DRAFT [September 8, 2005] Poverty Outreach Working Group

Microenterprise Development Services for Very Poor People: Promising Approaches from the Field
INTRODUCTION In 2000, the U.S. Congress passed the Microenterprise for Self-Reliance Act,1 which mandates that one-half of all U.S. Agency for International Development (USAID) microenterprise funds must benefit very poor people. The legislation defines the “very poor” as people living on less than US$1 a day2 or those among the bottom 50 percent of people living below a specific country's poverty line. This paper uses the same definition of “very poor,” which essentially implies extreme poverty. The law also requires USAID to develop and certify tools for assessing the poverty level of microenterprise beneficiaries so that the agency can determine whether or not its development partners are achieving the mandate of assisting the very poor. The U.S. legislation was advanced by pro-poor microfinance advocates who sought transparency concerning who the microfinance industry is really reaching. These advocates, and certain microfinance practitioners, viewed the legislation as necessary because most microenterprise development (MED) practitioners were not reaching very poor people, despite mission statements and promotional materials that identified these people as their target clients. The reality is that many microfinance organizations have no idea of who they are reaching. Most microfinance clients today fall in a band around the poverty line; the extreme poor are rarely reached. It it thus crucial that policymakers, donors and development practitioners have reliable information about the poverty levels of the beneficiaries of development services in order to steer investments and programs toward targeted population segments they want to reach. The current emphasis of the microfinance industry is on scaling up microfinance services to reach poor people on a mass scale. Given this background, the U.S. legislation was developed as a safety measure to keep resources focused on very poor people, a segment of the population that tends to be left behind in the quest for scale. Mainstream microfinance is beginning to be integrated into the formal financial system and the
1

Microenterprise for Self-Reliance Act of 2000, Public Law number, Cardinal number Cong., cardinal number sess. (date session began). The act was amended in 2003 and 2004. The Amendment to the Microenterprise for Self Reliance and International Corruption Act in 2003 requires that 50 percent of all USAID microenterprise resources benefit the very poor. The legislation was further amended in 2004 (Microenterprise Results and Accountability Act of 2004). 2 Equal to US$1.08 per day in purchasing power parity (PPP) dollars at 1993 prices.

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corresponding trend towards commercialization and financial sustainablility is driving microfinance operations. As commercial banks downscale to serve large portions of the microfinance market, the hope is that nongovernmental organizations (NGOs) will continue to innovate and create better ways to reach and serve very poor people, who can later be integrated into mainstream microfinance and the formal financial system. Although many practitioners and implementers opposed the U.S. legislation as restrictive and costly, it has successfully brought the issue of knowing who your client is, and how best to serve her or him to the forefront of microfinance discussions. Many organizations have created poverty assessment tools and conducted client analyses over the last two years and have come to realize that they are not even close to reaching their intended clients. The legislation has prompted many practitioners to think beyond poverty assessment and focus on the questions: Who is the client? How can we better reach and serve intended clients? If microfinance organizations better understand the needs and wants of their clients (in any income bracket), they will be more successful in designing appropriate products and services and retaining clients. And thus we come to the question: can microfinance reach very poor people? The authors of this paper believe the answer is yes, but recognize that doing so is not easy. The purpose of this paper is to highlight promising approaches to reaching and serving very poor people with financial and non-financial services. Such programs do not look like the majority of microfinance programs and are unlikely to achieve operational sustainability as quickly as mainstream microfinance institutions now achieve it. Nevertheless, there has been great innovation in the developmentment of low-cost delivery mechanisms, products and services appropriate for very poor people. This paper will examine some of the common elements that make such programs successful and recommend areas for further research. PART I. BACKGROUND Definition and status of poverty Traditionally, poverty has been conceptualized in terms of income, with the poor defined as those living below a given income level. Poverty can be also understood as pronounced deprivation in well-being.3 However, poverty is increasingly recognized as a multidimensional phenomenon that encompasses not simply low income, but also lack of assets, skills, resources, opportunities, services and the power or voice to influence decisions that affect an individual’s daily life.4 Poverty also frequently overlaps with and reinforces other types of social exclusion, such as those based on race, gender or ethnicity.5 This more comprehensive understanding of poverty better captures how the poor themselves define their situation.6
3 4

World Bank, World Development Report 2000/2001, page number? World Health Organization (WHO), Reaching the Poor, 2004, page number? 5 Ibid. 6 World Bank, World Development Report 2000/2001, page number?; and WHO, Reaching the Poor, 2004, page number?

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The complex and multidimensional nature of poverty makes it a challenge to measure. For the sake of simplicity, an income-based measure of poverty is used most widely, as it permits comparisons between regions and countries. The World Bank, for example, defines extreme poverty as an income of US$1 a day, seen as the minimum amount necessary for survival. To calculate extreme poverty in an individual country, the dollara-day measure is converted to local currency using the purchasing power parity (PPP) exchange rate, based on relative prices of consumption goods in each country. Based on such calculations, the World Bank estimated that 1.2 billion people were living in extreme poverty in 2003, roughly 23.3 percent of the population of all low- and middleincome countries.7 While the definition of very poor people used in this paper is based on income, the programs explored in the following sections address many aspects of extreme poverty, not income levels alone.
Box 1. Acronyms used in this paper ARC ASA BRAC CFPR/TUP CRS FFH IGVGD ILO MED MFI NABARD American Refugee Committee Challenging the Frontiers of Poverty Reduction/ Targeting the Extreme Poor, a BRAC program Catholic Relief Services Freedom From Hunger Income Generation for Vulnerable Groups Development, a BRAC program International Labour Organization microenterprise development microfinance institution National Bank for Agriculture and Rural Development - India’s apex bank for rural development

NGO
PACT PPP SEF SHG TCP TUP USAID WHO

nongovernmental organization
purchasing power parity Small Enterprise Foundation self-help group Tshomisano Credit Program, and SEF program Trickle Up Program U.S. Agency for International Development World Health Organization

Role of microfinance in serving very poor people By providing small loans and savings facilities to people who are excluded from commercial financial services, microfinance has become a strategy for reducing poverty. Access to credit and deposit services is a way to provide the poor opportunities to take an active role in their respective economies through entrepreneurship, building income, bargaining power and social empowerment among poor women and men.
7

World Bank, Sustainable Development, 2003, page number?

