In last Monday’s #mifimon conversation, we delved into http://www.opportunity.org/blog/john-magnay-on-food-security-in-africa-and-agricultural-finance/agricultural finance[/intlink], issues of financial sustainability, the opportunities and challenges of tapping into an untapped market, and issues related to power and electricity.

We were so pleased to have @ADKoehler @wwkendall @neddenriep @danalunberry @sperezlaut  and @andrewsprung on the most recent #MifiMon. Here are a few of the session highlights:

Recruiting Quality Local Loan Officers

As @ADKoehler, an http://www.opportunity.org/blog/interview-with-ghana-agricultural-finance-officer/agricultural finance officer[/intlink] for Opportunity, points out, without great http://www.opportunity.org/our-work/local-staffing/local loan officers[/intlink] for rural clients, agricultural finance can be difficult to enact. That’s why management works hard to recruit great local staff out of university graduates and national service graduates. “Our loan officers have the work ethic of ten people,” ADKoehler says. “The loan officers stay in the field Monday through Friday and have remote offices there.”

Technology and Strategies Being Employed

As @sperezlaut said, business and agricultural http://www.opportunity.org/our-work/training/training[/intlink] is a key component of making agricultural finance successful on an individual and community-based level. But clients are also reached with http://www.opportunity.org/our-work/rural-outreach/mobile banks[/intlink] and satellite branches. @neddenriep said, “It seems the sparse client density would be one of the biggest challenges to reaching a sustainable operation level in rural areas.” And @ADKoehler points out that in http://www.opportunity.org/our-work/where-we-work/microfinance-in-africa/microfinance-in-ghana/Ghana[/intlink], infrastructure like roads and bridges is growing, but it can still be a challenge to physically reach clients. http://www.opportunity.org/our-work/where-we-work/microfinance-in-africa/microfinance-in-malawi/Malawi[/intlink] also faces this problem. And Malawian clients have embraced high-tech http://www.opportunity.org/our-work/technology/technological innovations[/intlink] to overcome these limitations in infrastructure, making it more possible than ever before to reach their clients.

As @wwkendall points out, M-PESA http://www.opportunity.org/blog/cell-phone-banking-examination/cell phone banking[/intlink] service has the potential to be the most effective way of reaching agricultural clients.

Energy Issues

Cell phone usage for banking transactions is growing in popularity, especially through M-PESA. But in rural areas, as @danalunberry points out, electricity to charge cell phones can sometimes be unreliable. So to access these geographically remote clients, there need to be energy solutions in place. ADKoehler looks to solar panels to charge cell phones. There is a lot of sun in Ghana, he points out, and when needed, the panels can also be connected to car batteries to hold their charge. In the absence of personal solar panels, most clients have access to schools or clinics that run on solar power.

http://www.opportunity.org/blog/update-innovations-in-technology/Solid oxide fuel cells[/intlink] are also in development, which can run on indigenous and readily available fuels, such as palm oil, and will be available in the next couple of years. ADKoehler answered danalunberry’s query over expense and ease of use for cell phones by saying, “If they run on indigenous fuels and are cheaply produced, like they say, then I think this could be huge for alternative energy, which Africa needs desperately.”

This was a great discussion on all the intricacies, the challenges and the opportunities for agricultural finance clients. Do not miss the next #mifimon discussion about http://www.opportunity.org/blog/back-to-school/educational finance[/intlink] on Monday, Sept. 27, 12-2 p.m. CDT (GMT -5).

Once every two weeks, the microfinance community comes together on Twitter for Microfinance Monday, or #mifimon. Last  #mifimon, the use and implications of technology in microfinance took center stage. Questions ranged from “How do we address risks?” to “How can technology increase transparency?” to “How can technology be used to build political capital for change.” Although a range of opinions were present, several points struck a common chord. These included that technology is a means and not an end; it must be demand-driven and user-centric; and it must be appropriate. 

Before all else, #mifimon participants agreed that technology is an enabler, not an end. Advocates of technology have a tendency to push “the next big thing” and focus on analytics at the expense of intuition. The technology world moves a mile a minute. Alternatively, microfinance is about meeting people where they are, not where they will be. Microfinance practitioners occupy a middle ground where the lure of new technology must be weighed against the capacities, competencies and costs involved. 

Participants also agreed that technology has to be demand-driven and user-centric. No matter how robust or elegant, technologies are useless if the demographics they target don’t understand them or find them too difficult to use. Similarly, microfinance practitioners need technologies that are tailored to their circumstances instead of “solutions looking for problems.” One participant suggested that #tech4mf (tech for microfinance) advocates compile a list of use cases similar to “Portfolios of the Poor” [Link to:   http://twitter.com/ibl/status/11260585646]. By providing specific, flexible solutions for a range of common use cases, technology vendors have the potential to bolster thousands of institutions and impact millions of borrowers. 

