Micronance: A Vision of Financial Inclusion

Part of the mission of any nancial institution should be to promote nancial inclusion. The social and economic benets of reaching the unbanked are enormous: greater nancial security and economic opportunity for low-income people and expanding markets and prosperity for the entire world. Vikram Pandit CEO, Citi

Financial products are critical tools that enable people to participate in the formal financial system. They provide opportunity to save for children's education, protect against crop failure, or to borrow money to start a business. Today, over 200 million people access credit through microfinance institutions (MFIs) around the world, and as the sector has evolved, new financial products, offered by MFIs, have been added to enable people to live stable and more prosperous financial lives. In addition, millions of people are now depositing savings into MFIs and banks for the first time. This guide was developed to highlight some of the leaders in the microfinance field and showcase the ways they are impacting not only the ways MFIs function, but also the lives of the clients they serve. The Citi Foundation has been supporting the microfinance sector philanthropically for over 30 years through strategic investments to strengthen the institutional capacity of microfinance organizations and the financial capabilities of clients, while supporting research to identify innovations in the sector. Citi Microfinance focuses on developing relationships to support MFIs, networks and investors around the world in order to expand access to capital, individual lending through MFIs, and distribution mechanisms to broaden and increase the reach of financial services. In addition to our long-term commitment to support efforts that help the microfinance sector achieve scale and sustainability, we are distinguished in this field by our on-the-ground presence and partnerships in the countries where microfinance is making a difference. By supporting the success of the microfinance sector, Citi is helping to expand access to capital, as well as savings, insurance, remittances and other products that provide microentrepreneurs and their families with financial choices and opportunities. We believe that an inclusive financial services industry is crucial to economic and social development.

Bob Annibale Global Director Citi Microfinance and Community Development www.citimicrofinance.com

Pam Flaherty President & Chief Executive Officer Citi Foundation Director, Corporate Citizenship, Citi www.citifoundation.com

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ACCIONs international partners provided nancial services to more than million clients in 2010.

ACCION has been instrumental in helping micronance develop from a seminal idea into a global industry providing new resources to the world's poor.
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www.accion.org
Founded: 1961 Mission: Giving people the tools they need to work their way out of poverty Focus: Building sustainable microfinance institutions. Origin: Latin America Reach: Partnering with 30 MFIs in 23 countries on 4 continents to reach 4.3 million clients E-Mail: info@accion.org

Founded in 1961 to foster community development in Latin America, ACCION is a nonprofit organization with the mission of giving people the tools they need to work their way out of poverty. In 1973, ACCION began experimenting with making small, working-capital loans to the entrepreneurial poor in Recife, Brazil. The results proved profound and paved the way for what is now known as microfinance. ACCION has been instrumental in helping microfinance develop from a seminal idea into a global industry providing new resources to the world's poor. One of ACCION's key contributions to microfinance has been its focus on sustainability on building microfinance institutions (MFIs) that, like the poor themselves, proved to be investment-worthy. At present, ACCION works with 30 MFIs in 23 countries on 4 continents. In 2010, ACCIONs international partners provided financial services to more than 4.3 million clients. While executing its mission, ACCION has achieved many industry milestones, including: n 1983 First international network of MFIs. n 1984 First loan guarantee fund for MFIs. n 1992 First private, commercial bank dedicated solely to the poor. n 1993 First risk assessment tool for MFIs. n 1996 First jumbo microfinance CD for international institutional investors. n 2007 Most successful IPO in microfinance. n 2008 Creation of the Center for Financial Inclusion.

living a better life. BRAC has been I have always had potential and dreamt of a helping hand in achieving been a helping living a better life. BRAC has it. Munni, a BRAC client hand in achieving it. Munni, a BRAC client

I have always had potential and dreamt of

BRAC
www.brac.net
Founded: Mission: Focus: Origin: Reach: E-mail:

www.brac.net

1973 Alleviating poverty by empowering the poor to realize their potential and bring about positive change in their own lives Combining microfinance with programs in health, education, livelihood training and social development Bangladesh Working with 138 million women and their families in 10 countries michelle@bracusa.org

BRAC is a development organization dedicated to the alleviation of poverty by empowering the poor to realize their potential and bring about positive change in their own lives. BRAC started in Bangladesh in 1972, and has established itself as a pioneer in recognizing and tackling the many different realities of poverty. According to a study, in Bangladesh women members of BRACs microfinance program have 50 percent higher net worth and twice the savings rate of those who are not members. BRAC takes a holistic approach, combining microfinance with programs in health, education, livelihood training and social development to touch the lives of more than 138 million women and their families in 10 countries around the world.

