Harnessing Student Potential In Microfinance
Microfinance and Education
A recent New York Times article opened my eyes to the debate around integrating education programs into microfinance practices. Having come from a very strong Grameen background, my understanding has always been that there is an entrepreneur in everyone and that given a step, the poor will rise by themselves without any sort of training or business guidance from their bank.
Perhaps, my view has been limited not only in terms of my awareness of business education programs that work with the poor, but also in terms of my understanding of Grameen. Having read this article and done a little research, it seems that Grameen too integrates it's own sort of education through The Sixteen Decisions and other lending practices. At the Regional Microcredit Summit in Cartagena, Colombia, MFI education programs were also brought to my attention by the work of Fonkoze and TechnoServe.
Fonkoze exemplifies a really innovative form of microfinance/education through their program Chemen Lavi Miyo and their litteracy program. TechnoServe, which is actually featured in the New York Times article, has actually been helping small, under-privileged businesses grow since the late 1960s. As the NYT article brought to my attention, research out of Yale University by Innovations for Poverty Action group has demonstrated the importance of education.
Although I still believe that everyone has an entrepreneur inside them, I suppose I already knew the importance of education from my own background. I, who am lucky enough to live well, let along on more than $2/day, have been empowered by education all my life, without which I would most likely be challenged by many of the same hurtles facing the illiterate poor or those who do not have a business background.
While my mind has been opened to extending both a financial and educational wrung to the poor, I still believe that the poor posses the same ability to climb the ladder as all others.
The NYT article:
http://www.nytimes.com/2009/06/25/business/smallbusiness/25sbiz.htm...
A number of questions that come to mind include:
- What type of education programs have been most successful?
- How do these education programs work with the skills borrowers already posses?
- Are these programs most successful when required?
- How do most MFIs market and offer these programs?
Perhaps, my view has been limited not only in terms of my awareness of business education programs that work with the poor, but also in terms of my understanding of Grameen. Having read this article and done a little research, it seems that Grameen too integrates it's own sort of education through The Sixteen Decisions and other lending practices. At the Regional Microcredit Summit in Cartagena, Colombia, MFI education programs were also brought to my attention by the work of Fonkoze and TechnoServe.
Fonkoze exemplifies a really innovative form of microfinance/education through their program Chemen Lavi Miyo and their litteracy program. TechnoServe, which is actually featured in the New York Times article, has actually been helping small, under-privileged businesses grow since the late 1960s. As the NYT article brought to my attention, research out of Yale University by Innovations for Poverty Action group has demonstrated the importance of education.
Although I still believe that everyone has an entrepreneur inside them, I suppose I already knew the importance of education from my own background. I, who am lucky enough to live well, let along on more than $2/day, have been empowered by education all my life, without which I would most likely be challenged by many of the same hurtles facing the illiterate poor or those who do not have a business background.
While my mind has been opened to extending both a financial and educational wrung to the poor, I still believe that the poor posses the same ability to climb the ladder as all others.
The NYT article:
http://www.nytimes.com/2009/06/25/business/smallbusiness/25sbiz.htm...
A number of questions that come to mind include:
- What type of education programs have been most successful?
- How do these education programs work with the skills borrowers already posses?
- Are these programs most successful when required?
- How do most MFIs market and offer these programs?
Replies to This Discussion
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Permalink Reply by Haley Priebe on -
P.S. I have just had a conversation with Fonkoze USA that informed me of the importance of education within their program. Their Literacy Program works closely with borrowers in a country where 52% of the population cannot read or write. In line with their belief that you 'cannot throw a loan at a woman and walk away from here,' this program seems to offer a huge opportunity to borrowers so that they can go on to open doors for themselves.
This conversation also made me aware that the Literacy Program is one that they could use help funding. To me this is not only a compelling cause for students and activists alike, it's a cause that also inspires a number of creative fundraising ideas.
