As I look at the microfinance industry globally, I’m encouraged by the trends and the progress we’ve achieved so far. Whether you search in Wikipedia, CGAP or MIX Market, whatever the source of the data and however qualified, microfinance does have an impact on the lives of some 100 million clients today. And when you take into account that our clients are supporting an average of five people — family members, adopted orphans and employees — the impact of financial decisions are even greater. No wonder the industry is under such intense scrutiny!

Opportunity Relationship Officer Phiona Ndikibuliraani, left, offers guidance to sugarcane farmer Loy Naigaga, in rural Uganda, ensuring Joy’s long-term financial success.

When so many potentially vulnerable people are affected by an industry, it calls for the utmost care in how operators define and deliver on their mission. Microfinance must first and foremost be about making a difference in the lives of the impoverished and marginalized. It must be about having a positive impact for the overall welfare of microfinance clients. In order to effectively meet these needs, microfinance institutions (MFIs) must put clients at the center of their work.

MFIs must offer clients products and services that are responsive to their needs, with built-in flexibility to adapt as their businesses evolve. They must price products and services in a way that acknowledges that they are serving people in poverty. Yes, the microfinance target market arguably is very risky. Interest rates and fees charged should, justifiably, take into account this risk component, the high administrative costs of delivery of products and services, the funding costs, and the inflation rates in the markets served, among key factors. However, this cannot justify the high charges applied by some practitioners in certain markets, especially in cases where one finds large pricing differentials in the same market. I feel strongly that the profit motive must not take precedence over the social, transformative motivation. For some of us, serving impoverished people through microfinance is not simply a business. It is a calling, a mission, a passion.

MFIs must make every effort to treat clients fairly and gain a reputation for this ethos. Whether it is in pricing, or granting and collecting loans, microfinance clients must be respected, and they must feel that the institutions serving them will do so with humility and integrity.

MFIs must invest in the development of human capacity by training both MFI staff and clients. This is an added cost for the industry but one very much worth bearing in order to build the groundwork for sustainable financial growth among clients, and professional growth among staff.

Microfinance practitioners must ensure that they have in place sound governance and internal control structures, policies and procedures, as well as data integrity. That is, the information supplied to donors, funds providers, regulatory authorities, and the public at large must be accurate, transparent and reliable. They also must devise metrics to track a client’s transformative journey, from group borrower to independent small business owner with multiple product needs, as she or he develops and expands the business. Not all microfinance clients are entrepreneurs. Nor will all entrepreneurs succeed. This is a truism for businesspeople in developed and developing countries alike. The strength of microfinance is in its variety of other product offerings in addition to small business loans. These products may include savings, domestic and international transfers, trade finance, insurance, financial literacy and life skills training, and more, depending upon the local regulations and the license held by the microfinance institutions.

MFIs must utilize metrics to track their impact and progress with clients, or where gaps may appear. Introducing self-assessment policies and procedures is a way to catch problems and issues at an early stage and, more importantly, to develop pre-emptive or remedial action plans in a timely fashion.

As competition in the microfinance industry intensifies in the coming years, MFIs must be careful not to follow the path taken by the mortgage crisis, with imprudent lending practices involving over-lending to clients. Where credit bureaus can be created by the regulatory authorities or the microfinance industry, this is to be strongly encouraged as a source of information for managing multiple borrowings by clients. I see increased competition in the industry as a net positive if it leads to more lives positively impacted, increased quality of products and services, and more innovative delivery systems aimed at lowering costs for clients.

A few aberrant cases of excessive pricing and coercive collection practices are enough to negatively impact the reputation of the whole microfinance industry. Initiatives like The Smart Campaign, which emphasize the need to put clients at the center of microfinance, are a bellwether for the shift in focus that is taking place. In Opportunity International‘s own banks, we strive to adhere to our Code of Conduct, published in every local branch, which outlines not only our commitment to transparent pricing and a fair return on equity targets, but our pledge to always treat clients with dignity and respect.

We must read the writing that has appeared on the wall in recent months. If the microfinance industry and its members fail to self-police, to exercise due prudence and restraint in the conduct of their operations, to serve and treat their clients fairly, and to rigorously comply with the laws of host countries in letter and in spirit, then we are inviting tight and perhaps detrimental regulatory oversight and public scrutiny. And even more importantly, our clients risk losing more than profits; they risk losing everything.

A local radio station grants an interview to Opportunity staff.

