1. Santosh
-350 milllion below poverty line, appreciable figure or achievement?
-Agriculture, middle means doing great
-MF more organizaed than before
-More people committed to social cause because of system
-Mostly women are promising themselves towards the development in rural areas
-There are alternative methods available for developing rural because of Yunus and young people in microfinance
-500,000 Crores are unaccounted money of governtment to the welfare of the people; the reason NGOs are managed by bureaucrats
-Good rupees have gone but no development due to corruption and politics
-MF is the best way to manage money for rural development
2. Alex Counts, President of Grameen Foundation (USA)
-The time for microfinance evangelism is over
-If we don’t need to prove anything anymore, we need to improve microfinance at the sector level.
-Gates Foundation has placed a big bet to grow the saving side of microfinance
-Microfinance is not a financial product, but a platform of doing business with the world’s poor. Microfinance is providing an infrastructure of doing business with the poor that never existed before.
-Not all equally affective or ethical, but there is tremendous opportunity.
-Platform where people outside the sector are partnering with MF to partner with the poor.
-Most powerful asset we have is info about payment history of poor and how good they are. Though remains hidden from most of the people who would benefit from it.
-More relevant to poor if some changes in mainstream MF.
-Potential backlash against MF by regulators
-Remembers debating, could MF ever work in India….the caste system, etc. Today, MF is proven successful in India. Is in fact providing leadership at the global level. Achievements: scale achieved without very much subsidized money, which was the original fuel for growth in Bangladesh. Majority of funds coming from commercial banks, and private equity investors.
-Industry has taken on critical issues at critical moments and evolve, regulation crisis for example in past.
-Took on issue of consumer protection. Transparency issue was addressed- pricing came down significantly, on Social Performance side, sector that can move on a dime, much faster than other MF sectors. In India, diff models have been able to thrive and succeed side by side. Open mind to different types of people and players. SHG movement is thriving, older groups, newer grps all coexisting peacefully trying to build up sector. Team effort of local Indians, Indians returning from overseas, Young Turks, investors, wise men and wise women all working in a team way that from the outside looks like a model for the rest of the world.
-What remains? MF for poorest, most remote, most isolated, most vulnerable people; information systems, despite all IT expertise not a lot has helped except for very mature organizations
-Social Performance, origin of sector is social concern end is social results
-It’s very expensive to not know whether you are realizing your social mission.
-Challenge will be IPOs in the future which can be an incredible way to mobilize cap or controversial as it was in Mexico, figure out ways to cut in borrowers- amazing opportunity to show true values and unique values of microfinance
-Savings and deposit insurance are new areas in India
-Credit Bureau as way to avoid over indebtedness is a new horizon
Financial Inclusion:
-Is Financial Inclusion a means or an end to itself? Counts thinks has to be seen as a means
-Subprime lending movement went off course, originally developed as pro-poor approach to develop greater financial inclusion; thus is financial inclusion a means or an end?
Convergence of Government Schemes and MFI Services:
-What do people think is the best role of government in microfinance, and what is the acceptable, not best, role? What are the roles that not optimal, perhaps unacceptable? What can MFIs do to move government in a direction that is optimal?
Transparency and Client Protection:
-Transparency mostly meant financial transparency
- Example of when ACCION was asked how they recalculate repayment, they answered that they calculate however they to to get to 98%! Meaning we need to measure portfolio quality in standard terms, and define transparency in that way
-Client Protection: How do we get to the point where the whole industry can adopt a common framework, a grand bargain of the sector of what everyone is going to do in terms of client protection, it is hard only if some do it. The key pillar used to be fair and transparent pricing, fair came off of the agenda, India’s progress in pricing side transparency and bringing down costs, make it a leader that can bring the fair back into the discussion.
3. Vikram Akula, Founder of SKS
-SKS serves 42 lakh clients spread across 20 states, 322 districts
- Reached 2.4 crore clients as a sector
-Fundamental flaw/ fatal error: for all the success, are reaching very few % of need in country…have reached only a fraction of the market
-Meeting 10-20% of credit needs of the poor, even less on other services like savings, insurance, etc.
-“Financial Apartheid”…only some can get loans, so many cannot
-Not only need credit for running businesses, but for housing, education, consumption also needed
-Insurance more important to poor than credit (so many risks of drought, crop failure, external shocks)
-SKS believes that the best way to deliver is through vibrant competition, poor are no different than middle or upper class- they deserve choice!!!
-Competition will drop interest rates through efficiency
-Unintended consequences of competition, how do we do this vibrant competition in the right way, so we are not overindebting a client?
-Need to follow our own policies and processes (in respective to each individual MFI)
-Need to have competition that protects the poor
-Needs to be institutionalized and supported in ways that it is not now
-Financial literacy and transparency is the way to protect the poor
-Institutionalize microfinance in a way that truly benefits the poor
-Expand economic freedom for those that have truly been left behind
-Challenge of savings is creating a sector that is allowed to save the money of poor people
4. Mathew Titus, Executive Director of Sa-Dhan
-Financial inclusion not only focuses on the poor, but anyone excluded…how do you get good policy in the field?
-Success not only dependent on what do, but on the environment in which operate
-Tension is inherent in the services microfinance provides and the challenges it faces
-The nature of financial services tends to exclude rather than include people
-Danger in not saturating market, or danger of going through buss cycle rather than boom cycle
-Importance of range of financial services; credit on one side, insurance and savings on the other
-Poor households create assets for themselves outside the financial sector
-Constantly in business of converting cash into livestock, gold, land- things they can relate to, liquidate in time of crisis and use to address needs of poor households
-Participation in financial services depends on money remittance issues
-Require 6 months in one part of country, 6 months in another- if want to get at poor people on the move need to think differently
-Problems of repayment linked to cycle of export and commodity markets and their downturns
-Someone else is in the middle of deciding whether a client will get a loan, the client is only in the receiving end
-Client cycle is not only about transaction but also other parts
-Productive over a long period of time? Sustainable above one year cycle?
-Important to recognize that we don’t understand everything about loans even in the middle class. So how can we expect people without education to understand, look from demand side of clients…challenges of illiteracy, of dispersed populations, language issues, skill building issues, team issues….haven’t overcome these challenges yet but is a central piece of how we are going to expand the market
-Service can only grow if looks at clients as fundamentally part of success of service
-Only then MF sector has certain values that determines the way in which it proceeds and the way in which it grows
-How ensure no dilution in terms of who we are and who we present ourselves to be?