Grameen Foundation Insights

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At Grameen Foundation, our goal is to spur innovation in the global movement to eliminate extreme poverty. Part of that work is to develop better solutions and share them with people like you.

On GF Insights, we share lessons learned from our leaders in the field, news about efforts to expand access to financial and information services for the poor, and how poverty-focused organizations are using data to improve the way they work.

Latest Posts

11/19/2010 by

Recent reporting about the activities of for-profit microfinance institutions (MFIs) in India, specifically in the state of Andhra Pradesh, has raised important questions about whether microfinance is delivering on its promise to empower poor people. We take the concerns raised extremely seriously and are following developments on a day-to-day basis through our India-based team.

Though Grameen Foundation is not currently working with any of the MFIs that have been caught up in the allegations in Andhra Pradesh (our efforts in India are currently focused on the least-served states, in the north and east of the country), we have worked with and observed the Indian microfinance sector for more than a decade. We have seen its many challenges, as well as the hard work of MFIs and others to improve accountability and service to borrowers. Grameen Foundation strongly believes that MFIs must measure their social performance as rigorously as they measure financial performance – in other words, they must demonstrate that they are reaching the poor and poorest, and that these borrowers are moving out of poverty over time.

11/18/2010 by

Kimberly Davies is a Program Associate for the Microsavings Initiative, which is part of Grameen Foundation’s Solutions for the Poorest program. This is part two of Kim’s blog series. If you haven’t yet, we recommend you read part one of her blog post series.

 

A new hands-on interview process was piloted during CARD's Customer Service Associate interviews.

 

Based in the Philippines, CARD Bank is a close partner of Grameen Foundation that truly works to empower women, as the majority of their staff is even family members of past borrowers.

11/17/2010 by

This year’s SEEP Network conference featured Peg Ross, Director of the Human Capital Center on a panel titled “Meeting a Critical Need: Leadership for the 21st Century MFI.”

At their SEEP panel, Peg Ross, along with Kathryn Mayer, Director for the Center for Microfinance Leadership at Women’s World Banking and Glynis Rankin, founding Director of Creative Metier Limited attempted to answer a key question for the industry: How can MFIs develop skilled leaders focused on the double bottom line and build meritocratic organizations [where everyone is promoted and rewarded according to their ability] in a fast changing and increasingly commercialized and competitive marketplace?

As organizations grow, transform, and add additional product offerings to better serve their clients they are adding “increasing complexity at all levels of the organization.” Specifically, Peg explained, “there’s tremendous complexity that occurs at the field level – with the leaders from the field. As an organization grows and scales this issue of complexity needs to be dealt with.” For example, decision making must be decentralized to the lowest appropriate level within the organization and accordingly, individuals should be not only held accountable for business results, but also given the support necessary to deliver.

These field leaders are the backbone of microfinance institutions around the world. They can inspire the loan officers and branch managers they work with and when they are empowered with the proper level of decision making capability, they can drive the growth and impact of their institutions.

Figuring out how best to develop these mid-level leaders is key as organizations seek to expand their operations and delve deeper into the markets they serve. Peg also emphasized how “it’s important to deliver learning opportunities that are not just classroom based. Learning is about getting information in a just-in-time manner and then having the opportunity to apply that in your every-day job.” 

11/17/2010 by

Matt Duncan is the Director of Market Development, Technology for Microfinance Initiative for Grameen Foundation’s Technology Center based in Seattle, Washington. He has been collaborating with Microsoft Community Affairs to plan the Microfinance Leadership Summit in India, where microfinance institutes will learn about cloud solutions and other technology tools that will help them serve more people in poverty.

 

[caption id="attachment_1233" align="aligncenter" width="300" caption="Grameen Koota borrowers gather to repay their loans at a Kendra (Center) Meeting in Karnataka State"][/caption]

 

It was that awkward shuffle. I was standing in the aisle as our flight was loading. Despite repeated requests at the check-in desk, my wife and I did not get seats together, so I was faced with attempting to convince a fellow passenger to trade seats with me. I was optimistic as I had a highly-sought after aisle location to offer.

Attempt #1: failure. I could not overcome the language barrier between a shy Vietnamese woman and myself. Attempt #2: Again, a failure. I approached the woman who had the seat assignment next to me. I offered the comfort of an aisle seat near the front but no deal. I was left with one final option: shuffling around all four seats in our row without displacing the first woman who had refused to move. My last hope strolled onto the jet, and I worked my best pitch. Just as they announced the closing of the cabin door, I got a gentleman on his way home to Bangalore, India to switch seats with me. An exhausting way to embark on the first of two nine-hour legs to New Delhi.

Vikrum, the kind gentleman who had switched his seat, and I struck up a conversation across the aisle. He asked the obligatory question, “What do you do?” – a simple question that often gives me pause. My job is not easily explained in a simple sentence, at least for me. I respond, “I am solving world poverty.” He paused and replied, “Now that’s a grand goal. I work for a software company.”

We soon discovered that our careers were more aligned than we might have expected. Vikrum works in Marketing and Sales for Microsoft Azure, the software company’s cloud computing platform. An ironic synergy considering that I was headed to New Delhi for the Microfinance Leadership Summit, an event my organization – the Grameen Foundation – planned in partnership with Microsoft and Access Development Services, a local microfinance association. The Summit will help microfinance institutes (MFIs) understand how cloud computing and other technologies can help them accelerate growth and increase transparency. A serendipitous seat change indeed... We exchanged business cards and sat back as the plane took off.

Four hours into the flight, Vikrum invited me to join him to stretch our legs. Huddled in the corner of the plane, we discussed the tremendous upswing in the adoption of cloud computing. With more than 13 data centers worldwide, Microsoft is seeing businesses shifting to cloud computing on the basis of cost savings and convenience, among other reasons. Vikrum’s recent travel history serves a good indicator of the rising demand for this emerging computing approach. 

11/15/2010 by

Jason Polen works as a Social Media Intern for Grameen Foundation based out of our Seattle office.

In developing countries, the demand for financial services still far exceeds the supply. Usually when this occurs, businesses scale-up to meet the demands of the market. However, microfinance institutions (MFIs) are still not fulfilling the financial demands of the world’s poor. What is preventing MFIs from reaching everyone hoping to break the cycle of poverty? The key barrier is technology; many small and medium sized MFIs lack affordable, efficient, and usable technology.

In New Delhi, on November 17th, Grameen Foundation and Microsoft are holding a conference focused solely on the intersection between technology and microfinance. The 2010 Microfinance Leadership Summit entitled, “Fueling Growth: Strategic Technology for Microfinance” will bring together leaders from throughout the microfinance and technology ecosystem to discuss how they can better leverage technology to meet their business and social goals. Grameen Foundation and Microsoft will outline how MFIs can use technology to decrease administrative and transactions costs, increase social benefits, and maximize transparency.

Unfortunately, most small and medium sized MFIs charge relatively high interest rates (though they are still lower than the alternatives offered by informal loan sharks). Providing a thousand $25 microloans has significantly higher administrative costs than providing one $25,000 loan. Charging high interest rates is the only way for most MFIs to be sustainable, but adopting the appropriate technology can change this. It has the potential to significantly reduce the cost of distributing, monitoring, and collecting microloans, which decreases administrative costs and therefore interest rates. MFIs that have successfully integrated their banking software with mobile banking technology have experienced enormous decreases in overhead costs. Transactions become automated, reducing accounting costs and thousands of hours spent calculating inefficient or duplicate data entry. With the increased use of technology, MFIs can decrease the interest rates charged to borrowers and focus on reaching more people in need. 

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