Today, October 17, is the United Nations International Day for the Eradication of Poverty (IDEP) and this year’s theme is “From Poverty to Sustainability: People at the Centre of Inclusive Development.” First commemorated in 1987, the IDEP is “an annual opportunity to acknowledge the efforts of people living in poverty and to have their voices heard, recognizing that poor people are at the forefront of the fight against poverty and are critical partners for achieving sustainable development.” Opportunity International is in complete alignment with the objective of the IDEP–our core belief is that small-scale entrepreneurs can be big change agents in breaking the cycle of global poverty.

Opportunity staff and supporters just returned from our annual conference where we heard from poverty eradication experts and thought leaders in fields related to food security, global hunger and environmental sustainability. Among them were Dr. Julie Howard of USAID’s Feed the Future initiative; Ambassador Tony Hall of the Alliance to End Hunger; John Magnay, Opportunity’s agricultural advisor in Africa; and Richard Leftley, CEO of MicroEnsure, a purveyor of weather index crop insurance.

The experts shared that the most vulnerable people on the planet need not only short-term strategies to combat crop shortages, unpredictable weather and natural disaster, but they need long-term, sustainable solutions that they can implement for themselves to battle the effects of uncertain futures due to climate change and rising food prices. Agricultural finance products like market linkages and microloans, as well as weather index crop insurance, are sustainable, long-term solutions to these issues.

At Feed the Future, we’re working on long-term research to combat climate change and drought, as well as increase productivity of essential cereal crops and legumes.
-Dr. Julie Howard

World leaders have said to me, ‘Your aid is helpful, but when are you going to help our people get back on their feet?’ And they’re right. That’s what microfinance can do.
-Ambassador Tony Hall

There are one billion people in Africa, 75% of whom are involved in agriculture, yet the continent is not capable of feeding 100% of the people. [...] It’s most important that we finance agricultural production because that’s where we can most impact hunger in Africa. -John Magnay

MicroEnsure’s simple product and process design for microinsurance services, including weather index crop insurance, has created cost-effective access to risk protection for communities living in poverty. -Richard Leftley

Rosalinda Omega

Rosalinda Omega and her husband Topper sell flowers and garden plants in the market of Silangan, in Cebu City, the Philippines. Blessed with three kids, she and her husband work tirelessly but fear that they will not be able to save enough money to send her children to college. The couple rely mostly on the volume of harvested plants that are delivered to them by their supplier.

They know that environmental factors, seasonal celebrations, and the dwindling economy in this type of industry are just a few of the factors that could affect their income. Some days, the couple goes home with barely enough money to purchase even meager portions of food for their family.

Support Rosalinda and her family by contributing to her loan at opportunity.org/fundaloan »

For more on the UN International Day for the Eradication of Poverty, click here.

Session panelists (from left to right): Mary Ellen Iskenderian, Manasseh Phiri, Seema Aziz, Prime Minister Morgan Tsvangirai, Elaine Edgcomb, and Kebede Ayele.

In this afternoon panel, “Going Small for Big Results: Microfranchise and Entrepreneurial Growth,” participants discuss the impact of “microfranchise and microenterprise” business strategies to help create jobs and assist business owners in low-income, marginalized communities around the world where access to employment is the scarcest. Beyond employment, these small businesses can also deliver critical goods and services to more marginalized and underserved people, especially women. This panel focuses on communities where entrepreneurship is a key source of jobs, and other sources may not be available, and discuss those enterprise-development strategies.

Moderator:
Mary Ellen Iskenderian, President and CEO, Women’s World Banking

Participants:
Manasseh Phiri, Executive Director, Society for Family Health
Seema Aziz, Partner and Executive Director, Sefam; Chairperson, CARE Foundation
Morgan R. Tsvangirai, Prime Minister of the Republic of Zimbabwe
Elaine L. Edgcomb, Director, FIELD, The Aspen Institute
Kebede Ayele, Country Director, Ethiopia, iDE

As the session launched, each participant introduced their organizations or backgrounds, and how these relate to microenterprise.

Kebede Ayele explained that iDE was an international NGO headquartered in the U.S. which operates in Asia, Latin America and Ethiopia, working with local farmers to transform from subsistence to small-scale commercial farming. He emphasized that the goal is to make their work scalable, allowing them access to affordable irrigation technologies, increasing their productivity, and then designing irrigation technologies via a private supply chain, building local private micro-enterprises. “Though we are an NGO,” Kebede says, “we are also a market-based organization, working to reach scale. Microfinance plays a key role, enabling farmers to borrow money and then pay it back. Within three to five years, we have a goal of reaching 50,000 households.”

