Emily Gordon’s experience as an intern with Grameen Foundation’s Bankers without Borders® volunteer initiative showed her that “Everyone can offer something when it comes to making the world a better place."

After spending four years studying international relations and international development in college, I graduated bright-eyed and eager to go out into the world and start making a difference. I spent the summer researching different jobs and opportunities, looking for some way to get involved in the world of microfinance. When I was offered an internship working with Grameen Foundation on their Bankers without Borders (BwB) initiative, I immediately packed up, moved to Washington D.C., and never looked back.

As a recent graduate, it can be hard to find a place where you feel you are truly able to contribute. It seems that most internships and entry-level jobs consist of filing, answering phones and taking notes. Volunteering at Grameen Foundation could not have been more different. From the moment I started, I was given interesting and exciting tasks. I helped critique and perfect the BwB’s “Blueprint Projects,” creating clear guides for volunteers working with microfinance institutions (MFIs) on risk management, financial projection modeling, human capital management and Progress out of Poverty Index™ (PPI™) certifications. I was also able to use social media to create awareness and help recruit volunteers for BwB. I interacted with staff members around the world and heard first-hand accounts from volunteers completing their projects.

Working with Grameen Foundation was an invaluable experience. I met great people, learned a lot about microfinance, technology-for-development and social enterprise, and most importantly, felt that I was able to use my skills to help make a difference in the world. That feeling of accomplishment was one of the best parts of volunteering with BwB. Many students, business professionals and retirees hear about microfinance and are eager to learn more and get involved, but without direct microfinance experience, it can be difficult to find a place to volunteer or gain experience. BwB helps people use the skills they already have to make a substantial impact on organizations fighting poverty all over the world.

You don’t need to be an expert on development to create positive change. Poverty-fighting organizations need experts in all different fields. During my time at Grameen Foundation I saw lawyers, marketing experts, graduate students, engineers, bankers and others help with different BwB projects. Everyone can offer something when it comes to making the world a better place.

Working with Grameen Foundation helped me see how microfinance and technology can change the lives of the world’s poor. I plan on taking what I’ve learned and continuing to work in international development. Wherever my life takes me, I know I will continue to be a BwB volunteer – part of a smart, passionate and hardworking network. I encourage anyone who is interested in helping others to volunteer with Grameen Foundation. It will be an eye-opening, life-changing experience.

For more information on volunteering with Grameen Foundation, please visit BankersWithoutBorders.com.

This document outlines the Working Group members’ vision for the positive evolution of the microfinance field and underscores their commitment to raising industry standards, starting with their own.  Central to this vision is the Working Group’s support for three ambitious initiatives that are helping to lay the groundwork for a more responsible, client-focused and transformative industry: the Smart Campaign, MicroFinance Transparency and the Social Performance Task Force’s universal standards for social performance management.  Alex Counts first talked about the group and its goals in this blog post.

The Microfinance CEO Working Group members call for their valued peers in the microfinance industry to take action by endorsing these three initiatives, transforming their principles into action, and striving for better ways to provide financial services for the poor.

The full text of the letter can be read here.

The Working Group welcomes your comments and feedback. For more information, please contact Meghan Greene, manager of the Microfinance CEO Working Group, at mgreene@accion.org.

Two years ago today, a massive earthquake devastated Haiti.  Some 250,000 people perished among a population of about 9 million.  Not only did this disaster kill a greater proportion of a nation’s population than any other in history, but it toppled thousands of homes and buildings, destroyed cultural treasures such as the national cathedral and killed dozens of U.N. workers, including the commander of the mission.  A chaotic relief effort and weeks of nonstop media attention followed.

When reporters return to Haiti on this anniversary, expect hand-wringing about bungled aid efforts juxtaposed with heart-warming tales of grassroots groups working effectively, though on a tiny scale.  But those storylines tell only part of the story.

It’s important to remember that 2009 was actually one of Haiti’s best years in decades.  Law and order, even in the worst slums, had become the rule rather than the exception.  Major infrastructure projects were nearing completion.  Despite his flaws, President Rene Preval allowed a vibrant free press.

