Thanks Kim, let's hope the results will inspire..... But I referred at some length to the Savings Group Movement (can we call it that, and avoid brand names ?) when we discussed the need for better records, for better mechanisms to avoid damaging disputes, and for banks to have more reliable information on which to base lending decisions.

I rather doubt though that NABARD would pay for the development of savings groups, unless perhaps one could find a community which was entirely by-passed by bankers and hence SHGs. I'd be fascinated by some such experiment, perhaps formalising and insh'allah improving (not easy) something like the groups in the North East in our book, or, better, reaching way down to very poor people, who don't often get into SHGs.

In that context I suggested that they might try a BRAC or Bandhan type TUP, but ending in an SHG not an MFI. Maybe savings groups could be part of that.
----- Original Message -----
From: Kim Wilson
To: MicrofinancePractice@yahoogroups.com
Sent: Tuesday, February 21, 2012 1:07 PM
Subject: Re: [MFP] A Challenge

Dear Malcolm -

Thank you for this inspiring update on NABARD. Nice that women will have the option of privacy of individual accounts and I am assuming pension funds.

I agree with Jeff that these small groups really are a route to financial empowerment, an empowerment which can only fully express itself when a thoughtful range of long-term savings products are on offer. Please don't keep us in the savings group ghetto.

At the moment groups do not offer women privacy and except for the SHGs in India do not offer a chance at building long-term assets. I think that many male practitioners do not appreciate that women often want more than a year-long option to save. If given the chance, they might like a mortgage, or a chance to save for retirement. These products might require that solid financial institutions reach out to groups to serve individual members. Good that NABARD sees the wisdom of this. As always, they are a step ahead.

Kim Wilson
Faculty, Fletcher School, Tufts University (617-763-2469)
Kimberley.Wilson@...

----------------------------------------------------------
From: Malcolm Harper <malcolm.harper@...>
To: MicrofinancePractice@yahoogroups.com
Sent: Tuesday, February 21, 2012 7:20 AM
Subject: Re: [MFP] A Challenge


Jeff, and all,

Well timed, I just now came from a rather useful one-day meeting with NABARD, various banks, NGOs, the regulator and so on to discuss the next 20 years of SHGs. Starting next weekend as it happens, the first 20 years end on 26th February, the anniversary of the circular which allowed banks to lend to them.

Let's see what emerges, but there will for sure be emphasis on individual savings, in the banks, and some other good things. MFIs were hardly mentioned, they came and more or less went during the period.

Malcolm

----- Original Message -----
From: _
To: MicrofinancePractice@yahoogroups.com
Sent: Tuesday, February 21, 2012 1:20 AM
Subject: Re: [MFP] A Challenge

REVISED

Dear Brett, Malcolm, Prabat, Garrett,
I have been following this exchange with great interest. Prabatt I enjoyed reading your assessment of the first Savings Group conference held at Tufts. I recently returned from the second conference, one much more oriented to practitioners, held in Arusha, Tanzania with representatives from 46 countries. There are currently more than 6,000,000 Savings Group members, most of these in Africa but with growing number in Asia and Latin America underscoring the universality of this approach. Savings Groups are much like the Self Help Groups of India before they are linked to bank credit through the Self Help Group Bank Linkage program. There are between 80 and 100 million SHG members in India making SHGs by far the largest financial inclusion movement in the world.
The great strength of both Savings Groups and SHGs is that they are the right size - 15 to 30 members. The transactions that occur only during the meetings are observed by all the members. SACCOS and the smaller credit unions can work well but as the size of the membership increases beyond 75 or so the transparency that is the hallmark of Savings Groups as well as the need for much more sophisticated record keeping often overwhelms their capacity. There are two sizes of institutions that work well - small SGs and SHGs and larger credit unions, banks and MFIs where there is sufficient capacity and oversight to insure that they work well.
I believe that the greatest potential for financial inclusion is though these smaller groups which, like credit unions, also encourage discipline and develop social capital, mobilize local savings, keep money circulating in the community and where all the profits return to the members.

Jeff
Jeffrey Ashe
Director of Community Finance
Oxfam America
---- Original Message ----
From: _ <jaashe@...>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Mon, Feb 20, 2012 8:09 pm
Subject: Re: [MFP] A Challenge

---- Original Message ----
From: kendall <kendall@...>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Thu, Feb 16, 2012 6:20 pm
Subject: Re: [MFP] A Challenge

Brett,

I agree with you completely. I started working in the credit union industry when I was 13 yrs old in Hawaii. My father was one on the founders of the Hawaii movement in the late 1940's and 50's. As a PC volunteer in credit union development in Panama and Senegal, I've seen how hard it is to establish good CU's in Africa and South America Vs the Western World. illiteracy, low population rural locations, spending 10 yrs building savings before there were enough funds for lending, French culture that never developed cooperatives in most of France, etc. All contributed to the problems. We sent all our extension agents to Canada for training at Desjardins.

When I returned to the US, I managed a well established company credit union in CA for 10 yrs.

Ten years ago, a group of partners and I started a private MFI in Honduras. It's taken a full 10 yrs to establish a rock solid company. We are just now being certified for Central Bank regulation. A 3-yr program. We can then start to capture savings and not have to 100 percent rely upon private equity and debt equity which carry high costs.

As I follow this discussion, I'll jump in every now and then with comments on similarities and differences in running the 2 kinds of institutions.

Thanks for starting this discussion.

Dr Kendall Mau, MBA, DBA
Prisma de Honduras

Sent via BlackBerry from T-Mobile

----------------------------------------------------------

From: "bretthudsonmatthews" <brett@...>
Sender: MicrofinancePractice@yahoogroups.com
Date: Thu, 16 Feb 2012 21:38:19 -0000
To: <MicrofinancePractice@yahoogroups.com>
ReplyTo: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] A Challenge

Hi Garrett

Sorry, but I can't agree with you that `the debate is over'. Credit unions work very well in my country (Canada) and in most of the West, but they have manifestly failed in many parts of the developing world. They have manifestly succeeded better in urban areas than in rural areas. They often fall victim to elite capture and corruption. Federations secure monopolies and abuse them. While I sympathize greatly with credit union practitioners, I feel that we need to own our problems. If credit unions were such an extraordinary success story everywhere, if the debate were in fact `over', we would have already achieved financial inclusion. Instead, most immigrants from the developing world arriving in my country will choose a bank over a credit union, based on experience in their home countries. How is the debate `over'?

We do need conferences and discussions. Why is it that credit unions, after succeeding in many parts of Europe and America, did not transpant nearly as successfully in many parts of the developing world? Why it is that even in Europe they worked better in some countries (e.g. Germany) than in others (e.g. England)? What makes them work better in some contexts than others? Are some countries (e.g. India) ready now, based on a learning process that has emerged from their difficult past experiences? What is the role of literacy in maintaining the transparency and accountability needed for citizenship in a credit union? Why do we even need SHGs and VSLAs, if credit unions are so good? How do the roles of these various players overlap and complement each other, or it all wasteful duplication? The emergence of behavioral economics and the increasingly insightful analyses of how cooperation emerges, how trust is sustained and how institutions are built, should be of enormous interest to anyone who wants to savings-led models to realize their full potential.

It is indeed unfortunate (though not a crime!) that we have so little to say.

I know SHGs well, and most (with some shining exceptions) are not savings-led. They don't even test their own savings balances; savings transactions is tracked on a running account basis with no balancing. How can we call such a practice savings-led? It leads to tragedy, not to accumulation. I would love to see a conference on how to transform SHGs into the powerful, community-based, saving-led financial intermediaries they really could be. But I think credit unionists would rather retreat into a shell of their own than publicly ask the hard questions. And judging from other comments on this board, SHG advocates seem to be going in the same direction.

It's very easy to blame the other side for the current situation. But that isn't going to put poverty in museums. In fact, that attitude is precisely what will perpetuate it. Whether we like it or not, as practitioners our job is to be stewards of the future financial aspirations of poor people. I cannot be negative; I have no right. Stopping the talk is not good stewardship; it abandons stewardship. And in the silence, poor people continue to struggle on their own.