Manasseh Phiri represented the Society for Family Health, which emphasizes the “social marketing” of health issues and microfranchising through clinics and through community health workers, offering family planning services, and counseling and testing for HIV and for TB. They train community health workers in social marketing, providing them with small health items such as water purification tools that they can sell for a small price, then they earn a little money, save it, buy more items to sell, and create a micro-enterprise.

Elaine Edgcomb operates FIELD at The Aspen Institute, which provides microfinance, training and technical assistance through organizations and small companies in the U.S, engaging in specific sectors to produce enterprises that produce jobs. Asked by Manasseh about their employment of “developing world techniques,” Elaine says, “Actually, microenterprise in the U.S. takes lessons from international microfinance… We have lots of grassroots organizations that employ peer-lending, peer-learning, individual lending, and technical support. We’re eager to trade both ways and learn from you as well.”

Seema Aziz has grown her Pakistan-based businesses in the last 26 years, utilizing local micro-entrepreneurs and creating jobs in their community. They were creating high-quality clothing with machines but began outsourcing hand-embellishing of garments to local entrepreneurs, providing all the materials they need. When the local vendors began picking up more and more materials, Seema realized that they had grown and hired more employees to do this work. In this way, her businesses were providing more jobs within the local community. They now have about 200 master vendors/workers who each employ between 20 and 70 people. “This is very scalable in other countries,” Seema says. The vendors have minimal risk and need little access to capital, offering them access to opportunities they would not otherwise have. “We’re training women to go into flood areas now,” Seema says, “creating a bigger and more sustainable solution.” She says, “We created our model out of a desire to use local vendors and entrepreneurs, and now thousands of people are growing and creating businesses on their own.” But most of all, she says that education and training are really critical. “The difference between empowerment and helplessness is education.” The difference between empowerment and helplessness is education. -Entrepreneur Seema Aziz

Morgan Tsvangirai, the prime minister of Zimbabwe, asked how does a government create jobs. “I think a government facilitates conditions to create jobs and to develop people’s skills to do so.” Zimbabwe has a high percentage of people in the informal sector. We’re aiming to have a generation of educated, young Africans who have job opportunities. In Africa, corporate investment is not the solution, it’s small enterprises that touch big enterprises, increasing employment of young people and encouraging small entrepreneurs. But he asks, “How can you loan without collateral?” Seema replied that in the microfinance model, especially that employing Trust Groups, there is no collateral because the group co-guarantees each others’ loans.

Moderator Mary Ellen Iskenderian asks, “How do you make training sustainable?” Kebede says that iDE’s own staff trains farmers and then they recruit from their own farmers as training agents.

For Opportunity International, this panel reinforces the impact that small-scale entrepreneurs in the U.S. and around the globe can have on their local communities. Not only is small, grass-roots entrepreneurship sustainable but it is a local source of jobs. With training, education and opportunities, local and previously underserved people, especially women, can create big and sustainable changes in their lives, providing for their families with businesses that can be a sustainable source of jobs for the next generation.

Inspired by a Sept. 2009 article in The Economist magazine, Opportunity's program manager describes the impact that microfinance services can have on clients.

Every Wednesday, we highlight an article, book or a blog in our “What We’re Reading” series. We feature works that are noteworthy, inspiring, educational or relevant to the work we do at Opportunity. We welcome your comments in the comment field below–tell us what you’re reading, or respond to the piece we’ve highlighted. The following post by Opportunity’s program manager, Annsley Scruton-Wilson, uses a 2009 article in The Economist as the catalyst for an examination of the potential impact of access to financial services for our clients in developing countries…

In late September 2009, The Economist published an article linking the effects of climate change to chronic poverty in the developing world. It indicated: “Poor countries are particularly prone to flooding… climate change is overwhelming the social and other arrangements that in the past allowed countries and people to cope with floods. National budgets can ill afford the cost of improving defenses.” This article underlines the potential impact of changes in weather as well as the need to provide innovative microfinance products to those most affected.

