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Microfinance: Giving a Chance to the Working Poor


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Microfinance is one of the most powerful vehicles to help the working poor create jobs, opportunity, and to build a sustainable lifestyle. Jason Duff presents for Opportunity International about Microfinance, Microlending, and other tools helping the words entrepreneurs.

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Microfinance: Giving a Chance to the Working Poor

  1. 1. Presented By: <br /> Jason Duff<br />
  2. 2. The need<br /><ul><li> over 3 billion people – almost half the world’s population – live on less than $2.50 a day (
  3. 3. 1 billion children live in poverty (this means every second child)(
  4. 4. 25,000 people die daily from starvation and related causes; of these, 90% died where food was available but not affordable (UNICEF)</li></ul>Two young boys in Ghana<br />2<br />
  5. 5. the contribution disparity<br />The contribution disparity<br />In millions<br />Source: Giving USA <br />3<br />
  6. 6. The wealth disparity<br />The combined assets of the world’s wealthiest 3 people…<br />…equals the total annual income of the poorest 48 nations.<br />Source: ChristianAid<br />4<br />
  7. 7. The untapped market<br />What is microfinance?<br />Microfinance is a movement that envisions “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.” (-Robert Peck Christen, Richard Rosenberg & VeenaJayadeva; CGAP Occasional Paper, July 2004, pp. 2-3.)<br />Microfinance could benefit 500 million families worldwide, but less than 10% currently have access to microfinance.<br />Malawian farmer JakobChikaiko and his family<br />5<br />
  8. 8. Basic Breakdown<br /><ul><li> Individuals make donations to NGO’s (non-governmental organizations) like Opportunity International
  9. 9. These NGO’s turnaround and fund various local banks in developing microfinance countries
  10. 10. These local banks then hand out loans to ‘trust groups’ or individuals
  11. 11. Individuals apply these loans towards their businesses to create products
  12. 12. Products are then sold to consumers
  13. 13. The income generated through sales to consumers is used for several things:</li></ul>Pay Back of: Interest<br /> Loan Capital<br /> Savings<br />Other expenses: <br /> Home Improvements<br /> Education<br /> Medicine<br /> Food<br />Tanzania Insight Trip, September 2009<br />6<br />
  14. 14. Source: Modified by: Alex Kerr<br />
  15. 15. Believe in our clients<br />With microfinance, our clients, like Clementine Uzabakiriho, have the opportunity to eliminate poverty in their lives by building sustainable businesses.<br />When microentrepreneurs are included in the regular financial arena, self-sufficiency flourishes while new wealth is created.<br />Clementine Uzabakiriho from Rwanda with her family<br />8<br />
  16. 16. Opportunity’s Products<br />we provide which results in: <br />loans increased income<br />savings security for the future<br />insurance protection from disaster <br />training business skills and personal growth<br />9<br />
  17. 17. Loans<br />Loans are the beginning of monumental changes in the lives of our clients.<br />When clients build businesses with Opportunity loans, they often set into motion monumental changes. <br />• Family income rises. <br />• Children are well fed and go to school. <br />• Homes are improved. <br />• Women gain status. <br />For clients around the globe, these transformations take place every day – beginning with loans as small as $60.<br />Client SugeyArmenteo from Colombia<br />10<br />
  18. 18. Loans work with Trust Groups<br />Most of Opportunity’s loans are made through Trust Groups:<br /><ul><li> 10 to 30 people, mostly women, who guarantee each other’s loans
  19. 19. loan amounts as low as $60
  20. 20. short terms with weekly repayments
  21. 21. training by loan officers that provides holistic transformation
  22. 22. training topics that are tailored to the clients’ needs </li></ul>Dorothy Kanjautsowith her Trust Group, named Chilambo, in Malawi<br />11<br />
  23. 23. Savings<br />Opportunity’s regulated banks offer our clients a safe place to save.<br />Historically, people living in poverty in most countries have been excluded from traditional banks. Savings were kept in and around homes, or held by collectors who charged service fees.<br />Grace used to keep her savings in her home. Now she and her business partner keep nearly $2,000 in an interest-bearing account with Opportunity.<br />Savings client Grace Msowoya from Malawi<br />12<br />
  24. 24. Insurance<br />Insurance offers protection against the many risks faced by those living in poverty.<br />In 2002, Opportunity International began offering microinsurance that provides protection against the many risks faced by those living in poverty. <br />Innovative products cover policyholders with crop, loan, health, life and property insurance – offering clients a safety net when an unexpected hardship or disaster occurs. <br />Weather-indexed crop insurance not only contributes to increased incomes, but helps feed families. <br />Henry Kangwelema picks up seed to bring to his farm in Malawi<br />13<br />
  25. 25. Training<br />Training sessions develop business skills and enhance personal growth. <br />In countries where many people have low literacy and are unfamiliar with banking services, access to microfinance may not be enough to help them lift themselves out of poverty. Clients must also learn basic skills related to earning, spending, budgeting and borrowing money. <br /><ul><li> financial planning and control
  26. 26. teamwork
  27. 27. problem solving
  28. 28. health wellness
  29. 29. communication and more…</li></ul>TamaiaNyasulu, a loan officer in Malawi, training one of her Trust Groups<br />14<br />
  30. 30. Opportunity’s Strategies<br />Opportunity’s four strategies:<br /><ul><li>technology
  31. 31. bank building
  32. 32. rural outreach
  33. 33. local staffing</li></ul>A bank card used at Opportunity International Bank of Malawi (OIBM)<br />Customers at Opportunity International Bank of Malawi (OIBM)<br />15<br />
  34. 34. Technology<br />One of Opportunity’s mobile banks in Malawi<br />A critical tool in the fight against poverty, advanced technology allows Opportunity to bring services to the most marginalized and remote clients.<br />A client in Malawi with her bank card<br />16<br />
  35. 35. Rural Outreach<br />Through innovative technologies and an expanding network of banks, Opportunity is addressing the financial needs of isolated rural communities. <br />Fifty new branches are in development worldwide, bringing economic opportunity to those would not have access without Opportunity. <br />Before Opportunity’s mobile bank came to his small town, Lucas was among the millions of “unbanked”.<br />Rural loan client Lucas Chingore from Mozambique<br />17<br />
  36. 36. Giving that multiplies<br />Gifts are leveraged, dollars are recycled, and communities prosper<br />18<br />
  37. 37. What we can do<br />Our Responsibility and How We Can Make an Impact<br />Young Ambassadors <br />for Opportunity<br />Women’s Opportunity <br />Networks<br />OptINnow<br />Tanzania Insight Trip, September 2009<br />19<br />
  38. 38. Young Ambassadors for Opportunity<br />Young Ambassadors for Opportunity (YAO) is a network of young professionals (ages 20-35) who are committed to eradicating global poverty through the sustainable solution of microfinance. <br />By creating chapters in major metropolitan areas, YAO seeks to foster a grassroots approach which gives members the opportunity to employ their skills and resources in their Ambassador efforts.<br />20<br />
  39. 39. Women’s Opportunity Network<br />The Women’s Opportunity Network (WON) is a powerful network of women supporters and staff committed to helping Opportunity International end global poverty faster. <br />The mission of WON is to invest in the lives of women around the world, giving them access to financial services and training that transform their lives, their children’s lives and their communities. <br />21<br />
  40. 40. OptINnow<br />OptINnow™ is a new initiative from Opportunity International that enables you to &quot;opt in&quot; and become part of a global movement to transform the lives of entrepreneurs throughout the developing world – right from your computer. <br />22<br />