Experiencing Microfinance in Ghana

Kim Kerry-Tyerman is a volunteer for Grameen Foundation’s Bankers without Borders^® initiative, based in Ghana and Kenya for eight weeks to help the BwB team develop relationships with local organizations (companies, associations, microfinance clubs and institutions of higher education) there.  A graduate student in public policy at Mills College in Oakland, CA, Kim is a former AmeriCorps VISTA fellow, where she researched strategic volunteerism at the Taproot Foundation. She has dual citizenship in the US and the UK, and has volunteered on several community development projects throughout England, Eastern Europe and Africa. She says her hobbies include daydreaming, playing tennis and drinking beer.

Readers of this blog might enjoy the most recent post on her own blog, Akua Yevu, in which she describes her experiences meeting with staff and clients of a microfinance institution in Ghana:

Ghana moves slowly.  Meals at restaurants can take an hour to arrive and the mud sidewalks are crowded with ambling pedestrians who stop to chat frequently.  Last night a friend told me about checking in on an item he had ordered from a vendor; when he asked when it would be ready, the response was, “for sure maybe tomorrow.”  This is at once the most wonderful and most frustrating characteristic of Ghanaian life.  Something I really wanted to do on this trip was meet at least one microfinance client to see for myself if a small loan really made a tangible difference.  Recognizing the sluggish speed of life and acknowledging my short time here, I wasn’t too optimistic that I’d get the opportunity.  But as those who have come to know Ghana understand, things have a way of working out in ways you can’t anticipate.

The view from Hillburi, Aburi, Ghana.

The first MFI I met with last week was impressive from the moment I entered the office.  I did not expect them to be in a five-story office building with glass walls and cubicles, nor did I think that my flip flops and sundress would render me embarrassingly underdressed.  A team of three men in sharp suits, including the CEO, ran me through a well-prepared Powerpoint on their background and operations.  They base their banking on mobility; that is, their loan officers each have a mobile phone and a mobile printer through which they can serve hundreds of customers in remote villages throughout their target regions.  Customers receive a printed receipt while their information is sent from the phone back to an impressive information management system (that the company developed internally) so that the head offices can keep track of individual balances, outstanding loans, and agent collections.  This model is limitless, especially in terms of reaching customers in remote areas who lack access to financial services the most.  After an hour or so I thanked them for their time, and left the meeting more than satisfied.

>> Continue reading Kim’s blog

New Blog — and Book — on Microfinance in Haiti, by Alex Counts

Grameen Foundation founder, President and CEO Alex Counts is in the beginning phase of working on a new book on microfinance in Haiti, focusing in particular on the country’s best-known microfinance institution, Fonkoze.

Alex is in Haiti now, conducting research and working closely with Fonkoze staff and meeting with borrowers to find out more about what’s working, what’s not, and the organization’s overall impact on the poor. You can follow along with Alex’s progress at his blog, where he is posting updates on his activities, including videos and drafts from his book.  As Alex says, “I hope lots of people will take interest in this project, check out the postings and comment on them, so I can improve my thinking and writing, and even repost/circulate what I post to draw in others.”

Alex Counts (right) with Fonkoze borrowers in Haiti.

All proceeds from the book, which Alex expects to publish in early 2013, will benefit Grameen Foundation and our efforts to empower the poor through access to small loans, valuable information and unique business opportunities.  Alex has also set up a Facebook page for the book, which we encourage you to “like” and follow!

Reaching the Poor and Very Poor with Appropriate Savings Services

What does it take to design and create savings products that are useful and safe for poor people? In a guest piece for the CGAP Microfinance blog, Debbie Dean — Grameen Foundation’s Microsavings Project Director — discusses the team’s experience working with CARD Bank in the Philippines. Together, they are integrating poverty data and financial data to better understand the savings behavior of CARD’s existing clients and the markets it is serving, as well as to design products to fill needs where there are gaps. Her guest blog post is part of a special series on savings.

