Social Rating in Mali Namibia and Algeria 
Monday, October 6, 2008, 10:19 AM - The Solidarity Economy & Microfinance
painting- Adelino Timoteo

FIDES is a microfinance organization (and investor) that supports rural microfinance organizations in Africa and Eastern Europe. While many microfinance programs consider aspects of poverty they rarely look at the households in terms of their coping and asset strategies. How families use animals, jewelry as forms of savings and insurance. How they use social networks and groups. I worked with FIDES to develop a monitoring system that tracks these areas combining the quantitative data that donors & investors demand with qualitative methods for capturing the messiness of coping and asset building strategies.

Three types of analyses are used:

I. Client Poverty Measurement e.g. As of Dec. 2008 22% of Mali clients were likely below the poverty line. This data is generated through a 5 minute survey that uses the same questions from the national household expense surveys.

II. Client Profiling e.g. 42% of female Namibian clients have business assets in their own name. This data describes (in %s) and segments (in quartiles or sections) the client base in terms of social data: gender, poverty, rurality and the nature of their enterprise. Key portfolio data is also included that is relevant to social: retention rate; distribution of savings balances and distribution of loans disbursed as % GNI p.c. This data provides a springboard for further analysis.

III. In-Depth Analysis. Here aspects of household strategies, gender issues are explored in more depth. Due to lack of inheritance property rights, for example, widowhood or divorce can leave women in Namibia and Algeria and their children destitute despite income wealth and position. So we track women's personal assets as well.

In Mali, based on poverty segmentation of the client base, coping and asset-building strategies were explored for different households according to risk profile as the basis for a drought insurance scheme. For a recent paper on the process or for copies of the score-cards for FIDES’ Social Performance Monitoring system contact:

For a copy of a paper on this social performance system presented at the European Conference on Microfinance (Brussels) go to the link below and search "Complex Enough to Capture: Simple Enough to Use: Early Lessons from FIDES' Cross-Country Social Performance System"

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Good governance for Member-Owned Institutions in Remote Rural Areas 
Friday, August 8, 2008, 03:28 PM - MF Publications

Savings and Spider Plants: What is good governance for Member-Owned Institutions in Remote Rural Areas? This is a thematic cross-cutting article based on seven institutional case-studies in Africa, Asia and Latin America. This article is part of a larger FORD Foundation-funded, Coady Institute study on member-owned institutions. For access to the other articles go to the related link.

Key findings:

• Members are more likely to safeguard money that they perceive as their own rather than as external capital.

• Member-ownership did not guarantee trust or patronage if services were not competitive or flexible enough.

• Small autonomous groups and larger MOIs seem to have the strongest forms of governance and accountability. Small associations keep transactions simple and use witness-style governance, local norms for organizing and, often, oral bookkeeping. Complex reporting requirements can threaten groups’ ability to keep their own records or to supervise others to do so.

• Large sophisticated networks or cooperatives are able to effectively combine internal controls with external regulation and supervision including audits. Their success depended on finding creative ways to decentralize decision-making and member input.

• There is a trade-off between product diversity and member ownership. The complexity of products affects the complexity of governance and members’ ability to oversee.

• Being localized and networked at the same time proves quite challenging for governance because there are two overlapping governance structures. This model can be the worst of two worlds lacking the flexibility of localized as well as the standardization required to control risks.

• Village-based models that use local governance structures are an effective way to ensure wide outreach and local ownership. However, it is more likely that local power structures are making use of the MOI than the other way around. How these governance structures can be held accountable is the key to this model.

Click on related link for a copy of the paper.

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Kixi-Credito Angola and Financial Literacy 
Friday, July 11, 2008, 06:21 PM - The Solidarity Economy & Microfinance

Development Workshop pioneered microfinance in Angola in 1996, growing from it’s earlier Women Enterprise Development programme and a series of research studies on the informal economy and survival strategies in the market place. DW scaled up its solidarity group lending practice from 1999 as the Sustainable Livelihoods Project (SLP) within the framework of DFID. In 2002, with USAID support and later the Mary Tidlund Trust, abranch of SLP was opened in Huambo project. By 2004 SLP has made loans of about $1.9 million to micro-entrepreneurs of which 2/3 are women. By the end of the year the SLP programme had grown to the largest in the country with 3,674 clients in Luanda and another 1007 in Huambo.

DW transformed SLP into a commercial MFI under new Angolan legislation. The new MFI -- KixiCredito -- was launched at a national micro-credit conference in November 2004. KixiCredito has overcome significant challenges regarding the post-war environment, displaced families, control of PAR and limiting its operating expenses. It had considerable portfolio growth in 2005 and is now fully self-sustaining. It has also launched new products including an innovative housing loan.

Through the Coady International Institute, I worked with KixiCredito staff to develop financial literacy training for clients. Financial literacy helps the households to sort through what can be a maze of financial services, understand how to choose and make best use of them and plan for the future. This includes helping to build an awareness about advocacy and policy issues that affect the self-employed. I am happy to share these training materials in Portuguese. ... p?ett=1801

A Gold Thread: Building Assets and Courage among SEWA's Microfinance Members 
Tuesday, July 8, 2008, 03:35 PM - MF Publications

This article talks about the links between the "practical" livelihood interests of women and the broader "strategic" interests such as power shifts and policy change. There are necessary links between the two that I have seen demonstrated through the work at Self Employed Women's Association Bank and SEWA Association.

This women's association/union for the self-employed is comprised of over 800,000 women in India. It is an inspiring story of organizing, microfinance and advocacy through the visionary leadership of founder Ela Bhatt.

Through the Coady Institute, I worked with SEWA Bank on developing a training program for financial literacy of members, management of self help groups and strategic planning for district-level associations. These training materials are also available in English and Gujurati upon request.

For a copy of the article please contact me.

Remote Rural Finance and Selfish Genes 
Tuesday, July 8, 2008, 03:21 PM - MF Publications
Selfish genes is a good metaphor for small, informal financial associations. At their best, they are self-replicating and adaptive. This was a paper that I wrote for the Microcredit Summit in Halifax November 2006 based on our early work with the FORD Foundation study on remote, rural member-owned finance. I argue that there are different routes to overcoming the limitations of being small. Achieving scale is one route but there are others including self-replication of associations or linkages with other institutions (that allow them to stay small and flexible).
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