Since then, positive trends have quietly continued.  Travel times to the central plateau have been cut substantially.  A massive teaching hospital – a joint venture between Zanmi Lasante and the government – is nearing completion.  The cholera epidemic could have been much worse.  A new president emerged from a credible if messy democratic process, and is popular at home and abroad.

Though much post-disaster aid was used unproductively, some of it effectively built up Haitian institutions that predated the earthquake.  One of the most exciting of these local organizations is the country’s leading microfinance institution, Fonkoze (Creole for “shoulder-to-shoulder foundation”).

Fonkoze borrowers like the women above join "solidarity groups" that enable them to support each other.

The earthquake devastated many of Fonkoze’s 50,000 loan clients (and their micro-businesses), as well as its 200,000 depositors and 800 staff.  The headquarters were destroyed and one-quarter of its 41 branches were badly damaged.  With the banking system shut down, within days Fonkoze was running short of cash to pay out remittances.  (Fonkoze’s national network of branches was more extensive than any of the country’s financial institutions, so it was a key player in enabling people to receive money sent from relatives working abroad.)

Did this organization collapse under the weight of the quake and its aftershocks?  Far from it.  In fact, today it is probably stronger than at any time in its history.

Fonkoze did not stand idly by in the hours after the temblor.  When funds began to run dry, a daring airlift of $2 million in cash from Fonkoze’s bank in Miami to 10 locations throughout Haiti – accomplished with the support of the U.S. military and the Multilateral Investment Fund – succeeded in record time and without the loss of a single dollar.  Fonkoze went on to pay out $95 million in remittances during 2010, earning a tiny commission on each transaction.

A few enlightened donors saw the potential of leveraging Fonkoze’s human and physical infrastructure and relationships with tens of thousands of small business owners (mostly women).  Initially it was proposed that the entrepreneurs pre-earthquake loans be forgiven and new ones dispersed, in an effort to quickly jumpstart the rural economy.  Fonkoze’s management had a slightly different idea – one that the American Red Cross, Whole Planet Foundation, Fonkoze USA and others agreed to support.

The plan?  All loan clients would be treated as if they had taken out a catastrophic insurance policy that was weeks away from being launched when the earthquake hit.  This would not only get the clients fresh capital quickly, but it would also teach them to benefits of buying insurance.  Nearly 20,000 micro-businesses were recapitalized in a matter of a few months.

When the micro-insurance program was formally launched in January 2011, clients embraced it, gladly paying 3% of their loan amount as a premium.  When floods hit southern Haiti nine months ago, Fonkoze received a payment from its insurance partners of more than $1 million, enabling it to quickly get 4,000 clients back on their feet without a single dollar of “aid.”

As the international community considers its next steps in supporting Haiti, or in responding to other disasters, I hope that the transition from the “search, rescue, shelter and feed” phase to one focused on strengthening local institutions will be faster.  Defaulting to doing business with “Beltway bandits” must stop.  Organizations like Zanmi Lasante and Fonkoze, which have “sandals on the ground” long before a disaster strikes, can be powerful and cost-effective engines of reconstruction and innovation.

Anju Jaiswal lives in a remote village of Dheena in the state of Uttar Pradesh, India, where she and her husband, Ghanshyam, own a small kirana, or grocery.  Using a loan from Cashpor, a local microfinance institution (MFI), Anju is able to stock her family’s store with vegetables, provisions and other essential household items.  Her store serves the surrounding agricultural community, which can make earning a regular income challenging as most of her clients have seasonal farm jobs.  She uses most of the income she earns from the store to feed her family, often leaving very little for savings.  When the family is able to save, they keep their savings at home, like many other poor households.

For poor, rural households like Anju’s, opening a savings account poses several challenges.  The nearest Cashpor branch, for example, is 10 kilometers (about 6 miles) from Anju’s home, which means she would have to spend valuable time away from her business to go there.  In addition, the prospect of opening a savings account can be overwhelming for households that tend to have little schooling and low literacy skills.