Brett

--- In MicrofinancePractice@yahoogroups.com, Garrett Wyse <garrettwyse@...> wrote:
>
> Brett,
>
> It seems as if it is unacceptable to talk about it, because we would not
> have much to say. And this seems to be the crime.
>
> The debate is over. A savings led approach to delivering financial
> services is generally accepted as being the way to go, but it is not as
> profitable or as 'sexy' as the many variations.
>
> There would be no more justification for conferences, seminars, new
> research, new courses, new investment 'products' for developed nation
> institutional investors (NGO's, national aid and development programmes,
> international banks), i.e. the poeple who have a stake not in solving the
> problem but in teasing it out, and making money from it, while being able
> to sleep comfortably on well padded pillows.
>
> Credit unions work, ask the three quarters of Irish people who use them
> (and no bubbles from their loans), SHG's work, ask the millions of Indian
> poeple who use their services.
>
> So the thinking is over, the debate is over.
>
> However the merrygoround would have to stop is we accpet this, and we cant
> have that can we?
>
> Dave Richardson has for years been banging the credit union drum on this
> forum, he must be sick of reading and writing the same stuff, that the
> debate is over, science and sense have come out on top, savings led
> approaches work, simple.
>
> I myself have just about stopped, you just feel that you are shouting into
> an empty vessel.
> If you are not sying what people want to hear then they do not hear.
>
> However as ever more millions get access to more mainstream, demanded
> financial services then what does it matter what daft professors are
> talking to each other about.
> How about we put them all in a room and leave them there to talk to each
> other debating the finer points of ridiculous nuaces.
>
> Does anyone want to listen to their empty rhetoric anymore?, not I for
> one.
>
> Sorry to sound negative, but the self-interest of the few at the top, seems
> to hold sway over the life and work experiences and education of millions
> of people actully on the ground and their lives are infinitely more
> important to them than those they proclaim to serve.
>
> Garrett
>
>
>
>
> On 13 February 2012 16:57, Brett Hudson Matthews <brett@...> wrote:
>
> > **
> >
> >
> > Dear All:****
> >
> > ** **
> >
> > I have been working in microfinance for 12 years. My goal is to fight
> > poverty. This requires that we deliver safe, flexible savings as well as
> > loans. Before that I worked in credit union for 8 years. This credit union
> > was a member-owned bank with 50,000 members that was and continues to be,
> > consistently profitable and more inclusive than the commercial banks in my
> > city of Toronto. ****
> >
> > ** **
> >
> > I remember discussing with my friends at the Calmeadow Foundation, not far
> > from our office, the strange disconnect between the mainstream of
> > microcredit and the credit union world. These worlds seemed not to talk to
> > each other, and not to learn from each other. I greatly admire people from
> > both sides of this strange divide, and they have so much in common.
> > Raiffeisen, the first credit union pioneer, writes in his history of the
> > German credit union movement that the primary goal was to free the poor
> > rural farmer from the village moneylender. Desjardins, the North American
> > pioneer, was inspired to act by a horrific example of moneylender abuse
> > reported in Canada's parliament, and upheld by a local Canadian court. In
> > my mind, Dr. Yunus a great inheritor of a great tradition – but this is not
> > the way the matter is seen by my friends on either side of this divide.
> > Instead, both marginalize the other and ignore their work.****
> >
> > ** **
> >
> > Personally, I carry no ideological baggage. I was inspired by a personal
> > discussion with Dr. Yunus to work for a financial institution, and the
> > credit union seemed small enough to let me get a good handle on practice
> > fairly quickly. I am not interested in an ideological debate, though I know
> > that that is how this matter is too often framed by practitioners and
> > experts. Ideology in this case generates far more heat than light, and is a
> > waste of everyone's valuable time. ****
> >
> > ** **
> >
> > I am interested – like Dr. Yunus, like Desjardins and like Raiffeisen – in
> > fighting poverty, and I am seeking practical solutions. It is a historical
> > fact that credit unions delivered safe, flexible savings as well as
> > microcredit – often for periods of much longer than 1 year -- to 2 million
> > rural German households by 1900. That system spread to countries across
> > Europe in the second half of the 19th century, putting in place the
> > preconditions for the modern European cooperative banking system. ****
> >
> > ** **
> >
> > Given that rural financial inclusion is our largest problem in modern
> > microfinance, I challenge the readers here to tell me why it is considered
> > unacceptable to discuss how Raiffeisen did it? I challenge readers here to
> > explain to me – if they can – why a system that worked all over the
> > developed West a century ago is of no analytical or practical interest in
> > teaching us how to overcome the challenges of financial inclusion in the
> > developing world today? ****
> >
> > ** **
> >
> > I have posted a blog on this topic at
> > http://villagefinance.net/2012/02/13/the-first-wave-of-microfinance/.****
> >
> > ** **
> >
> > Best regards,****
> >
> > ** **
> >
> > ** **
> >
> > Brett ****
> >
> > ** **
> >
> > ** **
> >
> > Brett Hudson Matthews****
> >
> > Managing Partner | Village Finance****
> >
> > *Mathwood Consulting Company*
> >
> > 242 Gainsborough Road****
> >
> > Toronto, CANADA M4L 3C6****
> >
> > ** **
> >
> > brett@...****
> >
> > (416) 420 1096****
> >
> > ** **
> >
> > www.villagefinance.net****
> >
> > *Re-inventing village finance!*
> >
> > ** **
> >
> >
> >
>
>
>
> --
> Garrett Wyse
> 00-353-87-6536002
>

Reply to sender | Reply to group | Reply via web post
Messages in this topic (19)

Hi Malcolm and Kim,



I’ve been interested to read this thread about the increasing outreach (and hopefully downreach) of self-help groups in India. Trickle Up is working with nearly 2,500 ultra-poor participants in India using a graduation-model program (utilizing the same tools as other graduation pilots—consumption support, livelihood grant, training and careful coaching) that is focused around the self-help group. Ultra-poor women selected for the program start SHGs at the earliest stages of the program, working together to help plan and approve each individual woman’s livelihood plan, save collectively and borrow from the group. Ultimately, by the end of the 3-year project, we look for groups with strong savings and credit ratios and active membership. They link with banks and receive loan capital to support the growth or diversification of their livelihood activities.


I just returned from a field visit (visiting two partners that are about halfway through the project cycle) and was struck by the solidarity of the groups. Their savings habits are strong and regular, their attendance rates are good, and they’re moving beyond the financial benefits to taking collective actions to benefit the broader community—advocating with local political leaders to improve roads and other services, taking initiative to clean their village, clean wells and eliminate standing water. It’s becoming clear to us that after a certain point (1 year or so after SHG mobilization) the dynamic of the groups shift and they begin to drive the changes and benefits that affect their membership (and to an extent the broader community). For very marginalized populations such as members of the Musahar community this change can take a wee bit longer. But it does happen. Soon the dynamism of the group helps fuel economic changes for many in the group, allowing Trickle Up’s partner agencies to focus more on those participants that need a bit more support to ultimately ‘graduate.’



We’d be really interested in sharing this experience with you and others as we believe that creating independent, strong self-help groups is critical to the sustainability of the changes we’re now seeing in the communities. We’re preparing for an endline evaluation of three partner agencies (800 participants) this spring and will certainly be looking to better understand how the dynamics of these self-help groups interplay with the livelihood development goals of the project—and what other benefits, if any, accrue to the members as a result of SHG membership. We’d be happy to share the results of this research with anyone who is interested.



We’re looking forward to more and more ultra-poor women gaining a foothold in the tremendous growth and development of the SHG movement.



Thanks,



Janet





Janet Heisey

Director, Asia Program / Trickle Up

104 W 27th St, 12th Fl / New York, NY 10001 USA

Tel: 212.255.9980 x 205 / Fax: 212.255.9974

asia@... <mailto:airanpour@...%7C> / www.trickleup.org <http://www.trickleup.org/>













From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com] On Behalf Of Malcolm Harper
Sent: Tuesday, February 21, 2012 9:48 AM
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] A Challenge







Thanks Kim, let's hope the results will inspire..... But I referred at some length to the Savings Group Movement (can we call it that, and avoid brand names ?) when we discussed the need for better records, for better mechanisms to avoid damaging disputes, and for banks to have more reliable information on which to base lending decisions.



I rather doubt though that NABARD would pay for the development of savings groups, unless perhaps one could find a community which was entirely by-passed by bankers and hence SHGs. I'd be fascinated by some such experiment, perhaps formalising and insh'allah improving (not easy) something like the groups in the North East in our book, or, better, reaching way down to very poor people, who don't often get into SHGs.



In that context I suggested that they might try a BRAC or Bandhan type TUP, but ending in an SHG not an MFI. Maybe savings groups could be part of that.

----- Original Message -----

From: Kim Wilson <mailto:orientrow@...>

To: MicrofinancePractice@yahoogroups.com

Sent: Tuesday, February 21, 2012 1:07 PM

Subject: Re: [MFP] A Challenge





Dear Malcolm -



Thank you for this inspiring update on NABARD. Nice that women will have the option of privacy of individual accounts and I am assuming pension funds.



I agree with Jeff that these small groups really are a route to financial empowerment, an empowerment which can only fully express itself when a thoughtful range of long-term savings products are on offer. Please don't keep us in the savings group ghetto.