Finally, #mifimon participants agreed that technology must be appropriate. Microfinance institutions operate in environments where borrowers either have limited or no access to high technology. Even though most borrowers own or have access to a mobile phone, for instance, those with access to smart phones – or data, for that matter – are de minimis.  Accordingly, iPhone and Android applications are not relevant (yet). 

Technology has the potential to revolutionize microfinance by streamlining processes, increasing transparency and expanding geographic reach. Nevertheless, microfinance practitioners should approach technology with caution in order to ensure the appropriateness and accessibility of new services. 

A snapshot of participants: @mifos, @SeaMoMicro, @GrameenFdn, @ibl, @eblantz, @CIPEglobal, @GrameenAppLab, @ADKoehler, @OpportunityIntl, @savetogether, @Ajuonline, @msftcitizenship, @HoracioCoutino, @creditsms

The following is a guest post from Andres Hammer, an intern at MF Transparency.

Our mid-February #mifimon topic was: “microfinance and higher education.” One of the panelists was Chuck Waterfield @chuckwaterfield, who has 25 years of experience in microfinance, is on the faculty of Columbia University/SIPA, and is CEO & president of MicroFinance Transparency. Chuck’s course at SIPA teaches “how to build an MFI” and focuses on business planning, decision making and financial modeling software for MFIs.  Alexandra Fiorillo@alexfiorillo, vice president of MF Transparency, also participated in the discussion.

Questions discussed:

What are some education programs that highlight microfinance? What schools?

Various graduate programs in the U.S. either focus on microfinance or include it in their curriculum. Graduate programs with specialties in microfinance include: SIPA at Columbia University and SAIS at Johns Hopkins University. Microfinance and social entrepreneurship programs are also offered by:

• Business schools at Columbia, Harvard, Duke, University of Pennsylvania, Stanford, and Evans School @evansschool at the University of Washington
• The Kelley School of Business at Indiana University offers a class in social entrepreneurship
• University of Colorado at Denver, University of Oregon, and Brown University offer anthropology programs with an emphasis in microfinance

For programs in Europe, the suggestions were “University Meets Microfinance” and European Microfinance Programme at Solvey School in Brussels, and for Africa, The School of Applied Microfinance in Kenya.

What about programs teaching only microfinance? Do they provide good professional training?

One example is Boulder MFT, which was discussed as a good, but costly, program. It’s not a degree, but consists of approximately three weeks of classes focused heavily on microfinance commercialization.

Programs like Boulder MFT give real-world material to supplement academic classes. On the same topic, participants asked: what are the strengths of a graduate degree vs. a professional degree like Boulder MFT? A graduate degree allows students to work in broad topics, including microfinance, whereas, a short-term program like Boulder is more of a crash course. Both are great and complementary.

Can you give us any suggestions on getting hands-on experience in microfinance prior going to graduate school?

A great microfinance learning experience is to find an internship overseas that complements classwork. “Books give foundation, but internships give substance.”

One participant suggested the Kiva Fellowship Program as a good way to explore microfinance before going to grad school. The progam is unpaid, but sometimes support can be raised. However, don’t expect to find support equal to a paid job. Another person suggested serving an internship in a country where the cost of living is cheap, and doing fundraising events to help raise money.

 Is it a must to be a business generalist in implementing microfinance?

For some practitioners, it is better to get experience in accounting, finance, law or other specialties before seeking a career in microfinance. Adding many courses in some hard skills like finance while in school can help tremendously when entering the microfinance field. Language skills are also a plus. 

Imagine a B.S. in microfinance, does that exist? Should microfinance be a major at undergraduate level or is it a concentration? Should a degree be that narrow?

An undergrad microfinance degree might be too narrow and it might be too soon for a student to focus on such a narrow field. For undergraduates, it would be better to get economic, development, finance or business degrees and include some microfinance courses. It’s important to have microfinance and microfinance-related courses in the curriculum. Undergrad is a good time to build foundation and look for summer internships related to microfinance.

Another approach to integrating microfinance into undergraduate studies is through expanding microfinance principles beyond the economic/business classes to women’s studies, community development and other areas.  To believe that one understands microfinance simply because he or she has an MBA can be dangerous; there are more options available to get involved in the field.

Participants mentioned several good examples of ways to integrate microfinance into school programs, such as the Social Enterprise program at Seattle Pacific University Business School.

What is your experience with education networks, microfinance groups of students/faculty, etc.?

Student networks have great energy and are an excellent way to pull in outside experts, share job/intern ideas and build long-term relationships. SIPA at Columbia University has a very active and large student group studying microfinance. Check out the Microfinance Working Group (MFWG) for more info.

