Overcoming the Barriers to Fighting Poverty

Ananya Mukkavilli is a Bankers without Borders^® (BwB) volunteer who served as an institutional relations intern for Grameen Foundation’s External Affairs team in 2012. She is a rising junior at Haverford College, majoring in political science, with a minor in economics. Ananya will spend the next academic year studying international relations at The London School of Economics and Political Science.

When I first learned about microfinance, I was a freshman in high school in Bangkok, Thailand. Professor Muhammad Yunus, founder of Grameen Bank, had just won the coveted Nobel Peace Prize, and by happy coincidence I was representing Bangladesh in the Economic and Social Council of our Model United Nations Conference. The subject of microfinance could not be more relevant. I found the idea of microfinance revolutionary. It wasn’t about charity or donations; it was about giving people opportunities to economically sustain themselves, as part of an overall effort to address the ever-increasing global income gap. Cutting poverty in half by 2015 was a big part of the UN’s Millennium Development Goals, and the actors involved were always striving to look at bigger-picture, long-term solutions to poverty. Prof. Yunus had created an effective and simultaneously empowering means of doing just that.

Bankers without Borders volunteer Ananya Mukkavilli, pictured here during a trip to Dubai’s Old Town, discovered some essential truths about fighting poverty when she served as an intern at Grameen Foundation this summer.

Having grown up in Vietnam, Thailand and India, I am no stranger to the realities of absolute poverty and the importance of “giving back” to one’s community. What drew me to the subject of microfinance was that it challenged the “us versus them” mentality that often differentiates givers from receivers. Microfinance opened my eyes to what is now a widely accepted idea of creating shared value among everyone.

But the more I have been exposed to  microfinance and international development through my academic, cultural and extracurricular experiences, the more I have realized that there is not a one-size-fits-all solution to the problem of poverty. When the Andhra Pradesh crisis was unraveling in 2010, I saw for the first time how microfinance can fail when practitioners don’t put the poor at the center of their efforts. Working at Grameen Foundation this summer, I have seen the benefits of approaches to microfinance that innovate and cater to the needs of the poor, rather than those that follow a cookie-cutter, formulaic approach.

Connecting the Dots – From Seraphina to Prime Minister Odinga

Shannon Maynard is Director of Bankers without Borders^®(BwB), Grameen Foundation’s skilled-volunteer initiative. Maynard has more than 15 years of experience in nonprofit management and volunteer mobilization. Before joining Grameen Foundation, she served as Executive Director of the President’s Council on Service and Civic Participation, and managed strategic initiatives for the Corporation for National and Community Service, a federal agency. This is the final post in a four-part series; you can read her first post here, her second post here, and her third post here.

BwB Director Shannon Maynard (left) presents Seraphina (right), a women’s group leader and entrepreneur, with a cook stove that the other group leaders purchased as a thank-you for her wisdom and leadership to them.

As a U.S.-based employee of a global NGO, the small amount of time I spend in the field is incredibly helpful in checking assumptions around what’s possible and what’s needed with our work in particular places, and in gaining a better understanding the realities of my employees based there. Of course, being surrounded by abject poverty on a daily basis, combined with getting to see – in person – the hope and progress that takes root in poor people’s lives when they gain access to credit or savings, redoubles my own personal commitment to the work of Grameen Foundation and Bankers without Borders (BwB).

In addition to gaining such perspective during the two weeks I spent in Kenya, I was able to help better position BwB to benefit Kenya-based social enterprises such as the Visionary Empowerment Program (VEP), Paradigm Kenya and Paddy Micro Investment, among others. I also had the chance to shake hands with two very important people: Kenya’s Prime Minister Raila Odinga, and self-identified industrialist Seraphina, an elderly woman who lives in a rural village outside Thika town and makes soap to support herself and her family.

What do these three social enterprises and these two people have in common? Let me connect the dots – because that really is what Grameen Foundation is all about. We bring together the people and facilitate the collaboration required to foster significant, scalable financial- and information-related solutions for the world’s poorest.

