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Ten Groundbreaking Microfinance Providers

1. ASA

Activists for Social Alternatives (ASA) was founded in 1986 to assist "the poorest of the poor" women in Tamil Nadu, India. It incorporated microfinance into its holistic approach to women's empowerment that includes not only loans, but also provides training, IT support, and encourages poor women to organize politically. The "Grama Vidiyal" microfinance project now reaches over 2.6 million women.

ASA is not to be confused with "Asa," which is another innovative microfinance NGO in Bangladesh that has rapidly and efficiently expanded streamlined microbanking services to over six million poor clients.

Pictured: ASA members at a rally in Tamil Nadu (Photo: Activists for Social Alternatives)

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Ten Groundbreaking Microfinance Providers

2. Kiva.org

Kiva.org changed the face of microfinance by giving Internet users an easy way to loan money directly to entrepreneurs in 40 countries. The website allows anyone with a credit card to find projects around the world they want to support with no-interest loans.

What started as a simple website in 2005 had generated nearly 28 million dollars in peer-to-peer loans by April 2008. Kiva.org was dubbed the "eBay of microfinance" until eBay itself purchased MicroPlace, a similar website that lets users make for-interest loans to entrepreneurs.

Pictured: Kiva.org Co-Founder Matt Flannery and President Premal Shah (Photo: Kiva.org)

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Ten Groundbreaking Microfinance Providers

3. IMAGE Program

Can microfinance help reduce HIV/AIDS and gender-based violence? This is what the IMAGE project tried to answer in eight villages in South Africa during 2001-05. Along with training sessions and community activities, around 1,750 loans were dispersed over this period. Improvement was seen on nine empowerment indicators, including financial confidence, perceived contribution to household, and relationship with partner. Domestic violence also fell.

The IMAGE program was conducted by two local NGOs along with researchers from the University of Witwatersrand.

Pictured: Small group meeting of IMAGE program participants. (Photo Courtesy: Paul Pronyk)

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Ten Groundbreaking Microfinance Providers

4. M-PESA

The popularity of M-PESA in Kenya shows the vast potential of technology to expand access to financial services. M-PESA is a mobile phone money transfer service that had 1.6 million customers just one year after it launched in March 2007 by Safaricom. The mobile banking (or "m-banking") service is particularly useful for poor rural clients who had not been reached by financial services or banking infrastructure.

Next, M-PESA is expanding into Tanzania, a country of around 40 million people, of whom 1.6 million have a bank account, but 7.5 million have access to a mobile phone.

Pictured: A woman uses her mobile phone inside a Safaricom shop in Nairobi (Photo: Reuters)

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Ten Groundbreaking Microfinance Providers

5. ACCION International

Joseph Blanchard founded ACCION in 1961 to assist South America’s working and urban poor. It began microlending in Recife, Brazil in 1973. The ACCION network now stretches into 25 countries and serves over 3 million clients, most of them in Latin America.

ACCION is credited with pioneering the “commercial model” of microfinance, the idea that microfinance institutions should be sustainable and ultimately profitable. Some of ACCION’s microfinance partners have become commercial banks, including Mexico's Compartamos.

Pictured: Ramona Florentino of the Dominican Republic speaks with three ACCION loan officers. (Photo: Rohanna Merton / ACCION International)

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Ten Groundbreaking Microfinance Providers

6. Pro Mujer

Pro Mujer is a women's development and microfinance network that now reaches women in Bolivia, Peru, Mexico, Nicaragua, and Argentina. Founded in 1990 by Lynne Patterson and Carmen Velasco, Pro Mujer is known for pioneering integrated services - going beyond microcredit to provide affordable primary health care services, education and training. In Bolivia, the organization built a computer center to teach basic computing skills to the children of microfinance clients.

Pictured: Villagers in Nicaragua attend a Pro Mujer-sponsored health workshop. (Photo: Pro Mujer / www.promujer.org)

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Ten Groundbreaking Microfinance Providers

7. Bank Rakyat Indonesia

BRI is a commercial bank that has reached massive scale serving low-income regions profitably. BRI is now the single-largest microfinance network in the world.

During the 1970s, when the bank was entirely state-owned, BRI developed the Unit Desas (village banks) system to promote agricultural development. The focus of these banks gradually shifted to financial sustainability and ultimately to profitability. Many consider the expansion of small-balance saving accounts to over 30 million people as BRI's biggest contribution to microfinance.

Pictured: An Indonesian trader walks by a stocks screen in Jakarta, where BRI is highlighted. (Photo: Reuters)

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Ten Groundbreaking Microfinance Providers

8. Grameen Bank

Even before winning the Nobel Peace Prize, Muhammad Yunus was the most recognizable name in microfinance. After years of successful experimentation and expansion of microcredit in Bangladeshi villages, Yunus founded Grameen Bank in 1983.

As of early 2008, the bank had 7.4 million borrowers, 97 percent of them women. In recent years, Grameen has expanded its services to include pension schemes, insurance, individual savings accounts, and a range of “microfranchises,” such as the Village Phone initiative.