One only has to go as far as Brazil to imagine the effects on a potential client: Lena lived in the busy metropolis of Saõ Paulo. Working as an entrepreneur with her own candy cart, she made enough to get by. Her husband worked odd jobs, and together, they supported three little girls. When the floods came, as they do every year, there are a few scenarios for what might have happened to Lena:

Scenario A:

Because of her limited education, Lena had never learned the benefits of saving with a bank, and she lost all the Brazilian reais that had been tucked into a corner of her mattress. Unfortunately, she had not yet converted her paper money to the plasticized type offered by the government. Without savings, she was forced into prostitution and lost her husband and family.

Scenario B:

Lena was fortunate to be an Opportunity client. Despite her little formal education, she learned about the importance of saving with a bank when she took out a loan for her side business. Not only was her money safe from the gang-members that patrolled her favela, it was spared a quick and watery drowning. By the time that m-banking, or mobile phone banking, was available in Brazil, Lena was able to complete transactions electronically on her phone. Along with other Brazilian women in her poor community, she joined the ranks of wealthy Brazilians who were moving in a cashless, as opposed to a cash-based, society. Through her loan officer, she learned that electronic banking was one of the safest forms of keeping her family alive, especially in the unpredictable changes in weather that continued to hit Saõ Paulo.

Lena, although not an actual client, represents a thousand women like herself who work with Opportunity International. With electronic and cashless banking, clients can get the financial leg up that will make the huge different in this new environment of rapidly changing climates. Opportunity is not looking to just provide a band-aid solution, but they are actually encouraging poor clients to join the cashless society that is occurring all around them. That’s why Opportunity’s work is so vital. Electronic banking products can “waterproof” the life savings of a family and save them from the floods of poverty.

By Annsley Scruton-Wilson, Program Manager

Jeffrey Ebarrita (right) uses a GPS device to survey the land of Rodolfo Felipe, an Opportunity crop insurance policyholder in the Philippines.

A recent UPI wire story, which highlights Opportunity International’s weather-index crop insurance, hails microinsurance as an exciting new tool to help communities in the developing world face the worst impacts of climate change. The article, “Insuring the world’s poor against climate change,” quotes the UN University Institute for Environment and Human Security‘s Koko Warner as saying, “Because of things like location, education and life expectancy, the world’s poor are a lot more vulnerable to climate change.”

Weather-index crop insurance protects farmers from the financial risks associated with extreme weather such as drought, flood and typhoon–“events that stand to become more frequent as the climate changes.” A grant from the Bill & Melinda Gates Foundation is enabling Opportunity to pilot and expand the crop insurance program to several countries in sub-Saharan Africa and Asia.

Read the article here.

Watch the video, “The True Impact of Crop Insurance,” to discover how smallholder farmers in Malawi (with less than two acres) are protecting their crops from drought–and their families from starvation.

Read our latest Impact newsletter (page 4) for more about one of the world’s leading experts on weather-index crop insurance, Shadreck Mapfumo, who also serves as Opportunity’s vice president of agriculture.

Opportunity International is prominently featured in an article entitled “Food & Microfinance: Helping Farmers Reap Rewards” in today’s Financial Times. The article highlights Opportunity’s leadership in providing both agricultural finance and microinsurance to smallholder farmers to help them increase production, support their families and feed their communities. It also references “Feed the Future,” USAID’s new global hunger and food security initiative.

John Magnay, agricultural advisor for Opportunity International, is quoted as saying, “Microfinance is the lubricating system for smallholder farmers. Unless they can get access to inputs and finance the production and marketing cycle, they will not be able to produce at optimum levels.”

The article continues: “MicroEnsure, the insurance agency of Opportunity International and one of the shortlisted organisations for the Banking at the Base of the Pyramid award, is working with the United Nations through the Munich Climate Insurance Initiative to create a $5bn climate change insurance plan. This will cover people in developing countries who are facing increased incidences of climate-related flooding, drought and other extreme weather events. These experiments in micro-insurance for smallholders come at a critical time, as the risks that farmers face are likely to rise sharply with the effects of climate change.”

Sowing the seeds of success: a Tanzanian farmer working in her cornfield. Photo by Financial Times.

The article also highlights our program in Malawi as an example of microfinance institutions and non-governmental organizations that are starting to address the financial needs of smallholder farmers. “In Malawi, Opportunity International combines microloans with savings accounts and weather insurance products. ‘We’re also encouraging farmers to plant trees,’ says Mr. Magnay. ‘So, in seven or eight years, they will have household fuel wood and timber to sell.’”