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Although most MFIs aim to reach poor people, it has become increasingly apparent that they rarely serve very poor people. Most MFIs reach the “upper poor” in much greater numbers than the “very poor.”8 The extent to which microfinance programs are able to reach the poorest of the poor remains an open debate.9 In fact, there is no general agreement that, in order to have a real impact on poverty, microfinance should expressly target very poor people. Certain practitioners argue that it is important to have permanent operations based on a wider geographic outreach, with quality financial products delivered by competitive, efficient microfinance institutions. This approach to breadth of outreach is based on a long-term view of microfinance services and the belief that, in many cases, there is a limit to depth of outreach. This approach thus accepts a trade-off between sustainability and reaching very poor people. Other practitioners argue that microfinance should make reaching very poor people a priority because credit is a human right in the fight against economic exclusion. This approach requires narrow targeting of very poor people. Both breadth and depth of services are very important for the microfinance industry. What has become apparent, however, is that very poor people are unlikely to be served by microfinance programs unless these programs are intentionally designed to reach them. In order to design products and services for this target market, it is important to better understand the factors that contribute to the dire conditions of very poor people. Challenges in serving very poor people The challenges of reaching very poor people with microfinance services include physical and economic barriers, lack of awareness, self-selection and self-exclusion, among others. Physical barriers. In many settings, very poor people live in remote rural areas that have no access to financial services. Reaching very poor people in remote rural areas means higher transactions costs for MFIs. Such areas are often characterized by poor infrastructure, relatively low population density, low levels of literacy and relatively undiversified economies. Many rural economic activities, moreover, have low profitability and/or are high in risk. Most outlets of microfinance programs in rural areas also lack trained professionals, who are not properly supervised by head office. Lack of awareness. Poverty limits educational opportunities and access to information. [note: need to expand this point or drop, its fairly obvious] Economic barriers. Many microfinance programs use group-lending methodology clients to attend a weekly or monthly meeting to access credit. The cost of transportation to these meetings, together with the opportunity cost of attendance (i.e., lost income due to time away from work) can present a barrier for very poor people to participate in microfinance programs. Alternatively, many individual lending or savings programs require clients to
8 9

Hickson, Reaching Extreme Poverty, 1999, page or chapter number. See, for example, Aguilar, Is Micro-Finance Reaching the Poor?, 1999.

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save a certain amount before they can access loans, which often excludes the participation of very poor people. Self-selection. It is well known that solidarity groups in Grameen-style microfinance programs and village banks reject very poor members because they might be unable to repay their loans and would thus jeopardize the creditworthiness of the entire group. Self-exclusion. Even when very poor people are not actively excluded by a community, they often opt out of community-related projects because they are intimidated, believing that the services offered by such projects is not suited to their needs.10 Sector risk. Very poor people are often dependent on subsistence farming as their main source of livelihood. Given the high risks of agricultural activities and the unique requirements of financing such activities (payback of loans, for instance, can only take place after the production period, which often lasts several months ), MFIs usually shy away from lending to this sector. Impact of chronic poverty. Living in absolute poverty for a prolonged time strongly affects a person’s dignity and hope for the future, as well as his or her ability to take initiative and overcome stigma. Moreover, poor health (especially chronic diseases such as malaria and HIV/AIDS) presents a major obstacle for conducting successful microenterprise activities. PART II. FINDINGS OF SELECTED INNOVATIVE APPROACHES Overview of Existing Poverty-focused Microfinance Approaches Increasing numbers of microfinance practitioners are stressing the importance of offering a range of flexible quality financial services to meet the needs of the poor.11 Despite high risk, high transaction costs and other challenges, several microfinance organizations, NGOs and multilateral agencies are already successfully providing microfinance services to very poor people. Most microfinance programs, however, have a long way to go to find ways of reaching extremely poor households. To date, there has been inadequate exploration of financial products and low-cost service delivery mechanisms that would allow MFIs to serve extremely poor households without compromising sustainability objectives.12 This section of the paper documents successful experiences in reaching very poor people and recommends promising approaches for further exploration. The findings discussed here are based on a number of case studies (see table 1). While these examples are only a small sample of poverty-focused initiatives, they represent a broad spectrum of approaches currently being employed by different actors in the microfinance field. Detailed case studies can be found in appendix 1.

10 11

SEF Paper LOOK UP Ibid. 12 Hickson, Reaching Extreme Poverty, 1999, page number?

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Table 1 provides a snapshot of key features of selected microfinance programs that explicitly target very poor people. It should be emphasized that poverty levels of clients in programs listed in table 1 are measured and reported by the organizations themselves, not by means of a universal and reasonably reliable poverty measurement tool (whether based on income or expenditures), such as that currently being tested by USAID. On the other hand, several factors (e.g., targeting methodology and the selection of certain vulnerable groups, such as bonded laborers, dalits and people living with HIV/AIDS) suggest that most of these initiatives do indeed target very poor people. In the future, it might be worthwhile to measure the poverty levels of clients served by these programs and to analyze how effectively and efficiently these programs serve very poor people, if they actually do. The emphasis of such research should be on identifying the factors that contribute to program success. Table 1. Examples of serving very poor people through microenterprise development programs
Organization/ Project Name ARC, West Africa Three Step IG Program ASA, India Grama Vidiyal Microcredit Program Poor and very poor women, Dalits PWR and Housing Index Group-based microcredit (Grameen replication) Savings, pension and insurance products Very poor refugees, returnees Vulnerability assessment Grants followed by loans to solidarity hroups Target Group Targeting Method Financial Service Non-Financial Services

- Business skill development - Ongoing business support - Refugee relief services (nutrition, health, education) - Business development services - Gender sensitization - Capacity building - Advocacy and local governance - Food grain assistance - Skill training in income generating activities - Healthcare services - Social empowerment - Education: health, nutrition - Self-confidence - Enterprise and financial management - Social empowerment - Functional literacy - Healthcare services - Skill training in income generating activities - Business skill development - Ongoing business support

BRAC, Bangladesh Very poor women 1. IGVGD 2. CFPR/TUP FFH, Africa, Asia, Latin America Village Banking ILO, South Asia South Asian program against debt bondage SEF, South Africa Very poor Women Tshomisano Credit Program Participatory Wealth Ranking (PWR) Group-based microcredit (Grameen replication) Very poor bonded laborers Poverty indicators and vulnerability to bondage Group-based savings and credit Active targeting based on poverty indicators 1. Individual loans 2. Business asset grants

Poor and very poor women

Geographic targeting

Linkages with credit unions and rural banks Group-based lending (village banking)

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TUP, Cambodia W.O.M.E.N. PACT, OXFAM, FFH, CARE, CRS, NABARD Asia and Africa Very poor people with HIV/AIDS Active targeting based on poverty indicators Geographic targeting Individual business seed capital grants Savings match Savings-led MF Savings and lending Selfhelp groups Bank/MFI credit to SHGs

Poor and very poor women

- Business skill development Learning conversations - Healthcare services - Health and sanitation awareness - Basic literacy - Business skill development Learning conversations - Social Empowerment - Gender sensitization