In February of this year, I traveled to Uganda with an Opportunity colleague to learn about our work there. It was my privilege while there to meet several of our clients and visit many of the branches which serve them—including the wonderful staff who work so hard to help our clients attain their highest potential. When we visited, the Kyenjojo branch was preparing for its official opening—the building was not yet complete, and signs of ongoing construction were everywhere. But from the balcony above the branch we could see the community spreading out before us, and we were delighted to learn more about Kyenjojo’s residents, including their hopes and concerns, from a radio station that shares space in the building. Like many places in the developing world, Kyenjojo is a place of both great challenges and great potential.

Kyenjojo is a community of approximately 20,000 people, only 25 miles from the city of Mubende. Situated in the beautiful rolling hillsides of western Uganda, the town of Kyenjojo is comprised of a combination of rural residents and a diversity of traditional storefront businesses. One attraction of Kyenjojo for Opportunity Uganda is that there are very few finance companies in the region, and even fewer of them that address the unique needs of people in extreme poverty or of subsistence farmers. Opportunity is taking steps to make a significant contribution to the overall health and development of the Kyenjojo community.

Businesses across the road from Kyenjojo branch

Kyenjojo is a community of people with minimal knowledge of financial management, disease and nutrition. Financial and social education will be critical areas of impact. Few other banks in the community offer training, whereas Opportunity Uganda continues to view social transformation as critical to clients’ ongoing success in all areas of life.

Communities like Kyenjojo are ideal places for Opportunity to introduce its work because it has a great potential for positive change. When people are given access to resources and training that help them build a strong future, they realize the strength that is within them and begin to lift themselves up. We have seen this happen with countless clients around the world, and we work with hopeful anticipation toward this goal for our friends and clients in Kyenjojo.

Stay tuned for Part Three: Meeting the Needs of Farmers in Kyenjojo, Uganda.

Opportunity’s Grassroots Vision

The fruits of his labor: farmer Josephat Nvili of Mubende holds delicate, unroasted coffee beans in his hand

Opportunity International is committed to empowering entrepreneurs and communities in the developing world to break down the cycle of chronic poverty and hunger. We believe that real, lifelong change is possible when people at the grassroots level are empowered and equipped to recognize and seize the opportunities available to them. We strive to help those who have few resources or little confidence to see the dignity imparted to them by the One who created them in his image.

Empowering the Community Through Trust Groups

A critical component of Opportunity’s grassroots vision is the Trust Group model, through which loan clients receive transformational training, support and encouragement that equips them to be change agents in their communities. In places like Kyenjojo, Uganda, there are a number of established community groups who gather to pool their resources and knowledge, and strengthen and encourage one another. Established groups like these are being evaluated as potential participants in Trust Group programs in various communities throughout Uganda. The characteristics of these groups in many ways match those of Opportunity’s Trust Group model in that they elect their own leaders, determine who belongs to the group, and are already an important part of the civic aspect of their community. When these associations join Opportunity in the form of Trust Groups, their members receive weekly transformational training in a range of topics, including budgeting and financial planning, business development, health and spirituality. Since members of established groups already know and trust one another, it is less risky for the members who must co-guarantee one another’s loans. Equally important is the fact that these groups are already well-connected throughout the community and constitute small communities within themselves, serving as building blocks that have a ripple effect of transformation in the local community.

Meet the Tusitukire Wamu Trust Group

Tusitukire Wamu Trust Group in Mulago, Uganda

The Tusitukire Wamu (Together We Stand) Trust Group formed in 1997. The dedicated group of 23 members meets every Thursday in Mulago, a village located on a hill north of Kampala, and the members operate a variety of businesses, including shoemaking, food sales and services, transportation, carpentry and retail market stalls. In addition to Opportunity’s financial services, the group members receive and share advice and encouragement from one another and from their loan officer. Group members take advantage of the training opportunities provided with their loans, and are able to improve or develop business skills and a variety of life skills, including managing interpersonal relationships and family healthcare. Strong relationships among group members strengthen their businesses and their community.

A Holistic Transformation Model

A critical component of Opportunity’s grassroots vision is the combination of banking resources and holistic transformation training. Our transformational training is designed to address the unique situations of people who are economically active but impoverished, who have great capacity for change but may lack the knowledge, education and capital required to break the cycle of chronic poverty and hunger.

The primary platforms through which we engage people in poverty are microfinance banking services and transformational training, which enable us to walk together with our clients and their communities in multiple areas of personal and economic development. These areas include provision of basic banking resources, but through assessment of client need in each location we also are able to provide customized options that allow individuals to determine the best fit for them in improving their own lives as well as their communities.

