Virtual Conference: Understanding Multiple Borrowing and Avoiding Over-indebtedness Among Clients

December 20, 2011 By Leave a Comment

On January 12-13, CGAP, IFMR and MicroSave will host a virtual conference to discuss thoughts and experiences around multiple borrowing and avoiding over-indebtedness. Moderators will be facilitating online discussions on a variety of topics, and we are inviting you to participate.

Discussions will focus on the following topics:

Day 1: Multiple Borrowing – Definition, Concepts and Region

  • Issues around and causes of multiple borrowing and over-indebtedness;
  • Commercialization of microfinance

Day 2: Addressing Multiple Borrowing and Client Protection

  • Mitigation strategies adopted by institutions across the globe and how we can learn from cross-sharing;
  • How funding and training institutions are addressing challenges;
  • Client protection in the context of multiple borrowing and over-indebtedness.

You must register in advance in order to participate in the conference. Click here to register.

Should you have any questions regarding the upcoming virtual conference, please contact Erin Scronce of CGAP at the following email address: escronce@worldbank.org

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Making Microfinance Mobile

July 20, 2010 By Leave a Comment

CGAP - Mobile banking services are beginning to revolutionize the way people in developing countries manage their money, creating opportunities for microfinance institutions to substantially improve their services. Although widespread m-banking services are currently only present in a few countries, a new CGAP Focus Note, Microfinance and Mobile Banking: The Story So Far shows how microfinance institutions (MFIs) can link into existing m-banking services to make it more convenient and cost-effective for customers to borrow and repay loans. Still, for those MFIs located in countries without an existing m-banking service, most will find it too expensive, time-consuming, and complex to develop a service on their own.

The study, which examines the intersection of mobile banking and microfinance in countries both with and without existing m-banking services (Bolivia, Cambodia, Kenya, Malawi, Mongolia, Pakistan, Tanzania, and the Philippines), found that giving customers the flexibility to make loan payments and deposits using their mobile phones typically shortens group meetings and decreases cases of theft and fraud.
“Using mobile phones to automate payments can offer significant operational cost savings for an MFI if there is a large gap between technology costs and labor costs in their market, enabling them to lower interest rates for their customers,” says Kabir Kumar, co-author of the study.
Working as an agent in an m-banking system can also enable an MFI to learn more about how m-banking works without high investment costs, while helping them differentiate themselves from others in the market, and bringing greater liquidity to their branch locations.
Kenya offers some of the best examples of how MFIs are building on an existing m-banking service. In December 2009, MFI Faulu Kenya launched a service to link Safaricom’s successful M-PESA mobile money transfer service with Faulu savings accounts. Four months after the launch, about $60,000 was transferred between the two institutions each week and 30,000 customers were using the service.
Smaller MFIs can also work together to leverage an m-banking service. One such program is the Rural Bankers Association of the Philippines–Microenterprise Access to Banking Services (MABS) program. This USAID-assisted program organized a group of 60 rural banks, using their ties with more than a thousand small business customers to serve as resellers for GCash, a mobile payments solution developed by GXI, a subsidiary of Globe Telecom.

The study, which examines the intersection of mobile banking and microfinance in countries both with and without existing m-banking services (Bolivia, Cambodia, Kenya, Malawi, Mongolia, Pakistan, Tanzania, and the Philippines), found that giving customers the flexibility to make loan payments and deposits using their mobile phones typically shortens group meetings and decreases cases of theft and fraud.

[Read more...]

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The Haiti Earthquake: How microfinance is helping

February 1, 2010 By Leave a Comment

Consultative Group to Assist the Poor (CGAP) - At 16:53 on January 12 a massive earthquake hit Haiti and dealt a tragic blow to an already struggling country. It is estimated that over 100,000 people are dead. Many more are injured and access to medical care remains woefully inadequate. Huge areas of the nation’s capital and several adjacent cities lie in ruins. Up to one million people have been displaced–many of them forced to live in the street, injured, sick, and with little food or water.

Today, getting emergency aid to the citizens of this devastated nation is the highest priority. Despite a global outpouring of support, rescue and relief efforts have been hampered by the logistical obstacles of damaged air and seaports, destroyed hospitals, and an overall lack of functioning infrastructure. The help of any and all development organizations with local presence is desperately needed.

With so many basic needs still not met, it may be premature to think of the role of microfinance institutions (MFIs). Or, is it?

Devasted but not defeated… MFIs emerge as strong institutions

In Haiti, like elsewhere, MFIs are involved in providing much-needed assistance simply because they are resilient, strong institutions that find ways to continue operations against all odds. Leading MFIs in Haiti have gained the trust of the local community, and their actions over the past couple of weeks demonstrate a keen awareness of their role—and responsibilities—as part of the community.

Taking care of their staff first. In a first instance, often the very next day after the earthquake, several MFI managers went into action to find out how their staff were affected. The assessment of employees was quick, thorough, and caring. Fonkoze lost 5 of their 50 staff. Sogesol (in French) reports that the majority of their 189 staff members are in good health, though one has died, three are missing, and five are not yet functional. Read the complete article on the CGAP website.

Read and Download MABS Disaster Preparedness and Management Tips and Kit

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