Types of organizations The examples of successful downreach highlighted in table 1 include both MFIs that aim for financial sustainability, as well as multidisciplinary organizations other than MFIs. The two MFIs featured in this paper, Small Enterprise Foundation (SEF) in South Africa and spell out (ASA) in India, use a Grameen model to provide loans to solidarity groups of poor and very poor women. [GAAMAA, if you have data on financial sustainability for these mfis, please put the information here] In order to more effectively reach this target group, SEF established a separate program, the Tshomisano Credit Program (TCP). This program is designed to reach people living in the bottom 30 percent below the national poverty line. Freedom From Hunger (FFH) uses another group-based lending approach—village banking—which it offers as a new product line to existing rural banks and credit unions, enabling them to reach poorer clients. What sets these three cases apart from “mainstream” microfinance providers is that each program offers non-financial services in addition to its financial products. These additional services include education, skill training and confidence building. The remaining case studies relate to organizations and projects that typically share a broader mission of poverty alleviation and offer services that include microfinance or microenterprise development among many other activities. Since these organizations use an integrated approach to poverty alleviation—using microfinance as just one of a package of services—their activities are less bound by the rigid financial sustainability criteria that govern most MFIs. Spell out (BRAC), for example, a large, multifaceted development organization in Bangladesh, operates its broad rural credit program in addition to two microenterprise programs that specifically target very poor people. Its Income Generation for Vulnerable Groups Development (IGVGD) program provides food subsidies and intensive skills training to vulnerable women, as well as a standard package of microcredit, healthcare and social services. BRAC’s more recent program, Challenging the Frontiers of Poverty Reduction / Targeting the Extreme Poor (CFPR/TUP), abandons loans altogether and offers enterprise asset grants instead to the same target group. Trickle Up Program (TUP), an international development organization, also assists very poor people with grants, in this case, to start or expand microenterprise activities. The organization also offers business training, relying on local partner agencies to provide other development services, such as education, healthcare and social empowerment.

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The South Asian Project against Debt Bondage of the International Labour Organization (ILO) and the American Refugee Committee’s (ARC) programs in West Africa both target uniquely vulnerable groups: bonded laborers (ILO) and refugees the Mano River Basin (ARC). These programs also employ a combination of financial and non-financial services to lift extremely vulnerable people out of poverty through microenterpreneurial activities. Finally, many organizations worldwide increasingly endorse savings (rather than credit-led microfinance) and the formation of small community groups to promote self-managed microfinance services by the poor and very poor, especially in rural areas. These small savings and lending groups, sometimes known as self-help groups (SHGs), also serve as an “entry point” for non-financial poverty alleviation programs. To target or not to target Research studies have shown that most poor people have benefited from microfinance programs, but that narrow targeting is not necessarily a condition for reaching very poor people. Some large-scale, non-targeted schemes have, in fact, proven capable of reaching very poor people.13 Nevertheless, most initiatives that successfully serve very poor people actively target this segment of the population. At minimum, most such programs tend to concentrate their programs in geographic areas where there is a high incidence of poverty. FFH’s introduction of village banking to existing credit unions and rural banks, as well as most savings-led microfinance initiatives, reach very poor people simply by working in poor rural areas. Rather than exclusively reaching very poor people, geographic poverty targeting, which is also employed by ASA, tends to reach both poor and very poor clients. Other initiatives utilize a more meticulous targeting method. SEF, for instance, introduced a visual poverty indicator test to identify very poor people, after it realized that its original microcredit program did not effectively include such customers. SEF went on to create participatory wealth ranking (PWR), a poverty assessment technique that involves community members in identifying the poorest among them. BRAC went through a similar evolution. Its IGVGD program first used a rather passive targeting method, extending services to food-insecure women who were selected by local elected representatives. Its CFPR/TUP program later used geographic targeting, PWR and surveys to identify the extreme poor. Trickle Up Program employs a poverty assessment tool in the form of a five-question survey, which scores the poverty level of potential program participants according to locally determined criteria. In addition to using this tool, its Cambodian partner agency, W.O.M.E.N, works exclusively with people living with HIV/AIDS in the slums of the capital Phnom Penh, a group that is by its very nature extremely vulnerable. Similarly, ILO (South Asia) and ARC (West Africa) target both very vulnerable groups of people and use active targeting tools to ensure that the poorest of the poor are included in their programs.

13

Hickson, Reaching Extreme Poverty, 1999, page number?Ibid.

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Products and services When it comes to providing very poor people with relevant and useful services, designing the right product is as important as with any other market segment for the microfinance industry. The case studies show a wide variety of financial services available to very poor people. In some cases, the same products are offered to poor and very poor clients alike. In such cases, an active targeting strategy is often necessary, as SEF learned from experience: only after it began implementing an active targeting method, it managed to reach the poorest sections of the communities it served. Especially when clients have multiple options to choose from, the loan size, type of financial service, as well as the delivery system can all affect to some degree the poverty level of the most likely users. SafeSave in Bangladesh for instance manages to attract extremely poor households, by allowing them to deposit very frequently very small and variable sums of cash, which is very relevant to the needs of this section of the population. 14 PUT IN REFERENCE! Similarly, mandatory group meetings might be a price that only very poor people might find worth paying to access savings or lending services. Both SEF and ASA use a solidarity group lending approach based on the Grameen model. They argue that very poor people can pay back loans just like the better off middle poor. Instead of modifying their core microcredit model for the poorest segment of their client population, both organizations opted for providing very poor people with additional services that are meant to improve their livelihoods as well as their ability to pay back small loans. In fact, all initiatives reported in the case studies offer, each in a different degree, a range of non-financial services, discussed in more detail in a later section. Other credit approaches build in repayment flexibility for loans extended to very poor people. Grameen Bank in Bangladesh, for instance, started a zero-interest credit program with flexible repayment schedule for beggars.15 [PUT IN REFERENCE!] need to add some additional information, either that these practices actually improve repayment rates, or that they have helped the program have a positive impact.] Taking into account the vulnerability and irregular cash flow of people at risk of debt bondage, the ILO program also advocates a softer repayment culture, including timely repayment refunds, repayment holidays and tailored repayment schedules.16 [PUT IN REFERENCE!] [query: and the results are? Better repayment rates? Better impact?] The savings-led approach, on the other hand, recognizes that savings are often more important for very poor clients than are loans. Members of savings groups all save and as their pooled savings grow, individual members can take loans from the group fund at an interest rate set by group members themselves. Some savings-led models, such as the NABARD-promoted SHG linkage model in India, for example, facilitate access to bank loans for strongly performing groups in order to expand the rather limited funds of such groups.