Many clients dream of starting or expanding a business; others are farmers who lack the knowledge or resources to grow successful crops in hostile terrain; others desire simply to send their children to school but cannot afford the costs of education; and still others have the vision to educate their neighbors’ children in their community, knowing that doing so increases the chances of lifelong success for these students who will become the backbone of the community someday.

Without basic resources such as loan capital or access to secure savings, many impoverished people have no hope of ever building a successful future in which they can provide for their families and escape the cycle of poverty. As we get to know our clients and their neighborhoods, we are able to walk beside them as they strive to make their dreams, and their families’ dreams, come true.

Stay Tuned for Part Two: Getting to Know the Community

Opportunity champion Felicitus Mmboge has worked hard to grow a successful business, Grace Hair and Beauty Products, in Nairobi, Kenya.

We root for teams, our countrymen and -women, to win and bring home the gold. We smile when the cameras focus on the ecstatic families in the stands cheering and dancing and crying and shouting and hugging all at once. If you’re a sap like me, at moments like that you may even shed a tear or two. Because as powerful as it is for us at home to see an athlete accomplish that Olympic victory, it is so much more meaningful for the supporters who have been with them every step of the way, who intimately know their background story. The athletes may be members of Team USA or Jamaica or Japan during that incredible 17-day experience, but you can bet that each and every one of them has a team–in the stands and at home–rooting for them, medal or not.

That support team is what Opportunity is for so many clients, our champions in places like Kenya, Colombia, the Philippines, and many more. Our champions may never stand on a podium for a medal ceremony or appear on international TV, but their stories of perseverance would blow those of many Olympians out of the water. They have dreams too; not of besting world records, but of affording a home with a real floor and roof, or sending their kids to school, or opening their own business and contributing to their community.

Felicitus’s “coach,” her loan officer Annie Wanjero, guides her and helps her reach her goals.

Our champions are also members of teams, Trust Groups, collections of people who support and teach each other, who have their teammates’ backs should misfortune fall. The loan officers, branch managers, and local Opportunity leadership are these teams’ coaches, always available to give guidance and extra support to their champions. And then there’s the home “nation”–all of the Opportunity family-at-large–made up of international staff, donors, Insight Trip travelers, YAO members, even interns (!)–who are there to cheer on the champions as they stick every landing, flip every turn, jump every hurdle, and pass every ball with passion and grace.

Olympians show pride for the countries they represent. Just so, our clients are shining representatives of Team Opportunity. The whole network– individuals, teams, coaches and nation–comes together with a mission for success for each of these champions who put themselves on the line and give 100% every day.

So when you find yourself leaping off of your couch and screaming at your TV over the next two weeks, remember the other champions that are out there giving their all and succeeding thanks largely to your support. Because that’s the best part about our “Games”: you too can play a crucial role in the making of a champion.

This post was written by Elise Egan. She’s the intern in Opportunity’s International Education department, an avid cyclist, and a big fan of metaphors.

Linda Godinho leads the farmers’ training session in Mozambique

We’re committed to helping farmers in sub-Saharan Africa transition from subsistence to economically- and commercially-active farming. Through an innovative and sustainable approach to agricultural finance, Opportunity provides products and services designed to achieve financial sustainability. These efforts ensure an ongoing contribution to poverty eradication and economic development in underserved rural communities.

Financial literacy training to a roomful of farmers

In June, Opportunity Mozambique launched its financial literacy training program geared to farmers. The chief transformation officer, Linda Godinho, led 175 farmers through the course presented in the local language, which covered budgeting, basic record-keeping and the importance of saving and business-planning. Farmers responded with unanimous appreciation and Linda received recognition by the Mozambican government officials who were there to observe the training. Now having conducted a successful pilot, Linda plans to roll out the training to farmers across Opportunity Mozambique’s rural bank branches this year.

Linda at the whiteboard

By supporting farmers with comprehensive financial tools and managing partnerships throughout the value chain, Opportunity is providing a successful example of how to improve farm productivity and alleviate rural poverty, enabling them to increase their yields at harvest time so they can send their children to school and put more food on the family table. These efforts are helping to increase food security and transform the continent’s hunger and poverty landscape.

Travelers Katherine Gardner and Margaret Gardner (at right) gather in Opportunity's Bogotá offices to meet client Maria Elena Villa Orozco (second from left, in pink) and three of her fellow Trust Group members.