Summary of Recent Issues Surrounding Grameen Bank and Prof. Yunus

A network of people who support Grameen Bank and its founder, microfinance pioneer Professor Muhammad Yunus, has put together a short, factual summary of the recent confrontation between Professor Yunus/Grameen Bank and the Bangladesh government.  It’s meant to be a quick read that will help people separate fact from fiction, with plenty of links to key documents for those who want to dig deeper.  There has been much misinformation circulated in the media and around the web about these issues, so we hope this will prove to be a reference that people can easily share, to enable supporters of microfinance to spread the truth.  This fact sheet will be updated as conditions change; to read, share or download the most recent version of this fact sheet in PDF format, visit the Friends of Grameen website.

The international media recently has been full of stories and speculation about Professor Muhammad Yunus and Grameen Bank, joint recipients of the 2006 Nobel Peace Prize for their work fighting poverty. Because of false accusations against Professor Yunus and the Bank – including emails and other materials widely distributed by Sajeeb Wajed, the son of Bangladeshi Prime Minister Sheikh Hasina Wajed, as well as by other government officials – many of the stories were inaccurate and confused. Though Grameen Bank has responded to these allegations through the media and other means, unfortunately this disinformation campaign has continued, so we feel that it is necessary to create this fact sheet, which contains a quick review of the events as they’ve happened, as well as resources for those who want to know the truth.

In late November 2010, a Norwegian television network aired a documentary called “Caught in Micro Debt” that made a number of false accusations about Professor Yunus and Grameen Bank. For example, it said that funds received from a Norwegian aid agency, NORAD, were improperly transferred between Grameen Bank and Grameen Kalyan, its non-profit sister organization. This matter was clarified and settled between NORAD and Grameen Bank in 1998. After the documentary aired, Norway promptly investigated the transaction again, and again said there was no improper use of funds.

The documentary also claimed that Grameen Bank charged from 30% to 200% interest, but a study of Grameen Bank’s interest rates by leading authority MicroFinance Transparency noted that “Grameen has an extremely simple and transparent pricing system,” while a report by the Review Committee appointed by the government (see below) to examine the Bank noted that it has the lowest interest rates of any microfinance institution in Bangladesh, with 20% being its top rate.

Even though Prof. Yunus has resigned his post as Managing Director of the bank he founded, the Bangladeshi government has continued to pursue efforts to take over Grameen Bank, and even to take control of unrelated social businesses that share the Grameen name.

Even so, the Bangladesh government – led by Prime Minister Sheikh Hasina Wajed, who reportedly has viewed Professor Yunus as a political rival since he looked into setting up a political party in 2007 – led a campaign to force Professor Yunus from his post as managing director of Grameen Bank, with the 77-year-old finance minister, Abul Maal Abdul Muhith, claiming that the 70-year-old Yunus was “too old” for his post. At a press conference following release of the documentary, the prime minister stepped up the rhetoric, accusing Professor Yunus of “sucking blood from the poor in the name of poverty alleviation.” Other officials of her government, including the Foreign Minister, the Agriculture Minister, top Awami League officials and special advisors, made repeated false allegations and personal attacks against Professor Yunus.

Muhith repeatedly asked for Yunus’s resignation, but Professor Yunus declined, reminding Muhith that – according to the Grameen Bank Ordinance of 1983 – only the Grameen Bank Board of Directors had the right to hire or fire the managing director, since the Bank is an independent entity. (The Bank’s board comprises 13 people, three of whom – including the chairman – are appointed by the government, with nine being elected by the Bank’s 8.3 million borrower-owners, and the managing director as the remaining member.)  The government then stepped up the pressure by appointing a disgruntled ex-employee and vocal critic of Professor Yunus, Muzammel Huq, as chairman of the Grameen Bank Board in January.

