Author Archives: microfinance

Responsible investing & giving- Xmas project 2007

As we approach the end of 2007 and the gift-giving season, we look back to see what were the highlights of the year, what have we learned and achieved. I think that one of the things that struck me the most this year was the increase in options available on how to get engaged, invest or donate using the web. It has never been so easy to make a difference or try, at least. For investments in microfinance one can go to Kiva or Microplace. For donations one can start searching with Global Giving. Any topic is easy with the help of Google and Wikipedia. So we launched a modest Xmas project. Instead of Xmas presents to our nieces/nephews and children of our friends we have given everyone a stipend for them to either donate or invest. They first have to research and find a cause or project that appeals to them, donate or invest. At least half of the amount has to be used for the project and the rest they can keep it for their own. Another condition was that they have to give a mini presentation in the new year on how they found the project and why they chose it. The children and youth are in Switzerland, Japan and Australia. I am thrilled to learn from their findings.

UN, Google and Cisco launch a website to track Poverty Reduction

On November 1st, UN, Google and Cisco unveiled the MDG Monitor www.mdgmonitor.org , an innovative site to track the progress towards decreasing global poverty by 2015, a global campaign known as the Millenium Development Goals, or MDGs. From their press release;

…a Web surfer can use Google Earth to fly anywhere on the planet and explore from above, in three dimensions, the places where work is being done to realize the MDGs. With a few simple clicks, user can access country assessments and data collected by the UN worldwide…By laying out areas of progress and continuing challenge for the world to see, MDG Monitor aspires to keep the global community’s eyes firmly fixed on the Millenium Goals and to provide vital information for policy makers and development practitioners worldwide.

It is a very cool site. A great example of innovative partnerships leveraging their expertise and creating huge impact.

MicroPlace, an ebay company launches a Microfinance Investment Website for the retail investor

On October 24th, MicroPlace launched its web site that allows people to invest as little as $100 in microfinance. More precisely, people can purchase investment notes with returns ranging from 1.5 to 3.0% that are issued to a particular microfinance institution. This is great news as this provides another option for people to participate in supporting microentrepreneurs worldwide. So now in addition to Kiva which allows people to support microentrepreneurs with a loan (you get capital back but no interest) you have MicroPlace where you can make money from these loans “doing good, doing well”. This news has been covered by Businessweek, Reuters, Fortune etc but the best article out is by Rob Katz of nextbillion titled “Kiva vs. MicroPlace-What is the difference?” an excellent read. Kudos for Calvert Foundation, which is the first issuer for MicroPlace. Calvert has been offering for the past 10 years community investment notes including those that went to fund microfinance institutions and these notes were offered to the public at large. One of the very few choices that have existed but now their efforts can be inmensely scaled!
One request to MicroPlace/ebay and to the microfinance investment community. Kiva is a non-profit so everyone can participate but investments in MicroPlace is only available for US investors (US residents). I am aware of the constraints in the investment world but can we/someone make a platform or several platforms for investments so that everyone can invest?

Nobel Peace Prize 2007-a tribute to Jeff Skoll’s vision

The 2007 Nobel Peace Prize was awarded to Al Gore and to the UN climate panel (IPCC)

“for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change”

The impact of the movie “An Inconvenient Truth” has been spectacular changing the debate of climate change and raising awareness of the urgency of this subject worldwide in a very short period of time. The movie has become mandatory viewing in schools in Engand, Scotland and many countries in Scandinavia. We should pay tribute also to the person who made it possible for Al Gore’s message to be disseminated in such an efficient way by making it into a movie and promoting it. Jeff Skoll, philanthropist, social entrepreneur, founder and Chairman of Skoll Foundation and the independent movie company Participant Productions was the key person behind this. Thank you Jeff and congratulations!

Intel launches ICT program for the poor in Bangladesh together with Grameen Solutions

Intel’s Chairman Craig Barette and Muhammad Yunus have signed an agreement on September 4th for the launch of Intel’s “World Ahead Program” in Bangladesh. Intel’s World Ahead Program is a global effort to provide people in developing countries with the benefits of better, faster access to information and communication technology(ICT). It aims to accelerate the access to ICT to the next billion users in the world and it integrates and extend Intel’s efforts to advance progress in 4 areas; accessibility, connectivity, education, and content. According to the press release, Intel and Grameen Solutions will jointly introduce several programs to make it easier for people across Bangladesh to access the vast resources of medical, educational and commercial knowledge on the Internet. They will also deploy a PC ownership program that will offer low cost PCs on easy monthly installments and will launch a project to set up telecenters across the country. The telecenters will enable employment opportunities for rural citizens to offer services such as Internet access, photocopying, printing and PC usage for e-government and e-commerce services. The telecenters will be financed through microloans. Grameen Solutions was founded by Muhammad Yunus to promote economic and social development through ICT and to create affordable technology solutions for ordinary people. The country-wide implementation of this program is also being launched with collaboration with the government of Bangladesh.

