Archive for the ‘Social Performance’ Category

Day Eight: Reaching the Poor and the Organizations That Serve Them

November 18, 2012

For the 12 days leading up to Thanksgiving in the U.S., we’re featuring 12 stories from six different countries we work in, as a way of saying, “Thank You” to our supporters, who make our work possible. We hope that you enjoy seeing the difference that you’re making in the lives of poor people around the world, every day.

Cristopher Lomboy lives in Los Banos, in the Philippine province of Laguna. He joined Grameen Foundation in November 2009 as its poverty measurement specialist in Asia.

One of our exciting initiatives in Asia is the microsavings initiative in collaboration with CARD Bank in the Philippines, which reaches around 600,000 clients. Its goal is to encourage more poor people, especially those living on $1.25 or less a day, to have access to formal savings services. The program allows them to pool their money as a group and then open one account for each member of the group.

Cris strives to put life-changing tools – like savings accounts – in the hands of the poor, and to help other pro-poor organizations reach more poor people, more effectively.

My role is to help the project measure the poverty levels of the clients, then use this information to find out if we are reaching the poorer people. If not, we develop approaches to reach those clients. What makes my job rewarding is the opportunity to become a thought and practice leader in poverty measurement, and to support “blended performance reporting” – meaning that we look at both financial sustainability and social impact. Also, being able to learn about poverty alleviation efforts in different Asian countries enriches my own approach to helping influence pro-poor organizations’ initiatives to help the poor.

One of the challenges of my job involves reaching out and sharing our rich experience and tools with more pro-poor organizations. The magnitude of poverty is great and there is a real need quickly exchange knowledge and stories between practitioners, to help improve their practice. We also collaborate with other organizations, such as the Ford Foundation, to provide technical support for poverty measurement data.

Our goal is to increase our direct outreach to poorer clients. There are many people who do small jobs, like selling vegetables and seasonal manual labor, who are most vulnerable to crisis. If they can at least save some money for an emergency or life event in their families, then reduce the risk they face, and break the cycle of poverty for themselves and their families.

You can help us connect even more poor people to savings accounts when you support Grameen Foundation today.

Our 12 days of Thanksgiving series stories were collected and edited with the help of Bankers without Borders® volunteer Nicole Neroulias Gupte.

You can read the rest of our series here: Part 1 | Part 2 | Part 3 | Part 4 | Part 5| Part 6| Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12

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

July 24, 2012

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?

July 20, 2012

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 >>

Things Move More Slowly in Africa

June 27, 2012

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 post is the third in a four-part series; you can read her first post here, and her second post here.

“Things move more slowly in Africa” – this is a common refrain for many of us at Grameen Foundation when we find ourselves experiencing hurdles with our work in places like Nigeria and Ethiopia. In fact, African countries and the organizations we work with do often lack the infrastructure – particularly the Internet connectivity – that contributes to the fast-paced, rapid-response world that those of us based in the United States have grown so accustomed to. Slower is also a word I’d use to describe Bankers without Borders’ own presence in Sub-Saharan Africa.

Joining Grameen Foundation after primarily working with US-based NGOs, I remember my own first experiences arranging a call with a microfinance institution (MFI) leader in Sub-Saharan Africa – fumbling around with Skype to enter the correct phone number, then getting a voicemail message in a language I couldn’t understand. It might take a few weeks of trying to connect at a time convenient for us both. In those early days, Grameen Foundation did not have local offices or staff in places like Nairobi, Accra or Kampala. Cultivating relationships and managing projects is difficult to do from a different continent, which is why I am amazed we were actually able to do any work in places like Ghana and Nigeria in those first few years of BwB.

Over the past year, however, BwB has been able to gain some traction in the region, thanks to the regional leadership of Erin Conner and Steve Wardle, and BwB Regional Program Officer Martin Gitari, all based in Nairobi.

David Washer (right) spent a week meeting clients and lending his skills in finance to Eshet, an Ethiopian microfinance institution, as part of Bankers without Borders' FiDavid Washer (right) spent a week meeting clients and lending his skills in finance to Eshet, an Ethiopian microfinance institution, as part of BwB's Financial Modeling Reserve Corps.nancial Modeling Reserve Corps.

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

Grameen Foundation’s own programs, particularly our MOTECH work in Ghana and Community Knowledge Worker (CKW) program in Uganda, are BwB’s biggest clients. In our early days, we had a hard time convincing Grameen Foundation’s own technology teams of the services we could provide, because Grameen Foundation’s own employees assumed BwB was only focused on connecting bankers with microfinance institutions (a fair assumption, given our name). Thanks to some education on our part and the willingness of these programs’ leaders to give us a try, we’ve been able to place volunteers such as Chris Smith and Gillian Evans (a husband-and-wife team) with CKW and Roche employee Lynda Barton with MOTECH, in year-long placements. We’ve worked with CKW to establish a local collaboration with Makere University to provide interns to our Uganda office each semester. And we’ve just finalized arrangements to engage a Glaxo Smith Kline employee with the CKW team on a six-month assignment, starting this month.

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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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Reporting from Hong Kong

June 14, 2012

Shannon Maynard is Director of Bankers without Borders®, 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 post is the first in a four-part series.

The summer after I joined Grameen Foundation to run Bankers without Borders (BwB), I had the pleasure to travel to Shanghai, China, where we had amassed a significant pool of advocates for our work – the “Shanghai Volunteers.” I met with these inaugural members of our BwB community (organized by uber-volunteer Susan Place Everhart) and joined Jennifer Meehan, our Regional CEO for Asia, in meetings with potential corporate partners for Grameen Foundation’s work in the region.  After spending time in Shanghai, I then traveled to Bangalore, India, where BwB was undertaking one of its first corporate collaborations and field-based projects in Asia, with Grameen Koota and a team of volunteers from Accenture, Dow Chemical and Citi.

