Archive for the ‘Alex Counts’ Category

Lessons from Medicine for Poverty Alleviation

October 31, 2012

This post by Alex Counts was originally published on his blog, where he describes the process of writing a book on Haitian microfinance pioneer Fonkoze.

It has been a few weeks since I have posted on this blog, but I have continued to study and to work inside Fonkoze all along.  Now I feel like I finally have a juicy topic to write about and time to do so.

In response to my post on outcomes and impact (as opposed to inputs) in poverty reduction programs, Meredith Kimbell, a top-notch management consultant in the Washington, DC area whom I have known for years, mentioned the book Better by a physician named Atul Gawande, and in particular a chapter towards the end titled “The Bell Curve.”  I read the entire book, which is basically about how the practice of medicine has been and can be improved (with lessons for other disciplines).  I found that the book had some important lessons for the effort to end poverty through holistic approaches to microfinance such as those employed by Fonkoze
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The Rise of Mobile Microentrepreneurs

September 14, 2012

A simple and widely available tool – the mobile phone – is creating substantial impact in the developing world, changing the lives of low-income individuals, especially in rural communities. Today, 6 billion mobile phones are being used throughout the world, with approximately 75 percent of users living in developing countries.

In Indonesia, “mobile microentrepreneurs” like the one pictured here are already helping other poor people in their community find jobs and get information on market prices for their goods.

In Indonesia, “mobile microentrepreneurs” are already helping other poor people in their community find jobs and get information on market prices for their goods.

Recognizing the opportunity offered by this technology, Grameen Foundation and eBay Foundation began working together this summer to build solutions that address market challenges facing microentrepreneurs in Indonesia. Our joint effort will support Grameen Foundation’s Mobile Microfranchise initiative, which currently works with a network of more than 10,000 women microentrepreneurs, heavily concentrated in the West Java region.

This network, which is managed by Ruma – a social enterprise that Grameen Foundation helped to incubate and grow – currently reaches more than 1 million customers.

In this piece on The Huffington Post, Alex Counts, President and CEO of Grameen Foundation, and Lauren Moore, Head of Global Social Innovation for eBay Inc., and President of eBay Foundation, discuss our new collaboration.

“Financial Vandalism” in India, and a Way Forward

August 15, 2012

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.

I was invited to give one of the closing keynote addresses to the Sa-Dhan conference, something I had been preparing for at least since I travelled to India in early July to work on an upcoming book about the latest trends in microfinance.  I had intended to arrive in time for the inaugural session on August 7, but travel delays prevented that.  (Word to the wise: when travelling to India on the non-stop flights from Newark, plan to arrive in Newark long before your onward flight is due to depart.)

Upon arrival, I was told that the conference’s mood on the first day alternated between “somber” and “angry.”  Just a few days earlier, the Reserve Bank of India (RBI) had announced new regulations affecting microfinance.  Though these policies rolled back some harmful policies announced a few months back and helpfully clarified others, they also introduced a controversial new rule saying that microfinance institutions over a certain size would be subject to smaller margins than they were currently allowed between the rates they borrowed and lent at.  The whipsaw nature of Indian microfinance policy at the national level, coming on the heels of the debilitating and draconian law passed in the state of Andhra Pradesh in late 2010, had justifiably enraged many of the practitioners in attendance – particularly as there had been no warning or explanation for many of the policies announced over the last 12 months.

Grameen Foundation President and CEO Alex Counts (lefts) speaks about the Indian microfinance sector at the Sa-Dhan Conference held earlier this month in that country. With him on stage are Jayshree Vyas (center), Managing Director of SEWA Bank, who served as the moderator, and Sujata Lamba of the World Bank.

Grameen Foundation President and CEO Alex Counts (left) speaks about the Indian microfinance sector at the Sa-Dhan Conference held earlier this month in that country. With him on stage are Jayshree Vyas (center), Managing Director of SEWA Bank, who served as the moderator, and Sujata Lamba of the World Bank.

The second day did not get off to a good start.  Sa-Dhan executive director Mathew Titus announced that a senior government official had canceled his opening address.  However, as the day got going, the overall mood improved.  Royston Braganza, CEO of Grameen Capital India, organized and moderated an excellent panel on “Overcoming the Barriers to Resource Flows” to the sector.  (Grameen Capital India is a joint venture between Grameen Foundation and affiliates of two major banks operating in India.)