One example of BRACs success is Munni, who took out a US$73 loan in 2006 to start a business making biscuits by hand. Today, she has a factory with 17 employees selling biscuits all over Bangladesh and is looking to expand internationally. n BRAC works with poor women to empower them with the right tools to bring about changes within their families and their communities. n BRAC has become more than 70 percent self-financed through built-in measures to ensure efficiency and cost-effectiveness and by innovating the concept of social enterprises, whose revenues are fed back into its development programs. n Working in countries where the poor number in the tens of millions, specializes in taking an idea, testing it, perfecting it and then expanding it rapidly to national scale, cost-effectively and without compromising quality.

Members of BRACs micronance program have a

50%

higher net worth than other women in Bangladesh.

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CGAP
www.cgap.org
Founded : Mission : Focus :

www.cgap.org

1995 Founded : 1995 Mission : Advancing nancial access for the world's poor. Advancing financial access for the world's poor Focus : Providing market intelligence, promoting standards, Providing market intelligence, promoting standards, developing developing innovative solutions and offering advisory services. innovative solutions and offering advisory services Reach : Global Reach : Global E-mail: cgap@worldbank.org Group to Assist the Poor (CGAP) is an independ The Consultative research center dedicated to advancing nancial access to poor p The Consultative Group to Assist the Poor (CGAP) is an independent policy and research center dedicated to in the World Bank, it isto poor people. Housed in the World Bank, it advancing financial access supported by more than 30 developmen private development agencies a private agencies that share a is supported by more than 30agencies that shareand common mission to alleviate pov common mission to creation in 1995, CGAPcreation in 1995, CGAP has established itself alleviate poverty. Since its has established itself as a leading global r as a leading global resource center for access to finance by providing market intelligence, for access to nance by providing market intelligence, promot promoting standards, developing innovative business models, and offering advisory services developing innovative business models, and offering advisor to microfinance providers, governments, donors governments, donors and investors. micronance providers, and investors.

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Access to nancial services servicesin the Access to nancial whether whether in form of savings, credit, money transfers or the form of savings, credit, money insurance is a fundamental tool is a fundamental transfers or insurance for improving a familys well-beingfamilys well-being and tool for improving a and productive

productive capacity.

As a global partnership working for the public good, CGAP focuses on helping a diversity of financial service providers reach more poor people with a broader range of financial services at lower cost, and helping the microfinance industry develop a real responsible finance agenda by: n Testing and sharing knowledge on new business models that may produce the low transaction costs required to reach scale. n Promoting transparency in the financial and social performance of microfinance providers. n Conducting research and advocacy on consumer protection for low-income users of financial services. n Engaging with governments to foster a supportive policy and regulatory environment for financial inclusion. n Working with donors and investors to improve their effectiveness in supporting microfinance.

www.finca.org
Founded: 1984 Mission: Provide financial services to the worlds lowest-income entrepre neurs so they can create jobs, build assets and improve their standard of living. Focus: Providing credit and money transfer services as well as savings and insurance products. Origin: Bolivia Reach: Serving more than 815,000 clients in 21 countries E-mail: bob.price@finca.org
FINCAs mission is to provide financial services to the worlds lowest-income entrepreneurs so they can create jobs, build assets and improve their standards of living. As a global organization with wholly-owned subsidiaries on four continents, FINCA owns and manages its worldwide network. Globally, more than two-thirds of FINCAs clients are women, and in many markets 90 percent or more of FINCAs clients are women. FINCAs loan sizes are as small as $50 to $100 for new clients and can grow to as high as $10,000. In addition to its credit services, which include group lending as well as individual lending products, FINCA has created savings and insurance products and offers money transfer services to clients. FINCA also is actively pursuing opportunities to introduce branchless/agent banking solutions to increase outreach in underserved areas. As of April 30, 2011, FINCA had provided financial services to more than 815,000 clients worldwide through a loan portfolio of nearly $440 million, annual loan disbursements of some $80 million per month, and a repayment rate of more than 98 percent. Voluntary savings by FINCA clients is nearly $25 million.

