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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 EntrepreneursQuestions and Answers for Plenary Panelists
Question #1, read by plenary Chair Anwarul Karim Chowdhury: …The three greatest charges made against the contents of this paper are that bankers should be bankers, and they should not delve into other areas, such as health, for the sake of the financial strength of the institution. Secondly, bank workers are not expert enough to lead technical discussions on health or other social development issues. And thirdly, it says that some subjects are too delicate, like reproductive health and HIV/AIDS prevention. How do you respond to those charges?
Christopher Dunford: …I don't think it is a bad thing in the social development business to push people to push the envelope, because if we don't, we are not really going to achieve social development. But, let's also keep in mind that I think a great many people, if not the vast majority of people who have become committed to microfinance, are not bankers. They are people who are, first and foremost, committed to social development and come from a variety of backgrounds. And, they are learning to be bankers. They are learning to adopt the sound practice of banking, at least those practices that are relevant to serving the very poor. But, that doesn't mean that they should be limited just to what bankers do. 
Sonya Sultan: …should bankers be bankers? Well, BRAC is very clear; we are not bankers, we are development workers. So our goal is very much development and empowerment of poor people, not just banking. Second, is the issue about bankers not being trained to deal with technical issues. There are two points I would like to make with regards to that, with regards to health. First of all, because we have this wonderful access to poor people and to communities, one of our roles is to link people to government services, to link them to people who have technical expertise. It is a mobilization job. Second, I'd like to point out that with poor people, health issues that really concern them have been made very technical, and have made it difficult for people to deal with these issues. For example, diarrhea. There is a very simple solution for dealing with it, and in Bangladesh we have been very effective in training people on how to deal with it. It doesn't need to be a technical issue. It can be addressed in people's homes in a very simple way. Finally, the third issue of dealing with sensitive issues. Again, since we are development workers that is what we are trained to do—deal with sensitive issues. It requires effort and training, but I think that is what we are there for. 
Lynne Patterson: …I think Christopher's point at the end of his paper, that there has to be a will, [is so important]. PRO MUJER definitely has the will, and we have been struggling to find the right package, the right way to bundle financial and non-financial service since we began in 1990. The question is, what services? And, PRO MUJER has answered that question, or at least identified the major things that women need. We think they need business development services to support their business income and their business management skills. They absolutely need health, and health services, because if they are sick they are not effective in any way. And, our goal is to empower women. The goal of empowerment of women is to lead a balanced, and a healthy, and a full-participating life. So, for us credit and training are a means, not ends in themselves. The big question that we face is, how do we finance both of these services? We are under tremendous pressure on the one side to be financially sustainable and cover all our costs, and PRO MUJER certainly embraces that goal. On the other hand, how are we going to fund our non-financial services? It seems to me that just as in microfinance there are subsidies to cover start-up costs, to get going, there should be subsidies to non-financial services. However, I think that in the long run we are going to have to cover the costs of non-financial services ourselves through the surplus that we generate from our income. I think it is the only way we can guarantee the provision of these very needed, very complimentary services, over the long run…. Question #2: One question says,…Ms. McKee, you talked about the necessity to consider payment for services, and education, in order to make the integrated model more sustainable. In your opinion, why haven't MFIs… already begun to implement fees for these services, or if they have, who are the leaders in this field?" …There is a question to BRAC, and it says, "From your own experience, would the clients be willing to pay for non-financial services? Do they generate sufficient income to pay for such services?" And, there is a general question that says "is there no danger that the offering of free non-financial services may lead to a culture of non-repayment of credit?" Kate McKee: ... I think the part we are struggling with is that each society decides for itself which kinds of activities are going to be considered more public goods, and are worthy of public subsidy. In some places it would just be unacceptable and inappropriate to be charging, for example, for health education. But, in other places, this might in fact be appropriate. The point we have to keep in mind is if charging some fees make it possible to serve many, many more people with this life-saving information, we need to consider it and not have a gut reaction against it. The final point I want to make speaks to this issue of financial sustainability. There are trade offs. We can't just will them away and say, "Wouldn't it be nice if successful MFIs could be the deliverers of all of these public goods that we would like to see out there, as well as many other goods for which fees could be charged." If an MFI is able to reach the point of getting past break-even and having a surplus, it has to decide how to use that surplus. And, there are trade-offs. You can use it for this purpose, you can use it to try to reach poorer clients, you can use it to reach out into rural areas, and you could use it to grow with successful clients. These are all worthy goals. They should make that choice based on their mission. Each of you makes that choice based on your mission. And, it should be OK in our field that we have different missions, that all relate to development. Sonya Sultan: So, the question was about whether clients are willing to pay for non-financial services, and the answer is yes. But, I'd like to explain that we have different categories of BRAC members. We have some who are extremely poor, or destitute. And then, you have some who, after being in BRAC for several years, have moved to either moderate poor or to the category of what we call loanable non-poor. So, among those upper two groups, we find that when people are generating enough income, and are capable of paying, they are very willing to pay for health services, and legal education classes. We have legal clinics where there is a service charge. Even for our poorest borrowers, just to make sure that there isn't this sort of culture of free things being given away, we have always had a small element of service charge. So, sometimes it might even be two takas (three cents), where 60 takas is roughly equivalent to a dollar. But, it is just to create that culture of paying for services. With regards to our health program, we have been able to collect service charges, and that is going part way towards recovering the costs of our health delivery program. Question #3: The first [question] says, "Your paper advocates for credit plus services for the poor. But, to my understanding, credit alone is enough to bring in other developments to the poor. It does not need parallel efforts. If money comes, it enhances understanding and awareness for other services, such as education, human rights, and health." What is your comment? And, a related question says, "I want to expand to credit plus. Do I need to write the health lessons, and the nutrition lessons, from scratch or are there resources I can turn to speed up the process, and lower that part of my cost?" Another says, "How realistic is it to find credit agents with the capacity to do health training in many developing countries?"