I attended Royston’s panel and then caught the end of a concurrent panel on “business correspondent” (BC) models for MFIs working in partnership with, and essentially as agents of, fully licensed banks.  Though some recent policies about the BC model have cast doubt on the viability of MFIs being able to work effectively with banks, it was an invigorating discussion.  Mukul Jaisal, Managing Director of Indian microfinance institution (MFI) Cashpor, talked about his experience pioneering this model for providing savings services (which the MFI has been able to implement with support from Grameen Foundation).

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The Time to Defend Grameen Bank is Now

August 4, 2012

Todd Bernhardt is Director of Marketing and Communications at Grameen Foundation.

As you might have read in the news this week, the Bangladeshi government seems to be moving into the end game in its longtime effort to take over Grameen Bank, a move that has been widely criticized within Bangladesh and around the world.  To briefly summarize, the cabinet – presided over by Prime Minister Sheik Hasina – voted on Thursday to amend the Grameen Bank Ordinance of 1983, effectively removing the Board of Directors’ right to choose the Bank’s Managing Director, and vesting that power instead in the Board’s government-appointed (and aligned) chairman.

As troubling as that disenfranchisement of the Bank’s 8.3 million borrower-owners is (more than 8 million of these owners are poor women), equally troubling is a directive from the cabinet to the Finance Ministry to examine and report on the salaries and benefits that Grameen Bank founder Professor Muhammad Yunus received after he turned 60, which is the official age of retirement from the Bank. It also asked the Ministry to examine whether he earned foreign currency that was tax-exempt during his time as Managing Director.

(Prof. Yunus, who is 72 and going stronger than ever, was exempted from the retirement age by the Grameen Bank Board, whose decision was reviewed and accepted by the government for more than a decade before it suddenly decided that he was too old for the job; the post of Deputy Managing Director was also exempted. For more information on the government’s 21-month campaign against Prof. Yunus and the Bank, see this Fact Sheet developed by the Friends of Grameen organization. Grameen Foundation President and CEO Alex Counts also recently blogged about this issue.)

The women on Grameen Bank's Board of Directors, who represent the Bank's 8.3 million borrower-owners and are shown here with Prof. Yunus at the Nobel Peace Prize ceremony, are in danger of losing their ability to choose the Bank's Managing Director.

The women on Grameen Bank’s Board of Directors, who represent the Bank’s 8.3 million borrower-owners and are shown here with Prof. Yunus at the Nobel Peace Prize ceremony, are in danger of losing their ability to choose the Bank’s Managing Director.

Let’s look at the second part of the cabinet’s actions first.  The idea that Prof. Yunus would benefit financially from any of his activities advocating for the poor is patently absurd.  Throughout his career, he has had multiple opportunities to join corporate boards as a paid advisor or even to lead for-profit organizations, for great personal gain – yet he has declined.  He has consistently donated whatever money he has earned as a public speaker to social businesses dedicated to serving the poor or to other charitable causes – including Grameen Foundation, which began with $6,000 that he earned from one such speaking engagement.  He lives in a small apartment on the Grameen Bank campus.  All of his activities – either as leader of Grameen Bank or as leader of the Yunus Centre, which focuses on fostering social businesses – have been other-focused, rather than focused on personal gain.

As for the government’s moves to give the Bank’s chairman almost unlimited power to choose a new Managing Director and to sideline the poor women who own this successful, innovative, Nobel Prize-winning microfinance institution – well, to many, it smacks of pure desperation, and an attempt to shift public attention away from a number of public policy failures.  The government of Sheikh Hasina is facing a host of challenges and embarrassments at home, including the recent cancellation by the World Bank of a loan to fund the $1.2 billion Padma Bridge project – a huge infrastructure initiative that was going to be a hallmark of her administration – because of corruption within the government and contractors involved.  She herself has become more autocratic and combative, as noted by The Economist in several articles, and as demonstrated by a recent appearance on the BBC’s “Hard Talk” interview show, where – among other things – she argued with the presenter about accusing Prof. Yunus of “sucking blood from the poor in the name of poverty alleviation” (a well-documented quote from her referring to him) and misrepresented Grameen Bank’s interest rates, saying that it charges between 30 and 45%, when her own administration has confirmed studies showing that the Bank’s highest charge is roughly 20%, seven points below the maximum rate set by the government.