The problem with student networks is that they tend to be short-lived because students graduate and there is no continuity in the work done. The MFWG at Columbia University has created a succesful  system of first-year board members to deal with continuity issues. For more information on student resources, visit NetImpact, a national organization that provides great resources to students interested in social entrepreneurship via college chapters. On the same topic, the participants asked: Should there be some sort of consistent faculty sponsor? The answer is definitely yes.  It is critical for momentum and for students to have an ally lobbying for curriculum.

What is the Two Dollar Challenge?

The Two Dollar Challenge is a way for students to engage in microfinance by living on only $2/day in support of Opportunity International’s work in Kenya and Colombia.

• $2 Challenge needs to factor in buying power of $2 in developing world. Could be equivalent of $10 or $20 in the U.S.
• It’s an education tool for students to help identify more with the developing world
• If it’s educational, then all the more reason to factor in the ‘exchange rate’ buying power, metrics
• The education factor comes in throughout the week through educational programs that include PPP. It is a platform.

 Participants:

@alexfiorillo, @chuckwaterfieldo, rarenaud, AJRenold,amycarolwolff @MFIConnect, @ReVisionLabs, @GrameenFdn,@mifos, cajames1, @kivafellows, @mgray2, @SeaMoMicro jeffzanatta,@OptINnow, zyozyfounder

MF Transparency is a non-profit agency established to promote the welfare of poor micro-entrepreneurs, and to promote the integrity of microfinance as a poverty alleviation practice by promoting pricing transparency throughout the sector. MF Transparency’s mission is to be the venue for the microfinance industry to publicly demonstrate its commitment to pricing transparency, integrity and poverty alleviation.

Happy new year to you all! I hope the holidays and the beginning of this year has been encouraging! We’re excited to start off the year with a fresh energy behind this microfinance chat that has fostered some extremely interesting perspectives. Here’s what we’ve got coming:

First, we took your advice. 140 characters is not enough for an in-depth discussion about microfinance. So we’re moving our 2-hour chat that, occurs every other week, to an online chatroom. This will allow us to not only have the freedom to explain our responses, but for those that miss the chat- you’ll be able to read the full text, have access to the links and use the information to further educate your colleagues, friends and community. As you know and we know microfinance is a powerful economic development tool, that typically takes more the 140 characters to make a well informed point.

Here’s the best part- since this is about collaborative learning, we would love for you to be involved in recommending the panelists, topics, and keeping us up to date on the latest microfinance news! You’ll be able to do this in the chatroom and we’ll be monitoring it and updating on a regular basis.

And don’t worry, we will still be engaging on twitter and facebook, sharing the highlights from our #mifimon discussions.

Our first official #Mifimon of 2010 will be on January 18 from 12pm-2pm CST. We’ll be starting off our series with “Define Microfinance.” This is a great chance for us to talk broadly about microfinace. We invite you to bring some rich content links, your insights on how to do microfinance well, cultural and political elements,  organizations to connect with and local microfinance events in your area. We are working on securing panelists at this time, so if you’re interested or know someone who is, let us know by tweeting @mifimon!

We’re looking forward to this year and hope that together, we can discover even more dynamic ways to empower others with effective microfinance services around the world.

See you on Monday!

The following is a guest post by Sheethal Shobowale,

Interested in learning about microfinance? Follow our biweekly Twitter discussion group #mifimon (because Microfinance Mondays was too long for Twitter’s 140-character limit). Our aim is to host an exchange of ideas about issues relevant to the microfinance industry. You’re welcome to lend your voice, whether you’re a practitioner in the field or a newbie just learning the basics. Just end your messages with the hashtag #mifimon!

I was honored and excited to take part in this week’s #MifiMon discussion about women and microfinance.

Panelists:

• @rarenaud – vice president of women’s philanthropy and interactive marketing, Opportunity International
• @sevenbar – Lee Carlton, social media lead for Seven Bar Foundation, a nonprofit that raises funds for microfinance through fashion shows and cause marketing campaigns
• @lethalsheethal, @Kiva – fellow at MFIs Asociación Arariwa in Cusco, Peru, and Emprender in La Paz, Bolivia, starting in January.

Moderator

@JulieSof – online community manager, @ACCION_USA, a direct microlending organization in the U.S.

Participants

@mix_market, @sonjkelly, @SeaMoMicro, @zyozyfounder, @mortgagelead, @VillageBanking, @sprungpr, @scotteverett, @ValbonaBushi, @IanScottHaisley, @seeingchange, @ACCION_USA, @AJRenold, @CFI_ACCION, @CIPEglobal, @OptINnow @adkoehler, @zimana_, @ShalynHockey, @mifos, @lifeofjenn, @CARE, @pigtailpals, @isfan, @socialresponse, @oasanchez,, @akhilak, @wonderwebby, @LisaHinAustin, @socialresponse, @louwhiteman, @chantellebaxter, @newtagdefs, @keithkall, @padschicago

What are the most prominent reasons that most microfinance is directed towards women?

