Asking the Right Questions Makes All the Difference

Sally Salem was an Atlas Corps Fellow at Grameen Foundation, where she worked with the human capital management team for a year learning and designing toolkits to support the strategic adoption of human capital practices at microfinance institutions.  Sally has more than a decade of experience in non-formal education and development and has worked with adults and young people on issues ranging from youth participation, volunteering, intercultural learning and human-rights education.

After working with Grameen Foundation’s Human Capital Center for a year as an Atlas Fellow, it was time to return to Egypt.  Looking back now on my year-long stay, I realize that I was lucky to have had Grameen Foundation as my host and to have worked with the human capital management team.

Thanks to good timing, one month after my fellowship ended, I had an opportunity to put all the theory I had learned into practice. I was invited to support an engagement with the Lebanese Association for Development-Al Majmoua, a leading microfinance NGO in that country, part of a collaborative effort between Grameen Foundation’s Human Capital Center and Grameen-Jameel Microfinance Ltd., a joint venture between Grameen Foundation and the ALJ Foundation, a subsidiary of the Abdul Latif Jameel Group.  My task was to help facilitate a human capital management assessment – the starting point for aligning an organization’s people practices with its business strategy.  As a native Arabic speaker with working experience in Lebanon and deep familiarity with the assessment, I was eager to volunteer my services through Grameen Foundation’s skilled-volunteer initiative, Bankers without Borders^®.

In Sidon, Lebanon, Sally (right) met Osama – a photographer and Al Majmoua client – who is carving out a niche in her city’s male-dominated photography industry.

Lebanon has an interesting (and somewhat tragic) modern history that some say sums up the story of the Middle East in the last 60 years or so. It is a country with a strong Phoenician heritage – sea people who made great ships using their mighty cedar trees and who explored the unknown Mediterranean at a very early stage of human history. This is still reflected in the adventurous character of today’s Lebanese people. There are more Lebanese outside of the country than in Lebanon. They are known for their entrepreneurial spirit, and wherever they go they prove to be clever merchants, excellent hosts and good cooks! What a great environment for microfinance to thrive and grow.

Grameen-Jameel Is Strengthening Microfinance in the Middle East

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World.

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.

Reflections of our journey (Part 5)

Kathleen M. Snoddon recently returned from Morocco where she was able to witness microfinance first-hand. This is the final entry in a five-part blog series about her journeys.

FONDEP Borrower

Having left Baiya’s with apologies for not being able to stay longer, we approached our original meeting place and could see our companions gathered and waiting our arrival.  It was hot and they were both exhilarated and spent by the activities and encounters of the last several hours. I wanted to stay longer. I wanted to spend time with each and every   woman who had made the effort to forge a future for themselves and their families.  I wanted to hear what their aspirations were for themselves and their children.

Reflections of our journey (Part 4)

Kathleen M. Snoddon recently returned from Morocco where she was able to witness microfinance first-hand. This is the fourth in a five-part blog series about her journeys.

Fennan and her goats

Fennan appeared to be in her early thirties.  She was pregnant with her fourth child.  Her other children were gathered around her, hiding behind her skirt and peering curiously at our group. Her loan from FONDEP had been 2000 Moroccan Dirham, about $250.  With it, she purchased two goats.  That was three years ago.  Her goats have since multiplied.  She has six.  Each morning, Fennan milks her goats and walks to the nearest market to sell the milk.  The trek is 7 kilometers each way, 14 kilometers each morning. This provides her with 30 Moroccan Dirham a day in income, $3.70.  Her husband, like most men in the village is a farm laborer. He works seasonally to plant and harvest the olive and apple trees and other products including lavender and fava beans that are grown in the countryside on the land owned by the “wealthy” men from the city. Fennan’s earnings provide a steady income for the family.

Reflections of our journey (Part 3)

Kathleen M. Snoddon recently returned from Morocco where she was able to witness microfinance first-hand. This is the third in a five-part blog series about her journeys.