Using Customer Data to Fine-tune Product Design and Marketing Strategy

Emily Hosoya is a Bankers without Borders^® volunteer and Communications Intern with Grameen Foundation’s Microsavings Initiative. We have included an excerpt from her post on our Progress out of Poverty­ blog, with a link to the full post below.

Since starting our work with CARD Bank in the Philippines, we’ve realized the best savings products are designed by the customers themselves. Although we’d love to sit down with each of CARD’s 500,000+ savings customers to discuss their needs, there is never enough time or resources to do so. Instead, with the help of our senior data analyst, Jacobo Menajovsky, we’ve created a process to use specific customer information to address our business questions and drive CARD’s product design and marketing strategy.

For more information on our approach, and how you can use data to help answer important business questions, see our case study titled Information as Power: Implementing Data Analytics at CARD Bank.

It can get overwhelming to sort through data without a clear approach. Over the past year, we developed a process to sift through customer information to cluster customers into manageable segments. This process allows us to better learn about their needs and analyze their savings habits.

Along with our Progress out of Poverty Index , a tool that uses country-specific indicators to predict a given household’s likelihood of poverty, we looked at CARD’s demographic and financial data to cluster customer types. In addition to poverty level, the most predictive variables we found in the clustering process included family size, education level and employment status.

Continue reading the full post >> 

Why Measure Poverty?

Steve Wright is Vice President, Poverty Tools and Insights for Grameen Foundation. He recently wrote a blog post for Nexii.com. We have included an excerpt below, along with a link to the full post.

Let’s start with the realization that poverty is bad. The hardships of the poor fill heartstring-pulling fundraising campaigns: unsafe drinking water, poor diets, poor education, untreated illnesses, saving cash under a mattress, danger, a roof that leaks, no access to the information we take for granted, and more. These hardships make life more difficult for the poor than the not-poor. But this is not the only reason why poverty is bad.

Poverty is also bad because it hurts us all.

A very simple logic model for Poverty Alleviation

The Theory: Poverty is an economic anchor. Those living in poverty (an economy’s losers) cannot be producers in the system. They are not generative. Meanwhile, the economic ‘winners’ remove their winnings and invest them in other markets or economies where they can earn a better return. And so, economies with severe inequality drag and leak, like a neglected ship with lifeboats for only a fraction of the passengers. However, people are not poor because of a lack of capacity and the prejudiced view that ignores this capacity is what makes poverty epidemic.

The Change: Economic success is defined as a state where the maximum number of people are generating value in an economy and receiving benefit from their work.

The Work: With strong local leadership, a community can invest in the generative capacity of the poor through education, health care and access to markets.

At Grameen Foundation, we try to catalyze the change described above. We implement interventions that provide valuable missing information to the poor to enable them to be equal actors in specific markets (agriculture in Uganda and Colombia and prenatal health in Ghana and the state of Bihar in India). We design and test innovative financial services products (microsavings and mobile financial services). We build mobile enabled technology to maximize the impact of those that serve the poor. And finally, we know we are serving the poor in all of these interventions because we measure poverty and use that information to inform our interventions.

To do the above with appropriate design and rigor we must have the ability to measure poverty.

Continue reading at the Nexii.com blog >>

Poverty Waits for No One

David Washer is a Bankers without Borders^® volunteer who recently returned from a project in Ethiopia. Upon graduating from Yale University, Washer began his career in portfolio management at McKinsey & Company, where he currently works as a financial analyst. During his time at Yale, he was actively involved in human rights advocacy and research, and now looks forward to using his knowledge of finance and international development in the service of colleagues overseas.

I’ve always had a healthy skepticism about short-term volunteer projects abroad. But as a Texas expatriate living in a Manhattan closet that passes for an apartment, I started to go a little stir-crazy as my heart for social justice from my undergraduate days began to beat again. The irony of it all? As an undergraduate, I had plenty of time – but no true, concrete skills to offer to development organizations. Once I began my work career, the opposite initially held true.

