The Ultimate (Social) Performance Review: Impact in India

Dr. Marcela Gutierrez recently returned from India, where she completed a Bankers without Borders® volunteer assignment for a 10-branch microfinance organization. Dr. Gutierrez used her skills and expertise to help the organization evaluate how their program helps the poor.

My interest in microfinance started when I first heard about Kiva on National Public Radio. Next, my daughter, a sociology student, took a class on microfinance, visited programs in the Dominican Republic and Belize, and taught me a lot about how microfinance institutions (MFIs) operate. I started researching opportunities to work as a consultant in program monitoring and evaluation, but I wasn’t getting much traction. But when I contacted Grameen Foundation, they told me about Bankers without Borders volunteer consulting opportunities and I signed up. I was later approached to help an MFI in West Bengal, India, develop a survey to understand the social impact of their loans to women borrowers.

Marcela & the MFI team designing the survey

I agreed to take on the project … and then started to panic. I was skeptical that, in just five days, we could accomplish the goals we had set for ourselves. I had no idea what the evaluation capacity of an MFI based in India would be, and assumed it would not be very strong since their main focus was on making loans. In preparation for the assignment I searched for pre-existing tools we could adapt to the MFI’s needs, and the week before I left for India I found a good match.

With the dedicated participation of the MFI’s executive director, in the first two days of my visit, we drafted a 24-question survey using the template I brought. Next, we took the draft survey to a branch office and tested it with five clients – which involved a five-hour round-trip train ride to the village in the midst of the monsoon season! Once back in the office, we worked on strategy for the next phase – a quasi-experimental study that would ultimately involve 450 clients and non-clients. When I left Kolkata, we had a clear plan for finalizing and translating the survey, training data collectors, drawing randomized samples, and dealing with data entry and analysis. All of this was accomplished in just five days, with a little time left over to wet my feet in the Ganges River!

Marcela in Kolkata

After returning home, I reflected on this phase of the project and realized that my original concerns about the MFI’s evaluation capacity had been unfounded.  That said, I had been wise to come prepared rather than re-inventing the wheel in the field. I found my work with the MFI very productive, rewarding and fun. Most important, I learned that people who work in microfinance – with the poorest clients – are dedicated, determined, selfless and will not take “no” for an answer. I am looking forward to finishing the project working with the team in Kolkata now that I know no matter how much I push them on something, their answer will always be, “No problem, Marcela!”

Working Together to Improve the Microfinance Sector

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.

One of the most familiar critiques of the social (or not-for-profit) sector by those outside of it – those in business or academia, for example – is that we are a very fragmented community of organizations that don’t talk to each other, much less collaborate as often as we should.  This results in duplication of effort and capacity, as well as unnecessary and unhealthy competition.  While often exaggerated, this criticism has some merit, and the socially-motivated international microfinance networks (as well as the microfinance sector generally) are hardly immune.  (We have our own criticisms of business and academia, but we’ll leave those for another day.)

For microfinance, 2010 was a year of upheaval and taking stock.  When it began, crises of various origins were still being felt in Morocco, Pakistan and Nicaragua.  Twelve days into the year, a massive earthquake hit Haiti, negatively affecting many microfinance institutions (MFIs) there.  Fortunately, Haitian MFIs, including Grameen Foundation’s long-time partner Fonkoze, have bounced back faster than anyone expected, as I have written in a separate blog.

A few months later, a controversial initial public offering by SKS Microfinance, a leading MFI in India, led to a backlash among the media, political leaders and civil society in general – especially in the Indian state of Andhra Pradesh.  (In the early days of that crisis I debated the founder of SKS, which was quite interesting to say the least!) As the year ended, the Bangladeshi government began to harshly criticize and harass Grameen Bank, the country’s flagship MFI, which led to violence against the bank’s employees and, ultimately, to the forced and premature retirement of its founder, microfinance pioneer Professor Muhammad Yunus.  (For more on the Bangladesh crisis, click here.)

Debate moderator Niki Armacost, co-founder of Arc Finance, with Alex Counts, at his October 2010 debate with Vikram Akula, chair and founder of SKS, at the Asia Society.

This was a far cry from the celebrations of microfinance in 2005, the U.N.’s “International Year of Microcredit,” and 2006, when Grameen Bank and its founder, Prof. Yunus, unexpectedly – and in my mind deservedly – shared the Nobel Peace Prize.  The fact that microfinance in most countries (and even in most states in India, the world’s largest market for microfinance) remained largely unaffected, and in fact continued to grow and contribute to poverty reduction, was rarely noted in the media or even at industry conferences.  There was a lot of soul-searching and hand-wringing, and perhaps a bit of panic.

Note From the Philippines: Client Learnings on Microsavings

Any good bank strives to understand its clients’ preferences and needs. This is especially critical when you’re working with very poor people. In our three-year microsavings project at CARD Bank in the Philippines, Grameen Foundation Project Manager Julie Peachey has worked with the CARD savings team to implement a better, more accessible savings product for their clients. She discusses her experience in the September edition of Microlink’s Notes from the Field. We’ve included a short excerpt of her piece below, followed by a link to the whole article.

CARD Bank client with her ATM card.

“By the grace of God, my business is running well these days. CARD Bank’s Matapat account is convenient for small traders like me. I need smaller amounts more frequently for my business, and the ATM helps me withdraw money at my convenience.” What a joy to hear Evangeline, a CARD Bank client, speak so positively about her experience with the various features of a newly designed savings product. In a conversation with our team, Evangeline told us that she likes that Matapat ensures a return on her savings, and she is particularly pleased about the texting service for deposit pick-ups. Evangeline explained to us, “I am using SMS pick-up to deposit to my account, thus avoiding a wait at a teller counter. The receipts given by the savings associate and confirmation message received on my mobile give a feeling of security since I know my balance from my phone.”

Scaling up affordable savings products

It was just about a year and a half ago that I arrived in San Pablo City, Laguna in the Philippines and took up my role on CARD Bank’s newly formed savings team as lead Project Manager from Grameen Foundation. Grameen Foundation is partnering with CARD Bank [i] in a three-year project aimed at scaling up CARD’s offerings of safe, convenient, and affordable savings products to poor clients. The goal is to reach 350,000 new voluntary savers by October 2012.

>> Continue reading this article at Microlinks’ website.