Women tend to be much more responsible with their loans, using the money to send kids to school, pay rent, buy a house, reinvest their profits from their businesses.  For every $1 a woman in the developing world earns, $0.80 is reinvested in her family. They also default less than men. Women comprise 70% of the poorest of the poor.

Do MFIs actively seek women clients?

You can get an idea of outreach by looking at the number of women borrowers in MFIs on MIX Market, for example in Peru. Asociación Arariwa, for example, allows lending to both genders, but targets women.  More than 70% of its entrepreneurs are women.  Opportunity serves men and women clients in 27 countries, but in India, the organization focuses exclusively on women in Trust Groups.  A Trust Group consists  of 10-30 clients, typically women, who come together and co-guarantee each other’s loans. They meet weekly during the 16-week loan cycle to repay loans and to receive weekly training on business skills & social issues. Trust Groups often build self-confidence among #women members, promote leadership and community support. 

How do you feel about #microfinance focusing on women? Is this effective? Is it fair?

Loans need to be spent appropriately and eventually repaid. This is less likely with males.  Opportunity is proud that 85% of clients are women, which reflects the goal of meeting the needs of the unbanked & underserved, which typically equals #women.  Sparse property rights for women equals no collateral.  Hence, their only financing options are #mifi or ROSCA/ASCA/other informal means.  Women are poorer and socially excluded, but also men are more likely to spend on alcohol & cigarettes.

Do organizations track the long-term results of self-confidence increase and leadership in women resulting from group lending?  What changes in a woman’s life and family situation happen w/ an increase in confidence, leadership, and financing?

Tracking gender statistics and long-term results are challenging. Women Advancing Microfinance (WAM) & CGAP advocate for this type of research.  But changes can obviously be great. There are many documented cases of women starting lucrative businesses off microfinance loans, such as this recent study about benefits of women receiving loans, with examples from the Opportunity Rwanda bank.  Many organizations do look at long-term results for women, like the @CARE Strategic Impact Inquiry.  Also, here is a link to a Social Performance Indicators Blog entry focusing on gender in microfinance. Through experience with lending groups in Nicaragua, for example, women are more active and visible in community and were more respected in and out of household.  However, many of the loans are more short term in effect, but provide a better quality of life over a short time.

How often do MFIs find that their women clients “graduate” into the formal economy?

The Next 4 Billion study emphasized bringing #BoP into formal economy.  Microfinance may be doing that for women.

How do equal opportunity lending laws in various countries affect regulated financial orgs focusing on one gender?

Many, if not most MFIs are not registered as financial orgs, but as NGOs, which is known to be a bump in the road ahead.  Gender neutral, Acción USA supports entrepreneurs of all backgrounds and genders in the U.S.  All borrowers grow their businesses with pride and take care of their families in country and with remittances.  There are also examples of husband and wife entrepreneurs working together.

For those in the field (past or present) can we get some stories about real life examples of women borrowers?

• Nuestra Capital Semilla (Our Seed Money) from Kiva Fellow @lethalsheethal
•  “Ok. Next question…” from @MQwightC, Kiva Fellow, Philippines
• Using Microfinance to Combat Human Trafficking: Spotlight on Katie Davis (KF7) by James Han, Kiva Fellow, Cambodia
• A Sierra Leonean Pick-Me-Up by Stephanie Meyer, Kiva Fellow, Sierra Leone
• Women borrowers stories from FINCA
• Portfolios of the Poor

What are some best practices for reaching out and bringing women into microfinance?

Local staff (loan officers) and word-of-mouth marketing draw many women to MFIs.  For example, Celina, a loan officer at Arariwa, has 3 lending groups in the Cusco potato wholesaler’s market, based on word-of-mouth.  However, the issue may be less about empowering women and more about knowing that women have a higher ROI in microfinance.  In actuality, the whole community needs empowerment.  We can’t address exclusion of women by excluding men.

Some Women Leaders in Microfinance

Many top MFIs are run by visionary women. Women in MFI leadership positions inspire younger women.

For example:

• Essma Ben Hamida of Enda in Tunisia
• Ingrid Munro of Jamii Bora in Kenya
• Tabinda Jaffrey of Asasah
• 70% of ACCION_USA’s executive team and program directors are women
• Most loan officers and accountants at Arariwa and some of the supervisors and board of directors are women
• Information Technology managers such as Polly Najori at Jitegemea in Kenya
• Khadija Shamte leads IT Firm, Adept are women
• Within the @mifos community, women play vital role in #technology ecosystem
• @ProMujer  – https://promujer.org/
• Women Advancing Microfinance (WAM) – chapters in NYC, D.C, Chicago, Atlanta, Northern CA, other cities worldwide. A group of women leaders in the microfinance field.

