This note explores how microfinance institutions and disability organizations can best contribute to increasing access to financial services for poor people with disabilities worldwide. After a brief discussion of the challenge and the opportunity, the concept paper advances several working hypotheses about steps the microfinance industry could take. This concept paper was the basis of a roundtable held on June 18, 2010 in Washington D.C. and the ideas presented within were the key areas of discussion.

This note explores how microfinance institutions and disability organizations can best contribute to increasing access to financial services for poor people with disabilities worldwide. After a brief discussion of the challenge and the opportunity, the concept paper advances several working hypotheses about steps the microfinance industry could take. This concept paper was the basis of a roundtable held on June 18, 2010 in Washington D.C. and the ideas presented within were the key areas of discussion.

The paper investigates the main approaches to defining and/or achieving responsible pricing, including RoE limitations, interest caps, comparative transparency, and promoting competition. Prices are influenced by a wide range of factors such as country context, loan size, profit levels, efficiency and outreach, all of which must be taken into account before determining whether an MFI prices responsibly. One thing is clear, however. A comparative transparency approach – providing full information about institutions in their own market context – can allow observers to apply their own judgments. While not setting a standard per se, comparative transparency can pave the way to benchmark practitioners according to relevant dimensions and spotlight those who appear out of line.

There are numerous examples of transforming microfinance institutions in which the alignment or misalignment between the personal interests of key decision makers and the long-term interests of the institution affected the ultimate outcome and future of the organization. Yet to date there has been little formal analysis or discussion of this issue. Without open discussion on how to treat personal interests, the issue is too often relegated to whispered conversations in back rooms. The resulting cost, in terms of institutions not transformed or transformed in an unsatisfactory manner, is not easy to see, but it may be quite significant.

In this paper, the focus on aligning interests speaks to the human elements at play during the decision making about the future of transforming MFIs. The people involved in the transforming MFI—general managers, board members, staff, and even clients—have a personal stake in the outcome of the transformation. The aims of this paper include:
- situating this paper relative to larger issues for the industry and transforming MFIs;
- defining the challenge of aligning interests, within the context of transformation from non-profit to for-profit operating paradigms;
- using examples and cases from actual industry experience; and
- proposing some tentative solutions to these issues in the form of suggested “good practices” and areas that require further industry collaboration.

This paper is available in a shortened version (CEN1E) and in a longer version with case studies (CEN1LE)

Brian Busch and Stephanie Dolan also authored this paper.

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**If you have trouble downloading this paper, please:
click here for English
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Rarely a day goes by without someone mentioning how financial inclusion can be boosted by new delivery channels. Yet for all the talk about reaching the “unbanked” and other low-income groups, it is banks, mobile operators, and retailers that have been experimenting with new delivery systems to reach the poor. As the group that is closest to the niche segment, microfinance institutions (MFIs) seem conspicuously absent from the discussion. Or are they? Based on research, it appears that while some experimentation is indeed occurring, significant obstacles remain.

This paper outlines ten challenges that are holding MFIs back from deploying alternative channels and provides a roadmap for MFIs—and broader stakeholders—who seek to overcome these hurdles. The paper concludes with a description of competitive advantages that MFIs have in this space to make them more effective in reaching low-income groups using innovative channels.

**If you have trouble downloading this paper, please use URL http://www.centerforfinancialinclusion.org/Document.Doc?id=731

This paper provides current market information and analysis to support the ongoing dia¬logues among policy makers and providers about the goal of full financial inclusion and how to achieve it in Mexico. The paper defines financial inclusion to include a full suite of products offered at a high quality and introduces the Financial Inclusion Scorecard as a basis for measuring Mexico’s current status and future progress. The paper also identifies who is excluded, projects trends forward to 2020 to identify areas where gaps could be most persistent, and highlights some of the top opportunities for closing inclusion gaps.

The microfinance industry has become a model of responsible finance that remains resilient and growing amidst a steep economic down-turn. The growth and increasing purchasing power of the vast global market of low-income people is attracting private sector attention across sectors. In finance, the success of the microfinance movement shows the business viability of financial services for the poor.

In her book, Elisabeth Rhyne demonstrates that providing financial services to the poor is a viable business prospect that allows investors to be socially AND financially responsible. Microfinance for Bankers & Investors provides the readers with a road map showing where and how businesses can invest in greater financial inclusion, guided by the stories of companies already leading the way.