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Permalink Reply by Chris Becker on -
With it's "Sixteen Decisions" the Grameen was able to prove to the world that it isn't just another ... being thrown at the poor but it is a part of the HOLISTIC approach to fighting poverty.
Microfinance isn't or shouldn't even been a tool that is independent of other aspects of development. It should always be accompanied with training and at some point that training needs to touch on education, general hygene, family dynamics, etc.
There are many different approaches to training MFI clients but most include about 40 hours of training either before the disbursement of the loans or through out the loan cycle.
Source: Zambia Site Team 2008 - MFI Overview Chart- The Collaboratory - Mes...
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Permalink Reply by katy cleminson on -
I agree that that the literacy program has great potential for student/university funding. According to Fonkoze's 2008 Gift Catalog it is possible to sponsor just one or many entrepreneurs as they learn the skills necessary to compete in local and global business markets. Student-led microfinance groups could make sponsoring a person/group of people a part of their fundraising goals for the fall semester. We'll have the Clark Microcredit Organizaiton include this in the campaign section of our 09-10 start-up guide that will hopefully generate some more awareness for the organization. Here is some of the cost information I found in their catalog:
TRAINING PACKAGES:
$75 – Cost to train 1 person in literacy & business skills
$100 – Cost to train 1 person in literacy, business
skills & good health practices
$150 – Cost to train 1 person in all 5 life-skill areas
$250 – Cost to teach 5 persons to read & write
$500 – Cost to teach 10 persons to read & write
$2,500 – Cost to teach 50 persons to read & write
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Permalink Reply by chris macrae on -
Could you explain further what this para means haley:
Having come from a very strong Grameen background, my understanding has always been that there is an entrepreneur in everyone and that given a step, the poor will rise by themselves without any sort of training or business guidance from their bank
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my understanding talking to Mrs Begum and from watching 1980s films at the archives of grameen HQ is that it is 10% bank and 90% personal and community development club
if we rewind back to the start - there is at least 5 days of training what a loan is, and empowering illiterate women to write their signature which for many was their first time - which is done team by team; moreover every 60 gramen members are allocated their own vilage centre where they peer to peer develop
if we fast forward to now: the magic of 7 million members connected through about 140000 (centres or hubs in modern language) truly got leveraged when mobiles connected these hubs from 1996 - hence the green children's theme song of microcredit in an internetworked age - you can hear me now
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Permalink Reply by Haley Priebe on
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Chris, you've highlighted some very important aspects of the Grameen model, which do, as you say, involve learning and peer to peer development.
What I meant when I said that "my understanding has been that there is an entrepreneur in everyone" is that while learning may be an important parallel to microcredit, there is not necessarily a need to provide borrowers with a fixed business plan or to educate them in a traditional way. Understanding this model, my curiosity was perked by the NYT's article which advocated more class-room type education programs that also seem to have very positive impact.
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Permalink Reply by Susan Hume on -
I have started a group based on your forum called Microfinance and Education because I think it would be great to exchange ideas on establishing and building these initiatives at other colleges. What do you think of putting this at the group level?
I am on faculty at The College of NJ and will be working with students to determine interest this fall.
Susan
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Permalink Reply by Haley Priebe on
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Hi Susan,
This is great! There is a huge need for building tools to teach students about microfinance and to understand the role of education in microfinance. I would love to learn more about your group. Would you like to build it on MFI Connect as a focus group? We have actually been working on providing greater education materials and have developed a cool partnership with a man who teaches microfinance classes by simulcast. That information will be going up soon.
Let me know your thoughts. Thanks,
Haley
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Permalink Reply by Zach Ingrasci on -
During the Regional Microfinance Summit it became apparent that there were very different philosophies on the role of education in microfinance. A very interesting model was the affordable business school that Jamii Bora has created in order to provide assistance and training to their clients. While it is not free it is very cheap enabling it to be sustainable. Check out http://www.jamiibora.org/bizacademy.htm.
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