On the other side of Uttar Pradesh, another Cashpor client, Sangeeta, lives with her husband and in-laws.  Sangeeta and her husband work in the family business in the remote village of Chaubeypur, making cardboard boxes used for packing sweets.  Though her husband has a bank account with one of the national banks, it’s often difficult for him to go to the nearest branch to deposit his savings because of distance and time constraints.  In fact, his account has been dormant for the past year and a half.

Thanks to Grameen Foundation's Microsavings Initiative and the work of its partners Cashpor (a local microfinance institution) and ICICI Bank, Sangeeta is now able to save a little each week to provide security for her future.

Poor, rural households face three common challenges when it comes to banking with a formal institution:

1. Many of them don’t use existing bank services because they’re too far away and don’t offer the services they need
2. They typically have very small sums to deposit, making the long trip to the bank not worth the time they lose
3. They are intimidated by documentation required for opening accounts because of low literacy and lack of self-confidence

To meet these challenges, Cashpor – in collaboration with ICICI Bank and Grameen Foundation – began in June 2011 offering the Apna Savings Account to more than 379,000 female clients, as well as non-clients, living in Uttar Pradesh and Bihar.  To date, Cashpor has enrolled more than 15,000 new savings customers – including Anju and Sangeeta – in more than 140 branches in five districts.  The demand for Apna (which means “ours” in Hindi) has been extremely high, with 300 to 500 new savers being added daily.

The savings product is designed to help the client overcome the challenges above.  Staff members conduct new-client enrollment via mobile phones, using the phone number as the account number.  Cashpor savings officers travel to clients to take their savings deposits (which clients can also make using their mobile phone), much as they do with traditional micro-credit clients. Deposits are then automatically updated, so clients can immediately check their balance using their phones.  Clients also can deposit, withdraw and send remittances through their phone using their mobile savings accounts.

As the project has grown, the partners have faced a few challenges in implementing the mobile savings account.  The biggest obstacle has been overcoming the cultural barriers in India to women owning a mobile phone, which is seen as a tool of the young and not respectable for Cashpor’s clientele, who are largely in the 31-45 age group.  However, when one group member decides to use the phone, we’ve seen that it is a powerful example to the others in the group.  In fact, 80 percent of Cashpor’s customers do have access to a phone (either their own phone or one they share with the rest of the household), so the potential for them using this savings account is large.  Current Cashpor clients and also non-clients are also expressing a strong willingness to buy a phone so that they can have access to formal-sector financial services.

For many women, having a savings account provides security. The savings provide a safety net for emergencies or household purchases, which is critical for poor women, who sometimes find it difficult to own property or assets.  At first, Cashpor’s clients feared their husbands would be able to check their balances on their phones, but now they’re realizing that saving with Cashpor provides more, not less, security for their savings.

The lives of Anju, Sangeeta and others who’ve taken up the new savings service have changed for the better. Grameen Foundation and its partners are working to bring safe, reliable savings accounts to poor women in rural India, provide quality customer service and use innovative approaches that will create a sustainable change in the lives of millions of poor women and their families.

Offering savings programs for the poor can be challenging. First, the microfinance institutions (MFIs) that want to offer these services are competing with a variety of alternatives, such as home-based savings (under mattresses, in strongboxes, etc.), or keeping money with relatives or neighbors. Second, offering savings products fundamentally changes the relationship between the MFI and its customers.  When clients only want loans, making that the primary purpose for their interactions with the MFI, there is a standard process. Taking voluntary customer deposits radically changes that relationship, to one that is initiated by the customer and that involves varying amounts of deposits or withdrawals. In other words, the customer interaction is less predictable.  At any time of the day or night, the customer can ask for her balance and withdraw from it.

A loan officer from CASHPOR in India processes loan payments on her mobile phone.

Grameen Foundation’s Microsavings team has found that poor customers all want to have easy and convenient access to their funds.  The MFIs we work with face common technology challenges involved with providing such access.

In this post on the CGAP Technology Blog, Leo Tobias, our technology program manager for the Grameen Foundation Microsavings Initiative, discusses two of the major technology challenges facing MFIs.