The second day of our Colombia Insight Trip we visited the Opportunity offices in Bogotá. There we met the dedicated staff that supports the outreach and ministry of Opportunity, as well as clients whose lives have been transformed through their work. After all, while Opportunity International is a nonprofit organization focused on creating economically secure business entrepreneurs, it also offers transformation through professional and personal training. In describing the work of the Bogotá office, Opportunity Colombia’s Chief Transformation Officer Jim Frantz said, “At the heart of what we do is reaching the poorest of poor.” Opportunity’s Trust Groups make the small loans possible for those without capital, but there are challenges to the Trust Group model. “Individual loans are safer and more lucrative,” Jim added, “But if that’s all we do we are just another bank.” Trust Groups offer more than just loans; they build upon a strong community. In a country like Colombia which has been torn apart by violence and civil strife, reestablishing community is tremendously important. Individuals, uprooted from rural villages where their families lived for generations, find themselves in large urban areas with no support system and few resources. In addition to needed funds, Opportunity Trust Groups give them a chance to meet weekly with a group of responsible and honest friends to receive training in financial management, social responsibility, and spiritual growth.

The first Trust Group we met today included a tomato seller, an egg crate recycler, several street vendors, and a take-out restaurant owner. Each originally from another part of Colombia, this disparate group of displaced people had found hope and community through their Trust Group. The second group we met included several former prostitutes. A smiling, middle-aged woman in pink named Maria Elena Villa Orozco explained to us how Opportunity had brought her hope and a new life. She arrived in Bogotá from a rural district at the age of 15 with a newborn baby boy in tow. She hoped that the father’s family here would help support her and the child. She discovered instead that the man’s sister and mother worked as prostitutes. Her only course was to join them “on the streets.” There she developed a drug and alcohol addiction. But when her son was murdered at the age of 13 she was determined to get out. A Catholic foundation helped with her rehabilitation, and when she asked about finding a new way to earn a living, they connected her with Opportunity International. “I had seen vendors selling snacks and coffee in the streets and I wanted to try that.” But she could not get a loan from a bank. Through an Opportunity Trust Group she received the money she needed to buy supplies. “It raised my self-esteem,” she said. “Before people would point at me. Some stores would not let me in, but now they do.” She has now participated in several loan cycles. “Opportunity has allowed me to grow my business, but also as a person,” she told us. “God blesses one through good work. I am happy now.”

Stay tuned to the Opportunity Blog for more updates from the Family Week Trip to Colombia in the coming days ahead.

Daniel Ryumugabe (second from right) and attendees of Monday's book discussion. From left: Jill Dailey Smith, Edna Schade, DeeDee Spence, Darlene Hanson, Kim Stephens, Daniel, & Linda Vander Weele.

Left to Tell is the story of how Immaculée Ilibagiza’s life in Rwanda was upended dramatically one day in 1994 when she and seven other women huddled silently in a cramped bathroom in a local pastor’s home for 91 days to escape the violence of the Rwandan genocide. When it was all over, Ilibagiza had lost most of her family, but she survived to share the miraculous story of her transition into forgiveness and a profound relationship with God. She now works for the United Nations in New York City and has established the Left to Tell Charitable Fund to help others heal from the long-term effects of genocide and war.

The group of women at Monday’s meeting is always eager to participate in an intellectual discussion about a gripping book like Left to Tell. But with Daniel in attendance, his inside knowledge of life in Rwanda today, as well as his daily work with people rebuilding their lives, helped bring the events in the book into tangible relief and put them in historical context.

Left to Tell: Discovering God Amidst the Rwandan Holocaust, by Immaculée Ilibagiza

Together, we explored the meaning and the impact of the events in the book, examining them in light of the post-colonial history of Rwanda since its liberation from Belgium in 1962, including violent military coups and cycles of conflict, culminating in 1994′s genocide. For Ilibagiza, we discussed what helped her survive her ordeal, and the aftermath of her experience, including what she terms “the pain of freedom.” We also spent time exploring the power of forgiveness, and how reconciliation within a nation can contribute to development and ultimately a more stable culture.

Daniel shared that Rwanda has been healing since the genocide through improved economic development, with solutions like microfinance and an emphasis on education for all in order to add to the stability of the country. He shared that Rwandan president Paul Kagame has set a bold goal for Rwanda, striving to graduate from being a developing country, and establish a middle class, by 2020. An ambitious goal given that 90% of the country lives on $2 a day. Kagame is also working to build a national identity that does not focus on fractious labels or disparate groups, but on reconciliation and unity.

Ultimately, Daniel acknowledged the horror and long-term impact of the Rwandan genocide, but he also helped us more deeply understand the journey that the country has been on since then and their collective hopes for the future. What a privilege it was to gain Daniel’s insight on this impactful book, lending our discussion an even greater resonance and richness.