At the moment groups do not offer women privacy and except for the SHGs in India do not offer a chance at building long-term assets. I think that many male practitioners do not appreciate that women often want more than a year-long option to save. If given the chance, they might like a mortgage, or a chance to save for retirement. These products might require that solid financial institutions reach out to groups to serve individual members. Good that NABARD sees the wisdom of this. As always, they are a step ahead.



Kim Wilson
Faculty, Fletcher School, Tufts University (617-763-2469)
Kimberley.Wilson@...




________________________________


From: Malcolm Harper <malcolm.harper@...>
To: MicrofinancePractice@yahoogroups.com
Sent: Tuesday, February 21, 2012 7:20 AM
Subject: Re: [MFP] A Challenge







Jeff, and all,



Well timed, I just now came from a rather useful one-day meeting with NABARD, various banks, NGOs, the regulator and so on to discuss the next 20 years of SHGs. Starting next weekend as it happens, the first 20 years end on 26th February, the anniversary of the circular which allowed banks to lend to them.



Let's see what emerges, but there will for sure be emphasis on individual savings, in the banks, and some other good things. MFIs were hardly mentioned, they came and more or less went during the period.



Malcolm



----- Original Message -----

From: _ <mailto:jaashe@...>

To: MicrofinancePractice@yahoogroups.com

Sent: Tuesday, February 21, 2012 1:20 AM

Subject: Re: [MFP] A Challenge





REVISED



Dear Brett, Malcolm, Prabat, Garrett,

I have been following this exchange with great interest. Prabatt I enjoyed reading your assessment of the first Savings Group conference held at Tufts. I recently returned from the second conference, one much more oriented to practitioners, held in Arusha, Tanzania with representatives from 46 countries. There are currently more than 6,000,000 Savings Group members, most of these in Africa but with growing number in Asia and Latin America underscoring the universality of this approach. Savings Groups are much like the Self Help Groups of India before they are linked to bank credit through the Self Help Group Bank Linkage program. There are between 80 and 100 million SHG members in India making SHGs by far the largest financial inclusion movement in the world.

The great strength of both Savings Groups and SHGs is that they are the right size - 15 to 30 members. The transactions that occur only during the meetings are observed by all the members. SACCOS and the smaller credit unions can work well but as the size of the membership increases beyond 75 or so the transparency that is the hallmark of Savings Groups as well as the need for much more sophisticated record keeping often overwhelms their capacity. There are two sizes of institutions that work well - small SGs and SHGs and larger credit unions, banks and MFIs where there is sufficient capacity and oversight to insure that they work well.

I believe that the greatest potential for financial inclusion is though these smaller groups which, like credit unions, also encourage discipline and develop social capital, mobilize local savings, keep money circulating in the community and where all the profits return to the members.



Jeff

Jeffrey Ashe

Director of Community Finance

Oxfam America

---- Original Message ----
From: _ <jaashe@...>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Mon, Feb 20, 2012 8:09 pm
Subject: Re: [MFP] A Challenge









---- Original Message ----
From: kendall <kendall@...>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Thu, Feb 16, 2012 6:20 pm
Subject: Re: [MFP] A Challenge



Brett,

I agree with you completely. I started working in the credit union industry when I was 13 yrs old in Hawaii. My father was one on the founders of the Hawaii movement in the late 1940's and 50's. As a PC volunteer in credit union development in Panama and Senegal, I've seen how hard it is to establish good CU's in Africa and South America Vs the Western World. illiteracy, low population rural locations, spending 10 yrs building savings before there were enough funds for lending, French culture that never developed cooperatives in most of France, etc. All contributed to the problems. We sent all our extension agents to Canada for training at Desjardins.

When I returned to the US, I managed a well established company credit union in CA for 10 yrs.

Ten years ago, a group of partners and I started a private MFI in Honduras. It's taken a full 10 yrs to establish a rock solid company. We are just now being certified for Central Bank regulation. A 3-yr program. We can then start to capture savings and not have to 100 percent rely upon private equity and debt equity which carry high costs.

As I follow this discussion, I'll jump in every now and then with comments on similarities and differences in running the 2 kinds of institutions.

Thanks for starting this discussion.


Dr Kendall Mau, MBA, DBA
Prisma de Honduras

Sent via BlackBerry from T-Mobile


________________________________


From: "bretthudsonmatthews" <brett@...>

Sender: MicrofinancePractice@yahoogroups.com

Date: Thu, 16 Feb 2012 21:38:19 -0000

To: <MicrofinancePractice@yahoogroups.com>

ReplyTo: MicrofinancePractice@yahoogroups.com

Subject: Re: [MFP] A Challenge





Hi Garrett

Sorry, but I can't agree with you that `the debate is over'. Credit unions work very well in my country (Canada) and in most of the West, but they have manifestly failed in many parts of the developing world. They have manifestly succeeded better in urban areas than in rural areas. They often fall victim to elite capture and corruption. Federations secure monopolies and abuse them. While I sympathize greatly with credit union practitioners, I feel that we need to own our problems. If credit unions were such an extraordinary success story everywhere, if the debate were in fact `over', we would have already achieved financial inclusion. Instead, most immigrants from the developing world arriving in my country will choose a bank over a credit union, based on experience in their home countries. How is the debate `over'?

We do need conferences and discussions. Why is it that credit unions, after succeeding in many parts of Europe and America, did not transpant nearly as successfully in many parts of the developing world? Why it is that even in Europe they worked better in some countries (e.g. Germany) than in others (e.g. England)? What makes them work better in some contexts than others? Are some countries (e.g. India) ready now, based on a learning process that has emerged from their difficult past experiences? What is the role of literacy in maintaining the transparency and accountability needed for citizenship in a credit union? Why do we even need SHGs and VSLAs, if credit unions are so good? How do the roles of these various players overlap and complement each other, or it all wasteful duplication? The emergence of behavioral economics and the increasingly insightful analyses of how cooperation emerges, how trust is sustained and how institutions are built, should be of enormous interest to anyone who wants to savings-led models to realize their full potential.

It is indeed unfortunate (though not a crime!) that we have so little to say.

I know SHGs well, and most (with some shining exceptions) are not savings-led. They don't even test their own savings balances; savings transactions is tracked on a running account basis with no balancing. How can we call such a practice savings-led? It leads to tragedy, not to accumulation. I would love to see a conference on how to transform SHGs into the powerful, community-based, saving-led financial intermediaries they really could be. But I think credit unionists would rather retreat into a shell of their own than publicly ask the hard questions. And judging from other comments on this board, SHG advocates seem to be going in the same direction.

It's very easy to blame the other side for the current situation. But that isn't going to put poverty in museums. In fact, that attitude is precisely what will perpetuate it. Whether we like it or not, as practitioners our job is to be stewards of the future financial aspirations of poor people. I cannot be negative; I have no right. Stopping the talk is not good stewardship; it abandons stewardship. And in the silence, poor people continue to struggle on their own.

