Let me build on what Hugh Allen wrote. In the twenty years I was involved in micro-credit (this was before "microfinance") it never occurred to any of us to seriously learn about those we supposedly wanted to serve were doing for themselves. When i read Rutherford's "The Poor and Their Money" I was humbled to realize that we were only bit players in the financial lives of the poor. Our entire focus was to do better at extending credit and to attempt of measure the impact of the services we provided. I agree with Hugh that we should spend a lot more time understanding how the informal sector works and enter into a dialogue about what better would look like and the role they would like to take in making better happen. I think we would be amazed at the outcomes. Savings Groups are a good starting point but I think we can do better.
In the USA I have been meting with focus groups of immigrants who told me about how they manage their ROSCAS - tandas, sanes, sociedades, ruedas - etc. Variable savings - they have that worked out. Want to get your payout earlier - ditto. There is a whole industry of those who organize these groups in exchange for the first payout and a small tip when a member receives a payout - the PSP model has already been invented. How about immigrants teaching the others about commitment savings?
Mobile money - our geeky contribution to the financial inclusion question that is used principally for transferring money - and opening a savings account - which is often dormant or excessively liquid so savings don't accumulate - or microcredit itself - are all our ideas introduced sometimes for better or worse.
Its time to go back to square one, 2.5 billion to go.
Jeff
Jeffrey Ashe
jaashe@aol.com
-----Original Message-----
From: 'Hugh Allen' hugh@vsla.net [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Tue, Jan 26, 2016 7:37 am
Subject: RE: [MFP] Measuring the Impact of Microfinance: Looking to the Future
I agree Anuj that we should look at finance for the poor from a financial inclusion perspective, but financial inclusion is, like so many things, deemed to be important but rarely defined in a way that makes much sense for the poor. For most of the 'industry' it's come to mean using a smart phone to handle money in some sort of way and to open a bank account (most of which, for the very poor, often remain dormant). I wish we'd start to look at financial inclusion as people making use of services that enable them to manage their financial lives better and with greater safety and flexibility and to do so from a position that is much more respectful of what the informal sector is doing well and can do a lot better. It is not, by definition, engagement with the formal sector, if the formal sector is, as is so often the case, only wants to drill a hole in the box and extract as much service income as they can. And don't tell me that of course, such things never happen, or maybe only in Mexico.
Thanks Getaneh, (and Leslie),
It is 2016, high time we get away from the endless debates of micro-credit, micro-finance, and start looking at it from financial inclusion perspective…. Let's admit, framing the subject and issues just around micro-credit is problematic and digresses us from more relevant debates of current times..
Can access to financial services relevant and be created for people in the margins to take control of their livelihoods, and make this world less unequal? High time we think through macro and micro together, and not be consumed by marginal issues.
If the capital-flows and financial services systems keep the majority of people on the economic margins, which is what we all are facing today, our frames of thinking and program design must change. Or so I propose.
Anuj
Thank you for the update on impact. ... True that most microfinance impact studies employ methodologies that can only reflect partial picture of the true story. Their focus is often 'microcredit' and forget savings, insurance, etc. They take samples from diverse countries, different contexts, and assume every thing about the poor is the same. etc, etc. ... But what is still not well discussed in both the Grameen Foundation's study, as well as the six country RCTs is the issue often raised by people like Milford Bateman -- the issue that MICROCREDIR might actually be crowding out real entrepreneurs (distorting the markets, etc) by using 'scarce' financial resources to every poor (even when they don't have ready business). If the evidence tells us that the welfare of only some 5-10% are 'significantly positively impacted', could it be more appropriately targeted to selected few (perhaps employ approaches like BRAC 'graduation' model) as some countries are increasingly using it???.... I think this can be discussed more.... I believe you would find the discussion (by Milford) in the following link useful.
I'm pleased to share the latest report in the Measuring the Impact of Microfinance series. Written by Kathleen Odell, it examined research published since 2010 (our first paper covered research up until 2005 and the second covered research between 2005 and 2010). The report is published in association with Accion, Dominican University, and the Microfinance CEO Working Group.
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