What are some of the challenges for women to participate in microfinance? How do organizations address these challenges?

Some challenges include not having enough time for group meetings, which take away from the business day. To address this issue, loan officers visit them at their place of business.  However, in some cultures women can’t leave the home alone, so just being able to travel to group meeting is big social change.  Women encounter profound travel safety issues affecting everything from education to business to health care access.

Are there particular products that women gravitate toward? For example, group loans versus individual loans, savings, etc?

The loans are typically disbursed to groups.  It is difficult to get an independent loan.  Group loans are typical entry point for #women clients. Savings accounts are one of Opportunity’s fastest growing products for women.  Arariwa does mostly group loans and group savings.  However, Accion International specializes in consulting w/organizations that do individual lending.

How can individuals support women entrepreneurs?

• Consider making a @Kiva loan to women entrepreneurs – you can lend internationally or domestically.
• Consider giving an OptINnow gift card as a Christmas present.
• People in the U.S. can choose local, women owned businesses to support entrepreneurs in their own community through Acción loans.
• Consider supporting @sevenbar’s Kiss away poverty campaign (in partnership with @sephora and @fusion_beauty)

Key Takeaways from this week’s #mifimon

@lethalsheethal – Empowering women = Empowering families

@rarenaud – Focus on women is key to eradicating poverty. They hold the key to caring for families, promote education of children.

@zyozyfounder – If you want to help the world’s poor, you have to invest in them, rather than just giving them money.  People seek dignity not dependence. Charity meets immediate needs but fails to enable people to solve own problems. There is a growing belief that the best solution to eradication of poverty is entrepreneurship and small business economics.  When passions and expertise are channeled to address real problems, absolutely anything is possible.  ”Girl + Education = Loan, Business, Community Development, Gender Equality.”

@CIPEglobal – There is no silver bullet for gender inequality, but women entrepreneurs are organizing to take aim.

How we can share #mifimon links and resources?

People join #mifimon facebook page.  Look for future topics, articles & longer explanations, etc. #mifimon is sometimes hosted on Facebook because it is less restrictive on text length.

Thanks to @JulieSof for moderating today’s #mifimon topic on #women and microfinance. We are grateful to have so many talented people and organizations involved in our discussions.

Panelist: Ruth-Anne Renaud (rarenaud), Vice President of Women’s Philanthropy and Interactive Marketing, Opportunity International

Ruth-Anne brings more than 20 years experience in providing strategic direction and integrated marketing programs that increase brand equity, expand targeted customer bases, generate revenue and enhance customer and channel relationships. In this position at Opportunity, Ruth-Anne is responsible for leading our online communications team, website strategy, and social media efforts. Leveraging our OptINnow.org platform, Ruth-Anne and the team are creating new ways to maximize the online donation experience enabling new and existing Opportunity supporters to help fund client loans and support strategic microfinance projects. In addition, Ruth-Anne is responsible for developing and supporting fundraising strategies designed to cultivate women donors and meet their special needs and interests. She works with the Women’s Opportunity Network, a key constituent group within Opportunity International, to raise funds for women’s needs, programs and leadership development, and with the Opportunity International Network to connect women donors to program initiatives in the field.

Ruth-Anne holds a bachelor of arts degree in government and law from Lafayette College in Easton, Penn.  She also completed executive courses at the Northwestern, Duke and Penn State University business schools as part of an AT&T management mentoring program. Ruth-Anne was recently appointed to the board of Women Advancing Microfinance (WAM) International. Ruth-Anne lives in Chicago, is a docent for the Chicago Architecture Foundation and leads tours of historic and cultural landmarks, modern skyscrapers and Frank Lloyd Wright homes in Oak Park, Illinois.

Panelist: A Representative from 7Bar Foundation (@Sevenbar)

The 7Bar Foundation is leading a change in the field of philanthropy with business models for social impact. With our philanthropic brands, we are spearheading these models to create consistent funding for female driven microfinance initiatives.

Panelist: Sheethal Shobowale (@lethalsheethal), Founder, Leap Work

A native New Yorker, Sheethal Shobowale attended Columbia University for both her undergraduate degree in Economics-Mathematics and her graduate degree in Strategic Communications. She worked as an investment banking analyst for Fox-Pitt Kelton and as an investment management analyst for Columbia Investment Management Company (the University endowment).  After earning her Master’s degree, she managed the data, analytics and research group of Media Contacts New York, an online media agency, and worked with several Fortune 500 and other large advertisers across varied industries.

Combining her passions for social change, technology and community building, she recently founded Leap Work, a consultancy that works with non-profits and small businesses in their online marketing communications.

