Food security and food price increases are of particular concern in poverty-stricken countries in the developing world and were the causes of recent violence in Mozambique. (Photo courtesy of opportunity.org.au)

In light of last week’s riots in Mozambique in which 13 people were killed, this post entitled “The Silent Crisis,” published on Opportunity Australia’s blog more than two weeks ago, has even more resonance.

This prescient blog post highlighted the concerns over food security and increases in food prices for economically marginalized people living in extreme poverty all over the developing world, including in India, the Philippines and a number of African nations. The blog reported:

Global food prices increased by an average of 43% between 2007 and 2008, according to the International Monetary Fund. During this period, food most commonly consumed by those in developing countries – including wheat, soybeans, corn and rice – saw the greatest price rises globally, with wheat prices increasing by a staggering 146%. [...] At the household level, increasing food prices have the greatest effect on underprivileged and food-insecure populations.

Mozambique’s food price increases, exacerbated by a reduction in food imports, including wheat from Russia, led to the food riots and looting. Last week, Sizwe Pamla of the National Education, Health and Allied Workers Union in South Africa told Financial Times online: “Too many workers are living from hand to mouth; the costs for poor people are skyrocketing.” 

Pamla’s words underscore the blog’s assertion that “[aid in a crisis] needs to be supplemented with a long-term solution to prepare those in greatest need for the predicted inflation in food prices.” In a country where 70% of the population live below the poverty line and more than half live on less than $1 a day, there is even greater need for Opportunity Mozambique‘s microfinance services to empower Mozambicans to create an economically stable future for themselves and their communities.

Read “The Silent Crisis” on Opportunity Australia‘s blog, full of information about food sustainability and security, and share your thoughts about the recent violence in Mozambique in the comment field below.

Daryl Skoog, Opportunity’s SVP of technology, develops innovations that improve the lives of our clients.

Recently, I had the chance to join a conference call with the Colorado-based Skoog to learn about the exciting strategies and products he’s working on. Some highlights from the call:

• Cell phone banking is one of the most exciting tools to bring microfinance to clients, says Skoog. In Kenya, the M-PESA product, through Vodafone and Safaricom, is reaching an estimated 13 to 14 million customers who use their phones not just for banking but to pay for fuel and food at certain vendors. An estimated 30 to 40% of Opportunity Kenya clients have cell phones, and with the service they can efficiently and easily make remittances on their loans, and transfer or receive funds into Opportunity savings accounts.
• Even for people who don’t have cell phones, an estimated 95% have SIM cards, and can often borrow or rent a phone in their community to use with a card.
• One obstacle to reaching geographically remote clients with cell phone banking is unreliable access to electricity. So Opportunity is partnering with manufacturers who’ve developed a solid oxide fuel cell that’s affordable and can run on virtually any indigenous, readily available fuel, like palm oil. The cell could go on the market in the next couple years. It generates one kilowatt of power–enough to run a household’s lights and a computer–and produces no noise, heat or fumes.
• Skoog says that one of the most technologically-advanced countries he’s seen is Malawi. “They are innovative and they take advantage of programs available to them through organizations like the World Bank.”
• “We’re working on really exciting things,” Skoog says. “Smart cards [cards with biometric technology] have really taken off in Malawi. And now we’re able to switch from smart cards to magnetic stripe cards, like ATM cards in the developed world, which are cheaper but contain the same biometric technology.”
• Other ways to reach unreachable clients? “ATMs and mobile banking vehicles are expanding and reaching more people than ever before,” he says. ”Mobile banks access rural areas that don’t have bank branches, and have bank tellers with cash and ATMs on board.” Skoog estimates the return on investment (ROI) for mobile banks is less than one year.

Thinking creatively about technology and innovating is key to reaching Opportunity’s most unreachable clients. And technology is changing and expanding every day.

Learn more and explore the tech innovations that help Opportunity fight global poverty at a breakout session with Daryl Skoog. At Opportunity’s Fall Microfinance Conference, Oct. 8-9 in Washington, D.C., Skoog will share the latest tech news in a session on ”Innovations in Technology.”  Click here to see all breakout sessions and learn how you can be a part of the conference.

School administrator Jacinta Njoki, of the Wisdom Junior Educational Center in Kenya, works with her students in the schoolyard. She started her school in 2001 with a $375 loan from Opportunity, and now has 150 kids and six teachers.

Welcome back to school. It’s an exciting time for kids of all ages: new teachers, new classroom, new school supplies… maybe even new back-to-school clothes. But for children living in poverty, their access to even the most basic education is never a certainty. 

Yet, education is one of the most vital development tools for economically marginalized individuals and communities. Access to educational opportunities can mean the difference between improving one’s future and mere economic survival. That’s why Opportunity provides funding for educators and proprietors who operate private schools in underserved neighborhoods, through our Banking on Education program. 