14 15

XXX XXX 16 XXX

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Finally, organizations like ARC and TUP offer program participants seed capital grants, which, although extended with certain conditions, do not have to be repaid. [query: and the results are?] After the initial grant, ARC provides qualifying groups access to loans. TUP does not provide a follow-up stage, but the majority of its local partner agencies facilitate savings, while some allow successful TUP grantees to “graduate” to a loan program. In Cambodia, TUP partner agency W.O.M.E.N encourages regular savings after an initial grant by matching the savings of program participants (households living with HIV/AIDS) for one year, up to a maximum of US$25. The majority of the programs examined by this paper cases deliver financial services to groups rather than individuals. ASA and SEF utilize Grameen Bank–inspired solidarity groups, while FFH promotes village banking. Self-help groups in Asia and Africa [queries: any specific program? facilitate savings-led microfinance through memberowned groups. Finally, ARC in West Africa offers enterprise grants and loans to groups of varying size, and the ILO project in South Asia delivers a range of financial services to groups of bonded laborers. TUP, plus the IGVGD and CFPR/TUP programs of BRAC, are the only exceptions: they opt for direct service delivery to individuals. SafeSave in Bangladesh also implements its microfinance program (flexible savings and loan products) to individuals, based on the belief that clients, no matter how poor they are, usually prefer individual service.17 Individual service delivery may be more appropriate, moreover, for clients who find it difficult to attend meetings or whose vulnerability makes them subject to too much stress from group pressure. On the other hand, the advantages of a group approach include reduced transaction costs, as well as a certain degree of social pressure that helps manage and allocate funds effectively. The benefits of group membership—including improved self-confidence and negotiation power—can also be extremely important for the most vulnerable community members. Non-financial development interventions Few approaches to assisting very poor people rely on microfinance services alone. In addition to the financial services, most poverty-focused organizations organize, by themselves or through strategic partnership with other institutions, non-financial interventions to strengthen the livelihoods of very poor people. Almost all such organizations seem to believe that this target group lacks the experience to manage a microenterprise and therefore offer some type of entrepreneurial and/or vocational skill development in addition to their core financial service. BRAC, for instance, promotes certain income-generating activities, such as poultry rearing, and teaches members relevant technical skills. Since it promotes certain business activities on a large scale, the IGVGD program also establishes appropriate marketing links for processing or selling products. Such specialized business development services (BDS) seem to be the exception, however, for very poor people. More common than BDS is the the provision of a social safety net to very poor people, such as the food grain subsidies and basic healthcare services offered by BRAC’s
17

Rutherford, Helping Mickles Make Muckles, 2004, page number?

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IGVGD program. Improved food security is often the most important change in the life of households that manage to increase their incomes. Very poor people also frequently suffer from chronic poor health. BRAC, ARC, the ILO bonded labor project, and Trickle Up partner W.O.M.E.N. all provide healthcare services as an important part of the safety nets through which they assist the poorest members of a community. In the case of sickness of a breadwinner, very poor households risk the rapid loss of assets because they face new expenses and lose part (or all) of their income. Village bank members of Freedom from Hunger’s Credit with Education program similarly receive not only credit, but also awareness training and education on nutrition, sanitation and health issues. Similar health and nutrition education is often delivered via savings groups and self-help groups, assisted by organizations that promote savings-led microfinance models. Social safety nets, skill training, healthcare, awareness-raising and empowerment are not common ingredients in minimalist microfinance, which limits service provision strictly to credit and other financial products. The more vulnerable and poor the target group, however, the more such non-financial services seem to take a more prominent place in what Hickson calls a comprehensive approach to poverty alleviation.18 This approach is based on the belief that “very poor households are essentially incapable of effectively managing small businesses and therefore are unable to use financial services without first participating in awareness and capacity-building programs.”19 However, not all microfinance initiatives that target the very poor include comprehensive non-financial services. SafeSave, for example, sticks to financial services only “on the grounds that even extremely poor clients are able to make good use of properly tailored financial services without other support, and that provision of non-financial services is costly and of questionable benefit.”20 The issue of how and by whom to deliver non-financial services is as important as the nature of these services. To understand the various poverty alleviation approaches that integrate microfinance into service delivery for the poor, it is important to understand the institutional framework of each organization that deals directly with very poor people. SEF, ASA and BRAC, for example, are all locally established institutions with a strong social mission, broad outreach, solid capacity and good access to donor funding. These organizations are strongly motivated to assist very poor people with an appropriate service package and have the capacity to deliver all aspects of an integrated package by themselves. Freedom from Hunger’s alliance with local financial institutions results in a different task division. FFH partners (rural banks and credit unions) agree to add a new financial product (village banking) and adopt FFH’s credit with education approach, which combines financial with non-financial services. Without a social mission or the capacity to provide non-financial services, these banks must create and train a new cadre of field staff and adopt new management systems to effectively do business with very poor women. In some cases, FFH consultants provide assistance with this.

18 19

See Hickson, Reaching Extreme Poverty, 1999. Ibid., page number? 20 Ibid., page number?

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The majority of organizations in the remaining cases studies are relatively small, local non-governmental agencies that generally use an integrated approach to development in small-scale projects. Typically, they rely on partnerships with international organizations or national donors, who only rarely provide them with the support required to provide an integrated package of financial and social services to their most vulnerable target groups. TUP, for instance, provides its partner agency W.O.M.E.N. with funds for seed capital grants, savings matches and overhead, while W.O.M.E.N. relies on another donor to fund its home healthcare and education programs. Similarly, most savings-promoting agencies tend to focus primarily on building sustainable savings and loans groups, while counting on local partner organizations to deliver essential services that very poor people need to take full advantage of financial programs. All initiatives examined in the study indicate that very poor people often lack confidence to engage in microenterprises or to cope with the responsibilities that come with a loan. Lack of self-confidence is often the reason why very poor people exclude themselves from microfinance programs in the first place. Even when there is no loan to be repaid, many poor people, especially women, are often initially afraid of the new responsibilities and new activities that are expected from them. Participating in group meetings, leaving one’s house to sell a product, negotiating prices or managing cash flows can be very intimidating to anyone who has never run a business. Confidence building and women’s empowerment are therefore high on the agenda of microfinance projects that have a strong poverty focus. The staff of the TCP program at SEF, for example, empowers and motivates the poorest community members to join the project, trains and supports them (many have no business experience) throughout the business cycle and facilitate group learning rather than “teach.” When FFH and CRS jointly developed Learning Conversations, they likewise sought to provide groups a problem-solving process rather than ready-made solutions. Learning Conversations are simple 30-minute group discussions about a story or activity that resembles real issues faced by group members. Such conversations enable people to identify issues themselves, reflect on causes and consequences, consider solutions and commit to action. The ILO bonded labor prevention projects, as well as other microfinance initiatives with a strong poverty focus, often educate their clients about human and labor rights. Selfhelp group members [query: of any specific case study?] discuss issues of family planning, women’s rights and domestic violence and often take joint action to improve their situation. Several organizations offer functional literacy and numeracy classes that enable women to understand and sign their own savings and loan passbooks. For example, PACT’s original Women’s Empowerment Program in Nepal (later improved and replicated in other countries as the WORTH program), concentrates on savings and literacy as the most important ways to empower women and help them build sustainable, self-managed savings groups. Leadership Involving very poor people in microfinance programs requires visionary leadership and a commitment of substantial resources. Each of the initiatives featured in this paper

