must hold accountable all those responsible for the management and administration of our governments…And, most importantly, we must incorporate our clients into decision-making positions in our institutions, our communities, and our governments…

Be renewed, be assured, have courage, and let’s all be bold. Embrace the goal of the Microcredit Summit. Speak loudly and proudly of our task to reach 100 million of the world’s poorest, especially the women, with all the tools of microenterprise…Give your voice to the vision and make your commitment to the Declaration and Plan of Action.

Fawzi al-Sultan*, President, IFAD, Co-Chair, Council of International Financial Institutions

Access to even small-scale deposit and credit services, together with other productive services, can work something close to miracles. Our experience, in a variety of conditions across the developing world, underlines that the rural poor are really bankable…

We must nonetheless keep in mind not only the benefits but also the limits of microfinance as a tool…it is not enough by itself to ensure sustainable development for the rural poor. the poor equally need access to better technologies, to health and education services, to fair markets and adequate infrastructure…

Throughout our efforts, we must make sure our work addresses the real needs and priorities of the people we want to serve. We also need to be realistic about the capacity of the microfinance providers themselves…Banking with the poor requires good management ability, especially in controlling the costs of operations and in assessing risks…

And, finally, we have to make sure the financial sector as a whole is set up to support our efforts…Interest-rate structure, monetary policy, and requirements for registration and reserves can make or break microfinance providers…

To help [the Summit’s] goal, IFAD is committed to allocating up to 30 percent of its loan portfolio, or about US$ 125 million a year, to promote financial services to the poorest…

We will integrate the microfinance strategy into our overall program planning and work with others, wherever possible to further the Summit Action Plan.

*Connie Evans is now the president and CEO of the Association for Enterprise Opportunityand Fawzi al-Sultan is now a senior partner with F&N Consultancy.

Related reading

Voices from the Field: Essma Ben Hamida

Pathways: financial inclusion to end extreme poverty | Find out what we heard from the industry in this year’s Listening Tour

We’ll be bringing you articles throughout April that reflect the results of this year’s Listening Tour Photo credit: by Geoff (originally posted to Flickr as Pilgrim’s path) [CC BY 2.0], via Wikimedia Commons

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In preparation for our 18th Microcredit Summit, the Campaign conducted a Listening Tour from December 2014 through February 2015. The Listening Tour served two purposes. First, it was our hope to find out how our audience (you) felt about on the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were at the top of everyone’s mind.

April is the Month of MicrofinanceLearn more

April is the Month of Microfinance
Learn more

The Listening Tour is our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face. We collected your feedback through an online survey and organized conversations with 27 leaders in the microfinance and financial inclusion sector. We heard from them on how financial inclusion can contribute to the goal of ending extreme poverty by 2030 and the role of microfinance in the post-2015 agenda. The results of this consultation will be reflected in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.

Below is a short excerpt from our conversation with Essma Ben Hamida, executive director of Enda Inter-Arabe in Tunisia.

Q: What do you think will be needed to achieve the goal of global financial inclusion by 2020 and how can this contribute to the goal of eradicating extreme poverty by 2030?

Essma Ben Hamida

Essma Ben Hamida is executive director of Enda Inter-Arabe in Tunisia

I’m not very optimistic, given the current situation. Banks and MFIs are having a crisis of liquidity especially during this last financial crisis. There is a lot of money in the MENA region, but our outreach numbers are low compared to other regions. Also, with just 1% of the population projected to own 50% of global wealth by end-2015[1], it is hard to see how the poorest can hope for financial inclusion. If it were possible, it would make an important contribution since without access to any financial resources, it is impossible even to work your way out of poverty. Those 1%, frankly, could not care less.

Q: In relation to our host region, what are the challenges and opportunities facing Africa & the Middle East in regards to microfinance and financial inclusion?

In Tunisia, we had a fairly successful democratic transition, much better than some of the other countries in the region, though we were still impacted by the situation in Libya. Banks didn’t have money because wealthy people were hiding money somewhere else, but now it seems we are getting back to normal. Enda is working more now after the revolution and our portfolio is again looking healthy. From time to time, we have to close a branch for a day or two, but I believe that the crisis has demonstrated the need for microfinance. [The revolution] has caused a lot more people to start a small business and the need for microfinance has grown strongly.

The MENA region is undergoing a democratic transition, and we need to make sure women and youth are included among the beneficiaries. They helped create that movement and we must listen to their frustrations and needs and find solutions. This can be achieved partly through creating and strengthening micro-enterprises thanks to micro-finance services.

