Microcredit Summit Campaign to Expand Efforts to Document Success of Microfinance
January 09, 2009
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Gates Foundation Provides $700,000 to Document Success of Microcredit
Grant will fund ambitious program to determine microcredit recipients who rise above extreme poverty
The Microcredit Summit Campaign was the recipient of a $700,000 grant from the Bill and Melinda Gates Foundation. The grant will help the Campaign measure progress toward its goal of ensuring that 100 million families rise above the $1 a day threshold by 2015.
As many as two billion people living on $1 a day or less do not have access to financial services that can help them increase their financial security and improve their lives. Without services like loans, savings, or insurance, it is difficult for families to save and pay for necessities like educational fees, medical bills, household improvements, or emergencies.
The Movement Above $1 a day Project was created in 2006, after the Campaign set new goals for 2015 at the Global Microcredit Summit in Halifax, Canada, to effectively document, through standardized methodologies, the number of microfinance clients who are pulling themselves out of extreme poverty One methodology includes training microfinance institutions (MFIs) in poor countries with “poverty scorecards,” which measure borrowers’ levels of poverty through questions such as what the client’s house is made of, how many of their children attend school, and whether anyone in the household works for a daily wage. So far, the Campaign has trained 25 institutions from 7 countries in Asia on the poverty scorecard.
Another methodology calls for establishing expert panels. The purpose of the expert panel is to develop a credible methodology in estimating the number of microfinance clients who crossed the $1 a day threshold between 1990 and the current year. The Bill and Melinda Gates Foundation grant will allow for the formation of these panels and implementation of a research exercise or study based off of their recommendations. The first such panel was created in Bangladesh and convened in April, 2008. Made up of top Bangladeshi researchers, the panel agreed that a nationwide, recall survey should be implemented to determine client progress The Microcredit Summit Campaign is currently forming an India Expert Panel and plans to form an Expert Panel in Ethiopia in 2009 with the same mandate.
The Microcredit Summit Campaign annually documents how many people around the world have received a micro-loan. The organization’s last report found that in 2006, microfinance institutions reached 133 million clients around the world, 93 million of whom were among the world’s poorest people when they took out their first loan.
“We have the data to support the idea that microfinance is an extremely important way to provide desperately poor families with dignified means to become self-sufficient,” said Microcredit Summit Campaign founder Sam Daley-Harris. “What was missing was the data that showed how many of these families were able to pull themselves above the dollar-a-day threshold. The resources provided by the Gates Foundation will help us do just that.”
Once the poverty scorecards are implemented and expert panels established in the target countries, the results will be reported annually in the organization’s State of the Microcredit Summit Campaign Report, starting in 2010.
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The Microcredit Summit Campaign: Brings together practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations and others involved with microfinance to promote best practices in the field, stimulate the interchanging of knowledge, and work towards reaching the Summit’s goals. The Microcredit Summit Campaign is a project of the RESULTS Educational Fund, a U.S.-based grassroots advocacy organization committed to ending hunger and poverty.
Bill & Melinda Gates Foundation: Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people's health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, the foundation is led by CEO Jeff Raikes and co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
For more information, contact RESULTS:
Robyn Shepherd, (202) 783-7100 x120
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