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resulted from a strong social mission and a willingness on the part of upper management to innovate. While buy-in from top management is essential, this commitment needs to be accompanied by an institutional culture dedicated to providing continued microfinance services to very poor people. In order to reach very poor people and provide them highquality financial services in a cost-effective way, an organization needs appropriate management practices and incentive systems. In addition to monitoring financial performance, several microfinance organizations with a social mission have begun to monitor their social performance as well. Social performance management for microfinance organizations that seek to serve very poor people includes monitoring poverty outreach, impact and cost-effectiveness. SEF in South Africa and ASA in India both have management information systems (MIS) that track financial and social impact, including client poverty, food, housing and education levels. The information obtained from their monitoring systems is then used, among other purposes, to make operational adjustments and improve financial products for very poor people.21 Both ASA and SEF report that at one time, their impact monitoring systems alerted them to the fact that they were not reaching very poor people to the extent intended and consequently adjusted their programs. PART III. EMERGING QUESTIONS AND INNOVATIONS The programs examined in this paper are testimony to the fact that very poor people can be reached successfully, if microfinance providers make a deliberate attempt to target them and offer services that suit their distinctive needs. Most microfinance practitioners agree that financial services alone are not sufficient—in fact, they are often counterproductive—to lift very poor people out of poverty. There is less agreement on what kinds of complementary services should be offered to this target group in addition to financial services. What can be concluded is that programs generally need to explicitly target very poor people and provide them a wider range of flexible services if they are to successfully serve this target market. In order not to lose sight of sustainability, innovative approaches that lower the cost and mitigate the risk of serving very poor people are recommended. The following two issues—targeting versus a market approach and minimalist versus integrated microfinance—should in particular be explored further. Targeting versus market approach (discussion about targeting vs. not targeting directly) Minimalist versus integrated microfinance What is the role of MED for very poor people and which services are most suited for them? There are programs that are described as protectional in that they focus on
21

XXX See cite author, title, publisher, place & year of publication, then cite URL. http://www.ids.ac.uk/impact/africa/sef_case_study.html [editor’s note: also need to cite a source for ASA] 13

expenditure smoothing, asset protection and risk management. Others are described as promotional, in that the focus is on income generation, asset building, and creating viable microenterprises. Very poor people often need to focus on protectional activities before they can move to promotional activities. Protectional activities require non-credit microfinance services, such as insurance and savings to reduce vulnerability and build a minimal financial base. This is often combined with training to build skills and confidence. Promotional activities are appropriate when there is a preexisting level of ongoing economic activity, entrepreneurial talent, and managerial talent. This is not the case in an immediate post emergency environment, for the chronically destitute, or where illness keeps people from productive activities.22 Whether savings or credit services are more effective in serving the financial needs of very poor people also remains open to discussion. Both savings and credit services can provide the means for very poor people to access a lump-sum of cash, but do so in fundamentally different ways. Credit provides the money up front and has the potential to create a positive income stream, if a borrower knows how to invest the money in an activity that generates an immediate and regular revenue stream that covers at least the loan repayments. For this reason, credit is extremely risky for very poor people, who typically have no income. Savings are much less risky, but such people must save a long time to build a sufficiently large amount of cash to invest in a microenterprise because they have little excess cash. Still, many argue that even very poor people can and will save if they have the opportunity to do so, and that, above all, they need a safe place to deposit their cash and a flexible savings service. Instead of resolving whether savings or credit is the most important financial service for the very poor, they should ideally have access to both. It is therefore not surprising that microcredit organizations are seeking ways to provide voluntary savings accounts (instead of the savings required to access a loan) to their borrowers, despite issues of cost effectiveness and legal restrictions. Self-managed savings groups can increase their members’ access to credit by linking with banks or organizing themselves into federations. The long-term sustainability and cost-effectiveness of small savings and credit groups, as opposed to larger microcredit institutions, will ultimately play a deciding role in identifying which approach works best in specific circumstances. Hickson distinguishes between an approach that modifies the client (by preparing her or him to better utilize financial services through training, education and/or social action) and a more demand-led approach that modifies the financial services (tailoring them to client needs).23 To be effective, assistance to very poor people may need to combine both approaches. The precise role and extent of non-financial services in an integrated approach remains unclear, however, and depends in large part on the circumstances and background of the very poor people being targeted. Poor nutrition and ill health clearly affect the majority of this target group, who, without a minimal social safety net, face
22 23

CGAP Note 20 XXX Hickson, Reaching Extreme Poverty, 1999, page number?

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almost insurmountable challenges in taking advantage of financial services or generating incomes. Even though skills training seems to be offered universally by microfinance initiatives that target very poor people, the type of training offered varies from organization to organization, ranging from motivation and confidence building to entrepreneurial and specialized vocational training. As noted earlier, the Learning Conversations of FFH and CRS represent an alternative approach, which minimizes formal training programs and instead promotes group learning and the capacity and confidence of very poor people to solve their own problems. The issue of training is further complicated by the fact that impact assessments of training programs are difficult and rarely done. Subsidy versus sustainability When providing financial services to very poor people the question should not be, “When are subsidies appropriate?”, rather it should be, “How does an institution most effectively use subsidies to serve very poor people?” Generally speaking, providing products and services to the poor and the poorest, be they financial or non-financial, is more costly than providing the same products and services to the middle class and the wealthy, which reason, among others, has inhibited most private sector industries from entering the BOP market—the bottom or base of the pyramid24. Historically, this is why the financial industry has excluded billions of poor and very poor people from the benefits of financial products and services. In an attempt to solve this problem the microfinance industry was created, however, the costs to serve the poor didn’t go away. New lending methodologies (group lending) helped cut costs, yet it would be awhile before even a handful was considered financially sustainable. In fact, according to Armendariz de Aghion and Morduch, “much of the microfinance movement continues to take advantage of subsidies”, with only sixty-six of 124 institutions surveyed by the Microbanking Bulletin reporting they were financially sustainable and just eighteen of forty-nine of microlenders focusing on the “low end” reporting the same. Armendariz de Aghion and Morduch argue that, in principle, there is nothing inherently wrong with using subsidies and even go as far as promoting the use of smart subsidies—“carefully designed interventions that seek to minimize distortions, mistargeting, and inefficiencies while maximizing social benefits.”25 One form of a smart subsidy is to subsidize those clients, very poor people, who are not yet ready to borrow from microlenders at “market” interest rates but who, with time, will be able to benefit from microfinance products that don’t require subsidization. This type of smart subsidy can be either (1) outright grants, in the form of cash to purchase business assets (as promoted by Trickle Up and ARC) or productive assets themselves, such as livestock (as promoted by BRAC’s CFPR/TUP program) or (2) subsidized loans, where the client pays below market interests rates until it is ready to assume the full costs of the loan. The use of IDAs, Individual Development Accounts—a common antipoverty strategy in the developed world where client savings are matched—is another
24 25

Prahalad, 2004. Armendariz de Aghion & Morduch, 2005.