Sugia Devi was a changed woman on November 7, 2011. She had just left the free cataract clinic in Bodhgaya in India’s northern state of Bihar and was grateful for her improved eyesight. She couldn’t wait to thank the people who had made it possible: the members of her adapted self-help group (ASHG).

Sugia Devi and her husband.

The group is part of Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School that is designed to enhance the skills of the ultra-poor, link them to income-generating activities and build their savings habits.

Sugia lives in Khaneta village with her husband and her son, and his family. When she first heard about the ASHG in August, her husband did not want her to join the program because of mistrust and a lack of understanding about the benefits of participation. She persisted and began attending meetings and saving a small amount each week. Starting with an initial deposit of 10 rupees (about 2 cents), by November she had saved 130 rupees (about $2.40). But it still wasn’t enough to pay her fare to get to the free clinic in Bodhgaya some 30 kilometres (19 miles) away.

That’s when Sugia turned to the members of her ASHG. In addition to providing a safe place to save, the groups also provide its members with quick access to short-term loans. Sugia’s group members approved her loan of 100 rupees, enabling her to cover her transportation costs for her operation.

Today, Sugia’s husband has a better appreciation for the value of the self-help groups, while she knows that her family can rely on the group when they need help. As her husband noted, before the ASHG, the family would have had to borrow from moneylenders who typically don’t lend less than 500 rupees (about $9), at very high interest rates.

Sugia has recovered from her operation, and now Friday – the day her ASHG meets – has a special importance in her life.

Last week I had the pleasure of visiting the historic city of Istanbul for the first time, on the occasion of the first Grameen-Jameel (GJ) partners meeting, followed by a two-day meeting of GJ’s Board of Directors, on which I serve.  GJ is a joint venture launched five years ago between Grameen Foundation and the Jeddah-based Abdul Latif Jameel Group to advance microfinance and poverty reduction in the Middle East and North Africa (MENA), and now Turkey as well.  (Peter Bladin and Jim Greenberg are the other two Grameen Foundation representatives on the GJ Board, while Fady Jameel is one of the two Jameel Group appointees, in addition to chairman Zaher Al Munajjed.)

The partners meeting was elevated by the presence of not just representatives of 13 of the 15 GJ’s partner microfinance institutions (MFIs), but by Grameen Bank founder and Nobel Laureate Professor Muhammad Yunus.  (The only MFIs that did not join were one from Egypt and one from Syria, the latter due to the inability to get a visa, because Turkey has closed its embassy there.)

Prof. Muhammad Yunus speaks to the crowd at the Grameen-Jameel partner meeting, held in Istanbul.

The first day of the meeting consisted of an excellent overview by its General Manager, Julia Assaad, of GJ’s accomplishments.  She announced that GJ had surpassed its goal of reaching 1 million poor families with microfinance through its partner MFIs to date, and had in fact crossed the 1.5-million mark in September.  Representatives of five of the partners – the Turkey Grameen Microcredit Program (TGMP)in Turkey, Enda Inter-Arabe in Tunisia, DBACD in Egypt, Tamweelcom in Jordan and FONDEP in Morocco – spoke about their journey of starting and growing their organizations, and how GJ was able to help them in critical ways.One of the speakers was Prof. Aziz Akgul, founder of TGMP, the largest MFI in Turkey (with more than 80 branches serving more than 55,000 families) and a key GJ partner.  Also present was Maya, the second leading MFI in Turkey and the first established there. It is one of the world’s few MFIs that not only serves 100% female clients but also has an all-female staff serving them.

But before these presentations, Prof. Yunus spoke.  He congratulated GJ and its partners on their accomplishments and detailed the track record of the Grameen family of companies, especially Grameen Bank, Grameen Shakti and some of the most successful social businesses.  There were many probing questions from the delegates, who clearly enjoyed hearing from Prof. Yunus.

In the afternoon, I led a session related to lessons learned in crisis management, drawn from Grameen Foundation’s partners around the world, especially in India and Haiti.  This was followed by formal presentations about the recent experiences of the LEAD Foundation in Egypt and Al Amal Bank in Yemen, both of which have had to manage their operations despite civil unrest and revolution.