Through this initiative, we’ve disbursed more than 450 loans to educational entrepreneurs in Ghana, Malawi, Uganda and the Dominican Republic. We offer school fee loans and scholarships to clients in India. Plus, we’re partnering with the IDP Foundation Rising Schools Program, which is pioneering a sustainable education model that combines financial and non-financial capacity building services in support of extremely undeveloped schools in rural Ghana. 

Through these programs, we’re working to bring educational opportunities to children living in extreme poverty all over the world. Learn more about our Banking on Education initiative and our work with IDP Rising Schools in “Education Finance: Schools for Children Living in Poverty,” a breakout session at our Fall Microfinance Conference, Oct. 8-9 in Washington, D.C. Visit our conference page for more information.

For Opportunity clients in the developing world, often self-employed entrepreneurs, providing for the future can be a difficult struggle. So on this Labor Day, we honor all of our clients who work hard every day to provide for their family.

Here is the story of one such family:

Noemi Gallegos and Family Noemi Gallegos and Jose Luis Barajas were raised in a small village called La Huacana, in Michoacan, Mexico. They moved their eight children to the city in order to find better educational and professional opportunities. Jose Luis works as a gardener in the municipal government in Guadalajara. During his spare time, he sows corn. Noemi has a small tortilla business, using the corn provided by Jose Luis to make her tortillas. When Noemi heard about Opportunity International through a friend who was a Trust Group leader, she decided to join her group. She applied for her first loan two years and a half ago, which she used to build a walk-up window for her store and make improvements to the building, and to buy supplies that she needs. Noemi has now received and paid back eight loans, and she feels very proud of her successful tortilla business. With their income, Noemi and Jose Luis also have been able to provide their children a better education. One of their daughters is in public university studying to become an accountant. During the weekends she helps her mother with the business and she pays her back a little money for her education. Their oldest sons are now working in restaurants and the youngest children are attending school. Every week Noemi attends her Trust Group meeting, and she has received training that has helped her improve her business. Noemi dreams about giving all her children a good education and teaching them the value of hard work. She is happy to be able to continue improving her tortilla business with the help of Opportunity.

Through access to financial services, clients like Noemi and Jose Luis are able to work to improve their futures, sending their children to school and providing for their families. What a blessing this is!

UnPoverty: Rich Lessons from the Working Poor, by Mark Lutz, inspires us to imagine the reality of a future without extreme poverty.

People living in the most extreme poverty in the world do not just survive: they often enjoy rich family relationships, build vibrant communities and exude deep faith. Their ingenuity, persistence, generosity and self-reliance contain teachings for those of us who happen to have been born into relative economic stability.

That is the inspiration and the theme of UnPoverty: Rich Lessons from the Working Poor, a new book written by Mark Lutz, the senior vice-president of global philanthropy for Opportunity. His book is a series of vignettes, introducing you to people living in extreme poverty, inspiring you with the knowledge that with just a small opportunity, these individuals can be big change agents in their own lives and in their communities.

After more than two decades of working closely with people living in extreme economic poverty in developing nations, Lutz believes that what he calls “unpoverty” is possible. He envisions a world in which we eradicate global poverty by empowering the economically marginalized, but emotionally wealthy, offering them the tools to create a more financially stable future–with the goal of completely eliminating extreme poverty for the more than one billion people who live on $1 a day.

Says Lutz: “The purpose of UnPoverty is to convince the reader that we can eradicate extreme poverty in our lifetime if we act strategically. I shine the spotlight on poor people so the readers see them in a new light and want to act on their behalf. Each chapter is a different lesson I’m learning from the poor. Each lesson is illustrated by the stories of Opportunity clients. My prayer is that thousands of readers will decide to invest in the poor, and that many of those will choose to do so by supporting the working solution of microfinance that Opportunity offers its clients.”

Praise for UnPoverty:

• “Mark Lutz has captured what I have seen to be true over and over again around the world. We have much to learn from the resilience, determination and generosity of the families in these stories and countless more who are able to do so much if only given a chance.” –Jonathan T.M. Reckford, CEO, Habitat for Humanity International
• “Instead of stirring feelings of pity in his readers, Mark Lutz reveals the resilience, perseverance, wisdom, and willingness of the working poor. Through his personal interactions with those living in incomprehensible poverty, as well as his own genuine “ah-ha” moments, the author builds a deeper level of understanding. By joining hands with the poor, we can go beyond good intentions to genuine change.”  –Sammy T. Mah, President and CEO, World Relief
• “Our abundance can render us tone-deaf to the needs of the extremely poor. We are proud of ourselves when we make a difference. Mark shows us how.” –Claudia Kennedy, U.S. Army Lt. General (Ret.), speaker at Opportunity’s Fall Microfinance Conference
• “How powerful–to be mentored by the marginalized about what it means to be generous and to live with dignity. Through personal vignettes I discovered unconventional wisdom that if heeded will see ‘unpoverty’ as our global footprint.” –Paula A. Curtis, President and CEO, Opportunity International Canada

UnPoverty is now available to purchase. Visit unpoverty.org to learn more.