15

possible smart subsidy that has great potential to develop and prepare very poor people to access unsubsidized microfinance services at a later period. Another way to subsidize the products and services of very poor clients is through the use of cross-subsidization strategies—using profits from larger loans to offset losses on smaller loans.26 However, those institutions that attempt to implement this strategy should only do so if they are profitably serving their larger clients at competitive interest rates. That is, if they raise interest rates on larger loans to cross-subsidize their smaller loans they have the potential of losing their top customers from competitors with the lure of cheaper interest rates. The benefit of this strategy, especially in very competitive markets, is that the MFI is developing a new potential client base that they can profitably serve in the future. Nevertheless, MFIs should be careful that their pool of subsidized very poor clients doesn’t grow too fast because they face the inability to serve them with the limited subsidies received from larger loans. Finally, institutions such as ASA, SEF and FFH offer financial services to very poor people in the form of credit under basically the same terms as for their less poor clientele. However, they recognize that very poor people are extremely risk adverse, and respond by providing them with free non-financial services, such as business training and business development services. This is yet another way to subsidize very poor clients as they move up the development ladder. It is important to recognize that serving very poor people can be a costly undertaking; nevertheless, those programs focused on social transformation should remember that smart subsidies may be the most effective way to ensure outreach and affordability for their poorest clients.27 There are appropriate places for subsidies in the microfinance industry and the use of smart subsidies to serve very poor people might possibly be one of the most important and appropriate forms. Sustainability versus cost effectiveness [editor’s note: I recommend that you dedicate this section to a detailed analysis of the cost-effectiveness and sustainability of the various programs in table 1. To this point, the discussion has been conducted at a conceptual level, without any hard facts. Microfinance specialists will want to know, at the very least, how many people these programs serve, cost per customer, volume of loans and/or other financial services, PAR, sustainability (operational or financial) rates, impact information (like how many clients “graduate” to more standard MF programs, etc.). The paper needs such a detailed analysis to be more credible]

26 27

Ibid. Ibid.

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PART IV. RECOMMENDATIONS FOR THE WAY FORWARD Focus on Innovation Research and development is a critical component of any successful business. In an increasingly competitive world market, it is absolutely necessary for companies to invest in R & D so that they can continuously develop innovative and creative products to retain their customers. Client-driven businesses—those that innovate and develop products based on changing needs and demands of clients—are those that tend to have the least amount of client desertion and are in turn the most profitable. In order to successfully serve very poor people with unique needs and circumstance MFIs must be client-driven with a willingness to invest in R & D. However, in general the microfinance industry, according to Cohen, is the last product-driven industry in the world.28 There are many reasons this may be the case but one big reason must certainly stem from the fact that, historically, microfinance products came in one size and shape and that clients accepted them because there was nothing else. Many MFIs over the years continued with this “one size fits all” approach because there was no need to do differently. However, as the industry has become more competitive, especially in more mature markets such as South East Asia and Central America, MFIs have been forced to be more innovated and responsive to client needs to stay in business. This response to competition with innovation and creativity is the same approach that must be taken when attempting to provide attractive and effective products and services to very poor people. When it comes to serving very poor clients the “one size” doesn’t fit anymore. In reality this “one size” doesn’t fit most clients in the market. Only through R & D and innovation can the microfinance industry effectively serve every market segment—the extreme poor, the moderate poor, the vulnerable non-poor, the non-poor and the wealthy. For an MFI with limited resources and personnel it is very tempting to disregard R & D and focus solely on performance—the bottom line. However, institutions that don’t balance growth and profitability with R & D will eventually not be able to perform successfully because they won’t have the necessary new products and services that will retain their clientele. Therefore, it is critical that MFIs integrate R & D into their core business to remain competitive. Furthermore, an MFI that is willing to invest in developing products and services that specifically meet the needs of very poor people, in addition to their mainstream clients, may have a competitive advantage over other MFIs in the end because they will have already developed a clientele base that will grow with their institution over time. Redefine performance benchmarks for programs focused on down reach–
Cohen, Market Research for Microfinance: Detecting the Needs Beyond the Numbers. Cohen, Monique. Caribbean Roundtable. Microfin. 2003.
28

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The MED industry is now driven by a strong financial performance culture and expects high financial performance standards which makes it difficult for NGOs to experiment in downreach. If groups that are lending to very poor people are held to the same benchmarks as those working with moderately poor people, they won’t measure up. In recent years, the social performance movement has been gaining momentum in the industry partly for this very reason. Organizations should be judged on their performance both against their financial goals and their social goals. We could consider redefining financial performance benchmarks for programs that work with very poor people or we can consider evaluating the performance of an organization against other organizations that are lending to the same level of clientele. Reorganizing the financial reporting information would give donors and funders a better picture of performance within peer categories. 1. Piloting innovative approaches (or supporting pilots), etc (this needs more brainstorming) Suggestions for program innovation, what kind of pilots would we like to see? All POWG members submitting ideas) This might be as much an issue of innovation with delivery as it is with new products The survey data highlight the importance poor households place on flexible financial services. The extent to which poor households seek this flexibility is not often appreciated by MFIs, or if it is, these demands are usually dismissed as unrealistic and impractical. This possibly belies a lack of understanding of the dynamics of poverty and the opportunities that exist for the provision of financial services to the extremely poor. To date there has been inadequate exploration of 1) financial products and 2)lowHickson's statement29 " cost service delivery mechanisms that would allow MFIs to include extremely poor households without compromising their sustainability objectives.”

Products and Services • Innovative savings services
-

-

flexible savings (as SafeSave, Stuart Rutherford) matched savings – IDAs – JAN Contacting MARK SCHREINER TO EXPLORE THIS WITH POWG contractual savings (ILO debt bondage paper recommends offering this type of savings, in which the client commits to regularly depositing a fixed amount for a specified period of time to reach a pre-determined goal. After the maturity date, the client can withdraw the entire amount plus interest earned. Early withdrawal is prohibited or penalized. Contractual products

29

Hickson, 1999

18

-

help depositors accumulate funds to meet specific expected needs. Savings match: similar to contractual savings, but extra incentive and faster accumulation) Safe place to save: lockboxes, etc.

Innovative lending services
-

Flexible repayment options (see ILO study) Combined or stepped grant-loan approach

Targeting geographic outcasts? DRC, Somalia, Southern Sudan, Liberia, etc. – the places where no one wants to do MED ---- target areas for strategic alliances with social protection groups…..