After an open discussion period, Professor Yunus offered some concluding remarks.  He noted in particular how impressed he was by the courageous behavior of the staff of Al Amal Bank.  He warned that, based on the post-independence experience in Bangladesh, things in the “Arab Spring” countries are likely to get worse before they get better.  However, he said that new governments – regardless of ideology – ultimately figure out that they need microfinance to thrive in order to be successful, so he urged the MFIs to put aside their own political beliefs and be open to responding to overtures from whatever leadership emerges in countries now in transition.

That evening, GJ hosted a dinner at which local business leaders joined the delegates at a restaurant on the Bosporus River, where attendees heard Prof. Yunus give yet another speech. He was introduced by GJ Chairman Zaher Al Munajjed, who publicly announced the achievement of 1.5 million families reached by Grameen-Jameel through its MFI partners.

The next day, Prof. Yunus gave speeches at Okan and Sanbanci Universities.  At Okan University, he inaugurated the “Muhammad Yunus International Centre for Microfinance and Social Business.”  The event at Sanbanci University was hosted by Prof. Nakiye Advan Boyacigiller, the Dean of the School of Management, attended by the chairman of the university’s board of trustees and was arranged by Mr. Al Munajjed.  In between those speeches, Prof. Yunus returned to the closing luncheon of the partners meeting to give some words of inspiration.

The second day was spent designing a road map for the partners and GJ to maximize their poverty-fighting efforts in a region in turmoil.  Muhammad Khaled – one of the most respected microfinance consultants in the Arab World, who established and ran an MFI in Palestine, and was the co founder of the Sanabel microfinance network in the MENA region – spoke to several of us about the accomplishments of GJ over the past five years.  While he said that reaching 1.5 million families was impressive, he thought that our impact went far beyond reaching this milestone. He noted that due to GJ’s efforts, banks in Egypt had begun lending to MFIs much more aggressively and, as a result of a new standard being set, more than $150 million in additional financing had become available to MFIs in Egypt alone.  (By way of comparison, GJ’s annual budget has always been less than $3 million.)

He also emphasized the impact and influence of the Progress out of Poverty Index^® – the social performance management and accountability tool based on Grameen Bank’s “Ten Indicators of Poverty.” GJ’s work to promote its use, he said, has helped the PPI^® become the industry standard in the region and globally.

Attendees at the Grameen-Jameel partner meeting mingle during a coffee break.

In a separate conversation I learned that Enda Inter-Arabe, the leading MFI of Tunisia, took advantage of the change of government there to secure the census data needed to design a PPI for that country (the tool is country-specific), and I assured the people I was speaking with that we would start the process of designing it right away.  It is exciting to see another country where the leading MFI uses this leading tool, which was commissioned by Grameen Foundation, in collaboration with CGAP and the Ford Foundation, and now being deployed by Grameen-Jameel in the MENA region.

After lunch, the delegates visited a branch of TGMP, the leading Turkish MFI.  In the evening, they dined at a traditional Turkish restaurant and, with the assistance of a three-piece band, sang and danced for hours.  The final sub-group returned to the hotel at 2:45 a.m.!

The Arab World is an unstable place right now, but it is also full of promise and a degree of optimism for the long term that I have not sensed before.  (I have been traveling there several times a year since my first trip in January 2002.)  Grameen-Jameel – the Arab World’s first social business and Grameen Foundation’s first joint venture – is in a unique position to contribute to realizing this promise, especially after this historic meeting and the timely advice and inspiration of Prof. Yunus.

With these solutions, a smallholder farmer will be able to know the specific prices for his crops and the best weather conditions for planting and harvesting, without even having to leave his land.

The pilot will start in Urabá and Santa Marta, areas that were hard hit by Colombia’s internal conflicts. Over the next year, we will begin using research that was conducted earlier to test applications that will enable farmers to access information more easily and provide the organizations that serve them with tools to do so more effectively.

In addition, we will be tapping volunteers from MasterCard to work on this project and other global initiatives through Bankers Without Borders®, Grameen Foundation’s volunteer program.