Sheethal also spends time volunteering at a local credit union, teaching financial literacy to youth and adults and coordinating her local block association. She is an avid rock climber, rooftop gardener, international travel fanatic and foodie who loves living in Brooklyn.

Sheethal is currently serving as a Kiva Fellow at microfinance institution Asociación Arariwa in Cusco, Peru and will move to La Paz, Bolivia in the new year to continue to serve as a Kiva Fellow with microfinance institution Emprender.

Moderator: Julie Soforenko (@JulieSof, @ACCION_USA), Online Community Manager, ACCION USA

Julie is the Online Community Manager for ACCION USA where she engages and collaborates with people passionate about small business and microfinance. She believes that every person has the power to create social change.

The following is a guest post by Jessica Elisberg from Microfinance Information Exchange (MIX).

Interested in learning about microfinance? Follow our biweekly Twitter discussion group #mifimon (because Microfinance Mondays was too long for Twitter’s 140-character limit!) The aim is to host an exchange of ideas about issues relevant to the microfinance industry. You’re welcome to lend your voice, whether you’re a practitioner in the field or a newbie just learning the basics. Just end your messages with the hashtag #mifimon!

We had a great turn-out for this week’s discussion: @BRAC_USA, @mix_market, @sonjkelly, @SeaMoMicro, @sprungpr, @ibl, @davidcabanban, @zyozyfounder, @smrtblondg, @scotteverett, @Unitus_Steve, @ACCION_USA, @AJRenold, @amycarolwolff, @CFI_ACCION, @CIPEglobal, @OptINnow, @laurakummer.

This week’s #Mifimon featured guest panelist @BRAC_USA and a discussion about “Microfinance Plus” approaches.

BRAC, the Bangladesh Rural Advancement Committee, began as a relief agency in 1972. Since then it has expanded its approaches to community development, and is frequently touted as a prime example of integrating financial and non-financial services – “Microfinance Plus.” BRAC is now comprised of a bank, a technological institute, and a university in Bangladesh, and has spread its operations to six countries outside of Bangladesh: Sri Lanka, Afghanistan, Pakistan, Uganda, Tanzania, and Southern Sudan. BRAC also has branches in the US and the UK, which work together to support the organization’s regional programs.
For more information about BRAC’s “Microfinance Plus” approaches, visit BRAC USA’s homepage. You can also learn more about BRAC’s microfinance operations by visiting their profile on MIX Market.

Microfinance + Health

In BRAC’s integrated model of microfinance and health services, members of microfinance groups are trained to be health promoters. Each woman receives two weeks of health training and then visits 150-200 families per month to provide health information and basic health services. These services include health products (basic medicines, soap, etc.) which the health promoters can sell to supplement their income. The topics for health promoter training are determined by surveys that identify regional health risks; common topics include tuberculosis, malaria, maternal health, and child health. BRAC also partners with third party providers to increase their clients’ access to health services. For example, they are currently working with Visionspring in Bangladesh to distribute reading glasses. Through this model, BRAC has 80,000 health promoters reaching nearly 100 million people. The organization has an active research and evaluation division which works to evaluate its programs beyond traditional monitoring and evaluation. Since beginning this health promotion program, BRAC has seen notable declines in maternal and child mortality, as well as lower fertility rates, in Bangladesh.

A number of organizations have been working on integrated microfinance and health service provision, including ProMujer, Opportunity International (MicroEnsure program), Freedom From Hunger (Microfinance and Health Protection Initiative), and Leapfrog Investments’ Microinsurance Fund.

Microfinance + Agriculture

In addition to integrating health and financial services, BRAC also integrates agricultural and financial services. The organization trains model farmers from its microfinance groups, who are then responsible for teaching best farming practices to 20+ farmers in their community. They also conduct research to develop higher quality seeds, and in Bangladesh currently operate a seed distribution social enterprise. The best practices that are promoted through BRAC’s agricultural service provision focus on sustainability as well as making use of organic techniques. They also focus on local agriculture markets because these service programs operate in areas that are not food self-sufficient. Overall, increased use of information and communications technology is having a major impact for rural areas and can continue to aid the integration of microfinance and agriculture.

Microfinance + Human Rights

Though data are lacking for showing a causal relationship, the general belief is that access to microfinance can help promote human rights – particularly when organizations focus on outreach to women (as BRAC does). The availability of financial services can reduce the potential for poor women to turn to human trafficking as a means of obtaining money. BRAC also provides legal education to its microfinance clients, teaching them about their rights and offering arbitration and legal aid services.

Conclusion

Integration of microfinance with other services is critical for addressing the many facets of development. As the guest panelist from BRAC USA stated, microfinance won’t end poverty alone, but it does provide a platform to deliver services that give poor people the tools to climb out of poverty. In order to provide these tools effectively, it is necessary to build strong partnerships with service provision organizations.

