1. Introduction to Financing Microfinance 101: Week ONE Robert Gailey, Point Loma Nazarene University WELCOME!

2. 2 Brief Outline for Tonight Introduction of Mr. Ali – learning about his business Introduction of participants Exploring how household financing works – group activity What are some different approaches to financing and how does microfinance fit in? Inspiration from Grameen Bank and Dr. Yunus Outline of remaining weeks of class Question Time

3. 3 Introductions State your name Your institutional affiliation if you have one Your first exposure to microfinance What you hope to get out of the course

4. Opening Questions 4 Why do people need financing? What things/events do people finance? What mechanisms exist for people to access financing?

5. 5 Rutherford (2000 + Summer 2009)The Poor and Their Money

6. 6 Old Chinese Proverb: A Fishing Analogy Give a man a fish (Traditional relief) or Teach a man to fish? (more progressive development) but He still needs the TOOLS to fish and ACCESS to the water

7. Difference between MED and MF What is the economic objective of an MED/MF Intervention? To build a business/enterprise: For start-up, expansion, or transformation. To provide lump sums of money: For people to use for a variety of needs/wants Which tools are available to meet the economic objective of the MED/MF intervention Financial Tools: Involve some form of cash transaction Non-financial Tools: Do not primarily involve a cash transaction 7

8. MF and MED Tool Matrix Economic Objective Non-Financial Tools Financial Tools Microfinance Institutions (MFIs), Business ROSCAs and ASCAs, Business Insurance, Pre-Entrepreneurial Business Grants (such as Trickle Up Program), moneylenders. Business Development Services (BDS), Livelihood and Vocational Training, Networking/Mentoring. Helping a Business/Enterprise start, expand, or be transformed (from micro to small-scale or small-scale to medium-scale). Helping an individual or family meet their needs/wants for Lump Sums of Money for use in emergencies, life-cycle needs, opportunities, and cultural obligations. Emergency, cultural, and life-cycle ROSCAs and ASCAs, Post Office Savings accounts, Deposit Collectors, Money Lenders Health education, literacy education, and other non-financial forms of information dissemination. 8

9. Typology of Financial Services Major Distinction Financial Services Methodologies Grouping Group Lending Individual Lending Loan fund generated within group Loan fund provided from outside source Source of funding Size of groups Village Banking (e.g FINCA) Solidarity Group Lending Accumulation ASCAs ROSCAs Non-time-bound ASCA Time Time-bound ASCA Latin America Model Grameen Model Ownership 9

10. Primary Goals of Microfinance Institutions (MFI) Breadth of Outreach (how many people served) Depth of Outreach (how poor are people served) Length of Outreach (serving people for many years) Positive Impact (long-lasting and substantive) 10

11. Vision of many MFIs Providing many poor families with access to affordable financial services. Creating indigenous sustainable institutions that can meet the long-term financial needs of their communities. Improving social conditions—better health, sanitation, nutrition, education. 11

12. 12 Outline for Rest of Course Week 2: Focus will be on Microfinance Institutions, interest rates, key debates, Week 3: Focus on local microfinance institutions – International Rescue Committee, Accion, CDC Finance – introduction and information Week 4: Hearing from the clients, clubs, and investors – meet staff and clients from La Maestra, college clubs, and San Diego Microfinance Alliance, and local individuals who are invested in microfinance

13. 13 Concluding Remarks Questions/Remarks Please turn in your tags Come hungry next week – Client of Accion – Happy Joe Luck Kape