Brett

--- In MicrofinancePractice@yahoogroups.com <mailto:MicrofinancePractice%40yahoogroups.com> , Garrett Wyse <garrettwyse@...> wrote:
>
> Brett,
>
> It seems as if it is unacceptable to talk about it, because we would not
> have much to say. And this seems to be the crime.
>
> The debate is over. A savings led approach to delivering financial
> services is generally accepted as being the way to go, but it is not as
> profitable or as 'sexy' as the many variations.
>
> There would be no more justification for conferences, seminars, new
> research, new courses, new investment 'products' for developed nation
> institutional investors (NGO's, national aid and development programmes,
> international banks), i.e. the poeple who have a stake not in solving the
> problem but in teasing it out, and making money from it, while being able
> to sleep comfortably on well padded pillows.
>
> Credit unions work, ask the three quarters of Irish people who use them
> (and no bubbles from their loans), SHG's work, ask the millions of Indian
> poeple who use their services.
>
> So the thinking is over, the debate is over.
>
> However the merrygoround would have to stop is we accpet this, and we cant
> have that can we?
>
> Dave Richardson has for years been banging the credit union drum on this
> forum, he must be sick of reading and writing the same stuff, that the
> debate is over, science and sense have come out on top, savings led
> approaches work, simple.
>
> I myself have just about stopped, you just feel that you are shouting into
> an empty vessel.
> If you are not sying what people want to hear then they do not hear.
>
> However as ever more millions get access to more mainstream, demanded
> financial services then what does it matter what daft professors are
> talking to each other about.
> How about we put them all in a room and leave them there to talk to each
> other debating the finer points of ridiculous nuaces.
>
> Does anyone want to listen to their empty rhetoric anymore?, not I for
> one.
>
> Sorry to sound negative, but the self-interest of the few at the top, seems
> to hold sway over the life and work experiences and education of millions
> of people actully on the ground and their lives are infinitely more
> important to them than those they proclaim to serve.
>
> Garrett
>
>
>
>
> On 13 February 2012 16:57, Brett Hudson Matthews <brett@...> wrote:
>
> > **
> >
> >
> > Dear All:****
> >
> > ** **
> >
> > I have been working in microfinance for 12 years. My goal is to fight
> > poverty. This requires that we deliver safe, flexible savings as well as
> > loans. Before that I worked in credit union for 8 years. This credit union
> > was a member-owned bank with 50,000 members that was and continues to be,
> > consistently profitable and more inclusive than the commercial banks in my
> > city of Toronto. ****
> >
> > ** **
> >
> > I remember discussing with my friends at the Calmeadow Foundation, not far
> > from our office, the strange disconnect between the mainstream of
> > microcredit and the credit union world. These worlds seemed not to talk to
> > each other, and not to learn from each other. I greatly admire people from
> > both sides of this strange divide, and they have so much in common.
> > Raiffeisen, the first credit union pioneer, writes in his history of the
> > German credit union movement that the primary goal was to free the poor
> > rural farmer from the village moneylender. Desjardins, the North American
> > pioneer, was inspired to act by a horrific example of moneylender abuse
> > reported in Canada's parliament, and upheld by a local Canadian court. In
> > my mind, Dr. Yunus a great inheritor of a great tradition – but this is not
> > the way the matter is seen by my friends on either side of this divide.
> > Instead, both marginalize the other and ignore their work.****
> >
> > ** **
> >
> > Personally, I carry no ideological baggage. I was inspired by a personal
> > discussion with Dr. Yunus to work for a financial institution, and the
> > credit union seemed small enough to let me get a good handle on practice
> > fairly quickly. I am not interested in an ideological debate, though I know
> > that that is how this matter is too often framed by practitioners and
> > experts. Ideology in this case generates far more heat than light, and is a
> > waste of everyone's valuable time. ****
> >
> > ** **
> >
> > I am interested – like Dr. Yunus, like Desjardins and like Raiffeisen – in
> > fighting poverty, and I am seeking practical solutions. It is a historical
> > fact that credit unions delivered safe, flexible savings as well as
> > microcredit – often for periods of much longer than 1 year -- to 2 million
> > rural German households by 1900. That system spread to countries across
> > Europe in the second half of the 19th century, putting in place the
> > preconditions for the modern European cooperative banking system. ****
> >
> > ** **
> >
> > Given that rural financial inclusion is our largest problem in modern
> > microfinance, I challenge the readers here to tell me why it is considered
> > unacceptable to discuss how Raiffeisen did it? I challenge readers here to
> > explain to me – if they can – why a system that worked all over the
> > developed West a century ago is of no analytical or practical interest in
> > teaching us how to overcome the challenges of financial inclusion in the
> > developing world today? ****
> >
> > ** **
> >
> > I have posted a blog on this topic at
> > http://villagefinance.net/2012/02/13/the-first-wave-of-microfinance/.****
> >
> > ** **
> >
> > Best regards,****
> >
> > ** **
> >
> > ** **
> >
> > Brett ****
> >
> > ** **
> >
> > ** **
> >
> > Brett Hudson Matthews****
> >
> > Managing Partner | Village Finance****
> >
> > *Mathwood Consulting Company*
> >
> > 242 Gainsborough Road****
> >
> > Toronto, CANADA M4L 3C6****
> >
> > ** **
> >
> > brett@...****
> >
> > (416) 420 1096****
> >
> > ** **
> >
> > www.villagefinance.net****
> >
> > *Re-inventing village finance!*
> >
> > ** **
> >
> >
> >
>
>
>
> --
> Garrett Wyse
> 00-353-87-6536002
>

Reply to sender | Reply to group | Reply via web post
Messages in this topic (19)

Thank you, Malcolm. 

It sounds as if you are with NABARD now in these moments of celebration. Hats off to them and to you, since you helped start this all. 

It does not matter that they have not added a product for 20 years. Most ASCA products on offer 'round the world are very simple and follow a cookie-cutter approach developed decades ago. So adding a simplistic credit piece is not a bad thing. 

The BRAC model is very interesting. So is the Trickle-Up model. I am huge fans of both, but who would absorb the costs? If it is NABARD, I think that is a bad idea. I can only imagine what wide government subsidy would do to these self-forming, NGO-forming, or government forming groups and their "add-ons". I am thinking SGSY writ large. Perhaps more appetizing would be for NABARD to focus on helping with individual accounts of all kinds. How might NABARD spread the word of the many products that India has to offer? 
 
Kim

________________________________
From: Malcolm Harper <malcolm.harper@...>
To: MicrofinancePractice@yahoogroups.com
Sent: Tuesday, February 21, 2012 9:48 AM
Subject: Re: [MFP] A Challenge


 

Thanks Kim, let's hope the results will inspire..... But I
referred at some length to the Savings Group Movement (can we call it that, and
avoid brand names ?) when we discussed the need for better records, for better
mechanisms to avoid damaging disputes, and for banks to have more reliable
information on which to base lending decisions.
 
I rather doubt though that NABARD would pay for the
development of savings groups, unless perhaps one could find a community
which was entirely by-passed by bankers and hence SHGs. I'd be fascinated
by some such experiment, perhaps formalising and insh'allah improving (not
easy) something like the groups in the North East in our book, or, better,
reaching way down to very poor people, who don't often get into SHGs.
 