Click here to read the full story.

To learn more about Opportunity’s agricultural finance initiative, attend the Opportunity International Microfinance Conference on Oct. 8-9 at the Marriott Crystal Gateway in Arlington, Va. The conference will feature speakers such as John Magnay and Roger Thurow, Senior Fellow on Global Agriculture and Food Policy for the Chicago Council on Global Affairs, as well as breakout sessions on key issues such as global poverty, hunger and microfinance. To register, click here.

Watch our video or read the latest Impact newsletter to find out how you can get involved with Opportunity’s Banking on Africa campaign to provide financial access to more people living in poverty.

“I strongly believe that, through CGIU, we can harness the energy and power of today’s young leaders to improve the lives of people around the world and build a stronger future for us all.” – President Bill Clinton

Reflections from Clinton Global Initiative University (CGIU)… At this conference we spent 36 hours rubbing shoulders with the next generation of young leaders from college campuses all around the world. Participants are students, universities, and youth organizations chosen by CGIU, invited to spend the weekend at the University of Miami collaborating and sharing their ideas for global change. CGIU was founded by President Clinton, who aims to build upon the success of the Clinton Global Initiative to generate collaboration among world leaders and to harness the power of young, innovative thinking.  In his characteristic public style, President Clinton mixes candor, humor, and draws upon his personal experience to inspire action and deliver results through consistent commitment, development support, and the annual CGIU Conference. To date, CGIU has delivered 2,000 individual commitments into action in the areas of clean energy, climate change, poverty, global health, and the promotion of human rights and peace.

Naturally, Opportunity International participates annually in CGI conferences because they are the largest gatherings of domestic and global leaders in the country. But there is one big difference at this conference–these are young leaders, eager to use exciting, new ideas to make improvements on a global scale.  We made a commitment to create a volunteer-led regionally based chapter network of passionate, globally-minded young professionals, Young Ambassadors for Opportunity (YAO), who actively INSPIRE, EDUCATE, and INVOLVE others in microfinance and raise $2.7 million to support Opportunity International’s initiative to start a regulated microfinance bank in Tanzania.

President Clinton said it best in his opening address: “The most important thing that we learned from Haiti is that if there are enough people behind a cause, you can change the world.”

Opportunity International is working to equip countries to be agriculturally self-sustainable through microfinance.

There is a green revolution occurring in the developing world led by passionate individuals with a heart for change. Within this revolution, Opportunity International is equipping nations to do something radical–to feed themselves.

In honor of www.blogactionday.org, I would like to introduce Lucas Chingore. Lucas is a farmer in Mozambique. His desire was to farm on a plot of land just outside of town. But his goal was always out of reach. He did not have the financial services that he needed to succeed. Finally, he found Opportunity International and his farm took root. He received a loan for an irrigation pump that brought precious water to his crops and greatly enhanced his yield. Another loan allowed him to diversify into poultry so that hundreds of chickens now populate his fields. And he opened an Opportunity savings account to protect his business profits and earn interest.

Lucas is now feeding his family, his community and his nation, thanks to a loan from Opportunity.

Two-thirds of the sub-Saharan Africa labor force is employed in agriculture. With this in mind, Opportunity institutions in eight African countries (Ghana, Kenya, Malawi, Kenya, Mozambique, Rwanda, South Africa, Tanzania and Uganda) are committed to addressing the issue of food security. Opportunity plans to solve this great agricultural conundrum through the success of people like Lucas.

The issue of food sustainability is not a new issue. It is, however, one of the most pressing problems in the developing world. With the global food crisis still a battle that the poor face daily, Opportunity International recognized the need for a long-term solution to this chronic problem.

Using technology, Opportunity has pioneered crop insurance that mitigates weather problems in farming. Using education, Opportunity is teaching farmers about the true market value of their crops. Using savings products, Opportunity is allowing farmers to manage their cash flow. Using new seeds, Opportunity is helping farmers to increase crop yields and decrease risk.

As Roger Thurow and Scott Kilman insist in Enough, this is a problem that can only be solved by creativity and commitment. Opportunity International has become a champion of the farming poor. And in doing so, Opportunity has equipped nations to feed themselves.

To read more about Lucas’ story, click here. To learn more about Blog Action Day and the topic of climate change, go to www.blogactionday.org.