Women empowerment is very important for the Arab region. Besides loan disbursement [to women], Enda does a lot of training, discussions, partnerships with NGOs, support for marketing, and computer literacy training as well as exposing them to different models and ideas. It’s important to talk about how we can empower [women] through financial literacy and overall citizenship education. For youth, we have to invest in their start-ups and assist with non-financial services such as training, coaching, developing business plans, exchange visits, and a lot more.

Q: What are key themes to consider or important debate topics we need to address in the microfinance & financial inclusion sector in the coming year?

Technology can help in many ways. For instance, mobile banking can save time and money for clients and reduce costs for MFIs. Using tablets and relevant apps can hugely improve loan officers’ performance. We see technological advances in financial products and services, and as a region, we want to know how to use them. They seem to be working well in some places in Africa (M-PESA), but what other experiences are working in our region? But governments, especially central banks, must encourage this rather than setting up barriers to technologies that have been working in other countries for several years already.

I also would add crowdfunding as an alternative source of funding for financial inclusion of the millions of micro-entrepreneurs in our region. It is still ignored and even rejected by central bankers in our countries. An exchange between central bankers and Kiva (USA), Babyloan (France), and other crowdfunding groups for microfinance would be very helpful for the industry in our region. Overall, we need to work to bring different models from around the world to learn from all the regions.

About Enda Inter-Arabe

Enda is the first and by far the largest microfinance institution in Tunisia. With a staff of close to 1,200 working out of 80 branches, Enda serves 250,000 active clients with a US$110 million loan portfolio and a global repayment rate which stood at 99% at end-2010 before the revolution in 2011. Today, it has declined to a still-respectable 96%, though quite a few clients are facing difficulties due to current economic problems in the country.

In addition to issuing traditional lines of credit, Enda has developed specialized products including education, housing and agriculture loans, and has recently introduced a special loan to encourage young people to launch into self-employment. Enda also provides business development services, including financial literacy classes, vocational training, marketing, and workplace guidance.

Prior to her career in microfinance, Essma worked as a journalist/reporter in Tunisia, New York, Rome, and Geneva and as a consultant for the United Nations. She has received distinguished awards and decorations. She was selected outstanding social entrepreneur for the MENA region in 2010 by the Schwab Foundation and the World Economic Forum.

Visit Enda Inter-Arabe’s website: http://www.endarabe.org.tn/

FOOTNOTE

[1] Oxfam International press release (1/19/2015), “Richest 1% will own more than all the rest by 2016.” Accessed 4/1/2015: https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-own-more-all-rest-2016

Relevant resources

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

How are you building financial capability among clients?

BRAC group meeting

How are you building financial capability among clients? Take the Center for Financial Inclusion’s financial capabilities survey today!
Photo credit; BRAC

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Reposted with permission

Calling All Innovations in Financial Capability! A New FI2020 Project Needs to Hear about You

March 24, 2015 | Center for Financial InclusionCFI-at-ACCION-logo

>> Authored by Julia Arnold, Research Consultant

A colleague recently shared a story about helping a friend’s housekeeper open a Jan Dhan Yojana account in India – a free bank account offered through India’s massive new financial inclusion scheme. After being stonewalled by the bank teller and yelled at by the assistant manager, who insisted the bank no longer offered the account, my colleague and the housekeeper were ushered into the bank manager’s office. The bank manager proceeded to ask the housekeeper for multiple forms of ID, none of which are required for the Jan Dhan Yojana account. Only when the bank manager recognized my colleague as a financial inclusion expert and author of a scathing newspaper article on the Indian banking sector, did he “make an exception”. When the housekeeper returned the following day to get her debit card, she was asked for payment. Luckily, she pointed to a copy of a pamphlet in the local language, which showed that she should be allowed to open the account without a deposit. Now, after all that, she is a member of the formal banking system of India.

What this story shows is that a decree that banks must offer a financial product to the unbanked is not enough. Educating frontline staff, shifting workplace culture, and strengthening consumer protection laws are all key changes needed to enable genuine inclusion.

Read the full article.


Innovations in Financial Capability Survey

CFI is seeking innovations in financial capability to understand the range of ways the financial inclusion world is building financial capability among clients with an emphasis on innovations and use of tech and integration of behavioral insights. Financial capability refers to a person’s knowledge, skills, attitudes, and behavior, which lead to more informed, personal financial choices and outcomes. Innovations refers to any new or a new use of a delivery mechanism, program idea, or process. We are searching both for stand-alone efforts and especially for elements that are integrated directly into other processes.

Fill out the survey.

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.

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.


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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

 

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