In that context I suggested that they might try a BRAC or
Bandhan type TUP, but ending in an SHG not an MFI. Maybe savings groups could be
part of that.
----- Original Message -----
>From: Kim Wilson
>To: MicrofinancePractice@yahoogroups.com
>Sent: Tuesday, February 21, 2012 1:07 PM
>Subject: Re: [MFP] A Challenge
>
> 
>Dear Malcolm -
>
>
>Thank you for this inspiring update on NABARD. Nice that women will have the option of privacy of  individual accounts and I am assuming pension funds. 
>
>
>I agree with Jeff that these small groups really are a route to financial empowerment, an empowerment which can only fully express itself when a thoughtful range of long-term savings products are on offer. Please don't keep us in the savings group ghetto. 
>
>
>At the moment groups do not offer women privacy and except for the SHGs in India do not offer a chance at building long-term assets. I think that many male practitioners do not appreciate that women often want more than a year-long option to save. If given the chance, they might like a mortgage, or a chance to save for retirement. These products might require that solid financial institutions reach out to groups to serve individual members.  Good that NABARD sees the wisdom of this. As always, they are a step ahead.
> 
>Kim Wilson
>Faculty, Fletcher School, Tufts
University (617-763-2469)
>Kimberley.Wilson@...
>
>
>
>________________________________
> From: Malcolm Harper <malcolm.harper@...>
>To: MicrofinancePractice@yahoogroups.com
>Sent: Tuesday, February 21, 2012 7:20 AM
>Subject: Re: [MFP] A Challenge
>
>
> 
>
>Jeff, and all,
> 
>Well timed, I just now came from a rather useful one-day meeting with NABARD, various banks, NGOs, the regulator and so on to discuss the next 20 years of SHGs. Starting next weekend as it happens, the first 20 years end on 26th February, the anniversary of the circular which allowed banks to lend to them.
> 
>Let's see what emerges, but there will for sure be emphasis on individual savings, in the banks, and some other good things. MFIs were hardly mentioned, they came and  more or less went during the period.
> 
>Malcolm
> 
>----- Original Message -----
>>From: _
>>To: MicrofinancePractice@yahoogroups.com
>>Sent: Tuesday, February 21, 2012 1:20 AM
>>Subject: Re: [MFP] A Challenge
>>
>> 
>>REVISED
>> 
>>Dear Brett, Malcolm, Prabat, Garrett,
>>I have been following this exchange with great interest. Prabatt I enjoyed reading your assessment of the first Savings Group conference held at Tufts. I recently returned from the second conference, one much more oriented to practitioners, held in Arusha, Tanzania with representatives from 46 countries. There are currently more than 6,000,000 Savings Group members, most of these in Africa but with growing number in Asia and Latin America underscoring the universality of this approach. Savings Groups are much like the Self Help Groups of India before they are linked to bank credit through the Self Help Group Bank Linkage program. There are between 80 and 100 million SHG members in India making SHGs by far the largest financial inclusion movement in the world.  
>>The great strength of both Savings Groups and SHGs is that they are the right size - 15 to 30 members. The transactions that occur only during the meetings are observed by all the members. SACCOS and the smaller credit unions can work well but as the size of the membership increases beyond 75 or so the transparency that is the hallmark of Savings Groups as well as the need for much more sophisticated record keeping often overwhelms their capacity. There are two sizes of institutions that work well - small SGs and SHGs and larger credit unions, banks and MFIs where there is sufficient capacity and oversight to insure that they work well.
>>I believe that the greatest potential for financial inclusion is though these smaller groups which, like credit unions, also encourage discipline and develop social capital, mobilize local savings, keep money circulating in the community and where all the profits return to the members.
>> 
>>Jeff
>>Jeffrey Ashe
>>Director of Community Finance
>>Oxfam America
>>---- Original Message ----
>>From: _ <jaashe@...>
>>To:
MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
>>Sent:
Mon, Feb 20, 2012 8:09 pm
>>Subject: Re: [MFP] A Challenge
>>
>>
>> 
>> 
>> 
>> 
>>---- Original Message ----
>>From: kendall <kendall@...>
>>To:
MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
>>Sent:
Thu, Feb 16, 2012 6:20 pm
>>Subject: Re: [MFP] A Challenge
>>
>>
>> 
>>Brett,
>>
>>I agree with you completely. I started working in the
credit union industry when I was 13 yrs old in Hawaii. My father was one on
the founders of the Hawaii movement in the late 1940's and 50's. As a PC
volunteer in credit union development in Panama and Senegal, I've seen how
hard it is to establish good CU's in Africa and South America Vs the Western
World. illiteracy, low population rural locations, spending 10 yrs building
savings before there were enough funds for lending, French culture that
never developed cooperatives in most of France, etc. All contributed to the
problems. We sent all our extension agents to Canada for training at
Desjardins.
>>
>>When I returned to the US, I managed a well established
company credit union in CA for 10 yrs.
>>
>>Ten years ago, a group of
partners and I started a private MFI in Honduras. It's taken a full 10 yrs
to establish a rock solid company. We are just now being certified for
Central Bank regulation. A 3-yr program. We can then start to capture
savings and not have to 100 percent rely upon private equity and debt equity
which carry high costs.
>>
>>As I follow this discussion, I'll jump in
every now and then with comments on similarities and differences in running
the 2 kinds of institutions.
>>
>>Thanks for starting this discussion.
>>
>>
>>Dr Kendall Mau, MBA, DBA
>>Prisma de Honduras
>>
>>
>>Sent via BlackBerry from T-Mobile
>>________________________________
>>
>>From: "bretthudsonmatthews" <brett@...>
>>Sender: MicrofinancePractice@yahoogroups.com
>>Date: Thu, 16 Feb 2012 21:38:19 -0000
>>To: <MicrofinancePractice@yahoogroups.com>
>>ReplyTo: MicrofinancePractice@yahoogroups.com
>>Subject: Re: [MFP] A Challenge
>>
>> 
>>Hi Garrett
>>
>>Sorry, but I can't agree with you that `the debate is
over'. Credit unions work very well in my country (Canada) and in most of
the West, but they have manifestly failed in many parts of the developing
world. They have manifestly succeeded better in urban areas than in rural
areas. They often fall victim to elite capture and corruption. Federations
secure monopolies and abuse them. While I sympathize greatly with credit
union practitioners, I feel that we need to own our problems. If credit
unions were such an extraordinary success story everywhere, if the debate
were in fact `over', we would have already achieved financial inclusion.
Instead, most immigrants from the developing world arriving in my country
will choose a bank over a credit union, based on experience in their home
countries. How is the debate `over'?
>>
>>We do need conferences and
discussions. Why is it that credit unions, after succeeding in many parts of
Europe and America, did not transpant nearly as successfully in many parts
of the developing world? Why it is that even in Europe they worked better in
some countries (e.g. Germany) than in others (e.g. England)? What makes them
work better in some contexts than others? Are some countries (e.g. India)
ready now, based on a learning process that has emerged from their difficult
past experiences? What is the role of literacy in maintaining the
transparency and accountability needed for citizenship in a credit union?
Why do we even need SHGs and VSLAs, if credit unions are so good? How do the
roles of these various players overlap and complement each other, or it all
wasteful duplication? The emergence of behavioral economics and the
increasingly insightful analyses of how cooperation emerges, how trust is
sustained and how institutions are built, should be of enormous interest to
anyone who wants to savings-led models to realize their full
potential.
>>
>>It is indeed unfortunate (though not a crime!) that we
have so little to say.
>>
>>I know SHGs well, and most (with some shining
exceptions) are not savings-led. They don't even test their own savings
balances; savings transactions is tracked on a running account basis with no
balancing. How can we call such a practice savings-led? It leads to tragedy,
not to accumulation. I would love to see a conference on how to transform
SHGs into the powerful, community-based, saving-led financial intermediaries
they really could be. But I think credit unionists would rather retreat into
a shell of their own than publicly ask the hard questions. And judging from
other comments on this board, SHG advocates seem to be going in the same
direction.
>>
>>It's very easy to blame the other side for the current
situation. But that isn't going to put poverty in museums. In fact, that
attitude is precisely what will perpetuate it. Whether we like it or not, as
practitioners our job is to be stewards of the future financial aspirations
of poor people. I cannot be negative; I have no right. Stopping the talk is
not good stewardship; it abandons stewardship. And in the silence, poor
people continue to struggle on their own.
>>
>>Brett
>>
>>--- In MicrofinancePractice@yahoogroups.com, Garrett Wyse <garrettwyse@...> wrote:
>>>
>>> Brett,
>>>
>>> It seems as if it is unacceptable to talk about it, because we
would not
>>> have much to say. And this seems to be the crime.
>>>
>>> The debate is over. A savings led approach to delivering
financial
>>> services is generally accepted as being the way to go, but
it is not as
>>> profitable or as 'sexy' as the many variations.
>>>
>>> There would be no more justification for conferences, seminars,
new
>>> research, new courses, new investment 'products' for developed
nation
>>> institutional investors (NGO's, national aid and development
programmes,
>>> international banks), i.e. the poeple who have a stake
not in solving the
>>> problem but in teasing it out, and making money
from it, while being able
>>> to sleep comfortably on well padded
pillows.
>>>
>>> Credit unions work, ask the three quarters of
Irish people who use them
>>> (and no bubbles from their loans), SHG's
work, ask the millions of Indian
>>> poeple who use their
services.
>>>
>>> So the thinking is over, the debate is
over.
>>>
>>> However the merrygoround would have to stop is we
accpet this, and we cant
>>> have that can we?
>>>
>>> Dave
Richardson has for years been banging the credit union drum on this
>>>
forum, he must be sick of reading and writing the same stuff, that
the
>>> debate is over, science and sense have come out on top, savings
led
>>> approaches work, simple.
>>>
>>> I myself have just
about stopped, you just feel that you are shouting into
>>> an empty
vessel.
>>> If you are not sying what people want to hear then they do
not hear.
>>>
>>> However as ever more millions get access to more
mainstream, demanded
>>> financial services then what does it matter
what daft professors are
>>> talking to each other about.
>>> How
about we put them all in a room and leave them there to talk to each
>>>
other debating the finer points of ridiculous nuaces.
>>>
>>> Does
anyone want to listen to their empty rhetoric anymore?, not I for
>>>
one.
>>>
>>> Sorry to sound negative, but the self-interest of the
few at the top, seems
>>> to hold sway over the life and work
experiences and education of millions
>>> of people actully on the
ground and their lives are infinitely more
>>> important to them than
those they proclaim to serve.
>>>
>>> Garrett
>>>
>>>
>>>
>>>
>>> On 13 February 2012 16:57, Brett Hudson Matthews
<brett@...> wrote:
>>>
>>> > **
>>> >
>>>
>
>>> > Dear All:****
>>> >
>>> > ** **
>>>
>
>>> > I have been working in microfinance for 12 years. My goal
is to fight
>>> > poverty. This requires that we deliver safe,
flexible savings as well as
>>> > loans. Before that I worked in
credit union for 8 years. This credit union
>>> > was a member-owned
bank with 50,000 members that was and continues to be,
>>> >
consistently profitable and more inclusive than the commercial banks in
my
>>> > city of Toronto. ****
>>> >
>>> > **
**
>>> >
>>> > I remember discussing with my friends at the
Calmeadow Foundation, not far
>>> > from our office, the strange
disconnect between the mainstream of
>>> > microcredit and the credit
union world. These worlds seemed not to talk to
>>> > each other, and
not to learn from each other. I greatly admire people from
>>> > both
sides of this strange divide, and they have so much in common.
>>> >
Raiffeisen, the first credit union pioneer, writes in his history of
the
>>> > German credit union movement that the primary goal was to
free the poor
>>> > rural farmer from the village moneylender.
Desjardins, the North American
>>> > pioneer, was inspired to act by
a horrific example of moneylender abuse
>>> > reported in Canada's
parliament, and upheld by a local Canadian court. In
>>> > my mind,
Dr. Yunus a great inheritor of a great tradition – but this is not
>>>
> the way the matter is seen by my friends on either side of this
divide.
>>> > Instead, both marginalize the other and ignore their
work.****
>>> >
>>> > ** **
>>> >
>>> >
Personally, I carry no ideological baggage. I was inspired by a
personal
>>> > discussion with Dr. Yunus to work for a financial
institution, and the
>>> > credit union seemed small enough to let me
get a good handle on practice
>>> > fairly quickly. I am not
interested in an ideological debate, though I know
>>> > that that is
how this matter is too often framed by practitioners and
>>> >
experts. Ideology in this case generates far more heat than light, and is
a
>>> > waste of everyone's valuable time. ****
>>> >
>>>
> ** **
>>> >
>>> > I am interested – like Dr. Yunus, like
Desjardins and like Raiffeisen – in
>>> > fighting poverty, and I am
seeking practical solutions. It is a historical
>>> > fact that
credit unions delivered safe, flexible savings as well as
>>> >
microcredit – often for periods of much longer than 1 year -- to 2
million
>>> > rural German households by 1900. That system spread to
countries across
>>> > Europe in the second half of the 19th century,
putting in place the
>>> > preconditions for the modern European
cooperative banking system. ****
>>> >
>>> > ** **
>>>
>
>>> > Given that rural financial inclusion is our largest
problem in modern
>>> > microfinance, I challenge the readers here to
tell me why it is considered
>>> > unacceptable to discuss how
Raiffeisen did it? I challenge readers here to
>>> > explain to me –
if they can – why a system that worked all over the
>>> > developed
West a century ago is of no analytical or practical interest in
>>> >
teaching us how to overcome the challenges of financial inclusion in
the
>>> > developing world today? ****
>>> >
>>> > **
**
>>> >
>>> > I have posted a blog on this topic at
>>>
> http://villagefinance.net/2012/02/13/the-first-wave-of-microfinance/.****
>>>
>
>>> > ** **
>>> >
>>> > Best regards,****
>>>
>
>>> > ** **
>>> >
>>> > ** **
>>> >
>>>
> Brett ****
>>> >
>>> > ** **
>>> >
>>> > **
**
>>> >
>>> > Brett Hudson Matthews****
>>> >
>>>
> Managing Partner | Village Finance****
>>> >
>>> >
*Mathwood Consulting Company*
>>> >
>>> > 242 Gainsborough
Road****
>>> >
>>> > Toronto, CANADA M4L 3C6****
>>>
>
>>> > ** **
>>> >
>>> > brett@...****
>>>
>
>>> > (416) 420 1096****
>>> >
>>> > ** **
>>>
>
>>> > www.villagefinance.net****
>>> >
>>> >
*Re-inventing village finance!*
>>> >
>>> > ** **
>>>
>
>>> >
>>> >
>>>
>>>
>>>
>>> --
>>> Garrett Wyse
>>>
00-353-87-6536002
>>>
>>
>>
>
>