The following is a guest post by Grameen America DC’s Alice Geglio, for Opportunity International

Interested in learning about microfinance? Follow our biweekly Twitter discussion group #mifimon (because Microfinance Mondays was too long for Twitter’s 140-character limit!) The aim is to host an exchange of ideas about issues relevant to the microfinance industry. You’re welcome to lend your voice, whether you’re a practitioner in the field or a newbie just learning the basics. Just end your messages with the hashtag #mifimon!

We had a great turn-out for this week’s discussion: @ACCION_USA, @AJRenold. @amycarolwolff, @CFI_ACCION, @ChristieMisty, @CIPEglobal, @CU_Rising, @Grameen_DC, @jyandziak, @laurakummer, @lend4health, @OptINnow, @rarenaud, @ReVisionlabs, @robgarciasj, @suggett

This week’s #mifimon challenge: Leave a comment to this post, telling us about your favorite MFI. In which countries does it operate? Urban or rural borrowers? Is it large or small? Are its borrowers registered in the formal sector? Does it operate in conflict areas? What about it makes it your favorite?

This afternoon our #mifimon group discussed (View previous conversations) where in the world microfinance is working. Mifi is arguably the hottest new idea in international development, and in the past decade it has spread like wildfire. Surely the ability of MFIs to adapt to the conditions and cultures of each country is a tribute to the strength of the fundamentals of the microfinance model. However, we found that there were some interesting questions that came up over and over, no matter what the environment.

Policies and regulations

The rules governing financial sectors vary widely from place to place. Regions also differ in the level of transparency, red-tape, and consumer protection required by MFIs. Which countries have the most mifi-friendly business environments? Last month, The Economist issued a pilot study ranking 55 countries according to their microfinance regulatory framework, investment climate, and industry development. ACCIÓN International’s Center for Financial Inclusion offers a client protection library (http://www.centerforfinancialinclusion.org/Page.aspx?pid=1415) with information about requirements in a dozen countries. The Economist ranks Peru as the #1 microfinance environment, which is unsurprising considering the maturity of the industry. Latin America and Southeast Asia have well-established microfinance sectors, thanks to early work by Grameen Bank and FINCA, among others.But where will new growth be? Will microfinance branch out to the regions where there is an untapped demand for credit, but little microfinance-related policy in place? We discussed China: there is a vast unbanked population, and in the past few years there have been regulatory changes that make it one of the most promising countries for industry growth.

Rural and urban needs

Is microfinance more likely to serve rural populations, where poverty is especially severe and financial services especially scarce? Or will expand in urban centers, where MFIs can count on a certain degree of infrastructure and community? The answer depends on the country and on the goals of the MFI, but on a global level only time will tell.

Size of the MFI

As microfinance grows, will more small MFIs spring up, or will we see them consolidate into larger organizations? A large number of small players could lead to haphazard or uneven industry standards. Also, large MFIs can take advantage of scale efficiencies to increase their impact. Grameen Bank and ASA, for example, are able to reach millions and still deliver personal attention. However, there are also great niche MFIs tailoring their services to unique clientele, such as Haiti’s Fonkoze, which makes a big difference one baby-step at a time. In addition, a choice between many competing MFIs can mean better terms for borrowers.

Informal microbusinesses

In Mexico, many of the microenterprises funded by MFIs are part of the informal market — that is, they are not officially registered as businesses. Does a thriving informal sector make a good environment for microfinance? 93% India’s jobs are in the informal sector, so one can imagine that a borrower would have no trouble finding a business opportunity. On the other hand, many organizations say incorporating the financially-excluded unbanked into the mainstream finance industry is key to long-term poverty alleviation.

Political conflict

Violence has an undeniable effect on the business climate in developing nations. For example, recent political unrest in Mexico may explain why so many microfinance clients opt for informal businesses. The troubled situation in Afganistan may have attracted the attention and determination needed to get the ball rolling. However, conflict is very disruptive, as in Kenya, where it caused many borrowers to lose their businesses. It seems that MFIs must always seek a balance between going where the need is greatest, and where success is most likely.

Innovations

There are limitless possibilities for experimental changes to the model to fit each environment. Our collaborators were excited about microfinance and credit unions in Ghana and the US – any other ideas?

Next #mifimon:

Please join us Monday, November 2 from 12 to 2 CST for a discussion about the interaction between microfinance and other community development initiatives, like health care or disaster relief. We’d love to hear from you!

This week’s call to action:

1. Find an article on U.S. microfinance and post it as a response to this blog and on our #Mifimon facebook page.
2. Have a conversation with a friend or colleague about U.S. microfinance and tell us about it here via a response to this blog!

