Thursday, July 23, 2020

Re: [MFP] fyi thoughts on this anyone?

 

Thank you, Hugh and all, and of course one of the merits of Savings Groups is that 'we' don't mess with them.  We should, thanks to the efforts of Hugh and others, recognise and respect them, and, perhaps,  leave them alone. 



On Thursday, 23 July 2020, 11:42:23 BST, hugh@vsla.net [MicrofinancePractice] <microfinancepractice@yahoogroups.com> wrote:


 

Marc.  Good to know that you and IFAD are engaged in developing a policy that recognises the powerful role of SGs in opening up entry-level financial services.  I'm not convinced that SGs need therefore to 'evolve,' because the path to chaos is littered with logical intentions, but I support the idea that SG members, as individuals, are primed to take advantage of services offered by next-level-up pro-poor institutions. Institution to institution linkages (i.e. SGs to MFIs/banks) are, however, very hard to get right, especially when the goals of each are potentially in conflict. 

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 22:49
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] fyi thoughts on this anyone?

 

 

Hugh, I am working on laying the groundwork for a new rural finance policy for IFAD (for Michael Hamp). Looking at over 50 programmes. SCGs in all their forms are alive and kicking, and still often a low tech means to financial service access, although I imagine they will quickly be subsumed in ITC solutions…… I very much like the social capital part of SCGs and we see them as a means to organize for smallholder value chain development participation…

 

Marc de Sousa Shields

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: Wednesday, July 22, 2020 4:41 PM
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] fyi thoughts on this anyone?

 

 

I'm rather surprised to see no mention of SGs, which are in at least 75 countries and cover more than 20 million people – without a sou of outside capital and with community-based shareholding.  I'm also quite struck that unless there's someone from the formal sector hovering on the periphery, they are not considered to offer 'inclusion.'  Time´, perhaps, for a new definition, and a recognition that inclusion often means bedfellows, seeking to maximise shareholder return, whose interests are often diametrically opposed to those of self-managed alternatives.  When 'inclusion' can offer 20% return on investment, instant loan processing, zero operational costs  and loan loss rates less than 1%, maybe the unincluded will get to be interested.

 

I don't see SGs as a total solution, and certainly not for emerging entrepreneurs who need debt more than they need to save, but I also don't see linkages of community groups to formal institutions as conferring legitimacy-by-definition, or a track to the sunlit uplands.

 

Best wishes

 

Hugh

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 20:10
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] fyi thoughts on this anyone?

 

 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

 

Cooperatives are rapidly losing ground to.producer companies.. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

 

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure.. 

 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

 

Regards,

 

Smita 

 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

 

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RE: [MFP] fyi thoughts on this anyone?

 

Marc.  Good to know that you and IFAD are engaged in developing a policy that recognises the powerful role of SGs in opening up entry-level financial services.  I'm not convinced that SGs need therefore to 'evolve,' because the path to chaos is littered with logical intentions, but I support the idea that SG members, as individuals, are primed to take advantage of services offered by next-level-up pro-poor institutions. Institution to institution linkages (i.e. SGs to MFIs/banks) are, however, very hard to get right, especially when the goals of each are potentially in conflict. 

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 22:49
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] fyi thoughts on this anyone?

 

 

Hugh, I am working on laying the groundwork for a new rural finance policy for IFAD (for Michael Hamp). Looking at over 50 programmes. SCGs in all their forms are alive and kicking, and still often a low tech means to financial service access, although I imagine they will quickly be subsumed in ITC solutions…… I very much like the social capital part of SCGs and we see them as a means to organize for smallholder value chain development participation…

 

Marc de Sousa Shields

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: Wednesday, July 22, 2020 4:41 PM
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] fyi thoughts on this anyone?

 

 

I'm rather surprised to see no mention of SGs, which are in at least 75 countries and cover more than 20 million people – without a sou of outside capital and with community-based shareholding.  I'm also quite struck that unless there's someone from the formal sector hovering on the periphery, they are not considered to offer 'inclusion.'  Time´, perhaps, for a new definition, and a recognition that inclusion often means bedfellows, seeking to maximise shareholder return, whose interests are often diametrically opposed to those of self-managed alternatives.  When 'inclusion' can offer 20% return on investment, instant loan processing, zero operational costs  and loan loss rates less than 1%, maybe the unincluded will get to be interested.

 

I don't see SGs as a total solution, and certainly not for emerging entrepreneurs who need debt more than they need to save, but I also don't see linkages of community groups to formal institutions as conferring legitimacy-by-definition, or a track to the sunlit uplands.

 

Best wishes

 

Hugh

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 20:10
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] fyi thoughts on this anyone?

 

 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

 

Cooperatives are rapidly losing ground to.producer companies.. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

 

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

 

Regards,

 

Smita 

 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

 

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Posted by: <hugh@vsla.net>
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Wednesday, July 22, 2020

RE: [MFP] fyi thoughts on this anyone?

 

Hugh, I am working on laying the groundwork for a new rural finance policy for IFAD (for Michael Hamp). Looking at over 50 programmes. SCGs in all their forms are alive and kicking, and still often a low tech means to financial service access, although I imagine they will quickly be subsumed in ITC solutions…… I very much like the social capital part of SCGs and we see them as a means to organize for smallholder value chain development participation…

 

Marc de Sousa Shields

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: Wednesday, July 22, 2020 4:41 PM
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] fyi thoughts on this anyone?