Reply to sender | Reply to group | Reply via web post
Messages in this topic (19)

It would appear that Raiffeisen has been entirely lost in the mists at the beginning of this thread. However, this seems to be a timely moment to remind participants here of the case I am making.

Jeff states below that "There are two sizes of institutions that work well - small SGs and SHGs and larger credit unions, banks and MFIs where there is sufficient capacity and oversight to insure that they work well." This appears to have become modern doctrine, as has its corollary -- that there is no path of institutional evolution that leads from 'small' to 'larger'. We can link the two, but it is impossible for the first to evolve into the second.

Raiffeisen of course, faced the same problem. The average size of the 'village banks' in rural Germany in the 19th Century was about 60-100 members, with very few getting much larger. This was a matter of policy for the Raiffeisen movement. (The Italian casse rurali, following close on the heels of their German cousins, were even smaller, typically < 60 members). Cooperative banks in Germany today have millions of members, and they evolved from these roots through a bottom-up process. I explain how here. http://savings-revolution.org/blog/2011/4/6/crossing-a-wild-ocean.html

The saddest aspect of this is that in the past two decades enormous sums of money, human energy and hope have been frittered away testing various 'federating' models in both the SHG and VSLA worlds with very little to show for them.

During most of the time I worked in Cambodia no moto driver would be caught dead with a functioning rear-view mirror on their bike. Used bikes were imported into the country and then the rear-view mirrors removed before sale (this has changed in recent years, mercifully). It is microfinance 'experts' driving without a rear-view mirror -- not poor people -- who are causing these federating failures. I am reminded of Dr. Yunus' wonderful comment: "Poor people always pay back their loans. It's us, the creators of institutions and rules, who keep making trouble for them."