It’s now three years later, and I am headed to Hong Kong – Grameen Foundation’s regional headquarters for Asia – to spend time with Sharada Ramanathan, the extraordinary woman behind BwB’s presence today in Asia. Working with Grameen Foundation’s regional staff, we’ll brainstorm how to continue to deeply integrate volunteers into the way Grameen Foundation does business – from helping us fundraise and addressing our own capacity gaps, to creating standard roles for volunteers in delivering our programs and services in Asia. We’ll also look at how we continue to share the skills and expertise of volunteers in our database – more than 20% of whom are based in Asia – with other social enterprises that have a market-based approach to improving the lives of the poor.

BwB Regional Program Officer for Asia, Sharada Ramanathan, and Director Shannon Maynard are spending a week meeting with volunteers and supporters in Hong Kong.

BwB Regional Program Officer for Asia, Sharada Ramanathan (left), and Director Shannon Maynard are spending a week meeting with volunteers and supporters in Hong Kong.

As I prepare for this trip, I think it’s worth reflecting on some of BwB’s successes, failures and insights from our three-year history in Asia.

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Making Progress Through Savings

June 14, 2012

Kimberly Davies is a program officer on Grameen Foundation’s Financial Services team.

Traveling to the field and talking with clients is the favorite part of my job.  I’ve worked in microfinance for five years and think daily about the poor women and families whom we support. Working with partner organizations and meeting clients face-to-face not only reminds me of why I’m in this field – it also helps me better understand the poor’s demand for financial services and the many challenges involved in providing those services.

It has been really exciting to see the progress of our microsavings project in India.  The first time I visited our partner organization Cashpor Micro Credit – a poverty-focused microfinance institution (MFI) in Varanasi, India – it was not yet offering savings products to its clients. This was partly due to complex Indian regulations requiring MFIs to work with banks to provide savings. Since then, Cashpor partnered with ICICI Bank and Eko Technologies (a tech provider that enables savings via the mobile phone) to launch a new savings product in the summer of 2011.

Microsavings accounts provide poor parents with a safe place to save for their children's future.

Microsavings accounts provide poor parents with a safe place to save for their children’s future.

Since the launch, Cashpor has added about 250 new savers every day, and currently has more than 60,000 savings accounts. Cashpor’s clients have spoken loud and clear about their desire to save. Clients told us during my last visit that they wanted their own safe savings accounts, but I wasn’t sure what the real demand truly was. It’s also challenging to offer convenient services to clients, because some do not have cell phones, most can’t read and many are even numerically illiterate. These challenges, on top of others, were things that I knew would take time to navigate.

However, the huge demand does make sense. A safe place to save is critical for families, because it helps them smooth consumption during times of sporadic income, or prepare for an emergency or a planned lifetime event. Of course, people want convenient tools to help them better manage their lives. In the United States, we have access to so many financial tools in our everyday life – various savings accounts we can access at any time, insurance, loans, locked CDs that yield a safe and consistent interest rate, etc. You name it, we have it. The poor want these same tools.

Truly moving out of poverty is a huge task. Though tools like the Progress Out of Poverty Index® can measure the likelihood that an MFI’s client base is poor and track its movement out of poverty over time, this is a complex thing to measure, because forces such as natural disasters and family illnesses can prevent people from moving out of poverty or cause them to slip back into poverty. These uncontrollable forces make the use of easily accessible and affordable financial tools – such as savings accounts – all the more important to the poor.

Again and again, I’ve seen with my own eyes and heard with my own ears how access to financial services has improved the lives of poor people and their families. I look forward to seeing Cashpor’s savings program grow even more over the next year, as they help more women and families in need.

Growth for All: Including the Poor in Strategies for Economic Growth

May 31, 2012

Michael Castellano is a graduate student at The George Washington University, studying International Affairs and Development. He interned with Bankers without Borders® at Grameen Foundation during the spring of 2012.

In the years following the global financial crisis, politicians and policymakers across the globe have harped on one cardinal goal: economic growth. Without a doubt, plans for growing the economy will dominate discussions in the upcoming U.S. presidential election. It seems as though we as a society have collectively determined that if only the economy would turn around, conditions would certainly improve across the board. If only we could enact legislation to spur economic growth, inevitably we would all be better off.

Fortunately, statistics show that the United States has seen steadily climbing annual growth rates since the nadir of the “Great Recession.” Developing countries and emerging economies have, on the whole, experienced average growth rates of more than 5 percent thus far in 2012 and will continue to propel the world’s progress, according to financial forecasts. So – this is good news for everyone, right?

Not necessarily.

Although a country’s national economy may grow, the poorest of the poor often remain completely disconnected from the financial, political and social systems in place. Without active bank accounts, the poor cannot easily save or access other financial services. In rural villages, people may not have easy access to healthcare and can quickly fall victim to external shocks such as disease or natural disaster. Without these services, poor people around the world cannot reap the benefits of overall economic growth.

During my time at Grameen Foundation and through my studies in International Development during this past year, one fundamental lesson has stood out: Though economic growth is certainly important, growth does little to reduce poverty if the poor lack access to essential services. This illustrates a key principle that development practitioners dub “pro-poor growth.”

Michael Castellano served as an intern at Grameen Foundation this spring.

Michael Castellano, shown here during a trip to Australia, served as an intern at Grameen Foundation this spring.

Pro-poor growth involves forming development policies and strategies that target the poorest of the poor and offer new ways of connecting them to financial markets. Professor Muhammad Yunus, Nobel Prize laureate and founder of Grameen Bank, stated, “The direct elimination of poverty should be the objective of all development aid. Development should be viewed as a human rights issue, not as a question of simply increasing the gross national product.”

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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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