 

 

I'm rather surprised to see no mention of SGs, which are in at least 75 countries and cover more than 20 million people – without a sou of outside capital and with community-based shareholding.  I'm also quite struck that unless there's someone from the formal sector hovering on the periphery, they are not considered to offer 'inclusion.'  Time´, perhaps, for a new definition, and a recognition that inclusion often means bedfellows, seeking to maximise shareholder return, whose interests are often diametrically opposed to those of self-managed alternatives.  When 'inclusion' can offer 20% return on investment, instant loan processing, zero operational costs  and loan loss rates less than 1%, maybe the unincluded will get to be interested.

 

I don't see SGs as a total solution, and certainly not for emerging entrepreneurs who need debt more than they need to save, but I also don't see linkages of community groups to formal institutions as conferring legitimacy-by-definition, or a track to the sunlit uplands.

 

Best wishes

 

Hugh

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 20:10
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] fyi thoughts on this anyone?

 

 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

 

Cooperatives are rapidly losing ground to.producer companies. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

 

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

 

Regards,

 

Smita 

 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

 

__._,_.___
Posted by: "Marc de Sousa Shields" <mdess@esglobal.com>
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RE: [MFP] fyi thoughts on this anyone?

 

I'm rather surprised to see no mention of SGs, which are in at least 75 countries and cover more than 20 million people – without a sou of outside capital and with community-based shareholding.  I'm also quite struck that unless there's someone from the formal sector hovering on the periphery, they are not considered to offer 'inclusion.'  Time´, perhaps, for a new definition, and a recognition that inclusion often means bedfellows, seeking to maximise shareholder return, whose interests are often diametrically opposed to those of self-managed alternatives.  When 'inclusion' can offer 20% return on investment, instant loan processing, zero operational costs  and loan loss rates less than 1%, maybe the unincluded will get to be interested.

 

I don't see SGs as a total solution, and certainly not for emerging entrepreneurs who need debt more than they need to save, but I also don't see linkages of community groups to formal institutions as conferring legitimacy-by-definition, or a track to the sunlit uplands.

 

Best wishes

 

Hugh

 

From: MicrofinancePractice@yahoogroups.com <MicrofinancePractice@yahoogroups.com>
Sent: 22 July 2020 20:10
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] fyi thoughts on this anyone?

 

 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

 

Cooperatives are rapidly losing ground to.producer companies. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

 

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

 

Regards,

 

Smita 

 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

 

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Posted by: <hugh@vsla.net>
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Re: [MFP] fyi thoughts on this anyone?

 

Thank you Smita, I am old and out of date, so it's good to know that a youngster such as you agrees with what I thought might be my outdated view. Malcolm

On Wednesday, 22 July 2020, 19:50:23 BST, Smita Premchander smitapremchander@gmail.com [MicrofinancePractice] <microfinancepractice@yahoogroups.com> wrote:


 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

Cooperatives are rapidly losing ground to.producer companies. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

Regards,

Smita 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:
 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

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Re: [MFP] fyi thoughts on this anyone?

 

Good to see this once very very active group getting re-activated. 
What we need are new models to achieve financial inclusion and not new types of institutions. We already have a plethora of institution types, some of them more successful than others, some of them resembling each other more than they look distinct, and some on the verge of becoming obscure. In terms of operating models, we have the Grameen/ JLG, we have the SHG and we have the individual lending. All of these are focused on lending, and not on financial inclusion. All of them appeal to certain income segment somewhere in the middle-poor segment, and does not work effectively for the segment below this sweetspot.
At Grameen Foundation, we have been noodling with and experimenting with what this new model may look like, which will have a more universal appeal (in terms of client segment) and drive a complete suite of financial services and not just lending. It is built on the local intelligence, trust and human connect, (a key success factor for SHG and JLG) and digital technology and insights from behavioral economics.to drive adoption. In terms of business model, we are looking at a Social Business approach, something that Prof Yunus has been passionately advocating for around the world in last decade.
Happy to share more if there are others who are interested in joining hands to ideate and collaborate.

best regards
Prabhat  


Sent by

Prabhat Labh
CEO
Grameen Foundation India



On Thursday, July 23, 2020, 12:20:22 AM GMT+5:30, Smita Premchander smitapremchander@gmail.com [MicrofinancePractice] <microfinancepractice@yahoogroups.com> wrote:


 

Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

Cooperatives are rapidly losing ground to.producer companies. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

Regards,

Smita 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:
 

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  

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Re: [MFP] fyi thoughts on this anyone?

 


Are there co-operatives of producer communities/companies?   There is a proposal to form a co-operative of artisanal farmers.  Would they be classed as producer companies?  This co-operative would hopefully decide to create a revolving fund from within the membership to fund more local farmers and subsidiary industries.  Are you saying that this type of co-operative is growing?  We'd love more information on start up a farmers co-op in Africa.

Thanks

Brian Hill



On Jul 22, 2020, at 11:09 AM, Smita Premchander smitapremchander@gmail.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:



Agree with Malcolm. We have a pretty diversified Microfinance industry, with institutional forms ranging from SHGs and JLGs, to MFIs, Small Finance Banks, and refinance schemes for the SHG and MFI models.

Cooperatives are rapidly losing ground to.producer companies. And collectives are rapidly losing ground to investor led company Non Banking Finance Companies.

It would be more efficient and effective to attend to the many policy needs of the current institutions than revamp the structure. 

Especially in COVID 19 times, MF sector needs support, not an overhaul.

Regards,

Smita 

On Wed, Jul 22, 2020, 8:36 PM MALCOLM HARPER malcolm.harper@btinternet.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

Hmmmm, interesting, but India is rather better at launching politically popular high profile anti-poverty innovations than at working steadily to improve what's there already. Many Indian MFIs are becoming banks, maybe better to accelerate and facilitate that process (without politicising or weakening the fundamental strengths of what's there already) than to make bold new initiatives.  





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