Brett

--- In MicrofinancePractice@yahoogroups.com, _ <jaashe@...> wrote:
>
>
> REVISED
>
> Dear Brett, Malcolm, Prabat, Garrett,
>
> I have been following this exchange with great interest. Prabatt I enjoyed reading your assessment of the first Savings Group conference held at Tufts. I recently returned from the second conference, one much more oriented to practitioners, held in Arusha, Tanzania with representatives from 46 countries. There are currently more than 6,000,000 Savings Group members, most of these in Africa but with growing number in Asia and Latin America underscoring the universality of this approach. Savings Groups are much like the Self Help Groups of India before they are linked to bank credit through the Self Help Group Bank Linkage program. There are between 80 and 100 million SHG members in India making SHGs by far the largest financial inclusion movement in the world.
>
> The great strength of both Savings Groups and SHGs is that they are the right size - 15 to 30 members. The transactions that occur only during the meetings are observed by all the members. SACCOS and the smaller credit unions can work well but as the size of the membership increases beyond 75 or so the transparency that is the hallmark of Savings Groups as well as the need for much more sophisticated record keeping often overwhelms their capacity. There are two sizes of institutions that work well - small SGs and SHGs and larger credit unions, banks and MFIs where there is sufficient capacity and oversight to insure that they work well.
>
> I believe that the greatest potential for financial inclusion is though these smaller groups which, like credit unions, also encourage discipline and develop social capital, mobilize local savings, keep money circulating in the community and where all the profits return to the members.
>
>
>
>
> Jeff
>
> Jeffrey Ashe
> Director of Community Finance
> Oxfam America
>
>
>
>
>
> ---- Original Message ----
> From: _ <jaashe@...>
> To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
> Sent: Mon, Feb 20, 2012 8:09 pm
> Subject: Re: [MFP] A Challenge
>
>
>
>
>
>
>
>
>
>
> ---- Original Message ----
> From: kendall <kendall@...>
> To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
> Sent: Thu, Feb 16, 2012 6:20 pm
> Subject: Re: [MFP] A Challenge
>
>
>
>
>
>
> Brett,
>
> I agree with you completely. I started working in the credit union industry when I was 13 yrs old in Hawaii. My father was one on the founders of the Hawaii movement in the late 1940's and 50's. As a PC volunteer in credit union development in Panama and Senegal, I've seen how hard it is to establish good CU's in Africa and South America Vs the Western World. illiteracy, low population rural locations, spending 10 yrs building savings before there were enough funds for lending, French culture that never developed cooperatives in most of France, etc. All contributed to the problems. We sent all our extension agents to Canada for training at Desjardins.
>
> When I returned to the US, I managed a well established company credit union in CA for 10 yrs.
>
> Ten years ago, a group of partners and I started a private MFI in Honduras. It's taken a full 10 yrs to establish a rock solid company. We are just now being certified for Central Bank regulation. A 3-yr program. We can then start to capture savings and not have to 100 percent rely upon private equity and debt equity which carry high costs.
>
> As I follow this discussion, I'll jump in every now and then with comments on similarities and differences in running the 2 kinds of institutions.
>
> Thanks for starting this discussion.
>
>
> Dr Kendall Mau, MBA, DBA
> Prisma de Honduras
>
>
> Sent via BlackBerry from T-Mobile
>
> From: "bretthudsonmatthews" <brett@...>
> Sender: MicrofinancePractice@yahoogroups.com
> Date: Thu, 16 Feb 2012 21:38:19 -0000
> To: <MicrofinancePractice@yahoogroups.com>
> ReplyTo: MicrofinancePractice@yahoogroups.com
> Subject: Re: [MFP] A Challenge
>
>
>
>
> Hi Garrett
>
> Sorry, but I can't agree with you that `the debate is over'. Credit unions work very well in my country (Canada) and in most of the West, but they have manifestly failed in many parts of the developing world. They have manifestly succeeded better in urban areas than in rural areas. They often fall victim to elite capture and corruption. Federations secure monopolies and abuse them. While I sympathize greatly with credit union practitioners, I feel that we need to own our problems. If credit unions were such an extraordinary success story everywhere, if the debate were in fact `over', we would have already achieved financial inclusion. Instead, most immigrants from the developing world arriving in my country will choose a bank over a credit union, based on experience in their home countries. How is the debate `over'?
>
> We do need conferences and discussions. Why is it that credit unions, after succeeding in many parts of Europe and America, did not transpant nearly as successfully in many parts of the developing world? Why it is that even in Europe they worked better in some countries (e.g. Germany) than in others (e.g. England)? What makes them work better in some contexts than others? Are some countries (e.g. India) ready now, based on a learning process that has emerged from their difficult past experiences? What is the role of literacy in maintaining the transparency and accountability needed for citizenship in a credit union? Why do we even need SHGs and VSLAs, if credit unions are so good? How do the roles of these various players overlap and complement each other, or it all wasteful duplication? The emergence of behavioral economics and the increasingly insightful analyses of how cooperation emerges, how trust is sustained and how institutions are built, should be of enormous interest to anyone who wants to savings-led models to realize their full potential.
>
> It is indeed unfortunate (though not a crime!) that we have so little to say.
>
> I know SHGs well, and most (with some shining exceptions) are not savings-led. They don't even test their own savings balances; savings transactions is tracked on a running account basis with no balancing. How can we call such a practice savings-led? It leads to tragedy, not to accumulation. I would love to see a conference on how to transform SHGs into the powerful, community-based, saving-led financial intermediaries they really could be. But I think credit unionists would rather retreat into a shell of their own than publicly ask the hard questions. And judging from other comments on this board, SHG advocates seem to be going in the same direction.
>
> It's very easy to blame the other side for the current situation. But that isn't going to put poverty in museums. In fact, that attitude is precisely what will perpetuate it. Whether we like it or not, as practitioners our job is to be stewards of the future financial aspirations of poor people. I cannot be negative; I have no right. Stopping the talk is not good stewardship; it abandons stewardship. And in the silence, poor people continue to struggle on their own.
>
> Brett
>
> --- In MicrofinancePractice@yahoogroups.com, Garrett Wyse <garrettwyse@> wrote:
> >
> > Brett,
> >
> > It seems as if it is unacceptable to talk about it, because we would not
> > have much to say. And this seems to be the crime.
> >
> > The debate is over. A savings led approach to delivering financial
> > services is generally accepted as being the way to go, but it is not as
> > profitable or as 'sexy' as the many variations.
> >
> > There would be no more justification for conferences, seminars, new
> > research, new courses, new investment 'products' for developed nation
> > institutional investors (NGO's, national aid and development programmes,
> > international banks), i.e. the poeple who have a stake not in solving the
> > problem but in teasing it out, and making money from it, while being able
> > to sleep comfortably on well padded pillows.
> >
> > Credit unions work, ask the three quarters of Irish people who use them
> > (and no bubbles from their loans), SHG's work, ask the millions of Indian
> > poeple who use their services.
> >
> > So the thinking is over, the debate is over.
> >
> > However the merrygoround would have to stop is we accpet this, and we cant
> > have that can we?
> >
> > Dave Richardson has for years been banging the credit union drum on this
> > forum, he must be sick of reading and writing the same stuff, that the
> > debate is over, science and sense have come out on top, savings led
> > approaches work, simple.
> >
> > I myself have just about stopped, you just feel that you are shouting into
> > an empty vessel.
> > If you are not sying what people want to hear then they do not hear.
> >
> > However as ever more millions get access to more mainstream, demanded
> > financial services then what does it matter what daft professors are
> > talking to each other about.
> > How about we put them all in a room and leave them there to talk to each
> > other debating the finer points of ridiculous nuaces.
> >
> > Does anyone want to listen to their empty rhetoric anymore?, not I for
> > one.
> >
> > Sorry to sound negative, but the self-interest of the few at the top, seems
> > to hold sway over the life and work experiences and education of millions
> > of people actully on the ground and their lives are infinitely more
> > important to them than those they proclaim to serve.
> >
> > Garrett
> >
> >
> >
> >
> > On 13 February 2012 16:57, Brett Hudson Matthews <brett@> wrote:
> >
> > > **
> > >
> > >
> > > Dear All:****
> > >
> > > ** **
> > >
> > > I have been working in microfinance for 12 years. My goal is to fight
> > > poverty. This requires that we deliver safe, flexible savings as well as
> > > loans. Before that I worked in credit union for 8 years. This credit union
> > > was a member-owned bank with 50,000 members that was and continues to be,
> > > consistently profitable and more inclusive than the commercial banks in my
> > > city of Toronto. ****
> > >
> > > ** **
> > >
> > > I remember discussing with my friends at the Calmeadow Foundation, not far
> > > from our office, the strange disconnect between the mainstream of
> > > microcredit and the credit union world. These worlds seemed not to talk to
> > > each other, and not to learn from each other. I greatly admire people from
> > > both sides of this strange divide, and they have so much in common.
> > > Raiffeisen, the first credit union pioneer, writes in his history of the
> > > German credit union movement that the primary goal was to free the poor
> > > rural farmer from the village moneylender. Desjardins, the North American
> > > pioneer, was inspired to act by a horrific example of moneylender abuse
> > > reported in Canada's parliament, and upheld by a local Canadian court. In
> > > my mind, Dr. Yunus a great inheritor of a great tradition â€" but this is not
> > > the way the matter is seen by my friends on either side of this divide.
> > > Instead, both marginalize the other and ignore their work.****
> > >
> > > ** **
> > >
> > > Personally, I carry no ideological baggage. I was inspired by a personal
> > > discussion with Dr. Yunus to work for a financial institution, and the
> > > credit union seemed small enough to let me get a good handle on practice
> > > fairly quickly. I am not interested in an ideological debate, though I know
> > > that that is how this matter is too often framed by practitioners and
> > > experts. Ideology in this case generates far more heat than light, and is a
> > > waste of everyone's valuable time. ****
> > >
> > > ** **
> > >
> > > I am interested â€" like Dr. Yunus, like Desjardins and like Raiffeisen â€" in
> > > fighting poverty, and I am seeking practical solutions. It is a historical
> > > fact that credit unions delivered safe, flexible savings as well as
> > > microcredit â€" often for periods of much longer than 1 year -- to 2 million
> > > rural German households by 1900. That system spread to countries across
> > > Europe in the second half of the 19th century, putting in place the
> > > preconditions for the modern European cooperative banking system. ****
> > >
> > > ** **
> > >
> > > Given that rural financial inclusion is our largest problem in modern
> > > microfinance, I challenge the readers here to tell me why it is considered
> > > unacceptable to discuss how Raiffeisen did it? I challenge readers here to
> > > explain to me â€" if they can â€" why a system that worked all over the
> > > developed West a century ago is of no analytical or practical interest in
> > > teaching us how to overcome the challenges of financial inclusion in the
> > > developing world today? ****
> > >
> > > ** **
> > >
> > > I have posted a blog on this topic at
> > > http://villagefinance.net/2012/02/13/the-first-wave-of-microfinance/.****
> > >
> > > ** **
> > >
> > > Best regards,****
> > >
> > > ** **
> > >
> > > ** **
> > >
> > > Brett ****
> > >
> > > ** **
> > >
> > > ** **
> > >
> > > Brett Hudson Matthews****
> > >
> > > Managing Partner | Village Finance****
> > >
> > > *Mathwood Consulting Company*
> > >
> > > 242 Gainsborough Road****
> > >
> > > Toronto, CANADA M4L 3C6****
> > >
> > > ** **
> > >
> > > brett@****
> > >
> > > (416) 420 1096****
> > >
> > > ** **
> > >
> > > www.villagefinance.net****
> > >
> > > *Re-inventing village finance!*
> > >
> > > ** **
> > >
> > >
> > >
> >
> >
> >
> > --
> > Garrett Wyse
> > 00-353-87-6536002
> >
>

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Dear MFP members

I have finally moved on from Mf, livelihoods etc

I have refused several assignments during the last year and am clear I no longer want to be part of the industry that once was micro-finance!

A sincere thanks to many of you from whom I learnt a lot and especially through the discussions at this fora.

It is time to bid adieu now!

Good luck to all of you and Howard please unsubscibe me from the group

Thanks

Warm Regards

Ramesh

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[Attachment(s) from Marije included below]

Dear Linda and Getaneh:

Congratulations with your work! I read it with great interest and made some
notes along the way. I hope these are useful to you (see attach).

Looking forward to see you on a next summit or learning route (we are
presently developing one regarding microfinance, HIV and gender).

