Making Microfinance More Effective

Harvard Business Review

The Grameen model of microfinance gained a great deal of attention in the international development field after early data showed that it was associated with high repayment and low default. For the 2.5 billion people who live on less than $2 per day , shocks such as illness, crop failures, livestock deaths, farming-equipment breakdowns and even wedding or funeral expenses can be enough to tip them, their families, or even an entire community below the poverty line.

Innovating The Brick-and-Mortar Injustice Infrastructure

Mills Scofield

This week''s post is by Andy Posner , Co-Founder & Executive Director of Capital Good Fund ( CGF ), a non-profit microfinance organization targeting the root causes of poverty through innovative micro-loans and personal financial coaching.

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Learning from Microfinance's Woes

Harvard Business Review

A few weeks ago, I attended a lecture about microfinance, and got sucker-punched. Expecting to hear a litany of pros and cons about the business, and an exploration of good and bad models, I was instead greeted with a knockout punch: Microfinance doesn't work, at least not in the way we think it does. The pugilist-presenter was David Roodman, a fellow at the Center for Global Development and the author of a new book, Due Diligence: An Impertinent Inquiry into Microfinance.

Peer-to-Peer Microfinance: A Sustainable Solution to Poverty

Modern Servant Leader

Book Review: The Social Entrepreneur’s Handbook

Chartered Management Institute

Rupert is the CEO of the foundation for International Community Assistance, a leading microfinance institution. The Social Entrepreneur’s Handbook by Rupert Scofield is written to guide the aspiring social entrepreneur through the full range of activities of starting, building and running a social business. Review by David Stephens FCMI. You are not watching this post, click to start watching

The Microfinance Contagion Scenario

Harvard Business Review

So far, the Andhra Pradesh (AP) microfinance crisis has largely been viewed as a local issue, with relatively little impact beyond AP or India's borders. Other microfinance crises, in Bolivia, Nicaragua, Nigeria, and Bosnia, have not spread beyond the borders of a particular country. In a recent paper, Jonathan Morduch and Jonathan Conning explain the role of debt and equity financing in the microfinance industry.

Women as Microfinance Leaders, Not Just Clients

Harvard Business Review

We're a network of microfinance organizations; we exist to share practices and develop the leadership skills required by a sector that has grown up fast. And as you might be aware, microfinance is a phenomenon that, while it did not set out to be "for women," has mainly turned out to be. It's vital to reverse the trend and help microfinance institutions attract, train, and retain talented women. Diversity Gender microfinance WWB

What is the best way to make a difference in the world?

CO2

My solution was to found a microfinance organization that puts women in a position to create their own destinies and achieve their full potential. This question is at the heart of Jacqueline Novogratz’s inspirational book, The Blue Sweater.

How Large NGOs Are Using Data to Transform Themselves

Harvard Business Review

A critical part was adapting a proven model in a related field: microfinance. By increasing or jump-starting these institutions’ housing microfinance lending, Habitat aims to create robust markets for this financing that can continue on their own.

I'm a bank - well, with the help of Kiva.org!

Jason Womack

Intercontinental Ballistic Microfinance from Kiva Microfunds on Vimeo. What happens when 620,000 lenders fund 615,000 entrepreneurs, students, and other microfinance borrowers around the world?

Lessons for Social Entrepreneurs from the Microfinance Crisis

Harvard Business Review

The microfinance industry has in just a few years gone from making headlines for the Nobel Peace Prize to stories about limited impact, allegedly abusive tactics, client suicides, government crackdowns, major lenders struggling with insolvency and the forcible removal of Mohammed Yunus as Managing Director of Grameen Bank. But we shouldn't ignore how the microfinance industry made itself vulnerable to attacks with a political motive.

Microfinance Is Good for Women, but It's Only Part of the Solution

Harvard Business Review

Career paths are not one-size-fits-all, yet in emerging markets, it's often assumed that microfinance — the use of small loans to foster self-reliant small businesses in a community setting — is the only path for women seeking economic opportunity. Microfinance has accomplished tremendous things and helped millions of women launch their own businesses; however, it is not a complete means of economically empowering women. Microfinance was one issue that we considered.

An Approach to Ending Poverty That Works

Harvard Business Review

Microfinance and other market-based interventions don’t generally reach them. Ending extreme poverty by 2030 is the BHAG – the big, hairy audacious goal – of our generation.

Can Technology End Poverty?

