World Ark Magazine - January/February 2009 - (Page 18)

poverty—maximum poverty reduction and really earning commercial returns are consistent and reinforcing,” he said. “but with more of a speculator’s mentality, i think they’re not consistent, and our financing partners should not be people who just want to dip in, make some money and get out.” ultimately, Counts said, he sees microfinance as a way of reaching the very poor. “[Microlenders’] most important assets are not their loan portfolios, but their high-quality relationships with the world’s poor,” he wrote in an article in the Stanford Social Innovation Review called “reimagining Microfinance.” by using these relationships microfinance’s success. a new Progress out of Poverty index (PPi) allows microfinance institutions to quantitatively measure the effect their work is having on clients. The index is a simple scorecard of eight or so questions, such as whether or not the client’s household has a television set, what materials the house is made of, and if children in the household attend school. Microfinance institutions use the scores to get a sense of borrowers’ standard of living and to track progress over time. Banking on the Future If microfinance becomes just another investment, microlenders might finally have access to the funds they need to reach millions, even billions of people. to deliver services like education and health care, and by maintaining long-term financial relationships, he believes that microfinance can, by improving the prospects of its borrowers, improve its profits as well. Writing the rule Book beginning in 2005, one u.S. organization has offered a novel way to connect borrowers with capital. Called kiva, this nonprofit uses the internet to connect lenders in the united States with entrepreneurs in developing countries. The lenders, who offer amounts of $25 or more, can handpick who their money goes to: a tailor in Cambodia, a 20-year-old beautician in eastern europe or a baker in Togo supporting her five children. repayment rates for these loans are extremely high, as they are elsewhere in the industry. like daley-harris, yunus, Counts, Munro and the other people who believe microfinance can one day put an end to Some of microfinance’s most interesting developments came in recent years, as the industry gained momentum and caught international attention. for one thing, industry leaders worldwide focused on making the industry’s practices more accountable and fair. Counts proposes a worldwide, industrywide system of regulation for microfinance institutions, a kind of code of conduct. To qualify for a good rating in this system, which Counts calls the “double bottom line,” microfinance institutions would have to meet certain benchmarks, such as including social programs and demonstrating that they are actually helping people—that is, that a certain percentage of their clients significantly improved their standard of living over time. “we’re not saying that microfinance that is not this double bottom line is not good,” he added. “but it’s not consciously trying to address a social problem.” industry leaders are also crafting ways to measure In Rwanda, village phone operators provide cellular phone service in their remote communities through Grameen Foundation’s Village Phone initiative. 18 j a n uar y / feb ruar y 2 0 0 9 | world ark www.h ei f er .o r g Photo courtesy Grameen Foundation. http://www.heifer.org

Table of Contents Feed for the Digital Edition of World Ark Magazine - January/February 2009

World Ark Magazine - January/February 2009 Contents Letters For the Record The Good Life Asked and Answered Microfinance: A Lot for a Little Business is Buzzing in Honduras The World Grows Smaller Mixed Media Heifer Spirit Heifer Bulletin Calendar First Person

World Ark Magazine - January/February 2009

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