Opportunity client Nida Custodio (right) runs a small food business out of her home in Compania Molo, Iloilo, in the Philippines. Here, she and her adult son prepare achara, a relish made with meat and cabbage, to sell.

The best ideas are shared over food. That’s why Young Ambassadors for Opportunity (YAO) is launching “Breaking Bread for Microfinance.” 

In honor of International Poverty Eradication Day on October 17, YAO encourages you to host a dinner for family and friends. It’s a way for guests and hosts alike to share their ideas and their inspirations for global change. Our goal is to hold at least 31 Dinners in 31 Days throughout the month of October to raise awareness and engagement in Opportunity‘s fight against global poverty. 

Check out opportunity.org/breakingbread to register your dinner; download materials like a sample evite, recipes, client stories and videos; and start your dinner fundraiser via OptINnow. 

Share a meal, and inspiration, to fight global poverty.

Brandon Green (seated front right) and his friends raised $200 a few weeks ago to help fund the loan of client Donasian on OptINnow.

Escape to Bear Mountain, N.Y.

YAO-NY member Brandon Green, an investment banker, was looking for a way to get out of the city. So he decided to start a “YAO Adventure Club of sorts,” and brought a group of ten people up to hike on Bear Mountain, N.Y. a few weekends ago.

“Everyone chipped in for the rental car,” he says, “and we donated those proceeds to help fund client Donasian Mbiry‘s loan in Tanzania through our YAO Adventure Club group on OptINnow. We got some cool pictures of us all at the top too (see picture at right).”

Thanks to the $200 Brandon and the group raised, Donasian’s $700 loan has now been funded to $325. 

Dressed in a beach theme for the LA Mud Run on Aug. 21, the ladies of YAO-LA had a blast getting muddy. "I may have taken the costume a little bit too far!" laughed Alison (pictured far right).

Getting Muddy in L.A.

On Saturday, August 21, Alison Oviedo battled the mud field at the LA Mud Run in Pasadena with fellow YAO-LA leaders Kristina Olinger, Bianca Javier, Mandy Cheung, and co-worker Emily Ritchey.  

“We ran this 5K,” says Alison, ”because it sounded like a lot of fun and we thought it would be a great way to bring people together while raising funds for Opportunity’s work in Tanzania. The five of us had a great time running through the mud and obstacle courses, and we’re hoping to make it an annual event. We plan to get even more creative with our costumes next year–we went with a beach theme this time!” 

The mud runners have raised a total of $845 so far for Tanzanian entrepreneurs, and you can still donate to Mandy’s fundraiser, Mud Run for a Bright Future, on OptINnow.    

So, are you as adventurous as these YAO members? Go to OptINnow, where you can create your own fundraiser, and let your adventures fund the loans of entrepreneurs in the developing world. You can invite your family, friends, co-workers and social network friends to track your progress, donate and share the victory when you reach your goals. Go to optinnow.org/fundraisers now to get started.

Magnay, a British-born, 33-year veteran of the agricultural development sector in Africa, has worked with several African governments to develop agricultural advancements, and now leads Opportunity‘s agricultural finance program in Africa. His work is highlighted in an article published last week in Medill Reports, a newsservice written by graduate journalism students at Northwestern University. 

Although the proportion of the economically active population engaged in agriculture has been falling in developing regions worldwide, it still exceeds 50% in Africa and Asia. Agricultural microfinancing, however, has been seen as too risky for financial institutions and many stopped providing the service. Agriculture accounted for 31% of World Bank lending in 1979-81, but by 2000-01, it had fallen to less than 10%, according to the U.N. International Fund for Agricultural Development.

“Climate is the biggest risk to agricultural lending,” said Paul Christensen, professor at Northwestern’s Kellogg School of Management. Christensen has three years’ experience as a fund manager for microfinancing investments. “One flood can wipe out all of your [banking institution’s] loans.” Which is why Opportunity has implemented an agricultural finance program that includes weather-indexed crop insurance, which can protect the farmer and the investor against the effects of climate change and unexpected weather events, like drought or flood.

A 2007 study released by Opportunity indicated nine primary requirements for a successful weather-indexed crop insurance system. Among them is a reliable network of weather stations, quality historic weather data dating back 30-40 years and relatively similar soil water containment capacity on the farm as is near the weather station. 

Opportunity successfully tested its first weather-indexed crop insurance pilot with 892 groundnut and maize farmers in Malawi. As a result, today, over 65 % of its population–more than 2,000 farmers–has weather-index crop insurance. Due to the program’s success in Malawi, it’s expanding its agriculture finance program to several other African countries in the next few years, including Ghana and Mozambique, and then to follow in Rwanda and Uganda.