Harvard Business Review

Shameran Abed, who runs BRAC's microfinance program, explains what happened: "In the first couple months, a lot of our borrowers would send the money through their mobile phones and then physically show up at the branch to check with the accountant that the money had turned up.".

Can Technology End Poverty?

Harvard Business Review

Shameran Abed, who runs BRAC's microfinance program, explains what happened: "In the first couple months, a lot of our borrowers would send the money through their mobile phones and then physically show up at the branch to check with the accountant that the money had turned up.".

The Innovation Mindset in Action: Shantha Ragunathan

Harvard Business Review

Sasikala, a Block Development Officer (BDO), talked to the Kodapattinam villagers about microfinance , only Shantha, of all the villagers, saw the opportunity and took action. To participate in a microfinance campaign, the village had to form a Self Help Group (SHG) of about 20 people, with each member contributing a certain amount of money every month. Undeterred, Shantha persisted until she persuaded the required number of people to sign up for the microfinance project.

What Makes Social Entrepreneurs Different

Harvard Business Review

Social entrepreneurs have also been some of the most attentive followers of the academic debate between the likes of Mark Pitt and Jonathan Murdoch about whether microfinance really helps reduce poverty.

How One Startup Developed a Sales Model That Works in Emerging Markets

Harvard Business Review

Experiment #5: Microfinance Institutions. In emerging markets, microfinance has been a key economic engine in helping low-income households fund businesses and other important purchases in daily life. Prem, a BioLite Burner on our West India team, gives a HomeStove demonstration to a group of customers at a microfinance branch in Rajasthan.

The Conference That’s Trying to Reinvent How We Network

Harvard Business Review

When those in the group that had the job givers question pulled off their masks, they discovered that Muhammad Yunus , a Nobel Prize winner for his microfinance work, had been with them, listening carefully to all their suggestions. C2 Montréal’s outdoor plaza at night.

Scaling Up Without Losing Your Edge

Harvard Business Review

Following Abed's twist on Schumacher — "small may be beautiful, but big is necessary" — it now touches the lives of an estimated 126 million people with healthcare, education, enterprise development, microfinance and a slew of other programs. Forty years ago, British economist E.F.

Entrepreneurship Needs to Be a Bigger Part of U.S. Foreign Aid

Harvard Business Review

These colossal “beltway bandits” work everywhere from Afghanistan to Zambia and purport to offer expertise in everything from microfinance to micro-irrigation. Here are two surprising facts. First, the average American estimates that over 25% of the U.S.

The 3 Preconditions for an Entrepreneurial Society

Harvard Business Review

And if you need access to money, crowdfunding platforms and microfinance options make that easier than ever.

How Social Entrepreneurs Can Have the Most Impact

Harvard Business Review

Or consider Kwabena Darko of Ghana, who helped found that country’s microfinance sector by forging a collaboration between global NGO Opportunity International , his national startup Sinapi Aba , and a myriad of village- and town-based trust groups. Social enterprise in the U.S. is a fast-growing, but fragmented, movement.

3 Things Driving Entrepreneurial Growth in Africa

Harvard Business Review

Firms are realizing what microfinance has known for a while: Local self-policing groups, or village headmen who police honor codes, can hedge cash flows in far-flung places. Fatigue may be setting in for some Western investors’ interest in African innovation, particularly those that have yet to reap rewards to brag about.

Banking on Women and Girls: Key to Global Poverty Alleviation

Harvard Business Review

On this 100th International Women's Day , it is right to reflect on how women have become the heart of the microfinance industry. It is easy to forget that the initial motivation for microfinance roughly 30 years ago was, to a great extent, gender neutral. The pioneering microfinance institutions sought to provide credit to poor entrepreneurs who had no assets to pledge as collateral and, consequently, were denied access to capital by the formal banking sector.

Give Impact Investing Time and Space to Develop

Harvard Business Review

We allowed microfinance and the venture capital industry the time and space to develop over a few decades. Impact investing has captured the world’s imagination. Just six years after the Rockefeller Foundation coined the term, the sector is booming.

Facebook Presence Is an Important Clue to a Social Venture's Future

Harvard Business Review

This makes sense to Milaap.org , a social enterprise in Bangalore that crowdsources low-cost capital for microfinance institutions through its online platform.

