Gang: World Relief is hiring for US-based and Sudan jobs.

Make it a great thanksgiving!



Remember all the debate surrounding regulations for microfinance institutions? Here’s the latest from CGAP on that topic:

Microfinance investor institutions signed on to the Client Protection Principles
October 22, 2008    
The following 34 microfinance investor institutions have signed on to the Client Protection Principles, a microfinance industry-wide initiative that encourages providers to ensure that low-income clients are treated fairly and protected from potentially harmful financial products. The Principles are distilled from the path-breaking work of microfinance institutions, international networks and national microfinance associations to develop pro-consumer codes of conduct and practices. While there is little evidence of substantial problems with regard to clients in the microfinance sector, these Principles represent a proactive effort to define minimum standards to safeguard the interests of vulnerable clients.

These early signatories have committed to a process to translate the Principles into standards, policies, and practices appropriate for different types of microfinance clients, products, providers, and country contexts. By doing so, these institutions commit to incorporate the Principles into their investment selection and oversight processes. While it is microfinance providers themselves that are in a position to apply the Principles, investors can encourage compliance and provide positive incentives.
Over the past several years, consensus has emerged that providers of financial services to low-income clients should adhere to the following six core principles:

• Providers will take reasonable steps to ensure that credit will be extended only if borrowers have demonstrated an adequate ability to repay and loans will not put the borrowers at significant risk of over-indebtedness. Similarly, providers will take reasonable steps to ensure non-credit financial products,(such as insurance) extended to low-income clients are appropriate;
• The pricing, terms and conditions of financial products (including interest charges, insurance premiums, all fees, etc.) will be transparent and will be adequately disclosed in a form understandable to clients;
• Debt collection practices of providers will not be abusive or coercive;
• Staff of financial service providers will comply with high ethical standards in their interaction with microfinance clients and such providers will ensure that adequate safeguards are in place to detect and correct corruption or mistreatment of clients;
• Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients;
• The privacy of individual client data will be respected, and such client-identified data cannot be used for other purposes without the express permission of the client (while recognizing that providers of financial services have an important role to play in helping clients achieve the benefits of establishing credit histories).

Much work is needed to identify practical approaches that adequately protect microfinance clients. CGAP is joining with others to support an industry-wide awareness-raising campaign and consultative process to develop appropriate client protection standards. While the Principles are universal, meaningful and effective implementation on the ground will require careful attention to the diversity within the provider community and conditions in different markets.

Additional signatories are welcome, and indeed, sought after. Investor Endorsers of the Client Protection Principles for Microfinance to date include:
Aavishkaar Goodwell India Microfinance Development Company Ltd and Goodwell Microfinance Development Company B.V.
ACCION Gateway Fund and ACCION Investments
Aga Khan Agency for Microfinance
Belgian Investment Company for Developing Countries SA/NV (BIO)
Calvert Foundation
CHF International
Co-Operative Bank (UK)
Deutsche Bank
Developing World Markets
Development Finance Equity Partners
European Bank for Reconstruction and Development (EBRD)
European Fund for Southeast Europe (EFSE)
FINCA International, Inc.
Global Microfinance Group SA
Grassroots Capital Partners
Inter-American Development Bank/Multilateral Investment Fund
MEDA/Sarona Fund
Mercy Corps
MicroCredit Enterprises
Microfinance Development Company B.V.
Opportunity International and Opportunity Transformation Investments
ShoreCap Management/ShoreCap International
Triodos Investment Management B.V.
Triple Jump
VisionFund International – the microfinance subsidiary of World Vision
Women’s World Banking Microfinance Equity Fund

Michael: thanks for the posting and for the link to the debate.  I’ll try to listen to it soon; but it will be tough, since Laura and I will be on a cruise next week and away from the internet.

Everyone, please intercede for my undergrad classmates.  Two of them were housemates with this Aid worker who was killed last week, so please joing me this week in asking for their safety and that they would give a great example of faith to everyone they know during this horrible time.

I’m sure most of us have heard of the recent tragedy in Afghanistan where an aid worker was killed. I was listening to the BBC’s “World Have Your Say” yesterday and the entire episode was devoted to this news story and the question, “Should aid workers preach?”

Below is the audio of that broadcast. I’d love to hear your feedback on the news story itself, the radio broadcast (if you find the time), or the question of evangelism and development work.

BBC World Have Your Say

The even more tragic part of the story is that the development agency that the worker was with does not do evangelism and the aid worker herself was not.

So this weekend Laura and I met a fellow who is in charge of teaching on an upcoming Sunday about Community and Economic Development.  The problem is that he doesn’t know very much at all about Development, but he does have in hand a copy of Bryant Meyer’s Walking With The Poor

My question to you:  He asked me for any resources that I knew about.  If you were going to teach about 2 hours on what Development work is, and how people of our persuasion do it, what resources would you use?  (put your thoughts in the comments, and I’ll pass them on to my friend – or e-mail me)

Hey, everyone, This post is just to say that Laura and I were just accepted by the organization we want to join, and on last Friday, we received notice that the particular country that we want to join has accepted our membership.  So things are really looking up for us.

We just finished (on Saturday) our training on developing financial and intercessory partners with that same organization.  Now we’re back in Indianapolis, hoping the process of developing those partners is a quick one!  You can remember that before the Father, please!

By the way, does anyone know if this blog is secure?  Can outsiders view it?

The Baby is fine, by the way.  Much Love,

Ross and Laura

Hello all –

I currently feel blessed to be working in a microfinance institution here in Burundi – “Turame Community Bank.” Just to fill you in, they operate “community banks” in which groups of 30-45 people (90% female) elect 5 executive leaders and apply for individual loans with Turame that are guaranteed by the group. Savings isn’t compulsory… but almost. Once all group members have repaid their personal loans (weekly installments @3%/month – 4 month term) they can apply for a new loan cycle, but personal loan amounts are judged by the level of savings they have. Turame has recently developed a “Staff salary loan” product, moving away from “free” advances on salaries, and are creating a few solidarity groups which would help successful clients graduate into a larger loan range. So that is that.

But this week a young woman from headquarters has arrived to help a partner organization begin implementing a savings driven operation that CARE created. From what I gather, they only work with churches that form groups. They (I’m not sure who “they” is at this point) train trainers to lead these advanced savings groups in which members save for a period up to 1 year, and then make decisions on who to give loans to and for how much. The idea is to help with consumption smoothing (not focused on entrepreneurial activities alone) and emergencies. Once established the groups should be self-sustainable and are expected to spontaneously replicate. Supposedly, CARE has recently declared this to be its most successful program and is diverting all of its microfinance resources to these new groups.

All that to say – what do you think.  Did we study this model in class? It isn’t familiar to me, but perhaps I wasn’t paying attention.

Final thing – Turame is struggling with its poor, problem ridden MIS software (Management Information Systems) and can’t expand to its new teller stations as expected due to the limitations of the software. They are looking for something new, and Wendy mentioned a new product that is out, but it is between .5 to 1 million! Perhaps I shouldn’t be surprised but I am. It seems like a large constraint for growing MFIs that could successfully expand and need updated software, but cannot afford such a tremendous cost. I find myself questioning why an MIS system designed exclusively for MFIs could cost so much, and why there aren’t more feasible AND adequate systems available out there for growing MFIs.  Why don’t one of you get on that and design a less expensive system… 🙂

Hope you are all well. Can’t wait to hear more stories and development adventures.

this is the first post for the group blog of Eastern’s MBA cohort of 2008. Hopefully this blog willbe a place for us to share stories, questions, issues, and prayer requests from our experiences in development.