At Opportunity, we’re always looking for our next good read. Do you have suggestions for great books about global development or issues faced by people in the developing world? Tell us about them in the comment field below.

Daniel shared the story of his childhood as a Rwandan refugee living in Uganda, and how he struggled to get an education, the only child in his family to go to university. He also told us about his work at Opportunity Rwanda guiding staff members to incorporate transformative training into their daily contact with our microfinance clients. As he told us, “Poverty is not just a deficit, not just a lack of resources, it is a deprivation. It is a trap with many cords. If you offer one solution–loans–but there are other problems related to health or financial education, the client cannot get out of the poverty trap.”

Would you like to meet Daniel for yourself? Join Opportunity supporters at the Breakfast for Tanzania in Boston, where Daniel will be a guest speaker along with award-winning author and journalist Roger Thurow. Get tickets to this event here »

Daniel also invites you to join him at other U.S. events during his visit:

International Visitor Daniel Ryumugabe of Opportunity Rwanda from Opportunity International on Vimeo.

I had the blessed opportunity to travel to Colombia on an Insight Trip where we spent two days in Bogotá and two days in Cartagena. We visited with clients who were receiving loans from Opportunity International ranging from $100 to $2,000. The numbers seem small, but they make a huge impact! It provides them what they need in order to send their kids to school, to have enough to eat on a daily basis, and to afford housing.

Emily Soltvedt (second from right), other travelers and Colombian staff pictured with clients and the dresses they made.

But the coolest part about microfinance isn’t just that clients’ physical needs are met, it’s the emotional and spiritual transformation that takes place that excites me the most. The clients learn they are capable, intelligent, gifted people, created by God for a purpose. They have aspirations for their future and the future of their children. They learn how to be leaders in their community through training provided by Opportunity’s staff working on the ground. They gain confidence in their ability to manage a business and they are able to restore their dignity. These are not handouts. They are real loans with interest that the client is expected to pay back on time. When we met with the clients, they looked us in the eye, proud of their accomplishments because they worked hard to create their business and knew we were equals.

I’ll share one example of a client who we met. The client took out a loan for her business, which is making high end baby and children’s clothes, which she sells in a store near the main market area. Her business has been successful, and in turn she has started a foundation as part of her business. She hires and trains single pregnant women living in poverty, who have no means of supporting themselves and their child, to make these clothes. The women get to keep the first set of clothes they create for their own child. Then, throughout their pregnancy, they receive support and learn a skill that they can use to generate income once the baby is born. I love this client story, because it is a striking example of how these loans have a big impact, not just on the clients themselves, but also on their entire communities.

Additionally, the staff of Opportunity International that I met in Colombia are beautiful examples of people who place all their trust in the Lord and live out their lives for Him by serving and leading others. The staff begin each work day with devotions in fellowship together. The first thing they do is place the day in God’s hands! And then they go out, sometimes traveling for hours, to love and serve their clients joyfully!

All of the people we met in Colombia had their own unique and inspiring story. But two things that stood out to me were 1) their thankfulness to God and 2) their determination. They gave God the glory for what He had provided and they did not waste any blessing that was entrusted to them.

I left greatly encouraged and my heart is full of joy over what has been done in the lives of Opportunity International’s clients. The clients that I met have confidence that they did not have before Opportunity, their children are going to school, they have dignity, and their hearts are full of thanks to the Lord for His blessings. My visit to Colombia makes me want to say, “Praise to the Lord!”

Baba Trust Group members, led by Sheela Shantakumari (center) of Chennai, India, meet for their weekly Trust Group Meeting.

“Opportunity International is grateful to The UPS Foundation for its dedication to helping impoverished families receive access to financial education and support,” said Dennis Ripley, our SVP of International Business Development. “Their support of our organization over the years has helped countless clients work their way out of poverty and toward a better life through entrepreneurship.”

In India, Opportunity’s mission is to serve people who do not have access to financial services. The grant from The UPS Foundation will help us expand our impact in the lives of Indian clients in both rural and urban communities.

The program funded by The UPS Foundation Grant includes microfinance services, such as Trust Group lending and financial literacy training programs on earning, spending, borrowing and budgeting. In addition, clients will benefit from insurance products provided by our subsidiary MicroEnsure, a leading insurance intermediary for people living in poverty.

“For nearly 40 years, [Opportunity] has fostered entrepreneurship in the developing world through education, savings programs, insurance services and training,” says Eduardo Martinez, director of philanthropy and corporate relations for The UPS Foundation. “We are proud to continue our support of Opportunity International’s efforts to increase economic literacy in India.”

For more on this exciting grant from The UPS Foundation, read the press release here.