The Elders- a Group of World Leaders for Humanity

On July 18th, Nelson Mandela launched the Global Elders, a group of leaders that will contribute their wisdom, independent leadership and integrity to tackle some of the world toughest problems. The founding members of this group are Desmond Tutu, Graça Machel, Koffi Annan, Jimmy Carter, Li Zhaoxing, Mary Robinson, Muhammad Yunus, Ela Bhatt and Gro Harlem Brundtland. The Elders was an idea conceived by Richard Branson and Peter Gabriel. In a recent article of Businessweek, Richard Branson explains “Peter Gabriel and I started a journey with Nelson Mandela several years back when we felt the world was rapidly becoming a global village, yet we had no advisers who were driven by what ‘s best for humanity rather than what’s best for the military, the economy, or a political group.We hope this group will become the elders of our global village and play a role in alleviating human suffering.” Mandela in his speech said “The Elders can speak freely and boldly, working both publicly and behind the scenes on whatever actions need to be taken. Together we will work to support courage where there is fear, foster agreement where there is conflict and inspire hope where there is despair.”
It is an impressive group of doers and also backed by powerful entrepreneurs. We are living in an unprecedented point in time when huge problems can be tackled and solved as there is the willingness, the funds, the ideas and the people that can do it. If you want to share your thoughts on the role of the Global Elders click here.

Ecobank and Accion to launch Microfinance banks in 20 African Countries

This story came to our attention through Microcapital. Ecobank Transnational Incorporated, the parent company of Ecobank, the leading regional banking Group in West and Central Africa serving wholesale and retail customers, and ACCION International a global microfinance network, announced their partnership to open microfinance banks in 20 African countries. Ecobank has a network covering 18 countries: Benin, Burkina Faso, Cameroon, Cape Verde, Central Africa, Côte d’Ivoire, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Sao Tome, Senegal, Sierra Leone, Tchad and Togo, with plans to establish presence in East and Southern Africa. The Group has a network of over 320 branches and offices. The two institutions started their collaboration in December 2006. According to the Accion’s press release “ACCION will work with Ecobank to develop a regional banking platform that will deliver financial service products to micro- and small entrepreneurs in African countries within the Ecobank network. These products may comprise loans as low as $100, savings and insurance products, and related financial services, all designed to help lift people out of poverty. Over the next three to five years, ACCION will work with Ecobank to develop a comprehensive mix of tailored financial products that will be distributed through its existing branch network, and introduce alternative delivery channels such as ATMs, point-of-sale terminals and cell phone banking.”
Another partnership that is making sense.

CGAP Note Analyzes Compartamos IPO

CGAP has released a draft Focus Note written by Richard Rosenberg. CGAP Reflections on the Compartamos IPO: A Case Study on Microfinance Interest Rates and Profits. The successful IPO of Compartamos on April 20th and the enormous gains produced through the sales have provoked discussions concerning 1) the very high interest rates charged over the years 2)were the grants given to Compartamos used inappropriatelly to benefit private investors and 3)governance issues on balancing social and commercial objectives after the IPO. Thus this is a very well written and welcome report providing the base for discussions and brainstorming needed for the microfinance industry. As the author puts it;

“All of us who are involved in commercial transformation-that is, moving microfinance operations from not-for-profit to for-profit institutional forms-need to be clearer and more realistic in dealing with the inevitable consequences of those transformations.”

The book “MicroFranchising”

Fairbournejacket.jpg MICROFRANCHISING: Creating Wealth at the Bottom of the Pyramid, the first major publication on this subject, is now available. (Edward Elgar Publishing). This edited volume comprising 13 chapters and 18 authors introduces the concept of microfranchising and discusses how this business model can be effectively used for poverty alleviation. Different models of microfranchising are reviewed and specific case studies are highlighted to show how it has worked and is working in different parts of the world. Also the advantages as well as potential problems and pitfalls of microfranchising are discussed. My contribution was on the subject of “Microfranchise Funding” (Chapter 12).
If there is one thing I could hope for is that the price for this book would be a bit lower so more people can afford to buy it and read it.

Japan Microfinance Symposium

The Japan Microfinance Symposium took place on May 10th in Tokyo at the Asian Development Bank Institute (ADBI). This symposium which was the first international conference of microfinance in Japan was facilitated by Planet Finance Japan and was jointly organized by JICA, JBIC, ADBI the World Bank Group, KRI International and Shinsei Bank. The theme was “Poverty alleviation and the role of private and public sectors in microfinance” The turnout was larger than expected with more than 220 people attending the full-day symposium. There was a good dialogue between the audience and the speakers as many questions were asked (which I was told is not so common in Japan). My presentation for this conference titled “Microfranchising-The Next Step” is available here.Download file