In early March, the Bangladesh Bank (backed by the Finance Ministry) informed Grameen Bank that Professor Yunus had been acting as managing director without its consent, which it claimed was a violation of its rules.  The letter also cited his age as a factor, and called on the Board to take appropriate action. Grameen Bank immediately responded to these allegations, showing that the Bangladesh Bank had given express approval of his appointment, and that his appointment had been extended formally and indefinitely. Professor Yunus and the nine independent Directors then began a legal process to declare the letters invalid.  After the country’s High Court summarily dismissed the petition, the petitioners turned to the Appellate Division of the Supreme Court, which in early May also dismissed the petition, despite well-reasoned and impassioned arguments from Grameen Bank’s attorneys.

Grameen Bank has fully cooperated with a Review Committee set up by the Bangladesh government to examine the Bank’s operations. The Review Committee’s report, submitted to the Finance Ministry in late April, confirmed that there was no wrongdoing involved in the transfer of Norwegian aid funds, and acknowledged that Grameen Bank’s interest rates are the lowest in the country. The Committee found no evidence of mismanagement or personal corruption among Grameen Bank employees, complimented Bank staff on their cooperation, and acknowledged the tremendous contributions made by the Bank on the country’s socio-economic condition. However, the Committee’s incorrect assumptions that Grameen Bank is a “government bank” and other incorrect findings prompted a detailed refutation by Grameen Bank.

On May 12, Professor Yunus announced he resigned from his post as managing director of the Bank, handing the position to Deputy Managing Director, Nurjahan Begum, while the Board conducts a search for a permanent replacement.  In a letter to his colleagues at the Bank, as well as a letter to the Bank’s borrower-owners, he emphasized the importance of maintaining the Bank’s independence, which the government is threatening to take away.

Professor Yunus has worked tirelessly to create other independent social businesses committed to promoting social good.  It now seems as if the government is now looking to take control of these enterprises, too.

Throughout this period, a network of supporters inside and outside of Bangladesh – millions of everyday people, as well as well-known politicians, diplomats and business leaders – have contributed their time and effort to protect the reputation of Professor Yunus and the independence of Grameen Bank. In addition, 3.7 million of Grameen Bank’s borrower-owners signed a petition asking that Professor Yunus stay involved with the Bank in some capacity.

You can help spread the truth and defend the independence of Grameen Bank by sharing this document with your friends, by voicing your opinion on social media channels (Facebook, Twitter, blogs, etc.), and by keeping informed about the latest Grameen Bank and Yunus Centre news.

It’s vitally important that the following points are reinforced in advocacy efforts:

• Grameen Bank must remain independent and free of government interference.
• Professor Yunus should be made chairman of Grameen Bank’s Board of Directors, to ensure smooth transition of the Bank’s management.
• The government must respect the authority of the Bank’s Board of Directors, and not change its composition or reduce the number of elected directors, which would weaken the voice of its borrower-owners.
• Other Grameen organizations, established as independent social businesses, should remain independent and free of government interference.

Thank you.

Lessons Learned from Mobile Technology for Community Health in Ghana

Sandra Fernandez is a Social Media Intern for Grameen Foundation.

Over nearly the last year, we’ve been piloting our Mobile Technology for Community Health, or MOTECH, initiative in the remote Upper East Region of Ghana.  MOTECH’s two key services – Mobile Midwife and Nurse Application – provide maternal health information via mobile phones to both pregnant parents and their community nurses in rural areas. The system was launched in July 2010, and we’ve experienced many successes ever since. As is expected with any new projects, it’s also been an intensive learning process. Here’s a short overview of some of the lessons we’ve learned.

Creating the content for the Mobile Midwife service was a fascinating process. We convened focus groups to test whether our messages were clear, effective and helpful – where, among other things, we learned that we needed to be sensitive about the accent and speed of the messages, as well as the “depth.”  Mobile Midwife users strongly preferred to hear messages from a voice that sounded like an experienced “auntie”– meaning a voice that wasn’t too formal or too casual, but wise and familiar. Using voices that users felt were trustworthy was a vital step in ensuring the effectiveness of our messages.

