Corporate/MFI Partnerships that are Profitable for the Corporation, the MFI, and the Clients

The causes of global poverty can be broadly linked to barriers to access for health, education, employment, information, housing, human rights, clean and safe environment, and ecological stability, among others. Faced with the struggle about which issues to tackle, development agencies often take a “siloed” approach to providing aid and development resources. Too often these “siloed” approaches, whether among separate organizations or even within the same organization, do not effectively leverage operational cost structures to maximize impact, streamline processes, and reduce wasteful investment. Competing aid agencies have even been known to “carve up” the developing world which results in organizations with good intent, working against each other to the detriment of those in need. These approaches to development have created serious inefficiencies in the delivery of development services and limited success in alleviating poverty. In recent decades, private sector strategies to alleviating poverty have emerged to tackle issues of inefficiency and a need for truly sustainable solutions while providing market opportunities for business. These strategies include microcredit/microfinance, multi-national corporations targeting emerging markets, and social entrepreneurs utilizing practices to create replicable and scalable models. Many of the private sector strategies to poverty alleviation have generated great hope and, in many circumstances, measurable improvement in the alleviation of poverty. As a result, many partnerships between corporations and microfinance institutions have been developed to leverage these successes. The purpose of this paper is to present examples of how microfinance institutions, corporations, and private sector strategies can be applied to overcome the challenges of poverty alleviation. Examples from 3 corporate/MFI relationships will be provided as well as an in-depth analysis of how microfranchising, as a solution to poverty alleviation, can work and should work in concert with existing service and product platforms. These platforms include: microfinance institutions, consumer products providers, information services providers, among others. Examples will be drawn primarily from the experiences of Scojo Foundation, a leading social enterprise which utilizes a microfranchise approach to product and service distribution.

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