Archive for the ‘India’ Category

A Real Education

April 26, 2012

Julia Arnold is a program associate for Grameen Foundation’s microsavings initiative, and will graduate from American University in May with a master’s degree in international development.

As a graduate student at American University and a Grameen Foundation employee, I have studied international development in the classroom and have seen it in practice through my work with Grameen Foundation’s microsavings initiative in India, Ethiopia and the Philippines, and our livelihoods work in India. This unique vantage point has given me many opportunities to reflect on the relationship between what is taught in school and what is done in the “real world” of international development. On a recent trip to one of the project sites of our microsavings project, I began to truly appreciate the difference between classroom theories and realities of the lives of the poorest.

Clients of Indian microfinance institution Cashpor take a break during a group meeting, where poor women like these meet to make payments on microloans and to make deposits in their savings accounts.

During our visit to the holy Indian city of Varanasi, my colleagues and I visited the homes of some of the urban and rural clients of Cashpor, a microfinance institution (MFI) we’re working with to deliver microsavings services to their ultra-poor clients. It was a privilege to be welcomed into the homes of the families for whom Cashpor provides access to vital financial services. The women I met were beautiful in their bright saris – and serious about their membership in the self-help groups (SHGs).

Though I was inspired by their resilience and determination, the women also bore the marks of very difficult lives. They were extremely small – a result of malnourishment – and extremely poor. Those in urban areas lived in one- or two-room homes in concrete apartment structures with little more than a bed and a curtain for a door, while those in rural areas shared their small homes with their precious livestock. One urban family lived in a very small room in an apartment that didn’t hold much more than a bed – shared among seven family members. The youngest of the five children was badly scarred from surgery for a broken leg and would never walk properly again.  Though most of the children wore school uniforms and were enrolled, I struggled to imagine where they studied or how long it would be before they would be pulled from school to help earn income for the family.

Several truths jumped out at me as a result of meeting these clients. These truths had been spoken during my classes, but I was not able to fully appreciate them until traveling to India to meet these women.

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Falling in Love … with Microfinance

April 17, 2012

Tânia Sousa works in the Microcredit unit within the Portuguese banking firm Millennium BCP, where she is responsible for marketing. A Portuguese native with more than 10 years of experience in the financial-services industry, Tânia studied economics, and has an advanced degree in marketing. She joined Bankers without Borders®, Grameen Foundation’s skills-based volunteer initiative, in February 2012 and recently completed her first field project in Varanasi, India, with Grameen Foundation’s Microsavings team. Tânia, who currently lives and works in Lisbon, hopes to continue volunteering with Bankers without Borders.

Tânia volunteering in Varanasi, India.

When I was a little girl and people asked me what I wanted to be when I grew up, I always said that I would like to be a medical doctor. I didn’t imagine myself in a traditional hospital or office. I always imagined myself in a distant country, helping the kids that I saw on TV who were living in extremely poor conditions, with no food, no healthcare and no opportunity to just be … well, kids.

Life carried me away from medicine — my soul wasn’t really there — and I eventually studied economics, later graduating with a master’s degree in marketing. After graduation, I started working in a small investment bank called Activobank, which is owned by the largest private Portuguese bank, Millennium BCP. I remained at ActivoBank for 11 years, until March 2011.

Then something amazing happened: I was invited to lead the Marketing department at Microcredit Millennium BCP. I didn’t know much about microfinance, so the challenge was huge. I immediately started to do a lot of research and, to my surprise, I fell hopelessly in love with microfinance.

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Helping MFIs Make Use of Their Best Asset

April 3, 2012

These days, microfinance institutions (MFIs) face myriad challenges, both from competition within the industry and from increased public scrutiny and government regulation. This is why it is more important than ever for MFIs to invest in their most important asset: their employees. In a new piece for the Microfinance Gateway blog, Peg Ross, Director of Grameen Foundation’s Human Capital Center, lays out five strategies for MFIs looking to ensure that their workers are mission-focused and successful.

Peg Ross, Director of Grameen Foundation’s Human Capital Center, joins a loan officer from Ujjivan, an Indian MFI, on her rounds to visit clients.

