A short 5-minute presentation on how microfinancing is bringing people out of poverty in the developing world, using Kiva as a case study, written for Ignite Liverpool 15, 15th August 2013

1. Microfinancing the
Developing World
Graeme Lamb

2. Microfinancing & Poverty
1.2 billion people in the world live on less
than $1 (£0.64) per day
World Health Organisation
Over 3 billion live on less than $2.50 (£1.61)
per day
World Bank

3. What is Microfinancing?
Microfinance is a general term to describe
financial services to low-income individuals or
to those who do not have access to typical
banking services.

4. What is Microfinancing?
"Microfinance is the supply of loans, savings,
and other basic financial services to the
poor.“
CGAP (Consultative Group to Assist the Poor)

5. What is Microfinancing?
Microfinance is the idea that low-income
individuals are capable of lifting themselves
out of poverty if given access to financial
services.

6. Microfinancing & Women

7. Microfinancing & Banks
๏ Banks don’t lend to the poor because they can’t
make enough money.
๏ Managing client accounts costs money, small
loans don’t allow large enough return
๏ Formal financial institutions were not designed
to help those who don't already have financial
assets - they were designed to help those who
do.

8. Microfinancing & Banks
Some banks do provide these services, however.
๏Grameen Bank in Bangladesh was formed out of
a project providing small loans to women in the
village of Jobra.
๏Bancosol, a commercial bank in Bolivia, is also a
bank which provides microfinance services for the
poor of Bolivia.

9. Microfinancing & Banks
Poorer people often depend on friends/family &
moneylenders
Informal survey of moneylender rates (14
developing countries, World Bank, 2001)
๏76% of rates more than 10% pcm
๏22% of rates more than 100% pcm

10. Microfinancing Organisations

11. Case Study
๏ Non-profit organisation
๏ Allows individuals to make loans from as
little as $25 (approximately £16)
๏ 972,009 Kiva lenders
๏ $460,333,275 in loans

12. Case Study
๏ 98.99% Repayment rate
๏ 213 Field Partners
๏ 450 volunteers around the world
๏ 72 different countries

13. Case Study
Mrs. Ret Aeth Village Bank Group (Cambodia)
๏Loan of $2650 (partnership with AMK, local institution)
๏Mrs Ret Aeth pig breeder, loan to buy more piglets
๏Also purchase fertilizer and hire farm labourers to grow rice

14. Case Study
๏ 93 lenders worldwide
๏ 14 months repayment terms
๏ 100% paid back in 11 months

15. Case Study
Said (Kenya) runs a retail shop and grocery store
๏Loan of $1425
๏Purpose of loan = add stock (flour, sugar, rice)
๏Also to buy hardware materials to open hardware store

16. Case Study
๏49 lenders worldwide
๏9 months repayment terms
๏100% paid back in 9 months

17. Microfinance Results
Not perfect, but is making a difference
๏Vietnam – Save the Children clients reduced food deficit
from three months to one month
๏Bangladesh – Grameen clients’ income 43% than non-
Grameen clients in same village
๏Indonesia – income of local microfinance recipients
increased by 112%, 90% of households graduated out of
poverty

18. Microfinance Results
Access to financial service is improving the status of
women
"Today I'm a very respected woman in the community. I
have come out of the crowd of women who are looked
down upon. Due to the loan that I received... you have
made me to be a champion out of nobody."
Rose Athieno, Produce Reseller, Uganda

19. Other Options
๏ Grants
๏ Infrastructure development (roads etc.)
๏ Employment programmes
๏ Functional skills (literacy, numeracy)
๏ Community programmes
๏ Legal & institutional reforms

20. Get Involved
๏ Kiva – http://www.kiva.org
๏ Lend With Care –
http://www.lendwithcare.org
๏ Grameen –
http://www.grameenfoundation.org
๏ Opportunity International –
http://www.opportunity.org.uk