Innovation in product delivery
• •

village banking and mentoring idea from Patrick Crompton strategic alliances with social protection groups – Hashemi - between financial and non-financial service providers - between those who target very poor people and those who provide services for less vulnerable poor (graduation to microcredit and other sustainable microfinance services) franchises of local institutions/organizations in remote areas with existing member-owned institutions (profit not taken out) post-office accounts, gas stations Technology –The use of information and communication technology (ICT) to help impoverished people gain access to information required to improve their lives is proving to be a powerful tool in many sectors, and will hopefully be applied on an even larger scale in the future.30 The deployment of ICT in delivering services can increase efficiency by reducing transaction costs, which are usually higher when servicing very poor people people. Many low-cost innovative delivery mechanisms commonly take advantage of ICT, such as .. [editor’s note: need concrete examples that show cost reductions despite the difficulties of deploying new technology] o Innovative use of technology: e.g., providing ATMs, palm pilots, cell phones, kiosks in rural areas for people to access info and services, etc.

• • •

30

Price, Reaching the Poor, 2001, page number?

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o interesting cases from FINCA affiliates in terms of using technology and improved cost-effectiveness 3. Issues for further exploration Further research on selected case studies It has become apparent from the review of the literature and selected case studies that there is limited understanding about what makes MED programs successful in reaching and serving very poor people. This lack of understanding is partly due to the fact that there has been no systematic effort to identify programs that are successfully serving very poor people and analyze how they address the perceived challenges of reaching this target group. If MED is to remain as an effective poverty alleviation strategy, it is thus imperative to increase our understanding by identifying successful poverty-focused MED programs and analyzing what makes them successful in serving very poor people. This can be done by measuring the client poverty profiles of selected MED programs that have a poverty focus and analyzing the critical factors that contribute to their success and/or failure. We have begun to conduct this research with the case studies used in this paper. This has been a first step. We recommend delving further in to each of these case studies and to identify others to be representative of all the regions and methodologies. The POWG is developing a research advisory board for the purposes of this project and to explore case studies further. See Annex X for more information. (GAAMAA input:) I would suggest that we propose to develop a framework to analyze selected case studies and increase the understanding about what makes institutions/programs successful in reaching and serving very poor people efficiently, effectively and sustainably. The following framework offers the criteria for success as well as allows for industry learning, to identify and analyze the key elements for success. Framework for analyzing poverty-focused MED programs

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Criteria for determining success in reaching very poor people: Key elements: Targeting mechanisms Methodology Financial services Non-financial services These are, in a sense, the following questions: How are these organizations or projects fostering success? Models? Leadership, innovations, impact monitoring, targeting, information technology? Depth of outreach Impact of outreach Quality of outreach - Cost of outreach These are, in a sense, the following questions: Who? Poverty level at entrance? Impact? Poverty level after some time in program? What services? Non-financial versus financial? Provided by MFO and strategic partner? If any? Cost? Quality of services as perceived by clients (client satisfaction)? Fundamental research questions about the tweaking of existing methodologies to better serve very poor people in rural areas. Focus on research and support for field initiatives to push microfinance farther into the rural areas, because that is where the very poor often are located (highest proportions in relation to local population). Even without targeting, mf pushed out to the rural areas will be more likely to serve poorer people. The challenge is to offer rural services sustainably, which may be the pre-eminent advantage of group-based lending; it enables the service provider to extend and sustain the “supply,” whereas alternative delivery strategies may not. That advantage (if real) probably comes from the greater efficiency of lending one loan per group to jointlyliable, self-managing groups. Better controlled research is needed to decide whether group-based lending is more or less efficient than individual lending, especially for very poor, women and rural areas (people not able or willing to come to a central point of service). This seems to me a crucial design issue that needs to be settled by some good research. Related to this question is what loan terms and conditions give clients the greatest opportunity to use their loans in part for agricultural investment. Village bank loans in rural areas get used for multiple purposes (regardless of stated intentions at loan disbursement), including for agriculture (crops and/or livestock). And the agricultural uses of parts of loans reveal a resourcefulness and determination to force loan terms (designed almost specifically to exclude agagricultural uses) to serve agricultural purposes. Some carefully controlled research is required to sort out the better

21

combinations of terms and conditions to accommodate rural loan use strategies of the very poor. Rather than give up on group-based lending because urban populations with other options prefer individual lending and rather than give up on group-based lending because it is not well-designed for rural economies, we might discover that rural lending (to the very poor who live there) means group lending. I think we have to answer these questions with some good evidence from the field: does group-based lending allow us to push microfinance farther out to the more rural areas? If so, why? Can group-based lending be tweaked to accommodate the realities of rural economies? What are some successful combinations of loan terms and conditions? Non-financial services? Regardless of being rural or urban: do the very poor need non-financial services to lead better lives? The answer seems obviously “yes”, but the specific questions are: do the very poor need non-financial services to participate in and benefit from financial services? More important for sustainability and scale, do the microfinance providers need to provide or link to non-financial services in order to be sustainable in their financial services to the poor? The case studies here preliminarily suggest that microfinance providers are much more likely to be committed to providing non-financial services if they have evidence that clients are more likely to repay on time and be loyal customers when they get non-financial as well as financial services. But we don’t have this evidence about client recruitment costs, retention rates, repayment and arrears in any controlled comparison of microfinance with vs. without non-financial services. What are the added benefits of adding non-financial services to mf for both the clients (in their currency of success) and for the mf providers (in their currency for success). This requires the “with vs. without” experiment. Dean Karlan of Princeton is currently working on this topic. Understanding client behavior –It is important to understand the behavior of very poor people if MED programs are to help very poor people to move out of poverty? We would like to investigate what factors influence clients crossing over the poverty line?