Muhammad Yunus’ model for non-collateralized, small loans consists of the formation of groups or “pods” that serve as a support system to guarantee that any one person does not default on their loan. Groups are formed with women who usually know each other and are, preferably, engaged in different enterprises.  This peer system has proven very effective and provides more than just monetary fall back in the case of sickness or an event that interferes with a borrower’s ability to make her loan payments. There is an emotional support system inherent in this structure.

Reflections of our journey (Part 2)

Kathleen M. Snoddon recently returned from Morocco where she was able to witness microfinance first-hand. This is the second in a five-part blog series about her journeys.

Microfinance Clients at a borrower meeting

At the top of the ridge leading into the village, we encountered a small group of tattooed-faced Berber women washing their clothes and cooking utensils in the rudimentary but resourceful aqueduct system that ran the perimeter of the village.  They seemed curious but shy.  We had been advised not to take anyone’s pictures without their permission. Some of older generation still believes that a photo can somehow capture their soul.

Descending the dirt path, we heard a cackle of excitement.  As we reached our destination we saw a large Berber carpet laid on the ground under a grove of trees.  Hakima had told us to expect to meet with 6 to 8 women.  The plan was to meet together as a group to exchange greetings and stories and then to split into smaller groups to accompany the borrowers to their homes and places of business.  In this rural village, most businesses are run in or around each of their homes.

Meeting borrowers in a Berber village in Morocco (Part 1)

Kathleen M. Snoddon recently returned from Morocco where she was able to witness microfinance first-hand. This is the first in a five-part blog series about her journeys.

Woman with mule heads to market

We had been walking for about two and ½ hours and had stopped just outside the village to allow some of the stragglers in our group to catch up.  Hakima, the loan officer from FONDEP was expecting us.  Earlier in the week, she had gone into the Berber village to tell her borrowers that some adults and students were coming to visit and would like to meet them and learn about how their small loans had helped them and their families.

Can Social Business Significantly Impact the Microfinance Industry?

Muhammad Yunus is blazing another trail in his constant search for new and often unconventional ideas for confronting poverty, head-on. Just as Grameen Bank revolutionized banking with its bottom-up approach, I believe his latest initiative—social business—has the power to transform the way societal problems such as poverty, ill-health and even environmental degradation are addressed.

We have already seen that transformative effect in the success of two social businesses, each one pioneered by Professor Yunus. Grameen-Danone has become operational and shows the potential to significantly improve the nutrition of Bangladeshi children while providing real economic opportunities to local communities. Grameen Green Children Eye Hospital will provide valuable eye care services with the goal of alleviating cataracts, which afflict hundreds of thousands of people in Bangladesh. The first hospital opened in 2007, and three more are planned.

Grameen Foundation has been involved in the successful creation of two social businesses, both of which are mentioned in Dr. Yunus’ new book. One is Grameen-Jameel Pan-Arab Microfinance Limited, a joint venture between Grameen Foundation and the Abdul Latif Jameel Group that advances microfinance in the Arab World. The second, Grameen Capital India, is a collaboration of Grameen Foundation, the Institute for Financial Management and Research (IFMR) Trust of India and Citicorp Finance (India) Limited (CFIL). These social businesses have already shown that by combining the responsive, ever-evolving nature of a capitalist business with the passion inherent in a social change-focused organization, we can create a model in which performance is measured in social impact, and its market value is influenced by the extent to which societal problems are solved.

The microfinance sector can make great gains in expanding its outreach and moving closer to social and financial sustainability through embracing the social business model of for-profit, non-dividend companies with an overarching social purpose. Agree? Disagree? What other strategies can microfinance embrace to propel themselves forward? How can other social businesses model the examples set by microfinance-based social business to enact their own changes, and how can those businesses synergize with MFIs?

Alex Counts is the President and CEO of Grameen Foundation.