Social Performance Indicators Blog

Adapting to a Changing Environment: Fonkoze, Non-financial Services, and the Earthquake in Haiti

Posted by: Katherine Oglietti and Mike Krell

 

Fonkoze’s literacy program in action

Interview with:
Myriam Narcisse, Director, Literacy and Education Program, Fonkoze

Microfinance institutions (MFIs) are often faced with the need to adapt to conditions beyond their control. To ensure both their own survival and the wellbeing of their clients, MFIs must sometimes alter the services they provide in response to the unexpected. Perhaps nowhere was this more the case than in Haiti after the earthquake in January. We caught up with Myriam Narcisse of Fonkoze to talk about how her institution has adapted to the situation there. We also discussed the way Fonkoze has tailored its literacy program to meet the unique needs of its clients.

MIX: In what ways have the needs of your clients changed following the earthquake that devastated Haitians this January?  Which of these needs can MFIs feasibly assist their clients in reaching?

Ms. Narcisse: The recent earthquake has changed the needs of our clients in significant ways. Microfinance institutions can assist with some of these needs but not all of them. One obvious way in which clients’ needs have changed results from an increased sense of vulnerability to weather-related dangers. Training clients in disaster risk reduction—how to identify and address a family’s or business’ vulnerability to weather—is one important way that MFIs can help. Another is through catastrophe insurance. Just as Fonkoze introduced micro life insurance when death proved a major de-capitalizing factor for our clients, a new insurance product will help mitigate the consequences of disasters on clients’ paths out of poverty.

Another way in which MFIs can help is by aiding clients in adjusting to the changed market conditions post-quake. They can also work to increase clients’ awareness of the importance of safe construction methods and regular maintenance. We also see right now as a crucial moment to increase youth entrepreneurship and believe it would be fruitful for MFIs to investigate how they can lend a hand in this matter. Finally, MFIs can help meet the need for increased health education.

Some needs, however, MFIs are not well-placed to meet. These include: an appropriate disaster warning system, increased access to schools, decentralized state structures, and increased access to basic services such as potable water, sanitation, and health.

Non-Financial Services: The Experience of Initiative Development Ghana

Posted by: Katherine Oglietti and Mike Krell

An ID-Ghana client and her wares

Interview with:
Godknows Kporha, Social Mission Manager, Initiative Development Ghana

In response to the rapidly growing population in Ghana’s capital city, fed by a large influx of migrants from rural villages, Initiative Development Ghana (ID-Ghana) caters its financial and non-financial services to deprived areas in Accra. Its approach is to target the poorest urban neighborhoods to build a more inclusive economy. It offers a combination of not only credit but also savings, insurance, and trainings to its "partners" (i.e., clients) with the contention that microcredit is a relevant but incomplete method to effectively respond to the global problem of poverty.

MIX: In ID-Ghana’s Social Performance Report, you report offering adult education training among other non-financial services. Which learning areas do these training sessions cover? How many of your clients participate in these trainings? Have you conducted any assessment as to whether clients have incorporated the skills they learned into their daily lives?

Mr. Kporha: Our trainings fall under two main headings:  business and social.  In our business trainings, we cover topics such as costing and pricing, customer care, business opportunity identification, record keeping, and credit management. Social topics include personal hygiene, national health insurance, domestic violence, and malaria prevention and management. These trainings have been integrated into the methodology for our new group loan product, Onipa Nua, and are compulsory for partners.

We closely monitor training attendance. In March 2010, 3,249 people received training from ID-Ghana, out of a total of 3,991 active borrowers. And while we have not yet performed an impact assessment of this new training regime, anecdotal evidence suggests that these trainings are having a positive outcome on our partners. We feel that these trainings have equipped partners with much-needed skills and knowledge regarding the effective management of loans, among other things, and that this is reflected in greatly increased loan repayment rates.

A Holistic Approach to Gender Equality: Financial and Nonfinancial Services at SABR, Uzbekistan

Posted by: Katherine Oglietti

SABR clients engaged in a training session

Interview with:
Madina Rakhimova, Executive Director and Saodat Akhmedova, Deputy Director, Socio Economic Development Centre (SABR), Uzbekistan

Socio-Economic Development Centre (SABR), based in Samarkand City, Uzbekistan, is an NGO founded in 1996 to support women survivors of domestic violence and their children. SABR seeks to “work with and for women and children in difficult socio-economic situations, providing support, encouragement, and the opportunity for an independent life in a safe environment.” SABR added a microfinance component to its operations in 2001, and officially became a microfinance institution (MFI) in 2006. The MFI aims to improve the socio-economic conditions of the most vulnerable layers of the population by strengthening their abilities to lead independent lives in a secure environment.

MIX: What led to the decision to include a microfinance component into your programming?

SABR: The results of socio-economic surveys in rural areas of Uzbekistan proved that the roots of gender inequality and violence against women are not found only in the gender stereotypes and traditions prevalent in a given society, but also in women’s economic dependence on their families or husbands. To address this problem, the priority of our programming became involving women from rural areas in entrepreneurial activities. The most appropriate means of supporting the startup of individual businesses is through microlending. At the time in 2001, microlending was the new and developing mechanism to support the low income layers of the population in Uzbekistan.

Non-Financial Services: SP Report Data Findings

Posted by: Taea Calcut

In keeping with our current theme of non-financial services, today’s Social Performance Indicators Blog post examines the services offered by 208 microfinance institutions (MFIs) from 69 countries worldwide, each of which submitted MIX Social Performance reports in 2008. (As explained in previous data posts, we draw readers’ attention to the fact that our current sample size remains too small to draw definitive conclusions. However, we present what information we have in the hopes of encouraging greater numbers of MFIs to submit Social Performance reports as well as to aid the formulation of research agendas in the future.)

Graph 1: Non-Financial Services Offered by MFIs (n=208)

First, we looked at the type and popularity of the services MFIs provide to their clients. As  Graph 1 illustrates above, we found that women’s empowerment services which aim to alleviate social inequalities and constraints faced by women rank among the most popular services and are offered by 98 (47%) of the reporting MFIs. Within this category, MFIs are most likely to offer business (82%) and leadership trainings (59%) to their female clients. The next most popular service offered by MFIs are enterprise services (95 MFIs; 46%), followed by adult education (77 MFIs; 37%) and health services (60 MFIs; 29%).

Enhancing Financial Inclusion: The Role of Non-Financial Services

Posted by: Taea Calcut

Earlier this year, the Social Performance Indicators Blog explored the range of financial products and services offered by microfinance institutions (MFIs) to meet the unique needs and constraints of their clients. However, recent research and industry discussions suggest that the achievement of MFIs' social performance goals may be better met with the additional provision of non-financial services that complement MFIs' core business and help clients best utilize the financial products and services available. To examine this issue further, the blog will present data and innovative approaches to non-financial services including enterprise services, adult education, health services, and women's empowerment using MIX Social Performance reports and interviews with select MFIs over the coming weeks.