Everyone Can Offer Something

Emily Gordon is a graduate of Lehigh University, where she studied International Relations, Spanish, and Business. She spent a semester in Buenos Aires, Argentina studying foreign relations and working with a human rights organization. Emily has worked with a variety of international non-profits, including interning with Grameen Foundation’s Bankers without Borders^® program in 2011.

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.

CEOs Release “Road Map for the Microfinance Industry”

The founding members of the Microfinance CEO Working Group — which includes the CEOs of pioneering microfinance organizations ACCION, FINCA, Freedom from Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer, VisionFund International and Women’s World Banking — have just released the “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance.”

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.

Progress In Haiti, Two Years Later

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.

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.

Giving India’s Poor a New Way to Save

Santosh Daniel is the project manager for Grameen Foundation’s Microsavings Initiative in India.

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.