Professor Yunus, who was a surprised and disappointed as the rest of us by the cabinet decisions and directives, released the following statement on Friday:

I was very apprehensive about it for some time. Now my fear is becoming a reality. I am disappointed that we were not successful in stopping this process. It  makes me immensely sad to see the poor women being deprived of their rightful ownership and their rights as owners to exercise their power over the bank. I am so shocked by the turn of events that I am left without words. I request my fellow citizens who are as shocked as I am, to try to  persuade our government to realise that this is a very wrong step they are taking; they should refrain from proceeding with this. The decision of the government would destroy this well known bank for the poor, the bank that has made the country proud.  I urge our fellow countrymen to come forward and save this successful national enterprise owned by the poor women. I am also urging the poor owners of Grameen Bank to appeal to the government and the citizens  to come forward to help them safeguard  their rightful ownership of the Bank.

What can non-Bangladeshis do about these injustices?  You can take action by speaking up – Grameen Foundation has a petition that we plan to give soon to U.S. Secretary of State Hillary Clinton, asking her to reiterate the U.S. government’s strong support for the continued independence of Grameen Bank and the rights of the poor women who own it.  Microcredit Summit has its own petition on Change.org, also in support of the continued independence of the Bank, that it plans to give to Sheikh Hasina.  Please sign both petitions, and urge your friends, family and those on your social networks to do the same.

We would also ask that you contact your legislative representatives, and the media, no matter where you live, and let them know how important it is to you that the world’s flagship microfinance institution remain independent and able to continue its effective, innovative role in the ongoing battle against poverty. Time is short. The Bangladeshi government’s commission reviewing the Bank and the other Grameen social businesses is moving ahead quickly, and new actions against the Bank may be announced soon, so it’s essential that you act now to defend the rights of – and opportunities for – the world’s poorest.

In the meantime, we will keep you informed about developments as they occur.  Of course, with your support, we will continue our work around the world to provide the poor with access to appropriate financial services like microsavings and loans, as well as access to life-changing, real-time information about their health, crops, animals and finances. Working together, in the spirit of innovators like Grameen Bank, we can begin to realize Prof. Yunus’s vision of putting poverty where it belongs – in a museum.

The India Microfinance Crisis, Reconsidered

August 1, 2012

Alex Counts is President and CEO of Grameen Foundation. He recently wrote this  post on his own blog. We have included an excerpt below, followed by a link to the full post. 

I have already written about my impressions of Bangladesh, so let me turn now to India. Much has been written about the microfinance crisis there. For my part, I have made public statements about it, transcribed and released of my debate with SKS founder Vikram Akula at the Asia Society (which took place at the outset of the crisis), and addressed the issue in the opening section of my chapter in New Pathways out of Poverty (the Spanish and French versions of which are freely available, as they are not protected by copyright). David Roodman gave an impressive account of the crisis in his book Due Diligencewhich I have reviewed (a review to which Roodman thoughtfully responded).

However, when I went to India I tried to free myself from preconceptions, and attempted to listen and observe with an open mind. I met with leaders of MFIs large and small, as well as other members of the ecosystem including consulting firms, industry associations, and the staff of Grameen Foundation’s wholly owned subsidiary Grameen Foundation India and our joint venture Grameen Capital India (both of which are organized as social businesses as per Professor Muhammad Yunus’ definition). Below is a list of eight things I learned that I did not know, or believe, before I arrived:

  1. Despite recent progress in terms of returning the sector to normalcy outside AP, and in advancing legislation that is flawed but still a net positive, I heard from multiple sources that that state government of Tamil Nadu is considering an AP-type of ordinance that would throw the Indian microfinance sector into a new and probably much deeper crisis. Stay tuned!
  2. At the height of the frenzied growth during the period 2007-10, many MFI field officers came to rely on so-called “agents” (also known as “ringleaders”) at the village level who took on many of the functions of staff. In effect, field staff were outsourcing their client recruitment and loan underwriting responsibilities. This was a ticking time bomb, as the MFIs effectively lost control of their own activities, most importantly in terms of their relationships with loan clients. The reasons for this probably include the lack of training given to the new recruits of fast-growing MFIs, and the impossibility of managing as many clients as staff were expected to serve (based on unrealistic targets that were the basis for awarding generous bonuses) using the traditional approach. It is not clear that MFI leaders were aware that this was going on, or whether they just turned a blind eye.
  3. I was aware that most of the smaller AP MFIs who do not have operations outside the state have effectively gone bankrupt. What I learned from sitting down with four leaders of these now defunct institutions – who predictably though plausibly claim to have been largely innocent of the abuses committed by the larger MFIs based in the state – is that two AP MFI promoters (i.e., founders) who were distraught by their life’s work being ruined have recently committed suicide, and more are feared.

Read the full post >>

Tipping: A Viral Infection We Want to Catch

June 15, 2012

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.

