Introduction To Microcredit And Microfinance

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A quick look at the history of microcredit/microfinance and my internship with the First MicroBank in Pemba, Mozambique.

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  • Put in the story of microcredit being popularized by Yunus here.
  • Ask if anyone knows what either microcredit or microfinance means. If someone does, ask what the difference between microcredit and microfinance is.Move onto the definition and read it out loud.Mention why they traditionally lack “access”:CollateralLower incomeSocial statusExplain the benefits of microcredit.
  • Put in the story of microcredit being popularized by Yunus here: In 1976, when Yunus was a professor at a university in Bangladesh, he visited a number of households in a local village. During his conversations with some of the women who were making bamboo furniture, he discovered that in order to purchase the bamboo, the women had to borrower from a local money lender that was charging a very high interest rate. He decided to loan the women (there were 42 of them) a total of USD 27. The women repaid him and Yunus made 2 cents of interest on each of the loans.After this encounter, Yunus decided to start the Grameen Bank (meaning “Village” Bank) which has now grown to become one of the largest microfinance institutions in the world.Grameen bank has provided $3.8 billion to 2.4 million families in rural Bangladesh.
  • In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below."
  • Explain the difference between microcredit and microfinance here.
  • Background on the AKFC:For more than 25 years, Aga Khan Foundation Canada has supported sustainable improvements in the quality of life of poor, marginalized communities in Asia and Africa. The organization is non denominational and is dedicated to improving living conditions and opportunities for the poor, without regard to their faith, origin or gender.
  • Pemba is a coastal town located in northern Mozambique with a population of approximately 150,000-200,000. Quick facts: The province of Cabo Delgado is one of the poorest of the provinces in Mozambique with 63% living below the poverty line (that’s less than $1 a day). The Gross National Income per capital is $75. The life expectancy at birth is approximately 38 years old.
  • As an intern, I was a “jack of all trades” and had an opportunity to assist with a variety of projects.
  • Introduction To Microcredit And Microfinance

    1. 1. An Introduction to Microcredit and Microfinance<br />Presentation to the Rotary Club of Oakville<br />Peter Nakamura<br />June 17, 2009<br />
    2. 2. Agenda<br />Introduction<br />What is microcredit and microfinance?<br />Microfinance today<br />My experience in Mozambique<br />How can you get involved?<br />Q&A<br />
    3. 3. Introduction<br />Born and raised in Kobe, Japan<br />Moved to Oakville, Ontario in 1999<br />Graduated from Appleby College in 2005<br />Graduated from Queen’s University with a degree in business in 2009<br />
    4. 4. Whatismicrocredit?<br />“<br />The extension of small loans to low-income clients who traditionally lack access to banking.<br />”<br />
    5. 5. Muhammad Yunus<br />
    6. 6. Muhammad Yunus<br />Mohammad Yunus receiving the Nobel Peace Prize in 2006. <br />
    7. 7. Benefits of microcredit<br />What are the benefits?<br />Inclusion of the poor into the financial system.<br />Access to loans can open up numerous opportunities such as starting a business, improving housing conditions, or purchasing an asset.<br />Lower interest rates compared to local moneylenders.<br />Dignity and self respect of employment.<br />Goes beyond the traditional concept of development aid as a “handout”.<br />Opportunity for education and community development.<br />
    8. 8. Microcredit v. Microfinance<br />Microfinance<br /><ul><li> Savings
    9. 9. Money transfer services
    10. 10. Insurance</li></ul>Microcredit<br />(i.e. Loans)<br />
    11. 11. Microfinance today<br />The industry has been growing rapidly with $25 billion currently at work in microfinance loans.<br />Microfinance Institutions (MFIs) are now offering a diverse array of products from savings to insurance.<br />Improved oversight and transparency.<br />Greater focus on improving the customer experience.<br />
    12. 12. Fellowship in Mozambique<br />Selected as a International Microfinance and Microenterprise Fellow by the Aga Khan Foundation Canada in May, 2009.<br />After a month-long training seminar, was placed in Pemba, Mozambique with the First Microcredit Programme for an 8-month internship.<br />
    13. 13. Mozambique<br />
    14. 14. Pemba, Mozambique<br />
    15. 15. Pemba, Mozambique<br />
    16. 16. The First MicroBank – Mozambique<br />
    17. 17. Projects and responsibilities<br />Developing a loan officer training program.<br />Assisting with the transformation of the microcredit program into an official bank.<br />Reviewing and suggesting improvements for various processes within the bank.<br />Setting up and managing the bank’s network and database.<br />Helping to prepare the bank’s annual business plan.<br />
    18. 18. Loan officer training<br />
    19. 19. My colleagues<br />
    20. 20. Our clients<br />
    21. 21. Our clients<br />
    22. 22. Our clients<br />
    23. 23. How can you get involved?<br />
    24. 24. How can you get involved?<br />Learn more!<br />Consultative Group to Assist the Poor<br /> (www.cgap.org) <br />Microfinance Gateway<br /> (www.microfinancegateway.org)<br />miX Market (Microfinance Information Exchange)<br /> (www.mixmarket.org) <br />
    25. 25. How can you get involved?<br />Donate!<br />ACCION<br /> (www.accion.org) <br />FINCA<br /> (www.finca.org)<br />Aga Khan Agency for Microfinance<br /> (www.akdn.org/akam.asp)<br />BRAC<br /> (www.brac.net) <br />
    26. 26. www.kiva.org<br />
    27. 27. Thank you!Any questions?<br />Peter Nakamura<br />peter.nakamura@gmail.com<br />905.849.0856<br />

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