by the MicroCapital Team -

SPECIAL REPORT: Measuring Impact with Agents for Impact’s AFISAR Tool

Agents for Impact: Driving Positive Impact… Together!

The 17 Sustainable Development Goals (SDGs) outlined by the UN in 2015 provide a blueprint for a just and sustainable world. While actors across a range of professional arenas are rushing to catch up with the SDGs, the term “impact” is being thrown around loosely to give the impression that the desired goals have been reached. It is tempting to assume certain businesses have a positive impact on the SDGs, simply based on intuition. However, some might negatively impact the SDGs or elicit both positive and negative outcomes in the long run. Without proper tools for impact measurement and assessment, we can only get so far!

Agents for Impact (AFI) understands how essential it is to improve the practice of impact measurement through stable and coherent frameworks. To deliver on this promise, we have designed a specialized investment approach to support microfinance institutions (MFIs) that exhibit strong commitment to and proven track records of progress toward the SDGs. To evaluate an MFI’s performance, AFI peels back the surface to deploy a strong assortment of cohesive and rigorous assessment tools, including financial analysis and addressing social performance indicators; sustain­ability factors; and

by Arin Atluri -

MICROFINANCE PAPER WRAP-UP: “Innovating Digital Financial Services for Posts,” Published by Universal Postal Union

Of the 5.4 billion adults worldwide, 1.5 billion access financial services through post offices. Postal services have large networks of branch locations that give them the potential to reach even more underserved populations. The extent of these branch networks is so wide because

by the MicroCapital Team -

SPECIAL REPORT: “Capital in the Age of COVID” at European Microfinance Week

European Microfinance PlatformAt this presentation on the effects of the COVID-19 pandemic on financial inclusion, which was subtitled “Navigating the Uncharted Sea of Insolvency,” Lucia Spaggiari of MFR (formerly known as Microfinanza Rating) predicted that the solvency challenges brought on – or simply exacerbated – by the pandemic may haunt institutions for the next 10 years. Although she described the solvency challenges of 2020 as “not drastic,” 22 percent of financial services providers (FSPs) in her dataset still significant solvency risk. Ms Spaggiari believes this may increase to as high as 34 percent over the next two years.

As for the potential effects on clients, there are clusters of greater risk among: FSPs in sub-Saharan Africa, where 17 percent of institutions are in danger; smaller FSPs, those with assets under USD 10 million; FSPs with

by the MicroCapital Team -

SPECIAL REPORT: Aligning Incentives, Setting Realistic Expectations for FSPs’ Outcomes Measurement at the e-MFP Investors Action Group

European Microfinance PlatformDuring European Microfinance Week last week, Célia Fernandez of the French NGO Comité d’Echange, de Réflexion et sur les Systèmes d’Epargne-Crédit (CERISE) described LabODD, a project to help mission-driven organizations measure their progress toward the UN Sustainable Development Goals (SDGs). LabODD is a four-year project funded by the French government’s Agence Francaise de Developpement. Among its outputs is a brief due out in December 2021 that will cover outcomes management for financial services providers (FSPs). Cécile Lapenu, also of CERISE, described several trends that will be presented in the brief.

The demand of impact investors for accountability from FSPs is growing. However, the focus now is more on measuring outcomes – which can be associated plausibly with the work of FSPs – rather than impacts – which must be shown to result from

by the MicroCapital Team -

SPECIAL REPORT: Private, Public Funders on Green Microfinance, Climate Adaptation, Biodiversity

European Microfinance PlatformToday, at the first plenary of European Microfinance Week 2021, climate adaptation was the hot topic – in contrast to climate mitigation, which is more of a preventative measure. The panelists argued that the scale of funding for climate adaptation is much too small and that many of those most in need still lack access to funding. These groups include smallholder farmers, women, youth and members of indigenous groups. Meanwhile, financial services providers (FSPs) are reporting that

by the MicroCapital Team -

SPECIAL REPORT: European Microfinance Week Opens with Daniela Konietzko of Fundación WWB Colombia Arguing Business Leaders Must Fight Gender Inequality

European Microfinance PlatformAs part of the first day of European Microfinance Week 2021, Daniela Konietzko of Fundación WWB Colombia today discussed the impacts of the COVID-19 pandemic, the brunt of which have fallen on women. There has been more domestic violence, neighbors have quarreled more over land disputes, and pregnant women and children have suffered the worst increases in malnutrition. Meanwhile children have missed school, and women have taken on greater unpaid caregiving responsibilities.

As COVID-19 threatens to undo the gains made against poverty in recent years, Ms Konietzko argued that we need to address development with a gender lens for many reasons. Women invest triple

by Arin Atluri -

MICROCAPITAL BRIEF: Terabank Georgia Borrowing $7m from EIB to Aid MSMEs in Adjusting to COVID-19 Pandemic

The EU’s European Investment Bank (EIB) recently opened a credit line of EUR 6 million (USD 6.8 million) – usable in synthetic Georgian lari – for Terabank Georgia, which is owned by the UAE-based Abu Dhabi Group. Terabank, which focuses on retail customers as well as small and medium-sized enterprises (SMEs), seeks to use the credit line to help

by the MicroCapital Team -

MICROCAPITAL BRIEF: Pro Mujer Launches Emprende Platform to Incubate Women-owned Microenterprises in Latin America

The US-based social enterprise Pro Mujer today launched the pilot phase of its Emprende platform, a Spanish-language resource for women running “subsistence” enterprises. Pro Mujer chose 600 women from 3,000 applicants to participate in the three-month pilot, which offers “pre-incubation” and incubation services in three categories:

Skills – Based on the idea of lifelong learning, Emprende offers learning opportunities, including via “edutainment,” with new content to be developed based on customer requests.