At Grameen Foundation, we often talk of the concept of “tipping,” which was popularized by the book The Tipping Point by Malcolm Gladwell.  I define the concept as taking something, such as an idea or a product, to the point where it starts to spread virally, exponentially and without much additional effort.  For an organization like Grameen Foundation that works with limited resources to make significant impact on a global problem such as poverty, it is a very important concept.  Through tipping, our early seeding and nurturing of innovations can lead to their widespread adoption by poor people, the organizations that serve them, and even by businesses and governments.

One example is our Growth Guarantees program, which pioneered loan guarantees to forge mutually beneficial business relationships between local commercial banks and microfinance institutions (MFIs) working to alleviate poverty.  In the program, we not only directly consummated transactions (bringing nearly $200 million to MFIs, who were then able to help more than 1 million new poor borrowers), but more importantly, proved the concept and prompted many other banks to follow suit (even without guarantees from Grameen Foundation).  Likewise, our efforts to replicate the highly successful village phone program of Grameen Telecom, initially in Uganda, set in motion dozens of “village phone” initiatives, most of which we had no direct role in starting or managing.

The PPI is a simple, short, country-specific survey that poverty-focused organizations can use to better understand the people they're trying to help, as well as the effectiveness of their work. This is a screenshot of the PPI for the Philippines.

The PPI is a simple, short, country-specific survey that poverty-focused organizations can use to better understand the people they’re trying to help, as well as the effectiveness of their work. This is a screenshot of the PPI for the Philippines.

I thought a lot about Grameen Foundation’s role in “tipping” last week when I flew to Jordan to attend the annual meeting of the Social Performance Task Force (SPTF), a group in which Grameen Foundation has been deeply involved for years.  More than 300 people attended.  The SPTF sets standards and shares best practices for those practicing ethical, poverty-fighting microfinance.  Partly as an acknowledgment of Grameen Foundation’s central role in the task force, I was asked to give the closing remarks at a historic “CEO Roundtable” where the heads of leading MFIs came together to discuss implementation of the just-completed “universal standards for social performance management.”  The standards have the potential to reshape how MFIs around the world work in fighting poverty, mainly by comprehensively adopting what have emerged as effective practices through the task force’s dialogue and research over many years.

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Giving Back: A Simple and Powerful Idea

May 17, 2012

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.

On Wednesday, May 9, I had the pleasure of attending a book signing event at the Museum of Art and Design in New York City.  Meera Gandhi, a long-time Grameen Foundation donor and volunteer whose husband Vikram sits on our Board of Directors, has come out with a beautiful and moving book.  It is titled simply Giving Back.  I was fortunate to arrive early enough that I was able to get my copy signed early, and didn’t have to wait in the long line that formed later.

The book tracks the long philanthropic journey that Meera has been on by profiling 75 organizations – including Grameen Foundation – that she and her family have backed.  It is a diverse group that she divides into four broad categories: women’s rights, children’s issues, protecting the environment/battling disease and poverty, and promoting culture and the arts.  She believes so deeply that those of us who are blessed should give back to society that she has created the Giving Back Foundation to help carry on the work described in the book and a related film of the same title.

Giving Back book cover

Grameen Foundation is proud to be one among so many outstanding organizations profiled in Giving Back.  Walking through the Museum’s atrium, I met many people who are involved in organizations that have been touched by Meera over the years.  It was a uplifting and humbling experience.

I was also interviewed twice on camera, including once by International Television Broadcasting, Inc. (ITV).  I met a woman associated with the Birch Wathen/Lenox School, which is profiled in the book.  My brother attended this school in the 1980s, and I was pleased to be invited to speak there this coming fall.  (Meera spoke there previously and the students loved it!)

One of the best sections of the book is a brief one titled, “How to Find a Charity that Speaks to You.”  I’d recommend her advice to anyone, especially those just beginning their own philanthropic journey.  In this mini-chapter, she asks the reader a series of questions about their preferences in such areas as gift-giving, and then suggests how different answers might affect the way that someone can engage most productively and enjoyably in philanthropy.  Her basic message is this: Find both a cause and a way of engaging with it that excites and motivates you.  It’s a simple and powerful idea.

What is clear from Meera’s writing and actions is that “giving back” – when done thoughtfully and in the right spirit – does not leave the donor with less, but rather with more.

Panel Explores the Power of the Mobile Phone in Fighting Poverty

May 14, 2012

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.

I first met Isobel Coleman, Senior Fellow for U.S. Foreign Policy and Director of the Civil Society, Markets and Democracy Initiative at the Council on Foreign Relations, through one of our greatest Grameen Foundation Board members, Lucy Billingsley.  When Isobel and I were introduced to each other, she was running a small program at the Council focused on women’s issues.  She has since grown it into a flagship initiative of this prestigious institution, and her reputation as a researcher and thought-leader has naturally grown along the way.