Servant Leadership Observer ? November 2010

Modern Servant Leader

Peer-to-Peer Microfinance: A Sustainable Solution to Poverty. Twitter. LINKEDIN. The Modern Servant Leader Servant Leadership & Technology. Leadership. Technology. Resources. Other. Archives. September 20, 2011 Servant Leadership. Servant Leadership Intro. Servant Leader Posts. Assessment.

Transforming Rural India Through Agricultural Innovation

Harvard Business Review

Over 1,900 beneficiaries have established micro-enterprises for which microfinance has been facilitated. With a majority of its population living in villages, rural poverty is a major problem in India. The disparity between the urban and rural incomes is also on the rise. This leads to migration to urban areas resulting in urban blight as well. Therefore addressing the problem of rural poverty assumes urgency.

It's Not All About Growth for Social Enterprises

Harvard Business Review

Successful examples of this approach are still rare; most people point to microfinance.

Entrepreneurs: You're More Important Than Your Business Plan

Harvard Business Review

We are proud to have made early investments in the work of Andrew Youn, who founded One Acre Fund; Wendy Kopp, who founded Teach for America; and Vikram Akula, who founded SKS Microfinance. "Would you take a look at my business plan?".

Making Sense of the Many Kinds of Impact Investing

Harvard Business Review

Currently, impact can mean anything from venture investments in new health technologies to microfinance loans in Peru; from affordable housing in the US to renewable energy in India; from social impact bonds to private equity funds that create jobs.

Why CEOs have Liberal Arts Degrees

Mills Scofield

She's spending the summer in Dhaka doing microfinance. Some of today's top CEOs were history, political science, sociology, chinese and music majors in college. They are leading global airline, chemical, healthcare, pharmaceutical, and financial companies, among others.

Businesses Serving the Poor Need to Get Over Their Unease About Profit

Harvard Business Review

The microfinance industry is a rare D and E success story. Microfinance banks, which provide desperately needed loans to low-income consumers, draw mainstream investors because of their attractive returns. Mexico-based Compartamos , a microfinance bank that sold 35% of the company for $450 million in 2007, generates a NIM of around 60%.

Funders Can Give More than Money

Harvard Business Review

Six years ago, David and Donna Allman approached Opportunity with an idea that fell outside our traditional microfinance model: to build a Community Economic Development (CED) program in Nicaragua. It called for leveraging the profits of the global microfinance institution, and coupling them with private investments from the Allmans and their donor network. We know that microfinance alone will not break the poverty cycle.

The Smart Way to Make Profits While Serving the Poor

Harvard Business Review

Grameen Bank, the microfinance bank in Bangladesh, is well known for its use of peer groups: Self-formed clubs of five to 10 people, usually women, share responsibility for microloans. Most companies trying to do business with the 4 billion people who make up the world's poor follow a formula long touted by bottom-of-the-pyramid experts: Offer products at extremely low prices and margins, and hope to generate decent profits by selling enormous quantities of them.

Global Entrepreneurs Need New Funding Models

Harvard Business Review

We wanted to do this because we recognize that small enterprises are a very significant engine for development; they create employment, which tends to be more sustainable and better paid than you would find in the more informal microfinance sector," says Oxfam's Nicholas Colloff. Some microfinance organizations are also moving out of the purely micro and toward larger lending.

How to Create Youth Jobs After Conflicts

Harvard Business Review

Upon graduation, the governments, nonprofits, or (more recently) microfinance companies give them loans to buy tools and opens shops. On December 2-3, the United Nations will host a seminar in Sierra Leone on "Strategies and Lessons Learned on Sustainable Reintegration and Job Creation: What Works in West Africa?" It will bring together government, civil society, and private sector representatives from Côte d'Ivoire, Guinea, Guinea Bissau, Liberia, and Sierra Leone.

It Takes a Village to Raise an Entrepreneur

Harvard Business Review

Commercial microfinance organizations are perhaps the best-known hybrid organizations, but social entrepreneurs now use hybrid models to address a diverse set of social issues that includes hunger, healthcare, economic development, environment, education, housing, culture, law, and politics.

Using Games to Get a Handle on Bank Risk

Harvard Business Review

Popular games also tend to spawn communities who share information and strategies about how to overcome hurdles, suggesting that peer to peer education is also possible (this has been seen in microfinance). Bank marketing materials focus on the dreams, anxieties and goals of consumers. Risk management processes don't — but they should. Most audits and regulations of banks are focused on certifying the integrity of data and controls.