Listen to Alberto Solano, Grameen Foundation’s regional CEO for Latin America and the Caribbean, discuss this initiative.

Read more at the MasterCard Worldwide blog.

Debora is a client of Tujijenge and serves as treasurer for her loan group. She sends repayments for the group using M-Pesa on her mobile phone.

Although MFS has been successful in Tujijenge, there are key lessons to be learned from this implementation. What was evident from the study was that customer awareness and training is key. Tujijenge did invest a lot of time training clients, conducting training at each group meeting, and creating informational pamphlets with simple language. Literacy levels in Tanzania are quite low, leaving a question over the success of the training and pamphlets, and whether clients had to struggle to understand the product, which would affect how easily and quickly they trusted the system.

The MFI’s staff are happy with the initiative. However, they are challenged by the down-times by the Mobile Network Operators’ system and the low literacy levels of most of their clients, which means they must spend a lot of time helping clients send their repayment. This close assistance can lead to fraud, as a loan officer may send money to his or her own phone account or to a wrong account, intentionally or accidentally. One way of mitigating this risk involves proper client training and awareness.

Another challenge involves the country’s financial regulator, the Central Bank of Tanzania, which regulates the amount that the e-wallet can hold per day. Each SIM card can only send a fixed amount of e-money per day and the transaction cost for loan disbursement is fixed at 1% of the value disbursed to the client. Due to these limitations, Tujijenge is not actively using mobile for disbursement.

Additionally, we have learned is that it is important to peg an MFI’s key performance indicators to any incentive scheme for staff, to motivate staff to enroll more clients into using the system when an MFI is rolling out MFS.

We’ve seen that market research is key to implementing mobile. MFIs interested in implementing such a program should always visit other regions where MFS is working, and do their own research, to familiarize themselves and contextualize how MFS works. “Copy and paste” never works! Remember that a different environment will always offer its own unique circumstances.

Finally, manage your expectations when rolling out an MFS solution. Tujijenge expected that many clients would be interested, but discovered many pitfalls after the pilot because it did not conduct enough market research prior to implementation, and so lacked information.

Asha Devi’s eyes sparkled as she rolled agarbatti (“incense sticks” in Hindi) for the first time. Asha is a member of an adapted self help-group (ASHG) in Pali, a village in India’s Bihar state, where the Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School, is being implemented. The sparkle in Asha’s eyes reflects newfound self-confidence and pride that by selling handmade agarbatti, she will be able to supplement her family’s income.

Women from the program hold up their newly-rolled agarbatti (incense sticks) during training

Nearly 100 women from six village ASHGs participated in our week long training. Agarbatti rolling, which is a common activity in almost all of the villages in the Gaya district of Bihar, is one of two income-generating activities being promoted through the project. These activities require simple skills and provide modest increases in income to help households meet their immediate consumption needs. As the clients’ confidence levels and skills increase, the project team will transition them into entrepreneurial income-generating activities, such as poultry farming and goat rearing, which require higher initial capital investment and skill sets but can significantly help fill income gaps throughout the year.

The agarbatti rolling training was unique not only because it was the first time women from the poorest families were receiving it, but also because it was the first time local women were given a leadership role to train their fellow community members. The experience of having a local woman train them in this skill helped increase the participants’ confidence, leaving them optimistic about their prospects and ability to contribute to their families’ income. While agarbatti rolling is common in the region, many of the households participating in our project had never done it because they live in relative isolation, making it more difficult for them to access agarbatti agents and vice-versa. Instead, they have depended largely on wage labor from agriculture production, construction work and road building.

Faced with very unpredictable and insecure income sources, these families have not had the luxury of time nor the opportunity to experiment with an entrepreneurial activity. In fact, these households often lack the necessary self-confidence to take up and learn a new activity, even such low-skill ones as agarbatti rolling. One of the aspects of the project is building the self-confidence of the members and, which, thus far, has been successful.

This training is the beginning of a change in this aspect of these women’s lives. As their self-confidence grows and they see their income rise, this positive change cycle will encourage them to seek out other opportunities. As they move forward, our team will work with them to continue on this path.