Pictured: Yunus with Grameen Bank representative Mosammat Taslima Begum receiving the Nobel Peace Prize in December 2006. (Photo: Reuters)

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Ten Groundbreaking Microfinance Providers

9. Opportunity International

Opportunity currently operates in 28 developing countries with the help of over 40 partner organizations, mostly microfinance institutions.

During the early 1990s, Opportunity pioneered the concept of a Trust Bank, a group of 15-40 community members who guarantee each other's loans. Opportunity also promotes the conversion of local NGOs and MFIs into formal financial institutions - regulated commercial banks, development banks, and credit unions that can accept deposits, borrow money, and accept investments that will help them grow.

Pictured: Clementine Uzabakiriho (left) of Rwanda was Opportunity International's one millionth client (Photo: Opportunity International)

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Ten Groundbreaking Microfinance Providers

10. MicroVest

Microfinance institutions (MFIs) might have local expertise, but many lack funding to put this expertise to work. As an alternative to government and charitable support, MicroVest seeks capital for MFIs through private equity and debt markets. It uses a commercial investing approach to financing MFIs, where the aim is to generate above-average returns for investors.

MicroVest seeks MFIs that are efficient and profitable, which gives MFIs an incentive to improve management and sustainability. By mid-2007, the three-year-old MicroVest I, LP fund had invested over 28 million dollars in MFIs in 16 countries.

Pictured: A microfinance client in her shop in Nicaragua.(Photo: MicroVest)

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Achieving the Millennium Development Goals

Goal 1: Eradicate Extreme Hunger and Poverty (1/8)

Reduce by half the proportion of people living on less than a dollar a day. Reduce by half the proportion of people who suffer from hunger.

China - Success: A young family in a supermarket in Shenyang in northern China. While poverty remains a big problem in many African nations, China managed to lift hundreds of millions of citizens out of extreme poverty during the last few decades. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 2: Achieve Universal Primary Education (2/8)

Ensure that all boys and girls complete a full course of primary schooling.

Southern Asia - Success: Participation rates in both private and public primary schools in Southern Asia has climbed above 90 percent in 2008; yet more than 18 million children of primary school age are not enrolled.(Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 3: Promote Gender Equality and Empower Women (3/8)

Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015.

Germany - Failure: Pedestrian crossing lights in Zwickau, where little green women have replaced little green men. While the MDGs focus on developing countries, rich nations like Germany would also fail on some of them. German women, for example, still earn on average 22 percent less than men. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 4: Reduce Child Mortality (4/8)

Reduce by two thirds the mortality rate among children under five.

India - Stalemate: A child is given a medicine during a camp in the southern Indian city of Hyderabad. Although infant mortality in India declined by as much as 35 percent during the last decades of the 20th century, mortality rates still remain high. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 5: Improve Maternal Health (5/8)

Reduce by three quarters the maternal mortality ratio.

Indonesia - Failure: A mother holds her newborn baby girl at a makeshift hospital on Indonesia's Nias Island. Among the five million deliveries in Indonesia annually, an estimated 20,000 women die due to complications related to pregnancy and delivery. Considering current trends, the fifth MDG is unlikely to be achieved in Indonesia. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 6: Combat HIV/AIDS, Malaria and Other Diseases (6/8)

Halt and begin to reverse the spread of HIV/AIDS. Halt and begin to reverse the incidence of malaria and other major diseases.

China - Failure: Catholic nuns weave a large red ribbon on World AIDS Day in Shenyang. Some 700,000 people in China are infected with HIV, including about 75,000 AIDS patients. According to the UK-based NGO AVERT, China is experiencing one of the most rapidly expanding HIV epidemics in the world. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 7: Ensure Environmental Sustainability (7/8)

Integrate the principles of sustainable development into country policies and programs; reverse loss of environmental resources. Reduce by half the proportion of people without sustainable access to safe drinking water. Achieve significant improvement in lives of at least 100 million slum dwellers by 2020.

Brazil - Slight Success: This aerial view shows farmland next to the Amazon rainforest in Brazil. Since August 2008, less than 10,000 square kilometers of Amazon forest have been lost, the lowest level in more than 20 years. But while deforestation rates have slowed since 2004, forest loss is expected to continue. (Photo: Reuters)

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Achieving the Millennium Development Goals

Goal 8: Develop a Global Partnership for Development (8/8)

Further develop a non-discriminatory open trading and financial system. Improve tariff- and quota-free access for exports from developing countries; enhance debt relief for heavily indebted poor countries; be more generous with development assistance.

World - Failure: American soldiers load food and water donated by USAID in Aceh, Indonesia, in December 2004. Official development assistance (ODA) continued to drop from an all-time high of 107 billion dollars in 2005, to 104 billion dollars in 2007. Aid flows need to increase by 18 billion dollars per year to meet the promise made by the G8 in 2005 of doubling aid by 2010. (Photo: Reuters)

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What the Poor Really Need

What do the poor need to escape poverty? Good advice? Moral support? Neither, according to Nobel laureate Muhammad Yunus, who says the poor really need a little capital to start climbing the economic ladder.

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Readers' Comments (1)

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Ali Jawo 2009-05-09 07:39:51

Microfinance
Mirofinance could be the best tool to contain poverty in Africa,and the program proved efficient in the Gambia.

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