Collaboration – The platform includes a “collaborative hub,” with content partners such as the US-based technology firms Microsoft and Platsi. Platsi is a trilingual

by Arin Atluri -

MICROCAPITAL BRIEF: Trafficking Survivors to Access Microfinance from NAPTIP of Nigeria

Nigeria’s National Agency for the Prohibition of Trafficking in Persons (NAPTIP) recently announced it is planning to offer microfinance to survivors of human trafficking as part of a set of “sustainable and evidence-based rehabilitation, reintegration and empowerment programs.” These programs also will include

by Bradley Shulman -

MICROFINANCE PAPER WRAP-UP: “Determinants of Financial Well-Being: Evidence from Latin America,” by Sebastián Cárdenas, Published by CAF

This paper addresses the measurement and causes of financial well-being in Latin America with the aim of encouraging the deployment of optimal policies and practices by both private institutions and governments. To define the term, Mr Cárdenas cites the US-based Consumer Financial Protection Bureau (CFPB), which considers a high level of financial well-being to mean individuals can “meet their financial obligations successfully, can feel secure about their financial future and are able to make decisions

by the MicroCapital Team -

SPECIAL REPORT: European Microfinance Week – Christoph Pausch Discusses the Main Event, November 17-19, Plus 2 Bonus Training Days

European Microfinance PlatformMicroCapital: European Microfinance Week (EMW) 2021 – like in 2020 – will be virtual. How is it possible to make an online conference a success?

Christoph Pausch: Like last year’s successful first virtual conference and in the years before it, EMW2021 remains primarily a member-led event, and the programme is developed based on what members propose and consider important. This is as true as ever. There are things we learned from last year’s event, and there will be some changes based on what we observed – and based on feedback from attendees, of course. But funda­mentally the idea remains the same: a programme covering a wide range of topic streams and presented via a whole array of different session models, chosen depending on the subject matter, the audience and the objectives of the session. That means plenaries, traditional panels, work­shops, topic lounges, publication launches and Action Group meetings – among others. As much as possible, we help our members put together sessions that are current, relevant, important and interactive. Beyond this, there are

by Arin Atluri -

MICROFINANCE PAPER WRAP-UP: “The Opportunity for Digital and E-commerce Payments in the Pacific Region,” by Chris Statham et al, Published by UNCDF

This paper explores the challenges and opportunities associated with leveraging digital payment structures, including how such structures might promote financial inclusion and improve economic conditions in the Pacific Island region. The study focuses on six of the 14 archipelagic countries in the region that are in

by the MicroCapital Team -

MICROCAPITAL BRIEF: CERISE, SPTF Invite Microfinance Institutions to Join Client Protection Pathway

Two NGOs, Comité d’Echange, de Réflexion et sur les Systèmes d’Epargne-Crédit (CERISE) of France and the US-based Social Performance Task Force (SPTF), recently announced the Client Protection Pathway, a free service through which financial service providers (FSPs) may get support and recognition for improving the ways they serve clients. The first step in the pathway is to agree that “Our organization has

by the MicroCapital Team -

SPECIAL REPORT: People Power: A New e-MFP Paper Shines a Light on the Human Resources Landscape in Financial Inclusion

Human resources (HR) is a critical success factor for financial institutions to become – and remain – competitive in a changing and increasingly complex business environment. Although most institutions would agree that HR functions – recruitment, onboarding, performance manage­ment, training and development, among others – are important, some questions remain: How can HR functions be carried out in a strategic and sustainable way? Are MFIs in a strong position to develop and retain the workforce they need to pursue their business and social objectives? How can they strengthen their capacity in these areas?

The lack of recent global data on MFIs’ HR management practices has made it difficult to answer these questions. To address this, the European Microfinance Platform’s (e-MFP’s) HR Action Group has conducted a large-scale

by Arin Atluri -

MICROFINANCE PAPER WRAP-UP: “Central Bank Digital Currencies: A Potential Response to the Financial Inclusion Challenges of the Pacific;” by Anton Didenko, Ross Buckley; Published by ADB

This paper explores how central bank digital currencies (CBDCs) might promote financial inclusion in the Pacific Islands. The Pacific includes countries that are “among the world’s most remote and geographically dispersed,” with great variability in access to

by Harriet Ritchie -

MICROFINANCE PAPER WRAP-UP: “Microfinance Clients Facing the COVID-19 Crisis: From Findings to Action for MFIs;” by Mathilde Bauwin, Thu Hien Dao; Published by ADA

This paper explores the impact of the COVID-19 pandemic on clients of microfinance institutions (MFIs) in terms of: “Which client segments are most affected? How are they coping with the situation? What are they doing to

by Harriet Ritchie -

MICROCAPITAL BRIEF: In India, MFIs, State Government Agree on Assam Microfinance Relief, Incentive Scheme for Women Borrowers Struggling with COVID-19 Impacts

The government of the Indian state of Assam recently announced it has reached an agreement with 38 microfinance institutions (MFIs), many of which are members of the self-regulating Microfinance Institutions Network (MFIN), to launch the Assam Microfinance Incentive and Relief Scheme (AMFIRS). For those who have been late repaying their microloans, the “relief under the scheme shall be extended to…

by Harriet Ritchie -

MICROFINANCE PAPER WRAP-UP: “Leadership as a Driver of Innovative Financial Services for Women;” by Jaclyn Berfond, Jennifer Iwueze; Published by WWB

This paper offers an analysis of data collected from alumni of the Women’s World Banking Leadership & Diversity for Innovation Program (LDIP), which engages “senior executives and high-potential women leaders to enable them to successfully serve low-income women” customers of financial service providers (FSPs). The authors focus on “the strategic business initiatives of LDIP participants” and