Christopher Dunford: …Clearly money is not enough. There is an assumption, perhaps more on the part of economists than others, that somehow if people have money then all problems will be solved. Certainly money is tremendously helpful, essential even, but by itself does not bring about human development…. On the issue of whether it is feasible to find…credit officers who can be trained to do this multi-tasking? The answer is clearly yes.…But, it does, as I said toward the end of my presentation, require very careful recruitment. Is there a set profile of a person that you can train to do more than just provide credit? I don't know what that profile would be at this point. I wish that there were a profile where you could just look at a person, ask them a few questions, and say "yeah, you will do. You will be able to be multi-tasked, to do microcredit and other types of services." But it is being done in the programs that Freedom from Hunger works with, the many partners like CRECER, and Focus Uganda that you heard about. All together there are some six hundred field agents around the world doing this. Not all of them are doing the job very well, but I would say that at least half of them are doing it superbly well, and it is, therefore, a testimony that you can train and supervise people to do this. … Then, on the third point about educational resources, no you do not have to write your own curriculum. A lot of work has been done in this area, and, as Kate McKee has said, I think it is appropriate that microfinance organizations, and those who support microfinance organizations, focus on developing educational approaches, and have more and more of the education occur at the level of the women or clients themselves. In fact, if you do good non-formal adult education, the clients are very involved, and very much participate….Let me just show you two books that that have been produced on HIV/AIDS prevention and care education. One of these is for the field officer, who is working with the clients. The other is for the staff trainer who is preparing the field officers to work with the clients with this book. This is a specific example relating to HIV/AIDS, but there are many other curricula that have been developed on a variety of topics, and available from a variety of organizations. So, you don't have to create your own curricula. However, most organizations like to start with something like this, and then adapt it [to] their own specific philosophy, mission, and the context of the particular clients they are working with. Adaptation is a very important part of this trainers guide, "How to Adapt the Education to the Local Circumstances." This particular example is due to collaboration between World Relief and Freedom from Hunger, and you can order these…
Lynne Patterson: I have to tell you, credit is not enough. A lot of us know that. When we started designing the educational component of PRO MUJER, we went up to El Alto and we worked with groups of mothers who are ex-receivers of donated food- they were organized in mothers clubs- and heard horror stories about women who did not go and use health services because they were treated badly. We are operating in countries where health services are inadequate, where there is no education, and we are talking about clients who have had maybe a couple of years of education. To see this video of PRO MUJER with clinics inside the focal centers is incredible. I am so impressed because here are women receiving adequate health care, and being referred to health care that we are not able to give them…This wouldn't happen automatically. We can't assume that, with a little bit of money, a woman is going to fall into a health clinic and bring her children in for vaccination. I think it is an absolute necessity that we raise awareness on the part of women. We also know that with a little bit of money, she is the last one she is going to spend money on. She is going to use that money for everything else, and she is going to be dying before she takes herself to a clinic to get some help. So again, the importance of self-esteem- you are important, this is the way to preserve your health, you deserve this- this is all such an important piece of empowerment. Personally, …I am convinced that credit is the least of it. We use credit, it is the motor, it brings the women in. They want to increase their income, but the social participation, the group and leadership skills, the training that is coupled with this, makes this packaging and this integration so much more powerful. Sonya Sultan: I'll be very brief. I would just like to respond to the issue about technically if you can train people who do microcredit also to address health issues. Again, I want to emphasize that maybe we use people with technical expertise again to reinforce gaps between poor women, who have no technical knowledge, and specialists. In BRAC, rather than just training program organizers to deal with health issues, we have even trained community health volunteers, Shasthya Shebikas, who are basically a woman from our village organizations, one of our members. She goes to people's houses and can deal with ten basic illnesses. We have also addressed the issue of sustainability of this program by ensuring that she can charge a small service charge, and sell certain health products. So, she is making an income by going to people's houses and providing health care services. She has special access to women, children, and many people in the community because she is a part of the community. And also, an important part is that because she is now seen as somebody who can provide health advice and assistance, it has also created another woman leader in the community. So, I think that we should not always think that dealing with health issues will always mean very technical, complicated issues, and that it is not possible for our organizations to handle such matters. |