Peg points to recent studies showing that people issues are at the core of most of the problems that MFIs face, and that progressive HR policies can lead to significant improvements in productivity. An MFI should start, she says, with an internal HR assessment to determine “what works and what doesn’t work, so that the organization can focus on the right levers for change.” From there, the MFI can create a long-term plan and focus on implementing best practices in everything, from hiring to performance evaluations to the professional development of its people.

Read the full post to find out more.

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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Giving India’s Poor a New Way to Save

January 5, 2012

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.

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.

Tackling the Challenges of Offering Voluntary Savings to the Poor

December 23, 2011

Leo Tobias is Grameen Foundation’s Technology Program Manager of the Solutions for the Poorest Microsavings Initiative.

Offering savings programs for the poor can be challenging. First, the microfinance institutions (MFIs) that want to offer these services are competing with a variety of alternatives, such as home-based savings (under mattresses, in strongboxes, etc.), or keeping money with relatives or neighbors. Second, offering savings products fundamentally changes the relationship between the MFI and its customers.  When clients only want loans, making that the primary purpose for their interactions with the MFI, there is a standard process. Taking voluntary customer deposits radically changes that relationship, to one that is initiated by the customer and that involves varying amounts of deposits or withdrawals. In other words, the customer interaction is less predictable.  At any time of the day or night, the customer can ask for her balance and withdraw from it.

A loan officer from CASHPOR in India processes loan payments on her mobile phone.

A loan officer from CASHPOR in India processes loan payments on her mobile phone.

Grameen Foundation’s Microsavings team has found that poor customers all want to have easy and convenient access to their funds.  The MFIs we work with face common technology challenges involved with providing such access.

In this post on the CGAP Technology Blog, Leo Tobias, our technology program manager for the Grameen Foundation Microsavings Initiative, discusses two of the major technology challenges facing MFIs.

The Value of Group Savings and Lending to the Poorest People

December 21, 2011

This is a guest post from Sudarshan Behera, Field Executive for our Livelihood Pathways for the Poorest project in Gaya, India.

Sugia Devi was a changed woman on November 7, 2011. She had just left the free cataract clinic in Bodhgaya in India’s northern state of Bihar and was grateful for her improved eyesight. She couldn’t wait to thank the people who had made it possible: the members of her adapted self-help group (ASHG).

Sugia Devi and her husband

Sugia Devi and her husband.

The group is part of Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School that is designed to enhance the skills of the ultra-poor, link them to income-generating activities and build their savings habits.

Sugia lives in Khaneta village with her husband and her son, and his family. When she first heard about the ASHG in August, her husband did not want her to join the program because of mistrust and a lack of understanding about the benefits of participation. She persisted and began attending meetings and saving a small amount each week. Starting with an initial deposit of 10 rupees (about 2 cents), by November she had saved 130 rupees (about $2.40). But it still wasn’t enough to pay her fare to get to the free clinic in Bodhgaya some 30 kilometres (19 miles) away.

That’s when Sugia turned to the members of her ASHG. In addition to providing a safe place to save, the groups also provide its members with quick access to short-term loans. Sugia’s group members approved her loan of 100 rupees, enabling her to cover her transportation costs for her operation.

Today, Sugia’s husband has a better appreciation for the value of the self-help groups, while she knows that her family can rely on the group when they need help. As her husband noted, before the ASHG, the family would have had to borrow from moneylenders who typically don’t lend less than 500 rupees (about $9), at very high interest rates.

Sugia has recovered from her operation, and now Friday – the day her ASHG meets – has a special importance in her life.

Building Skills, Building Confidence: How Ultra-Poor Women in India Are Taking a Step Toward Self-Reliance

November 10, 2011

This is a guest post by Avinash Kumar, a staff member of The Livelihood School of BASIX who is working with Grameen Foundation as the project manager for the Livelihood Pathways for the Poorest project in Gaya, India.

Asha Devi’s eyes sparkled as she rolled agarbatti (“incense sticks” in Hindi) for the first time. Asha is a member of an adapted self help-group (ASHG) in Pali, a village in India’s Bihar state, where the Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School, is being implemented. The sparkle in Asha’s eyes reflects newfound self-confidence and pride that by selling handmade agarbatti, she will be able to supplement her family’s income.