Poor people, like everyone else, need a full range of nancial services: working capital for their businesses; credit to help meet life emergencies as well as everyday needs; insurance to reduce vulnerability; and a safe place to deposit savings.

Voluntary savings by FINCA clients is nearly

$25 million.
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www.microcreditsummit.org
Founded: 1997 E-mail: info@microcreditsummit.org

The Microcredit Summit Campaign is a project of the RESULTS Educational Fund, a U.S.-based grassroots advocacy organization committed to ending hunger and poverty. The Campaign brings together microcredit practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations and others involved with microcredit to promote best practices in the field to stimulate the interchanging of knowledge. The Microcredit Summit Campaign goals are: n To ensure that 175 million of the world's poorest families, especially the women of those families, are receiving credit for self-employment and other financial and business services by the end of 2015. n To ensure that 100 million families rise above the US$1.25 a day threshold adjusted for purchasing power parity (PPP), between 1990 and 2015.

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www.grameenamerica.com
Founded: Mission: Reach: E-mail: 2008 To provide affordable microloans to financially empower low-income entrepreneurs United States info@grameenamerica.org

Grameen America's mission is to provide affordable microloans to financially empower low-income entrepreneurs. Since opening in January 2008, Grameen America, has disbursed over $25 million in microloans to more than 7,300 members. Started in Jackson Heights, Queens, Grameen America has expanded to Brooklyn, Manhattan and the Bronx in New York City, as well as Indianapolis, Indiana, and Omaha, Nebraska. Grameen Americas vision is to help create a world free of poverty. Grameen America creates a community where any individual with a dream can receive affordable financial products regardless of income, previous credit history, education, or business experience. They envision a world where burgeoning entrepreneurs are empowered to lift themselves out of poverty through hard work and determination to forge better lives for their families and future generations.

$25 million in
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Grameen America, has disbursed over

microloans to more than

7,300 members.

www.grameenfoundation.org
Founded: 1997 Mission: Combining the power of microfinance and technology to defeat global poverty. Focus: Providing access to small loans, essential information, and viable business opportunities. Reach: Global E-mail: info@grameenfoundation.org

Grameen Foundation helps the world's poorest, especially women, improve their lives and escape poverty. Through two of the most effective tools known small loans and the mobile phone Grameen Foundation works to make a real difference in the lives of those who have been left behind: poor people, especially those living on less than $1.25 per day. Its programs provide access to small loans, microsavings and other financial services; life-changing information about health, crops and finances; and new ways to earn a steady income. Grameen Foundation also helps to strengthen the entire microfinance sector, enabling microfinance institutions (MFIs) and other poverty-focused organizations to reach more people efficiently and effectively. It has generated more than $171 million in local-currency financing since 2005 through loan guarantees and has provided more than $4 million in direct funding to organizations working in underserved areas.

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Grameen Foundation's Progress out of Poverty Index helps organizations in countries measure their social bottom line.

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www.mftransparency.org
Founded: 2008 Mission: Facilitating pricing transparency in the microfinance industry. Focus: Collecting and disseminating microloan pricing data; developing educational materials and tools; providing policy advisory and training and advocacy. Origin: United States Reach: Global E-mail: Jordan@mftransparency.org
MicroFinance Transparency (MFTransparency) is a US-based international nonprofit dedicated to facilitating pricing transparency in the microfinance industry. In operation since 2008, they promote standards for pricing disclosure by working with a range of industry stakeholders around the world. Their core activities include microloan pricing data collection and dissemination, development of educational materials and tools, policy advisory and training and advocacy. MFTransparency has undertaken data collection activity in 28 countries in Africa, Asia, Latin America and Eastern Europe. Microloan pricing data has been voluntarily submitted by more than 400 microfinance institutions for over 1,400 products sold to 38 million clients with about US$14 billion in loans. This data is continuously published and updated on their website. Believing education is as important as disclosure MFTransparencyprovides tools and trainings to microfinance institutions, networks, funders and a range of industry support organizations. They support regulators and policymakers in developing effective policies for pricing disclosure and client protection. In addition, they collaborate with client protection initiatives such as the Social Performance Task Force and Smart Campaign to bring responsible pricing to the forefront of industry discussions.

