Many microfinance providers who track the poverty level of their clients and their progress over time have developed creative ways of using the infrastructure for delivering financial services to provide other needed services as well.
Building a Pathway: Fonkoze and Bandhan
Fonkoze and Bandhan show us how long and arduous the journey out of poverty can be, especially for those living at the bottom end of the economy. But they also show us that with careful market segmentation and the development or appropriate products for each segment, it is possible to develop a set of products and services that make this journey less treacherous for their clients and that provide the tools needed for clients to improve their nutrition, income, assets, and hope for the future.
Fonkoze, one of the leading microfinance institutions in Haiti, piloted the Chemen Lavi Miyò (Path to a Better Life) program of Fonkoze in 2007-2008 and began scaling up in
2009. This program targets people living in extreme poverty and provides them with a set of financial and nonfinancial services to ease their journey out of poverty. To date, more than 1,000 clients of this program have graduated from extreme poverty. Read more.
Bandhan, one of India’s largest microfinance providers (more than 3 million clients), runs a similar graduation program for people who are too poor to benefit from traditional microfinance loans. The program provides a weekly stipend as well as training and assistance in starting a livelihood project (livestock, agriculture, trading or petty manufac-turing). Read more.
Creating Support Ecosystems: Equitas and CARD
Equitas and CARD show us how entrepreneurial leaders who focus on improvement in the lives of their clients can develop creative ways to address needs beyond the need for access to finance. Both CARD and Equitas see access to healthcare as an essential element in helping clients deal with a key area of vulnerability. The Microcredit Summit Campaign has also been working with Freedom from Hunger and others in the Health and Microfinance Alliance to increase the number of MFIs that can effectively deliver health education, health financing, and health products and services through their lending infrastructure.
Equitas in India takes a different approach from that of Fonkoze and Bandhan. They do not target the poorest clients, but rather all those who are excluded from the financial system. PN Vasudevan, managing director of Equitas, locates his branches in urban and rural areas with the largest concentrations of poverty, and then seeks to provide a range of services in a financially viable way that helps build an ecosystem that increases the chances for clients to succeed. Read more.
CARD MRI in the Philippines began testing a Grameen-style lending program in 1989 and quickly expanded to seven provinces of the Philippines. With its focus on helping rural women move out of poverty, CARD has developed ways to address the other developmental challenges its clients face. This has led them to provide access to healthcare, education, business training, microinsurance, and marketing assistance. Read more.
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Table of Contents
- Executive Summary
- Reaching Fewer
- The Promise of Mobile Technology
- The Psychology of Scarcity
- Developing Appropriate Products
- Conclusion and Recommendations
- Get Your Copy