Wednesday, April 27, 2011

Microfinance Notes: 25 April 2011

At Kiva, we value being in tune with the news, research, and latest findings in Microfinance, so we are making an effort to bring you more of the latest in Microfinance!

This post we cover: how to respond to critics of microfinance, the challenges of targeting the ultra poor, a case study of high interests rates in Pakistan, mobile banking in Rwanda, Colombia’s successful financial inclusion program, and much more!

If you can only read one...

source: Social Edge

This article about the changing view on microfinance mentions Kiva. It is highly recommended for all members of the Kiva Community who want to be able to respond to critics. For example, the article explains that the high interest rates associate with microfinance institutions are elevated in order to reach the remote poor and that financing these unsecured small loans are expensive. Additionally, the article points out that the majority of microfinance organizations like Kiva are not-for-profit and pro-poor.

If you can

source: Financial Access Initiative Blog

Kiva looks to support strong programs that provide impact to the poorest members of our society. While many microfinance institutions do serve lower-income customers, it is difficult to reach those categorized as ultra poor (making less than $1.25/day). Read about the challenges of reaching this most-vulnerable group of individuals.

source: Microfinance Focus

Kiva has been funding borrowers in Pakistan since 2007 and this study shows that despite high interest rates, borrowers are able to repay and are making positive strides.

source: CGAP Microfinance Gateway

Kiva Field Partner Urwego Opportunity Bank has developed new mobile banking avenues to reach the rural poor in Rwanda. This innovative program offers banking opportunities to people in areas that have typically been marginalized in accessing financial services.

source: CGAP Technology Blog

Kiva's work in Colombia started in late 2009. This article highlights a successful Conditional Cash Transfer (CCT) program in Colombia, which ties microfinance to childhood education and health interventions. Since 2000, the Colombian government has been providing cash transfers to poor families if their children are enrolled in school and if family members follow preventative health measures.

source: CGAP Microfinance Gateway

Kiva Field Partner Asociacion Arariwa in Peru is featured in a pilot program that uses the Bangladesh Rural Advancement Committee’s (BRAC) innovative model to serve the very poor. 
This approach focuses on helping the poorest people escape extreme poverty.

source: CGAP Microfinance Blog

Kiva believes that savings are as important as loans for helping unbanked people to achieve their goals and improve opportunities for their families. Read about how Grameen Bank's change to the "Grameen II" model has helped to mobilize savings.