Live Blog

Ulrich Grabenwarter, EIF: social enterprise must first meet social objectives before returning profits to investors

Daniel Rozas — Thu, 15 Nov 2012 14:19:04 +0000

The notion of social entrepreneurship is very broad. However, one common element is to have respect for all parties in the value chain of the social enterprise.

We at the European Investment Fund have designed the Social Entrepreneurship Fund as a knowledge exchange platform, which brings together the European Investment Bank, the European Commission, and the private sector. The objective is to raise EUR 200-250 million to support social entrepreneurs on the continent.

The objective is to show that these . . . → Read More: Ulrich Grabenwarter, EIF: social enterprise must first meet social objectives before returning profits to investors

What can microfinance take from social business?

Sam Mendelson — Thu, 15 Nov 2012 14:05:24 +0000

Jean Luc Perron of Grameen Credit Agricole says that there are thousands of potential social businesses, in developed as well as developing countries. Access to health, energy, education: in every field it is possible to envision a social business way to address an issue.

The first approach is to give people accesss to goods and services they dont have.

the next is to focus on ‘inclusive value chain’; so increased profits go back into the local communities.

So what types . . . → Read More: What can microfinance take from social business?

Mohammed Yunus: social business to meet social needs

Daniel Rozas — Thu, 15 Nov 2012 13:33:30 +0000

Grameen Shakti (Grameen Energy) — we now sell 1,000 solar home systems per day. We have now sold 1 million systems, which took us 16 years to do. And it’s growing. As the price of solar panels continues to come down, it becomes ever more competitive with other forms of energy.

This is a business, a social business. As a business it must operate sustainably and efficiently, but the problem it seeks to solve is is a social problem — . . . → Read More: Mohammed Yunus: social business to meet social needs

Yunus at e-MFP EMW: social entrepreneurs and social business enterprises

Sam Mendelson — Thu, 15 Nov 2012 13:22:59 +0000

Yunus is not opposed to anybody making money; but there is a ‘green zone’: cost of fund +10-15%. This is one way to allow profit while maintaining social purpose of microfinance.

The other things that must be prioritised are focusing on the poorest people, on women, and on income-generating activities. And we must emphasise ‘ownership’ of microcredit programs. This is something that was emphasised at Grameen Bank from the start. Now the 8.5m borrowers at Grameen own their microcredit organisations.

Preliminary results from Graduation programme – Bram Thuysbaert

Sam Mendelson — Thu, 15 Nov 2012 10:35:11 +0000

Who are the ultea poor? Most had hat least two meals in the previous day, but most faced food and fuel shortgages. They’re especially vulnerable to shocks – especially health. In Pakistan, 12% of household income went on medical expenses, and almost a third in the Indian studies had expeirenced a health shock in the previous year.

So the way to measure effect of the program is to look to the counter-factual – ie how would they have changed in . . . → Read More: Preliminary results from Graduation programme – Bram Thuysbaert

CGAP/Ford Graduation Program – understanding the lives of the poorest

Sam Mendelson — Thu, 15 Nov 2012 10:20:59 +0000

Graduation pilots start with recognition that poverty is multi-faceted; and we stand on the shoulders of giants who have developed this understanding – BRAC in Bangladesh notably.

Poverty relates to illness, social isolation, and lack of self-confidence too. BRAC pioneered the ultra-poor graduation products, and it has become best practice in this space.

Starts with careful targeting of who are the households who should benefit. Then we consuptions support, then a focus on literacy and savings, skills training, and asset . . . → Read More: CGAP/Ford Graduation Program – understanding the lives of the poorest

Handling fallout from negative press

Daniel Rozas — Thu, 15 Nov 2012 09:37:13 +0000

Bob Annibale: it’s key to have strong client protection standards. The industry has moved substantially in this area and good work is being done, though it needs to continue.

Sanjay Sinha: the negative coverage has had significant fallout on the Indian microfinance sector, and not just in Andhra Pradesh. The situation will improve gradually and we all have to be patient.

Ousmane Thiongane: financial culture of the clients have to be streghtened and financial education is important. But at the . . . → Read More: Handling fallout from negative press

Sanjay Sinha: product diversification is key to meeting financial inclusion

Daniel Rozas — Thu, 15 Nov 2012 09:10:35 +0000

MFIs have promoted many products, but when you look at the numbers, one product takes the lion’s share — the plain vanilla loan, with increasing amounts at each cycle. This, regardless of the client’s needs. There is nothing wrong with plain vanilla loans, but they should be targeted at clients who simply cannot be reached otherwise, since their borrowing sizes are simply too small. There’s much more room to meet actual client needs than is currently being done.

Part of . . . → Read More: Sanjay Sinha: product diversification is key to meeting financial inclusion

The causes and consequences of the Indian Bubble, according to Sanjay Sinha

Sam Mendelson — Thu, 15 Nov 2012 09:04:37 +0000

So looking back on the crisis in India, how could crisis have been avoided and results improved, asks Sanjay Sinha from M-CRIL? From 2003-2010, there was almost 100% growth year-on-year. Growth at that rate works when you have 10,000 clients which goes to 20,000 clients, or 20,000 to 40,000. But once you get to a million clients and you need to double your operations in a single year, you need to be be going from 10,000 loan officers to 20,000. . . . → Read More: The causes and consequences of the Indian Bubble, according to Sanjay Sinha

Sanjay Sinha: the role of microfinance is financial inclusion

Daniel Rozas — Thu, 15 Nov 2012 08:54:29 +0000

There has been a concern among all of us that microfinance may not be delivering promised results. It’s become apparent that we sold microfinance completely the wrong way, myself included. In the late 90s and early 2000s, there was too much emphasis that microfinance was a panacea for poverty. By 2005, the dominant idea among the media and those outside the sector was that microfinance was going to change the world.

So what about microfinance and financial inclusion? According to . . . → Read More: Sanjay Sinha: the role of microfinance is financial inclusion