Let’s build on the great conversation last week (Sept. 24) on #mifmon about domestic microfinance. Some of the major points that came up through the conversation is the a) need for other lending options in the U.S. besides “payday” and credit cards b) the crucial need for financial education and training when building a microfinance program and c) considering whether or not U.S. microfinance actually takes away resources from international microfinance. Specifically, is there a need for “banking services for the poor” in one of the wealthiest countries in the world?

OPTIONS WORTH CONSIDERING

In a time when credit card debt is over $2 trillion dollars, and the banking system is in repair, @Grameen_DC suggested that business owners need other options.  Personally, on Tuesday, I had an interesting conversation with an economics professor at the Kelley School of Business, Indiana University,  regarding non-profit social service. While, admittedly, Dr. Hauskrecht is a cynic of all non-profit community and economic development efforts, he explained that the least harmful and most sustainable method of development creates two things 1) access to current trade markets, with consideration of the country’s current economic standards of interest rates or 2) creation of new trade markets, again with the same considerations. He explained that microfinance, when structured well, can do this both internationally and here in the states. It is important to note that the average size of a U.S. microloan is typically much higher than that of a developing economy.  But one could argue that this accurately reflects the United States’ standard of living and thus, current need. Thoughts on this?

COMMITTED TO EDUCATION AND TRAINING

One of the most important, and unfortunately, neglected elements of financial services is financial and business training and education. You can provide resources to clients, but if they do not have an understanding of how to accurately use these resources, it can create even deeper financial instability.

From the Opportunity International website:

Increasing clients’ financial literacy through the training modules and videos helps them to:

• Better understand the wide range of financial services available to them
• Increase their use of savings accounts and insurance products
• Better manage their credit
• Diversify their assets

And, this point was emphasized several times in the #mifimon twitter conversation – that when constructing a microfinance program, it is critical to weave in training and education as a core service offered to clients.

DEFINING “POVERTY”

Going back to the old Merriam Webster definition of poverty, we’re discussing a state of an individual or group that “lacks a usual or a socially acceptable amount of money or material possessions”. And of course, no one would deny that we have poverty in the United States. But because the face of poverty is different in the US and in other developed nations, it has the danger of being considered as less urgent or important. And this is why I’m grateful for organizations committed to serving the working poor in the developed world. In these nations, poverty is no less psychologically devastating, emotionally taxing or emotionally humiliating. However, instead of being characterized by dirt roads, poor infrastructure, and poor sanitation, it comes in the form of your neighbor, exorbitant credit card debt, and a quiet shame of perpetual financial insecurity.  Thanks to organizations like Grameen America, Accion USA, Lend 4 Health, and others, these poor individuals may also have access to a much needed hand up.

NEXT #MIFIMON

Next week – let’s go international! Pick a country, learn about the microfinance market there and tell us about it here as a response to this blog!

Please join us on October 19, from 12pm-2pm on Twitter for our next #Mifimon! We’re always open to topic submissions! Feel free to post your suggestions in the comments section.

This summer, Opportunity International created the discussion, #Mifimon (Microfinance Monday was too long for twitter’s 140 character limit), which serves as the Twitter exchange on microfinance. We’ve touched on topics like short messaging technology, environmental sustainability and healthcare within the context of this fascinating tool of economic development.  We even started a Facebook fan page where participants can go and post longer thoughts and relevant articles, and share this discussion with those who may not have entered into the Twittersphere. I’m excited to say that we’re about to take it to a new level.

The goal is to have an active discussion on Twitter regarding a relevant topic within the industry of microfinance.  We’ll follow each discussion with a blog here that will not only recount the exchange, but also encourage participants with a set of challenges between conversations. For example, we’ll encourage those involved to find a new article revolving around an issue we discussed, research an opposing opinion, or come up with the following week’s topic. We want you to let us know what you find, and share it right here on our blog.

We’ll be seeking out panelists for each week as well. So if you know someone who can contribute to a discussion surrounding a relevant topic, please feel free to ping us on Twitter! It’s always exciting to learn about what others are doing in the field, be it peer-to-peer lending, fighting against trafficking, or providing a village with food supply.

We want people to learn more about this incredible work of microfinance. We’ve seen the way it has forever changed our clients’ lives financially, socially and spiritually. So whether you’re a practitioner in the field, or someone who wants to know more about the basics, we encourage you to join us. Every other week, it will be from 12 p.m. to 2 p.m. CST. Just include #mifimon with your Tweets!

Frequent #Mifimon participants on Twitter include: @Accion_USA, @ADKoehler, @AJRenold, @AliceGgo, @amycarolwolff, @bhalchander, @Ellenfrancik, @downeym, @Grameen_Fdn,  @ianscotthaisley, @ibl, @mfinsider, @ogrens, @Optinnow,  @rachelstrohm, @rarenaud, @redstarvip, @socialearth, @zyozyfounder.