Want to meet John Magnay in person and learn about innovations in agrifinance in Africa? He’ll be leading a breakout session, “Agricultural Finance: Reaching More of Africa,” at Opportunity’s Fall Microfinance Conference on Oct. 8-9. Click here to learn more and to register for the conference.

Further reading:

1. Spotlight on Agricultural Finance: An Interview with an Agriculture Finance Officer
2. Melinda French Gates on the Impact of Agricultural Finance
3. What We’re Reading: World Finance Magazine Discusses Opportunity’s Agricultural Finance Program

Watch the “Harvesting Hope” video:

Amosi Kasamira’s face lights up as he shares his plans for the next season. ‘My vision is to replace the grass roof of our home to better protect us from the sun and rain,’ he explains, ‘and I intend to cultivate ten acres next season.’ –Excerpted from: ‘There is Still a Lot of Work Ahead,’ World Finance, July-August 2010 (pp. 152-154)

Amosi Kasamira and his wife heard about the agricultural finance program at Opportunity International Bank of Malawi (OIBM) two years ago. Since then, they have repaid their first loan and are now growing more maize than ever before. They’ve also been able to increase the size of their land plot and access fertilizer and seed.

Deborah Foy of Opportunity International UK details Amosi’s family’s story in the July-August 2010 issue of World Finance magazine. She outlines how Opportunity’s agricultural finance program in sub-Saharan Africa is empowering smallholder farmers like Amosi with microfinance solutions like savings, insurance and loans.

As Foy explains in the article, Opportunity has developed a strategy to manage the risks inherent in providing financial products in rural areas, with undeveloped markets and farming techniques, poor infrastructure, and clients who have little credit history.

Opportunity ensures a profitable and well-managed agriculture microfinance program through:

• Traditional character-based lending techniques to select responsible borrowers
• Insurance like weather-index crop insurance, where available, to protect against drought or flood, and credit life insurance that’s included in all loans
• Savings to help manage cash flow
• Training on the principles of saving, borrowing, cash flow and good business practices
• High-quality technical assistance for clients with agriculture extension services to improve land management and yields
• Diversified portfolio risk across a variety of sectors, crops and geographic areas
• A robust, sophisticated management information system to ensure constant, real-time information on the status of agriculture loans within the portfolio

Opportunity recently wrote a guest blog post for the Hunger and Undernutrition Blog about Foy’s World Finance piece. Check out our blog post as well as the Hunger and Undernutrition Blog‘s wide-ranging coverage of a number of topics related to hunger, nutrition, poverty and agriculture by expert guest bloggers.

Access the full World Finance article here.

Watch a video about Opportunity’s Malawian agricultural clients and crop insurance:

Clients gather at the banking kiosk in Fatima, Malawi. Reaching people in rural areas is an important step to alleviating global poverty in countries like Malawi.

Travel in your mind to the shores of Lake Malawi. In this remote region, extreme poverty is widespread. But because of the donations, hard work and advocacy of Opportunity supporters and staff, the Malawians here have been empowered financially.

To reach the unreachable, Opportunity International Malawi has replicated its successful “hub-and-spoke” approach by opening a hub branch office in the district capital Nsanje, followed by the most recent launch of a “spoke”–a banking kiosk in the village of Fatima. Both locations are supported by an Opportunity Malawi mobile banking vehicle. This hub-and-spoke system is successfully increasing Opportunity’s outreach to more of these very isolated rural areas.

The new operations will initially help:

• 17,000 economically marginalized families to open secure savings accounts
• 3,500 families (approximately 17,500 people) to access small business loans and training
• 3,800 individuals to receive coverage with credit life, crop, funeral and product transit insurance

Mobile banking vehicles like this one help Opportunity to reach rural and isolated families like those in Fatima.

With your help, we can bring further expansions and improvements like these Malawian banking locations to more people living in poverty all around the world. To get involved in bringing microfinance to the more than two million Opportunity clients worldwide, go to opportunity.org/be-involved.

How can you help?

1. Meet the experts and learn about microfinance. Join us for Opportunity’s Fall Microfinance Conference, October 8-9, in Washington, D.C. Click here to learn more and to register.
2. Start a web-based fundraiser. Go to optinnow.org/fundraisers and launch a fundraiser for events like birthdays, travel, races and other sporting events, or just to raise awareness about this important issue. Engage the support of family, friends and colleagues to support your efforts and help end global poverty faster.
3. See the impact of Opportunity’s work firsthand. Travel on an Insight Trip to countries in Africa, Latin America and Asia. You will return home inspired to effect global change.

Be a part of Opportunity’s working solution to global poverty.