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Microloan pricing data has been voluntarily submitted by more than 400 micronance institutions for over 1,400 products sold to million clients billion in loans. with about

US$14

www.themix.org

Founded: Mission: Focus: Origin: Reach: E-mail:

2002 Strengthening microfinance institutions by improving transparency and the flow of information within the sector Delivering data services, analysis, research and business information on the institutions that provide financial services to the worlds poor United States Global info@themix.org

MIX collects, analyzes, and disseminates general business information, financial and operational data on microfinance institutions (MFIs), as well as general business information on funders investors and donors and service organizations, such as networks, rating agencies and other market facilitators. This information is made available to the public through a variety of publications and websites, including MIX Market (www.mixmarket.org). This web-based, microfinance information platform features financial and social performance information for approximately 2,000 MFIs as well as information about funders, networks, and service providers. Leveraging an average of 200 data points per MFI, MIX users can conduct in-depth analyses with enhanced data analytics, access one-stop market-level summaries for 110 countries that integrate data from MIX and external sources, and explore the microfinance funding landscape by aggregating tens of thousands of individual funding agreements.

MIX manages data on more than

2,000 MFIs in 110 countries 92

in the developing world, covering more than MILLION BORROWERS.

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www.opportunity.org
Founded: Mission: Focus: Reach: E-mail: 1971 Empowering people to work their way out of chronic poverty transforming their lives, their childrens futures and their communities Providing microfinance services, including lending, savings, insurance and transformational training, to people in need A community of 46 organizations working in 27 countries impact@opportunity.org.uk

Opportunity International has been serving some of the worlds poorest people for 40 years. They were one of the first nonprofit organizations to recognize the benefits of providing small business loans as capital to those working their way out of poverty. Today, Opportunity offers loans, savings, insurance and training to clients around the globe, and theyre expanding our reach through technological innovations and strategic initiatives. Clients in more than 20 countries can use these services to expand a business, provide for their families, create jobs for their neighbors And build a safety net for the future. Opportunity International staff put people before profit, building relationships with clients and giving them encouragement and along

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Freedom from poverty depends on community, tools and skills.

Freedom from poverty depends on community, tools and skills.

the way. They use a full set of microfinance tools, offering a variety of products, including loans, savings, microinsurance and training, to meet the diverse needs of their clients. Through dynamic strategies, such as local staffing, bank building, technological innovations, rural outreach and Trust Groups, Opportunity increases its outreach and effectiveness in empowering those living in poverty around the world. Not all our clients want microloans, so we offer savings accounts and microinsurance as well. And we use innovative technologies, like banks-on-wheels and cell phones, to take Opportunity to people living in remote areas. Fingerprint enabled smart cards enable them to access their savings even if they have no official form of identification. But a tool is only as good as someones ability to use it. Thats why we deliver innovative training to help clients develop their financial and business management skills. -- Opportunity International

average rst $138 is thefor members, loan who collectively share risk and guarantee repayment. 17

Pro Mujer invests in women because

www.promujer.org www.promujer.org Founded: 1990 Mission: Providing poor women in Latin America with the means to build livelihoods for themselves and futures for their families through microfinance, business training and healthcare support Focus: Establishing sustainable microfinance organizations that provide an integrated package of financial and human development services Origin: Bolivia Reach: Five countries in Latin America E-mail: jcramermontes@promujer.org
Pro Mujer is a nonprofit development and microfinance organization dedicated to providing women in impoverished communities in Latin America access to vital services they might not otherwise have access to due to their socioeconomic status. Pro Mujer seeks to alleviate poverty and empower women by offering them a multidimensional and holistic package of services that includes microfinance, business and empowerment training, preventive health education, and high-quality, low-cost primary health care.

Pro Mujer

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women invest in their families.