I was therefore very pleased when she invited me to speak as part of her Women and Technology series last week, alongside Ann Mei Chang, senior adviser for women and technology, Office of Global Women’s Issues at the U.S. Department of State (and formerly with Google), and Scott Ratzen, Vice President for Global Health at Johnson & Johnson.  The title of the session was “mDevelopment: Harnessing Mobile Technology for Global Economic Growth.”  We had a planning call with Isobel, Scott and Ann Mei the week before and I realized I was joining some extremely knowledgeable and articulate people.  To prepare, I read up on all of Grameen Foundation’s many programs that work to alleviate poverty by leveraging the mobile phone revolution, as well as some related research on inclusive business models.

Alex Counts makes a point while (from left) Isobel Coleman of the Council for Foreign Relations, Ann Mei Chang of the U.S. State Department and Scott Ratzan of Johnson & Johnson listen.

Alex Counts makes a point while (from left) Isobel Coleman of the Council for Foreign Relations, Ann Mei Chang of the U.S. State Department and Scott Ratzan of Johnson & Johnson listen.

The event was kicked off with remarks by Suzanne McCarren of ExxonMobil, which sponsors this speaker series.  Suzanne, whom I sat next to during lunch, explained why women’s economic development is a high priority for their company’s foundation, which has made more than $50 million in grants so far, according to my notes.  Then Cherie Blair, the former first lady of the United Kingdom and the founder of a foundation that bears her name, spoke.  She announced the release of an important new report titled, “Mobile Value-Added Services: A Business Opportunity for Women Entrepreneurs.”  I had met Cherie several times through Meera Gandhi, whose book Giving Back features the Cherie Blair Foundation for Women, as well as Grameen Foundation.

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David Roodman Does His “Due Diligence,” and Gets it Mostly Right

February 16, 2012

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.

David Roodman, Senior Fellow at the Center for Global Development, the country’s leading think tank on overseas aid and international development, has written Due Diligence: An Impertinent Inquiry into Microfinance, a remarkable book about microfinance.  It is, quite simply, the best book I have ever read about microfinance among the many I have gone through.  He analyzes the history, track record, recent developments and future of microfinance, and though I do not agree with all of his judgments, I agree with the vast majority of them and admire how he went about deconstructing such a diverse arena of human endeavor.

Most impressive is how he carries the reader through his rigorous thought process.  He repeatedly poses important questions, weighs the evidence, assesses whether there is enough information to make a definitive judgment, presents alternative answers and their implications, admits to a degree of uncertainty, and then does his best to provide an answer – all in plain language.  The hallmarks of his writing are nuance, detail-based distillations of publicly available information, fairness and dispassionate analysis.  If I had to keep one book on my desk for easy access to guide my writings, conversations, analysis and decisions, it would be his.  (Due Diligence is the culmination of research and writing process that played out on his blog, which has evolved to become a leading online source for microfinance information and analysis over the past couple of years.)

Cover of David Roodman's "Due Diligence"

Alex Counts, Grameen Foundation's president and CEO, calls David Roodman's new publication "the best book I have ever read about microfinance."

After some introductory remarks, Roodman sets the modern microfinance movement in a historical context, and does this better than I have ever seen before.  His survey also provides some important lessons for those working to expand and improve microfinance today.

The bulk of the book addresses the question “Does microfinance work?” in distinct ways. Does microfinance reduce poverty, does it improve the control the poor have over their lives regardless of whether it leads them to a poverty-free life and, thirdly, has it become a vibrant new industry that strengthens societies by enhancing ecosystems (in the broadest sense) consistent with long-term socio-economic development?  I admire how he has given equal weight to the three dimensions of “working” – I strongly agree with him that all are important and the latter two (especially the third) have been comparatively neglected by microfinance advocates and critics alike.

Due Diligence deserves to be read by anyone involved in microfinance, including those who volunteer their time or contribute and/or invest their money.  Let me summarize how he answers the main questions he asks, as well as his recommendations, and then distill how I believe someone involved with Grameen Foundation – or any microfinance network or institution – should feel about their past and future involvements, given his judgments and recommendations.

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CEOs Release “Road Map for the Microfinance Industry”

January 18, 2012

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 CEOs of microfinance-focused organizations have agreed on a common approach to pursue going forward, to ensure that they are serving the poor in the best way.

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.