22

The reference section needs to include references to the papers that form the basis for the case studies and that are also referred to in the body of the text. Make sure to also refer to additional papers within each case study folder!!! ADB (Asian Development Bank). 2005. “ADB Activities in Nepal: Reaching the Poor.” ADB, Manila, Philippines. http: www. adb.org/NRM/reaching_the_poor.asp. Accessed April 2005. Aguilar, V.G. 1999. “Is Micro-Finance Reaching the Poor? An Overview of Poverty Targeting Methods (ADA Dialogue). Appui au Développement (ADA), Luxembourg. Ani, Carlos. 2002. “Research and Innovation Agenda of the INCOME Project.” Development Bulletin, no. 57 (February): 81–4. Ashe, Jeffrey, and Lisa Parrott. 2003. “PACT’s Women’s Empowerment Program: A Savings and Literacy Led Alternative to Financial Institution Building.” Journal of Microfinance volume number, series no. (spring):start page–end page. Athmer, Gabriëlle. Year? “Challenging the CGAP Microfinance Discourse: An Alternative Institutional Approach in Rural Africa.” Where published or written? Interesting article that uses CARE Mozambique’s savings-led mF as an alternative to CGAP’s promoted credit-led approach. Also has lots of stuff for “areas of debate”… Churchill, Craig, Madeline Hirschland and Judith Painter. 2003? “New Directions in Poverty Finance.” Where published? By whom? start page–end page. (I haven’t read this one, but apparently chapter 3 has some information on povertyfocused microfinance. Specifically, it talks about institutional culture and human resource management as two important tools to achieve their social mission) Datta, Dipankar. 2004? “Microcredit in Rural Bangladesh. Is it Reaching the Poorest?” Journal of Microfinance 6, no. 1 (month? season?):start page–end page. Dhonte, R. 2004. Banking with the Poorest. London: Alternative Finance. Eversole, R. 2000. “Beyond Microcredit: The Trickle Up Program.” Small Enterprise Development 11, no. 1 (month? season?): 45–58. Grant, William, and Hugh Allen. 2003. “CARE’s Mata Masu Dbara (MMD) Program in Niger: Successful Financial Intermediation in the Rural Sahel.” Journal of Microfinance volume no., series no. (season?):start page–end page. Emrul Hasan, Mohammed. 2003. “Implications of Financial Innovations for the Poorest of the Poor in the Rural Area: Experience from Northern Bangladesh.” Journal of Microfinance 5, no. 2 (winter).

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Emrul Hasan, Mohammed, and Monique Iglebaek. 2004. “Microfinance with Un-reached People in the Rural Area: Experience and Learning; PLAN, Bangladesh.” Paper presented at the Asia Pacific Region Microcredit Summit Meeting of Councils, February 18, 2004, Dhaka, Bangladesh. Hashemi, S. 2001. “Linking Microfinance and Safety Net Programs to Include the Poorest. The Hardcore Poor and Why Conventional Microfinance Fails Them.” CGAP Focus Note, no. 21. Consultative Group to Assist the Poor, Washington, DC. Also available at http://www.cgap.org [insufficient URL, need full URL of where article is located]. Hickson, Robert. 1999. “Reaching Extreme Poverty: Financial Services for Very Poor People.” Office of Development Studies, Bureau for Development Policy, United Nations Development Programme, New York. [confirm this is a paper and not a book. Also confirm that it is a DRAFT] ———. Year? “Financial Services for Very Poor People—Thinking Outside the Box.” Small Enterprise Development 12, no. 2: start page–end page. [please verify that this is correct] Hirschland, Madeline. 2001. “Voluntary Savings Services: A Closer Look.” Common Interest 2, no. 1 (month?):start page–end page. Center for Micro-Finance in Nepal, Kathmandu?, Nepal. ———. 2003. “Savings Operations for Very Small or Remote Depositors: Some Strategies.” Institute of Development Studies, University of Sussex, Sussex, United Kingdom. URL? [editor’s note: believe this was also posted on the Microfinance Gateway] Maes, Jan, and Malika Basu. 2005. “Building Economic Self-Reliance: Extreme Poverty and Sustainable Microenterprise Development; Trickle Up’s Microenterprise Seed Capital for the Extreme Poor in Rural India.” Unpublished. Mathie, Alison. 2002. “Including the Excluded: Lessons Learned from the Povertytargeting Strategies used by Microfinance Providers.” Development Bulletin, no. 57 (February):17–22. Matin, Imran. 2003. “Targeted Development Programmes for the Extreme Poor: Experiences from BRAC Experiments.” BRAC (formerly Bangladesh Rural Advancement Committee), Dhaka, Bangladesh. Matin, Imran, David Hulme and Stuart Rutherford. 1999. “Financial Services for the Poor and Poorest: Deepening Understanding to Improve Provision.” Finance and Development Research Programme, Working Paper Series Paper, no. 9. [spell out] IDPM, University of Manchester, United Kingdom.

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Matin, Imran, and Sarah Walker. 2004. “Exploring Changes in the Lives of the Ultra Poor: An Exploratory Study on CFPR/TUP Members.” CFPR-TUP Working Paper Series, no. 4. BRAC Research and Evaluation Division, BRAC, Dhaka?, Bangladesh. Moser, Caroline. 1998. “The Asset Vulnerability Framework: Reassessing Urban Poverty Reduction Strategies.” World Development 26, no. 1 (month? season?): 1–19. Palaniswamy, V. 2005. “The Complementary Use of Loans and Grants.” Trickle Up Program, City, Country. Parker, J. 2001. “Linking Microfinance and Safety Net Programs to Include the Poorest. Where does Microfinance Fit?” CGAP Focus Note, no. 20. Consultative Group to Assist the Poor (CGAP), Washington, DC. Also available at www.cgap.org [insufficient URL: need full URL that locates the article] Pretes, Michael. 2002. “Grant-based Approaches to Microfinance.” Development Bulletin, no. 57 (February): 120–2. Price, P. 2001. “Reaching the Poor.” ADB Review 34, no. 1:start page–end page. ADB, Manila, Philippines. http://www.adb.org/Documents/Periodicals/ADB Review/2002/vol34 1/web watch.asp. Accessed when? Rutherford, S. 2004. Helping Mickles Make Muckles: Designing Suitable Swaps for the Poor. London, UK: Alternative Finance. Seibel, H., and S. Khadka. 2002. “SHG Banking: A Financial Technology for Very Poor Microentrerpreneurs.” Savings and Development XXVI, no. 2:start page–end page. Simanowitz, Anton. 2001. “Imp-Act Guidelines No. 4.” Imp-Act, City, Country. http://URL. Accessed when? ———. Year? Microfinance for the Poorest: A Review of Issues and Ideas for Contribution of Imp-Act. Publisher? Unpublished? WHO (World Health Organization). 2004. Reaching the Poor: Challenges for TB Programmes in the Western Pacific Region. Manila, Philippines: WHO. WHO and World Bank. 2001. Dying for Change: Poor People’s Experience of Health and Ill-Health. Geneva: WHO. Wilson, Kim. 2003. “The New Microfinance: An Essay on the Self-Help Movement in India.” Journal of Microfinance volume no., series no. (spring).

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World Bank. 2001. World Development Report 2000/2001: Attacking Poverty. Washington, DC: World Bank. ———. 2003. Sustainable Development in a Dynamic World. Washington, DC: World Bank. Wright, Graham A.N., Deborah Kasente, Germina Ssemogerere and Leonard Mutesasira. 1999. “Vulnerability, Risks, Assets And Empowerment—The Impact Of Microfinance On Poverty Alleviation.” MicroSave Africa, Nairobi, Kenya? http:// http://www.undp.org/sum/MicroSave/ftp_downloads/UWFTstudyFinal.pdf. Accessed when?

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