Regards,

Marije

Marije van Lidth de Jeude
A Company Consultora

Tel: +506 8651-4002 / 8858-3521
Skype: marije1
www.a-01.net

P Por favor considere su responsabilidad con el medio ambiente antes de
imprimir este correo 
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On 2/26/12 4:34 AM, "Linda Mayoux" <l.mayoux@...> wrote:

>
>
>
>
>
> Thanks Getaneh for putting these processes together
>
> The Discussion draft from the Summit is just a draft � I would very much
> welcome any comments before finalising it for circulation on Tuesday � in
> preparation for a gender and MF workshop with SDC and WWB in Berne. Including
> also some reference to the SPTF gender paper and the discussion in Ghana.
>
> I will send the final version to everyone copied in this mail by Wednesday.
> And please can I encourage any of you who are interested to join the
> genfinance Yahoo group genfinance Yahoo group:
> http://finance.groups.yahoo.com/group/genfinance/
> <http://finance.groups.yahoo.com/group/genfinance/>
> That is the best/easiest place for us to have ongoing discussions and any
> member can put up relevant files. Please also invite any of your colleagues to
> join.
>
> It seems the MicroCredit summit will be organising an e-discussion with their
> membership, CGAP and others sometime end April/early May. It would be good to
> have all the relevant resources and/or links to other initiatives/differing
> perspectives easily available from WEMANResources by then, so we don�t keep
> reinventing the wheel and having the same discussions, but move significantly
> forward. And we need to have as many voices (including those who may not agree
> with the �WEMAN line�) involved in the discussion to have as much impact as we
> can.
>
> Best wishes and looking forward to hearing from you,
> Linda
>
>
> From: WEMANNetwork_English@yahoogroups.com
> [mailto:WEMANNetwork_English@yahoogroups.com] On Behalf Of Getaneh Gobezie
> Sent: 26 February 2012 06:18
> To: genfinance@yahoogroups.com; WEMANNetwork; weman_espanol@yahoogroups.com;
> Sabina Gietema; 'Katja Koegler'; gdiaz@...; sejaldand@...;
> rurizar@...; plumumba@...; irislanao@...;
> spait@...; crevilla@...; mzobeida@...;
> bleussink@...; zia@...; aliani_s@...;
> asma.ravji@...; arbeela.sahar@...; creamwestnile@...;
> shoukat.abro@...; salma.umme@...; inafi.asia@...;
> seher.afsheen@...; dir.ndp.siraj@...; 'Bukonzo Joint
> Cooperative Micro Finance'; MicrofinancePractice@yahoogroups.com; Devfinance
> Listserve
> Cc: Jaclyn Berfond; Amelia Greenberg; Amelia Greenberg 2; Anne Hastings;
> Caitlin Scott; Carmen Velasco; Carolina Benavides; Celina Kawas; Elizabeth
> Lynch; Ewa Bankowska; Frances Sinha; g.athmer@...; Getaneh Gobezie;
> Irina Aliaga Romero; Iris Lanao; Jasmina Halilcevic; Laura Fleischer; Lisa
> Kuhn Fraioli; Marieke de Leede; Micol Pistelli; Mila Bunker;
> mresearch@...; Nejira Nalic; Norma Rosas Lizarraga; Radhika Desai1;
> rd@...; Rebecca Ruf; Rebecca Ruf 2; Sandra Hart; Tabasum Westra-van Til;
> Tigist Tesfaye; valbarracin@...
> Subject: [WEMANNetwork_English] Re: [MFP] New WEMANResources website
> genfinance section [2 Attachments]
>
>
>
> [Attachment(s) <#TopText> from Getaneh Gobezie included below]
>
> Dear Linda,
>
> Thank you for this resource, and linking up with important networks. ....
> Please note, however, that DevFinance network is unfortunately not currently
> active.
>
> We hope that this would stimulate the discussion on gender + microfinance,
> building up on the MCS event in Spain. The Report (titled ''FINANCIAL SERVICES
> FOR GENDER JUSTICE) is critical, among others, on the Social Performance
> indicators, proposed by the SEAL of Excellence (built on SPTF & Smart campaign
> works), which have been lose on 'empowerment' and 'gender equality' issues,
> limiting the gender indicators only to access + use of finance by women! The
> key issue here is that only access + use of financial services by women can,
> at best, lead to the maintenance of basic survival and well-being (e.g:-
> proper nourishment, good health, adequate shelter, reasonable clothing, clean
> water, etc). However, confining the analysis of gender inequality to these
> 'achievements' alone serves to convey the impression that women's
> dis-empowerment is largely a mater of poverty! The Report pointed out that
> more work is needed to identify such indicators on empowerment and gender
> equality, highlighting on-going efforts to establish them through
> participatory ways with clients, which proved effective in parts of Africa,
> Asia and Latin America.
>
> I am forwarding the Report on gender discussion and advocacy (attached again)
> also to the SPTF Gender group (in the CC) some of whom have been in the Summit
> but were not in the GENFINANCE-WEMAN Team discussion.... Also for the benefit
> of GENFINANCE-WEMAN Team, I am attaching the SPTF Gender group 'Position
> paper' which contains (pg 7) some of the gender indicators for further
> discussion.
>
> Note also that same critical issue has also been a point of discussion in the
> recent UN-Women 'Expert Group Meeting' on Economic Empowerment of women in
> Ghana (Sep 19-22, 2011).
>
> http://www.un.org/womenwatch/daw/csw/csw56/egm.htm
>
> I hope this helps, and look forward to hear from you.
>
> Kind Regards,
>
> Getaneh Gobezie
>
> --- On Sat, 2/18/12, Linda Mayoux <l.mayoux@...> wrote:
>>
>> From: Linda Mayoux <l.mayoux@...>
>> Subject: [MFP] New WEMANResources website genfinance section
>> To: genfinance@yahoogroups.com, "WEMANNetwork"
>> <WEMANNetwork_English@yahoogroups.com>, weman_espanol@yahoogroups.com,
>> "Sabina Gietema" <s.gietema@...>, "'Katja Koegler'"
>> <Katja.Koegler@...>, gdiaz@..., sejaldand@...,
>> rurizar@..., plumumba@..., irislanao@...,
>> spait@..., crevilla@..., mzobeida@...,
>> bleussink@..., zia@..., aliani_s@...,
>> asma.ravji@..., arbeela.sahar@..., creamwestnile@...,
>> shoukat.abro@..., salma.umme@..., getanehg2002@...,
>> inafi.asia@..., seher.afsheen@...,
>> dir.ndp.siraj@..., "'Bukonzo Joint Cooperative Micro Finance'"
>> <bukonzojointcooperative@...>, MicrofinancePractice@yahoogroups.com,
>> "Devfinance Listserve" <devfinance@...>
>> Date: Saturday, February 18, 2012, 11:45 AM Dear colleagues,
>>
>> I would like to announce the new genfinance section of a new website:
>> WEMANResources
>> http://www.wemanresources.info/Page3_GenderMainstreaming/3_5_Financial%20serv
>> ices/3_5_0_FinancialServices.html This section has updated and replaced
>> materials on genfinance, but can still be accessed through a holding page on
>> www.genfinance.info <http://www.genfinance.info/>
>>
>> This new website is intended as the basis for discussion on strategies to
>> promote gender justice through microfinance, as a follow up to the recent
>> discussions at the MicroCredit Summit in Valladolid.
>> The discussions will continue to take place through the genfinance Yahoo
>> group http://finance.groups.yahoo.com/group/genfinance/ which everyone is
>> welcome to join (but please do give a brief description of your background to
>> help our management). Our Spanish colleagues are invited to use the
>> WEMANEspanol Yahoo weman_espanol@yahoogroups.com
>> <http://us.mc1101.mail.yahoo.com/mc/compose?to=weman_espanol@yahoogroups.com>
>> . Particularly burning issues which emerged at the Summit were: 1)
>> Gender and the proposed Seal of Excellence � what impact and/or process
>> indicators are needed as the �minimum� and what as most desirable in order to
>> encourage MFIs to develop empowerment strategies. - What are the
>> relative merits of gender mainstreaming in a general seal compared to
>> promotion of a specific set of gender standards 2) What further
>> product innovations are out there eg pensions for women, products for asset
>> building under women�s ownership, products for men which promote them to
>> share assets and ownership more equally with women and take more
>> responsibility for household well-being rather than overburdening women? 3)
>> What further innovations are there for women�s empowerment strategies which
>> can have significant impact and also be sustainable? 4) Are there any
>> new examples of micro-finance as the basis for wider mobilisation of women
>> and/or men for collective action on gender justice � eg land rights,
>> political participation, gender-based violence etc 5) What should be
>> the main priorities for advocacy? In micro-finance networks? The regional
>> MicroCredit Summits? With governments? With donor agencies? 6) Are
>> there any new training/capacity-building programmes on gender and
>> micro-finance? Please feel free also to raise any other issues you feel are
>> important. And to invite any people you think will be interested. The
>> discussion will continue until at least the middle of March to feed into a
>> workshop on gender and microfinance with SDC in Berne. I would be very
>> grateful for any comments/suggestions for improvement of the webpages � they
>> are an ongoing resource which will be updated as further materials become
>> available. Hoping to hear from you, Linda PS some of the other sections
>> of the wemanresources website are still under construction but should be
>> complete by end of March.
>
>
>
>

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