This document provides an overview of microfinance presented at the 2013 Rotary International Convention. It defines microfinance as providing financial services to low-income individuals who traditionally lack access to banking. This includes small loans, savings, insurance, and training. It discusses the origins of microfinance in things like pawn shops and loan funds. A key example is the Grameen Bank in Bangladesh, which pioneered microcredit loans. The document also outlines Rotary's involvement in microfinance through groups like RAGM and district committees.

1. 2013 RI CONVENTION
MICROFINANCE 101
THE BASICS
Jim Louttit
President Elect, Rotarian Action
Group for Microfinance and
Community Development
(RAGM)

2. 2013 RI CONVENTION
• Who is Rotarian Group for Microfinance
and Community Development (RAGM)
• What is Microfinance
• Amparo Buendia Hernandez
• Kim Lorenz
• Candace Embling
• Q & A
AGENDA

3. 2013 RI CONVENTION
• Previously Rotarian Action Group for
Microcredit
• Recent name change to Rotarian Action Group
for Microfinance and Community
Development
• Assist Clubs and Districts to participate in
effective microfinance projects
WHO IS RAGM

4. 2013 RI CONVENTION
• Operates in accordance with Rotary International
policy
• Work with leaders in Rotary and MFIs to build
stronger partnerships to support Economic and
Community Development Projects
• RAGM Members live around the world
representing Rotary Clubs and projects globally
WHO IS RAGM

5. 2013 RI CONVENTION
• Umbrella providing financial services to low-
income consumers
• Traditionally lack access to banking and related
services:
- Loans
- Savings
- Insurance
- Training
WHAT IS MICROFINANCE

6. 2013 RI CONVENTION
• Individuals, small groups of five to six people
or even a larger community group
• Africa, India, Central & South America
WHAT IS MICROFINANCE

7. 2013 RI CONVENTION
MF COMMUNITY GROUP

8. 2013 RI CONVENTION
• 1500s: 1st pawn shop created by
Catholic Church
• 1700s: Irish Loan Fund System started – by
1840’s, over 300 funds running within Ireland
• 1800s: Financial Cooperatives started to
develop in UK & Europe
ORIGINS OF MICROFINANCE

9. 2013 RI CONVENTION
• 1900s: Latin America adaptations
• 1950-1970: State-Owned Development Finance
Institutions emerged
• 1970s: Experimental Microcredit Programs –
ACCION in Venezuela, Grameen Bank in
Bangladesh
• 1990s: Microcredit evolves to Microfinance
ORIGINS OF MICROFINANCE

10. 2013 RI CONVENTION
• Traditionally, banks not providing financial
services to clients with little or no income
• Costs of managing client accounts
• Clients have little or no assets for collateral
• Last resort is turning to local money lenders
paying high interest rates
WHY MICROFINANCE

11. 2013 RI CONVENTION
• Started by Muhammad Yunus, Bangladeshi
economist and professor
• Nobel Peace Prize winners in 2006 for their
efforts to create economic and social
development
GRAMEEN BANK

12. 2013 RI CONVENTION
PROFESSOR YUNUS

13. 2013 RI CONVENTION
• First loan venture was US$27 to 42 women
• Purpose was to buy bamboo to make furniture
• After making and selling the furniture, each
was able to repay their portion of the loan and
make a little profit
GRAMEEN BANK

14. 2013 RI CONVENTION
• Today, one of many financial operations
involved in microcredit lending
• Loan portfolio now over US$9 billion
• Borrowers number over 8 million
• 97% of their clients are women
GRAMEEN BANK

15. 2013 RI CONVENTION
PROUD CLIENTS

16. 2013 RI CONVENTION
• Rotarian Action Group for Microfinance and
Community Development (RAGM)
• District Microfinance Committees / Task
Forces
• Others – Club Projects, Conferences, Project
Fairs, Microfinance Institutions
ROTARY`S INVOLVEMENT

17. 2013 RI CONVENTION
QUESTIONS?