David Washer (center) spent a week meeting clients and lending his skills in finance to Eshet, an Ethiopian MFI, as part of BwB’s Financial Modeling Reserve Corps.

I began to research and critically examine different service opportunities, and eventually came across Grameen Foundation’s Bankers without Borders (BwB) program. Convinced that through this program I could help empower others to lead sustainable, grassroots development in their own communities abroad, I decided to join. I was not disappointed. ‪Once I became a member of the Financial Modeling Blueprint Reserve Corps, BwB provided me with the training, templates and tools I needed to apply my financial analysis and modeling skills in a development context.

Building Our Strength One CKW at a Time

Fiona Byarugaba, is Program Management and Communications Officer at Grameen Foundation’s AppLab Uganda office, and MTN/Grameen Foundation Relationship Manager. We have included a excerpt of her blog post followed by a link to the full post.

Samson Sabiiti Olet’s goat was suffering from a disease unknown to him. In a state of panic, Samson met his village Community Knowledge Worker, or CKW, telling him that the goat’s body was covered in “white dots.” After the CKW looked at the goat, he opened his phone, and within seven minutes had discovered that Samson’s goat was affected by ticks. Once Samson – a farmer from Oyam district, Adagayella village – started following the CKW’s advice about how to treat the goat for ticks, all was well, and the goat has gotten its healthy appetite back again.

Community Knowledge Worker Simon Obwoya from Gulu with a farmer

The journey of a thousand miles begins with a single footstep. Grameen Foundation helps the world’s poorest people to take those footsteps and lift themselves out of poverty by providing mobile phone-based solutions that address “information poverty” in the fields of agriculture, financial services, health and livelihoods.

Continue reading this post on our Applab blog >>

Risk Management: It’s a Mindset, Not a Budget Line Item!

Michelle Katics, CEO of BankersLab^TM, supports the MFI sector by providing pro-bono risk-management technical assistance to microfinance institutions (MFIs). BankersLab, through its corporate social responsibility program, supports Bankers without Borders^®, Bankers with Vision, MFIOpenSource and Kiva. We have excerpted a portion of her blog post, followed by a link to the full post.

I recently returned from a Bankers without Borders (BwB) volunteer engagement in West Bengal, India, with Society for Model Gram Bikash Kendra (GBK), a small non-profit microfinance company. As many BwB skilled volunteer-corps members can attest, volunteers typically feel they gain as much or more than the recipients of the services they provide. In this case, the experience for me highlighted important factors for success in risk management, some of which we forget from time to time in the traditional banking sector. Much of what I learned came from observing the energetic and curious discovery process of the GBK staff as they tackled typical risk management challenges.

When working with partners around the world, BwB (a Grameen Foundation initiative) recognizes that MFIs have a common need: risk management. MFIs face similar risk management challenges across the board, including how much risk to accept, how to mitigate the risk that cannot be avoided, and how to manage the real risks that are part of their day-to-day business and operations.

It’s free to change your mindset and habits.  The GBK staff expressed concern about how they could improve their risk management while remaining in control of their budget. They worried that IT systems and additional staff were the main (and costly) requirements for successful risk management, yet were delighted to discover simple and easy ways to improve their operations, with minimal cost. Many of these ways don’t apply to the traditional banking sector, which already has strong systems, but some of the simple ”mindset” changes are a relevant reminder for us all.  For example, GBK decided to research and implement new best practices in areas such as accounting and audit. Taking a step back to examine and improve the process can be the key to success. By doing this, they also realized the need to create contingency plans and other methods of dealing with crisis before facing one.

Another observation was the impact of GBK’s collegial and open collaboration among departments to jointly tackle risk management. In other words:

Cost of coffee and snacks for the meeting:  $20

Value:  Priceless

Continue reading the full blog post at the BankersLab blog >>