These services enable clients to establish and invest in their businesses, create financial safety nets, advance their own personal development, and provide their children and families with additional education and health opportunities. Through their own hard work and perseverance, as well as the support of their peers and Pro Mujers more than 1,500 employees, clients not only learn how to be small business owners they learn how to be owners of their own destinies. Over the past 20 years, Pro Mujer has served more than 1,000,000 women and their approximately 5,000,000 children and family members in Argentina, Bolivia, Mexico, Nicaragua and Peru. In addition, it has disbursed more than US$950 million in small loans - that today average US$309 while maintaining a 98 percent repayment rate.

Pro Mujer manages

US$17.8

million in client savings accounts. 19

SEEP Network

www.seepnetwork.org

Mission: Connecting microenterprise practitioners in a global learning community. Focus: Advancing the microfinance sector by driving information and interactions that increase results Reach: More than 120 member organizations working in 171 countries and reaching over 77 million microentrepreneurs and their families E-mail: Longendyke@seepnetwork.org
The SEEP Network is a nonprofit network of international organizations that believe in the power of microenterprise to reduce global poverty. Through SEEPs learning initiatives, microenterprise development practitioners co-create and exchange strategies, standards, and tools for building healthy economies with a sustainable income in every household. SEEPs members connect to achieve four primary objectives: n Identify the most pressing needs of the industry and its clients. n Create highly valuable and relevant learning products by fostering collaboration among SEEPs rich pool of experts. n Disseminate learning to important industry players around the globe through the member base and industry-wide outreach initiatives. n Evaluate existing products and monitor progress in the field.

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SEEP values: Member-Driven SEEP members govern the network and drive its agenda. Practitioner-Based SEEP gathers the experience of practitioners in an inclusive, neutral space for sharing and developing knowledge, and disseminates this knowledge broadly to advance microenterprise practice. Innovative SEEP aims to be creative and inventive in its own initiatives and services, and to motivate its members' programs to do likewise. Sustainable The needs of poor households dwarf donor resources. Demand-driven services must cover delivery costs to allow for scalability. Transparent SEEP strives for full transparency in its own operations and in the services its members provide to microentrepeneurs. Inclusive SEEP aims to respect and engage all people, placing high value on the diversity of experience that is represented.

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Womens World Banking creates innovative nancial products including credit, savings and insurance and works with partners to bring these products to scale.

www.womensworldbanking.org
Founded: 1979 Mission: Expanding the economic assets, participation and power of low-income women and their households by helping them access financial services, knowledge and markets. Focus: Womens World Banking designs financial products and services that fulfill womens needs while demonstrating the sustainability and social impact of serving women. Reach: Global E-mail: jsloane@swwb.org
Womens World Banking (WWB) seeks to alleviate global poverty by expanding the economic assets, participation and power of the poor, especially women. WWB provides insight and technical assistance to financial services providers across the developing world, including a core network of 39 microfinance institutions in 27 countries.

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They are the only microfinance support organization to bring an explicit focus on women to every aspect of designing and launching products and services. Their approach is anchored in specialized customer research, and involves working with financial institutions to develop and roll out innovative and sustainable offerings, tailored from end to end to the specific needs and circumstances of women and girls. Based on its research and pilot programs, WWB knows that microfinance needs to encompass more than loans. WWB is committed to ensuring that women have access to a full suite of financial products, including savings and insurance, to increase control of their financial situations. Womens Word Banking develops vital financial products to enable microfinance organizations achieve their mission to bring people out of poverty. In 2010, WWB facilitated more than 76,000 individual loans, 670,000 new savings accounts -including 9,000 youth savings accounts- and 11,000 insurance policies. The network serves more than 24 million micro-entrepreneurs worldwide, over 82 percent of them women.

Womens World Banking research shows that the poor save an estimated percent of their monthly income.

10 to 15

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The Citi Foundation supports the economic empowerment and financial inclusion of low- to moderate-income people in communities where Citi operates. We work collaboratively with a range of partners to design and test financial inclusion innovations with potential to achieve scale. We also seek to support leadership and knowledge building activities.

www.citifoundation.com

Citi Microfinance works with the microfinance sector and business investors to develop appropriate products, distribution mechanisms and financing to broaden and increase the reach of financial services. These activities include Citi providing direct and structured financing, access to local capital markets, leasing, individual lending through MFI partners, foreign exchange and interest rate hedging, remittances and insurance.

www.citimicrofinance.com