This project is about encouraging private businesses to engage in financial inclusion. The project was conceived by the private sector members of the UN Advisors on Financial Inclusion, a high-level body formed to continue the work of the United Nations International Year of Microcredit (2005), and financed by Visa, Inc.

The electronic version below is an EXCERPT only. To purchase the book in its entirity, please choose the hardcopy version or visit Amazon.com (discount available at Amazon.com).

In 2006 an estimated U.S.$300 billion in remittances—over 2 percent of U.S. gross domestic product in the same year—were sent worldwide by approximately 150 million immigrants. With such high volume it is no wonder that financial institutions, payment companies, and moneytransfer organizations have been trying to tap into this market, not only to offer money-transfer services, but also with the hope of providing access to financial services to this generally unbanked client base. This InSight presents some of the key findings as well as the opportunities and challenges that ACCION International has identified in the banking of recipient households. It presents recommendations of six key elements that financial institutions should to take into account in order to develop an effective strategy to bank recipients of remittances.

Past-due or non-collectible loans are part and parcel of the financial sector. As past-due rates surpass expected limits, though, this piece of the credit cycle can become a true problem. While often seen as a final step in the lending cycle, collections actually plays an integral role in the overall process. Drawing from the experiences of collections programs throughout Latin America and through the implementation of initial collections activities in India that are mainly focusing on Individual lending methodology, this InSight explores “best practices” and considerations that an MFI should take into account when attempting to successfully implement collections activities.

This paper discusses the Initial Public Offerings/listings of the four leading microfinance institutions that have carried out such transactions—Bank Rakyat Indonesia, BRAC Bank (Bangladesh), Banco Compartamos (Mexico) and Equity Bank (Kenya). The study attempts to determine the conditions under which a public offering or listing is suitable for a microfinance organization. It does this by analyzing the development of each of the four institutions and how that development influenced the decision to "go public." It also examines the purpose, structure and process of the offerings and listing in order to extract applicable lessons. The Council hopes that this research will be helpful to all that are involved in microfinance, especially investors and microfinance institutions seeking new entries to capital markets.

ACCION International's "Model for Social Change" seeks to explain what we do, why we do it, and why our approach is unique. Step by step, it bridges from the broad aspirations set forth in our mission statement to the specific objectives and metrics of the new strategic plan for 2008–2011.

A vast unmet demand exists for housing finance for low-income populations in the developing world. Though solutions have yet to reach significant scale, either at governmental or private levels, the microfinance industry has recently made great strides in this area. Housing microfinance (HMF) has shown signs of its potential to reach scale.

ACCION International and Habitat for Humanity International joined efforts to conduct a study covering ten of ACCION’s partners in Latin America, representing more than 90 percent of the ACCION Network’s housing portfolio. The objective of this research was to learn about the key success factors as well as challenges and barriers for reaching scale in housing.

Investment in microfinance, particularly cross-border investment, is booming. Where is this investment coming from? How is it being absorbed? What types of advances need to occur to build a healthy infrastructure for debt and equity investments into microfinance? How do we manage the risks investors face? These questions were discussed as part of the second annual Microfinance Cracking the Capital Markets conference, hosted by ACCION International and sponsored by Credit Suisse. The conference highlighted the growth in microfinance investment, recent innovations in structured deals, and ways in which microfinance institutions (MFIs) need to develop to integrate more fully into the capital markets.

On April 19, 2007, Banco Compartamos became the first Latin American microfinance institution (MFI) to offer equity though an Initial Public Offering (IPO). This InSight provides detailed information about the transaction – its rationale, process, results and key success factors.

This InSight describes a framework that microfinance institutions can use to assess and report on their social performance. ACCION has applied this framework to analyze how six leading microfinance institutions in Africa, Asia and Latin America adhere to these social performance criteria. The results of this application inform this InSight.

Microfinance is on its way to becoming mainstream. This transition creates tremendous opportunities for the service providers involved and, more importantly, for the millions of people who will, as a consequence, newly have access to financial services. Today, we can optimistically predict that in the coming decade the promise of microfinance will be substantially achieved. However, the road to fulfilling this promise is not without significant challenge and uncertainty.

This article, by Elisabeth Rhyne and María Otero, was published in the Winter/Spring 2007 issue of MIT's innovations journal.

Output of working group convened by Standard and Poor's to discuss microfinance rating methodology.

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