Women from the program hold up their newly-rolled agarbatti (incense sticks) during training

Nearly 100 women from six village ASHGs participated in our week long training. Agarbatti rolling, which is a common activity in almost all of the villages in the Gaya district of Bihar, is one of two income-generating activities being promoted through the project. These activities require simple skills and provide modest increases in income to help households meet their immediate consumption needs. As the clients’ confidence levels and skills increase, the project team will transition them into entrepreneurial income-generating activities, such as poultry farming and goat rearing, which require higher initial capital investment and skill sets but can significantly help fill income gaps throughout the year.

The agarbatti rolling training was unique not only because it was the first time women from the poorest families were receiving it, but also because it was the first time local women were given a leadership role to train their fellow community members. The experience of having a local woman train them in this skill helped increase the participants’ confidence, leaving them optimistic about their prospects and ability to contribute to their families’ income. While agarbatti rolling is common in the region, many of the households participating in our project had never done it because they live in relative isolation, making it more difficult for them to access agarbatti agents and vice-versa. Instead, they have depended largely on wage labor from agriculture production, construction work and road building.

Faced with very unpredictable and insecure income sources, these families have not had the luxury of time nor the opportunity to experiment with an entrepreneurial activity. In fact, these households often lack the necessary self-confidence to take up and learn a new activity, even such low-skill ones as agarbatti rolling. One of the aspects of the project is building the self-confidence of the members and, which, thus far, has been successful.

This training is the beginning of a change in this aspect of these women’s lives. As their self-confidence grows and they see their income rise, this positive change cycle will encourage them to seek out other opportunities. As they move forward, our team will work with them to continue on this path.

Helping the Poorest Access Resources, Training, Financial Services

November 2, 2011

Luckshmi Sivalingam, Program Officer for Grameen Foundation’s Solutions for the Poorest program, oversees the Livelihood Pathways for the Poorest (LPP) project in India.

One week last August, after slogging barefoot through a kilometer of muddy fields and monsoon rains, my colleagues from The Livelihood School at BASIX India and I reached our first ASHG (adapted self-help group) meeting of the week. We were greeted with warm smiles from the female members of one of the strongest ASHGs developed through the Livelihood Pathways for the Poorest (LPP) project in Bihar, India, to date. Trust levels and self-confidence are slowly building, as are savings habits among our members. Our project has two main goals: identifying and building a diverse and stable group of livelihood activities that will generate increased income throughout the year, and providing immediate and long-term socio-economic support for the group members and their families.

We have been working with the local government since May to link poor households to various support programs, including child and women’s healthcare and work for unskilled laborers. (The 2005 Mahatma Gandhi Rural Employment Guarantee Act guarantees 100 days of wage labor for adults in rural communities who are willing to do unskilled manual work or the equivalent in wages.)  Though the households in our project were eligible to receive these government programs, they either didn’t have the required proof of identification (India is one year into a national ID campaign that many hope will alleviate this problem) or were not aware of them. With our help, they now appreciate the immediate, tangible benefits of engaging in the government programs, as they begin to gradually access and experience the much-needed services that are rightfully theirs. Since we began our discussions with the local government, our target villages have been assessed to see which eligible households lack job cards; the ones that do are currently being processed. In addition, the households will each receive one to two fruit saplings for planting next month.

Participants in one of the LPP project's Adapted Self-Help Groups, or ASHGs, discuss the importance of savings.

Participants in one of the LPP project's Adapted Self-Help Groups, or ASHGs, discuss the importance of savings.

Understanding our clients’ thinking and the conditioning caused by a lifetime of chronic poverty is one of the most challenging aspects of this work. Our ready access in the developed world to the conveniences of modern life can limit our ability as practitioners to relate to and understand the very different reality of the poor we are seeking to help – a reality that can be a painful one. Living and interacting with them provides us with a window into the challenges of their daily lives, and shapes our own understanding of their needs and the context in which they live. It also helps us to understand the rationale behind the difficult daily decisions they must make – how to feed themselves and their families, what they must forego for the survival of their children and what sacrifices must be borne by the entire household, regardless of age. Designing a methodology, products and services to create “livelihood pathways for the poorest” will be a process of testing and retesting these next two years.

 

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