EmpowerAID

1. EmpowerAID Empowering African Individual Development through Microfinance Lisa BrownsteinPeter FleckReena ShettyJanelle SorensenVeena Vadgama

2. What’s the difference between you and her?

3. Every 30 seconds a child dies of malaria http://www.unmillenniumproject.org/documents/UNMP-FastFacts-E.pdf

4. 4 out of 10 people do not even have access to sufficient food or clean water http://www.un.org/waterforlifedecade/factsheet.html http://www.unmillenniumproject.org/documents/UNMP-FastFacts-E.pdf

5. The region is rife with political instability and violent conflict

6. Dire State of Sub-Saharan Africa Proportion of children completing primary school Economies at risk Gender equity and empowerment Human Development Index http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/04/africa_africa___the_world0s_poorest_continent/html/4.stmhttp://maps.grida.no/theme/poverty

7. Millennium Development Goals • Developed in the year 2000 by the UN • Eight Millennium Development Goals (MDGs) pledged by 189 world leaders and member states • MDGs range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education • MDGs propose a target date of 2015 to reach initial goals. • Rigorous efforts and intent to meet the needs of the world’s poorest.

8. Current UN and World Bank Policy Examples • Comprehensive Development Framework - emphasizes the interdependence of all elements of development • Africa Action Plan - investing in better health and education, supporting agriculture and private - sector development, closing the gap in infrastructure and expanding access to power, water, and transportation • Millennium Project - emphasizes coordinating aid, addressing systemic problems, investing in technical assistance and aligning development assistance with the MDGs. www.worldbank.org/cdf/ www.worldbank.org/features/2007/africa-landing.htmwww.unmillenniumproject.org/

9. Recommendation Overview • Maintain holistic work • Increase MFI work • Invest in Technology • Re-evaluate and re-allocate in 2015 EmpowerAID: Empowering African Individual Development

10. Why Microfinance? • Do you have a savings account? • Do you have a credit card? • Do you have insurance? • Have you taken out a student loan? • Do you have a home mortgage? These tools we take for granted help a person move forward and provide a safety net for hard times.

11. "Where once the poor were commonly seen as passive victims, microfinance recognizes that poor people are remarkable reservoirs of energy and knowledge.” Kofi Annan, former Secretary General of UN

12. Microfinance Programs • Micro-Savings - secures investments in future • Micro-Insurance - provides a safety net for unexpected set backs • Education Services - expands customer’s capacity to benefit from financial services

13. Microcredit • What is Microcredit? • Small loans to the poor • Microcredit lending programs have proved successful, can be easy to implement, and are relatively low cost Entrepreneur: Jeneba Kamara Location: Kabala, Sierra Leone Primary Activity: Fish Selling Amount Repaid: $125 of $200 http://www.kiva.org/app.php?page=businesses&action=listJournals&pageID=16

14. Why Microcredit? • It’s loans, not aid • Strong and large coalition • Empowers women • Extremely high repayment rates • Currently in Africa… • Upper/Middle Guinea • ADRA has provided technical assistance and credit to ~7000 farmer-households in Guinea • FINCA Uganda • Provided over 20K loans to low-income women • 96.7% on time repayment http://www.yearofmicrocredit.org/ http://www.microcreditsummit.org/press/FINCA.htm http://africastories.usaid.gov/search_details.cfm?storyID=323&countryID=9&sectorID=0&yearID=5

15. Government-Supported Banks Advantages More capacity Larger range of services Disadvantages Harder to establish May not be an option in certain countries Implementing Microcredit Programs Two distinct approaches: • Non-profit organizations • Advantages • Untapped pool of lenders • Less restrictions • Easier to setup • Disadvantages • Usually focused on a niche

16. Invest in core technology • Track loan repayments • Enable credit scoring • Produce reliable reporting and data analysis • Performance data and financial statements • Anchor delivery services • m-Banking • Sustain growth

17. Banking with cell-phones • One cell phone for every nine Africans • Three landlines per 100 • Preliminary research indicates acceptance • Necessary to craft supportive regulations • Support open standards

18. Stakeholder Snapshot United Nations, World Bank, G8, Africa Development Bank, African Union, NEPAD, cell phone companies Champions: Bill Clinton, Bill Gates, Bono, Oprah Winfrey, George Soros, Jeffrey Sachs Power Interest Power Interest FINCA, KIVA, Grameen Foundation, impoverished citizens, Thousands of NGOs around the world working on development issues Power Interest Corrupt African Government Leaders Power Interest Voters and General Public of developed nations

19. Success Stories Entrepreneur: Pendo Luisi Location: Dar es Salaam, Tanzania Primary Activity: General store Loan Requested: $175 to pay back monthly http://www.kiva.org/app.php?page=businesses&action=about&id=23303

20. Success Stories Entrepreneur: Maria Admirada Paulo Molane Location: Mahotas-Maputo, Mozambique Primary Activity: Agriculture Loan Requested: $400 to buy more material http://www.kiva.org/app.php?page=businesses&action=listJournals&pageID=24

21. Success Stories Entrepreneur: Maman Motuke Location: Kinhasa, Zaire Primary Activity: Selling Chikwangue Amount Repaid: $100 of $100 http://www.microcreditsummit.org/stories/zaire1.htm

22. Conclusion Whatever one’s motivation for attacking the crisis of extreme poverty—human rights, religious values, security, fiscal prudence, ideology—the solutions are the same. All that is needed is action. Jeffrey Sachs, economist and Director of the UN Millennium Project

23. Thank you! Go to EmpowerAID.org to learn more.

24. References Slides 16 & 17 Grameen Foundation. (2007). IBM partners with Grameen Foundation to expand Mifos. Retrieved December 1, 2007, from http://www.grameenfoundation.org/resource_center/newsroom/news_releases/~story=253 Ivatury, G. (2004). Harnessing technology to transform financial services for the poor. Small Enterprise Development, 15(4). Ivatury, G., & Pickens, M. (2006). Mobile phone banking and low-income customers: Evidence from South Africa . Washington, D.C.: Consultative Group to Assist the Poor/The World Bank and United Nations Foundation. Massachusetts Institute of Technology. (2007). Why Africa? Retrieved November 17, 2007, from http://eprom.mit.edu/whyafrica.html Mathison, S. (n.d.). Increasing the outreach and sustainability of microfinance through ICT innovation. Retrieved November 18, 2007, from http://www.fdc.org.au/Electronic%20Banking%20with%20the%20Poor/1%20Mathison.pdf Mifos. (2007). What is the Mifos Initiative? Retrieved December 1, 2007, from http://www.mifos.org/about Porteous, D., & Wishart, N. (2006). m-banking: A knowledge map. Retrieved December 1, 2007, from http://www.infodev.org/en/Publication.169.html Rice, Xan. (March 4, 2006). Phone revolution makes Africa upwardly mobile. TimesOnline. Retrieved December 8, 2007, from http://www.timesonline.co.uk/tol/news/world/article737130.ece Schreiner, M. (2004). Credit scoring for microfinance: Can it work? Retrieved November 18, 2007, from http://www.microfinance.com/English/Papers/Scoring_Can_It_Work.pdf