MICROFINANCE PAPER WRAP-UP: “microLINKS Connections, March 2009,” by USAID

The United States Agency for International Development (USAID) has released its March edition of microLINKS Connections. The monthly newsletter reports on the work of USAID and its partners in building microenterprises, summarizes research papers and resources on microfinance, and announces upcoming microfinance events. To subscribe to microLINKS Connects and for a complete version the March edition please refer to this link. Highlights from the March edition are as follows.

Note from the Field

Note from the Web: Building Microenterprise Capacity through e-Learning

The Center for Institutional Reform and the Informal Sector (IRIS Center) at the University of Maryland has created an online course on the use USAID Poverty Assessment Tools (PATs). The course is open to USAID-funded microfinance practitioners. It was set up to supplement USAID’s in-person training on PATs, as a result of lack of resources. PATs are designed to measure the poverty level of clients to ensure that USAID is adhering to a congressional mandate requiring 50 percent of its microenterprise funding to directly benefit the poor. Information on the course is available at http://povertytools.org/moodle.

News and Announcements

Request for Applications (RFA) for USAID’s Displaced Children and Orphans Fund (DCOF) Programs

The nonprofit World Learning has announced that it will award subgrants to projects that improve the safety, well-being, and development of highly vulnerable children on behalf of USAID’s DCOF. Such projects are invited to submit applications for funding between March 2 and March 31. It is expected that three to five three-year grants amounting to USD 2.5 million will be awarded.

Participate in upcoming Speaker’s Corner on Value Chain Finance

From March 24 to March 26, Janice K. Stallard, Senior Technical Director of the nonprofit ACDI/VOCA (“Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance”), will host an online discussion open to the public titled “Increasing Incentives and Reducing Risks: How Value Chain Finance Can Increase Industry Competiveness.” Value chain finance is defined as “financial products and services that flow to or through any point in a value chain in order to increase returns on investment and growth and competitiveness of that value chain.” For more information on the discussion and to register, please refer to this link.

Deadline approaching to enter Financial Times (FT) Sustainable Banking Awards

March 13 is the last day to enter the FT Sustainable Banking Awards, awarded to banks and other financial institutions that demonstrate innovation in integrating social, environmental, and corporate governance in their operations. A new category this year, the Award for Achievement in Basic Needs Financing, recognizes financial organizations that address the scarcity of essential goods across society. For more information, please see this link.

The International Labor Organization Announces Third Round of Grants for Microinsurance

March 10 is the deadline for applications for the third round of grants from the ILO’s Microinsurance Innovation Facility. By 2012, the facility aims to have awarded 40 to 50 grants, totaling USD 18 million, to organizations that aim to increase the availability of quality insurance products to low-income households. More information is available from the ILO Microinsurance Innovation Facility website.

USAID Knowledge Generation

This section of microLINKS Connections summarizes USAID-funded research papers. The March edition summarizes the following articles:

Three USAID microREPORTS on value chain finance:

“Striving toward a Competitive Industry: The Importance of Dynamic Value Chain Facilitation,” by David Knopp, Emerging Market Groups: September 2008

“Facilitating Behavior Change and Transforming Relationships: Field Application of Key Value Chain Principles,” by Marian Boquiren and Ivan Idrovo, Strategic Development Corporation Asia: October 2008

“Butterflies, Elephants and Icebergs: Using Language and Data to Mobilize Value Chains,” by Rob Henning, Neal Donahue and Eric Kacou, OTF Group: October 2008

A study searching for a correlation between the growth of small and medium enterprises and the growth of per capita income in a country:

“The Role of Micro, Small and Medium Enterprises in Economic Growth: A Cross-Country Regression Analysis,” by Anthony Leegwater and Arthur Shaw, IRIS Center at the University of Maryland: September 2008

A report exploring the feasibility of mobile phone solutions to expand access to financial services to Salvadorans:

“Mobile Phone Banking Feasibility Assessment in El Salvador,” Eve Hamilton and Raul Tapia, Chemonics International: September 2008

General Microenterprise Development Resources

The March edition of microLINKS CONNECTIONS summarizes the following non-USAID-funded microenterprise development resources:

A blog called, Knowledge-Driven Development that discusses how the loss of knowledge caused through short rotations of USAID workers in countries like Iraq and Afghanistan inhibits development.

A Microfinance Gateway article titled “What If Payment Networks Were Just Another Utility?” that discusses the concept of the payment network as a utility to demonstrate the potential of technology-enabled branchless banking in microfinance. The concept was first offered in the Consultative Group to Assist the Poor’s (CGAP) Focus Note No. 50, “Realizing the Potential of Branchless Banking: Challenges Ahead,” by Ignacio Mas.

A presentation by Radha Rajkotia of the nonprofit International Rescue Committee titled “Are We Failing Conflict-Affected Youth?” made at Washington Network for Children in Armed Conflict event. The presentation topic was subsequently written upon in an article, posted on March 3, 2009 by Christian Penottie of the nonprofit Children, Youth, and Economic Strengthening (CYES) Network.

The website of the professional network Development Executive Microfinance Group (Devex), which offers various resources on microfinance.

The Synergies Project website of the International Training Center (ITC) of the ILO, which is intended as a platform for current research on pro-poor financial services.

A report that discusses the establishment of benchmarks for microfinance equity valuation, and the outlooks for microfinance equity investment:

“Shedding Light on Equity Valuation: Past and Present,” by Nicholas P. O’Donohoe, Frederic Rozeira de Mariz, Elizabeth Littlefield, Xavier Reille, and Christoph Kneiding, CGAP and J.P. Morgan: February 2009.

MicroCapital recently released a two-part Paper Wrap-Up on “Shedding Light on Equity Valuation: Past and Present,” , Part I of which can be found here, and Part II of which can be found here.

By Ryan Hogarth, Research Assistant

Additional Resources:

DEVEX Microfinance Group: Home

International Labor Organization (ILO) Microinsurance Innovation Facility: Home

IRIS Training Center: “Using USAID Poverty Assessment Tools”

Financial Times (FT): “The FT Sustainable Banking Conference and Banking Awards”

Knowledge Driven Development: Blog

United States Agency for International Development (USAID): “Displaced Children and Orphan’s Fund (DCOF)”

USAID: “microLINKS Connections”

USAID: “Note from the Web: Building Microenterprise Capacity through e-Learning”

USAID: “Request for Applications (RFA) for Displaced Children and Orphans Fund (DCOF) Program”

USAID: “Speaker’s Corner: Increasing Incentives and Reducing Risks: How Value Chain Finance Can Increase Industry Competitiveness?”