MOTECH’s Nurse Application – designed to help community health workers track patients’ needs and care – was originally meant to utilize the nurses’ personal phones. Yet we learned that over the long term, it was cheaper and more effective to provide participating nurses with low-cost, durable handsets that were pre-programmed with MOTECH forms for data entry. As such, we could avoid the considerably high text-messaging costs associated with personal mobiles, while experiencing an easier, more cohesive training process.

These are just a couple of the findings. We’ve learned a lot since July of last year, and expect to continue doing so in the coming months. We’ve recorded more than 150 MOTECH messages (even some in song!), and we’re currently working on a replication project in the Awutu Senya district of Ghana’s central region, to assess opportunities of expanding the MOTECH initiative nationally.

If you’d like to read more about our findings, we’ve recently prepared a report of lessons learned available for download.

Celebrating 10 Innovative Years Fighting Poverty with Technology

Georgina Allen is a marketing and communications intern, based in our Seattle office.

David Edelstein, Director of Grameen Foundation Technology Center, speaks about the poverty-fighting potential of the mobile phone.

It’s been 10 years since Grameen Foundation established its Technology Center in Seattle to empower poor people through information and communication technology. On Tuesday, May 17, we hosted an open house to celebrate this milestone and thank the donors and supporters who help make our work possible. Almost 200 people attended!

Upon arrival, guests were invited to make their way around the space where different “stations” were set up to highlight each of the Tech Center’s projects and demo some of the accompanying mobile phone technology.  Photographs of microfinance clients, farmers and pregnant women who have benefited from our work lined the walls, with a story behind each photo that demonstrates the potential of communications technology in economic development.  Our staff was excited to welcome our supporters to explain more about our work and connect with people in the Seattle community.

Just when the office felt like it was at capacity (or over), Alex Counts, President and CEO of Grameen Foundation, took the stage to share some reflections on our work.  After welcoming and thanking supporters, Alex recollected the birth of the Tech Center 10 years ago.  At that time, Craig and Susan McCaw, long-time philanthropists with a background in telecommunications technology, generously partnered with Grameen Foundation to finance a replication of the village-phone program that Grameen Bank had pioneered in Bangladesh.  This seed then grew into the idea to establish an entire technology center devoted to the field of information communications technology for development.

Susan McCaw recalls the early days of Grameen Foundation Technology Center, while (from left) Alex Counts, Peter Bladin, David Edelstein and Craig McCaw look on.

Following Alex,  Susan McCaw briefly discussed her and Craig’s long-time belief in mobile technology as a solution to economic development.  She commented on the importance of dignified solutions like the Village Phone program, where individuals get the opportunity to earn income for themselves while offering a valuable service to individuals in their community.  She also drew on her experience as an ambassador, implying that “micro solutions,” like those supported by Grameen Foundation, actually have the potential to help solve “macro problems” like global security.

To conclude, Peter Bladin and David Edelstein, founding and current directors of the Tech Center, went through a list of the Center’s major accomplishments over the years, including proving the value of technology to microfinance institutions, delivering relevant and actionable agricultural and health information through the mobile phone, and creating microbusinessses.  Both acknowledged that Grameen Foundation’s mobile phone-related work would not be possible without the ability to partner with private mobile phone companies – whose work is the reason why 4 billion phones are in the hands of individuals in the developing world.  Both Peter and David also attributed our success to enduring core values – empowerment, sustainability, scalability and collaboration.

After nearly three and a half hours, the last of the guests trickled out, full of cheese, donated wine (courtesy of Vehrs Domestic and Imported Beverages) and interesting Grameen Foundation tidbits.  If the success of this event is an indication of how the rest of our anniversary-event series will go, be sure not to miss the next one!

Be sure to check out our photo album as well as a video of the program.