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| Volume 1, Issue 6: January '04 | ||||
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In This Issue UN General Assembly Launches Program for International Year of Microcredit Register Now for the Asia Pacific Microcredit Summit Region Meeting of Councils Archived Issues
Vol 1 Iss 5 Nov. '03 |
Plenary Session: Building Better Lives - Sustainable Integration of Microfinance with Education in Child Survival, Reproductive Health, and HIV/AIDS Prevention for the Poorest EntrepreneursRemarks by Christopher Dunford
…This paper is really about a question; how to provide even the poorest people with sustained access to both microfinance and non-financial services- what many call credit plus. The emphasis is on education because that is the most common non-financial service offered by microfinance providers. And, there is special emphasis on health-related education because of the growing awareness among us that health problems really are a critical constraint for our clients in coping with, or escaping, poverty. But, the lessons learned about integration with health-related education apply more broadly to other topics, topics of education, and even providing access to business development services, and even clinical health services. The starting premise is that the poor need more than microfinance, there is no dispute about that. The paper is written from the point of view of a social entrepreneur who, as a social entrepreneur, is managing for a double bottom-line, trying not only to achieve in his or her organization a financial performance for the organization, even profitability, but also trying to achieve social objectives. …. So we are talking about integration, and that requires a little bit of precise definition. I am going to give you all three of the opportunities here. Service integration is the coordinated delivery of services from different sectors, like health and microfinance, to the same people in need. There are three ways to do this. The linked approach: you as a social entrepreneur might want to go out and find another organization, or two organizations, or three, depending on the services you want to provide to your clients, and get them to provide their very different services to your clients. But what if you can't find such other organizations? Or, what if they don't provide good quality services, or they don't happen to provide services to your clientele, or you just can't get along with their management? …. So, you might choose instead a parallel approach, rather than the linked approach, in which you create a new service unit within your organization- separate staff, separate management, separate funding- but under the control of your organization, and under the same governing structure. But, what if you can't afford a separate service unit, or multiple service units? Then you have to look into training your staff to wear more than one hat- to be multi-tasked.
. . . The big challenge for the parallel approach seems to be the financing. The big challenge for the unified approach seems to be the management of multi-tasked staff. … With the parallel approach, the big advantage is that you have a wider potential range of services that you can provide…that your staff can specialize in their particular sector in which they were trained…. A disadvantage, however, is that two or more different types of services require two or more different types of staff, or different service units, which creates a financial burden…. Now the big advantage for the unified approach is that there is the potential for full cost recovery from the income, the financial margin, on the credit operations, because you are able to offer two or more services with just one staff. The disadvantage, however, is that you have a narrower range of services. You can't overload the staff too much. You can try, but it won't succeed. And, mainly you are limited to education, to provide services or products, really is just too much of a burden on this one staff. And then, finally, the disadvantage that management has an extra demand on it to have a real commitment to carefully recruiting the right kinds of staff, to very carefully training them for this multi-tasked job that they have, and to supervise them very carefully to make sure that they get proper signals and support to keep in balance the financial and non-financial services so that they are not stressing one at the expense of the other, but to keep them in balance. That requires careful supervision. … I just want to show you that regardless of which of these types of integration that you do, it seems that the impacts are about the same, if they are well managed. You get excellent financial impacts, non-financial if you are doing education, in the topics you are doing it in you can really see increase in knowledge and behavior change even. And, the combined effects of both money and information really does empower, especially if you have women clients it is very empowering, it can improve children's diet and nutrition. Client satisfaction can be improved considerably, and even the demand for your services can go up. However, only the unified model seems to offer this opportunity for whole cost recovery for both microfinance and education and other services. |