GreenMicrofinancing

This past week at the summit a major topic was interest rate transparency, as some MFIs have come under fire for charging relatively high rates and allowing "mission drift" to move them to a priority of high profits instead of the original mission of poverty alleviation. Long time microfinance insider Chuck Waterfield has taken the initiative to address these concerns, launching MicroFinance Transparency.

A highlight for me was the lively discussion between Professor Muhammed Yunus, Damian von Stauffenberg (the founder of MicroRate), and Chuck. They debated the importance of the profit motive in growing microfinance, with Yunus holding firm to the ideal of not making a profit, seeking only to break-even and pass any potential profits back to the clients. In my view microfinance has always been a profitable business proposition, with profit driving the ability to expand the reach of poverty alleviation efforts. Perhaps the debate should be reframed around reinvesting profits to expand reach vs. passing profits on to outside investors. Or is it possible to do both?

 The topic is getting great press in the Wall Street Journal, BusinessWeek, Forbes, and many more (100+ stories listed when I searched Google News).  It's great to see this positive move coming from inside the Microfinance community to address these issues now rather than later.
 
With current energy price pressures, environmental degradation, and climate change looming, we at GreenMicrofinance hope to lead a similar movement among MFIs, disclosing standardized metrics of environmental impact and sustainablility.

The energy and microfinance presentation went well today.  I opened my talk, reminding people of the ‘bad omens' Professor Yunus sees on the horizon: rising food and fuel prices, slowing economy, climate change and environmental degradation and the estimate that 100 million people are in danger of slipping back into abject poverty unless these issues are addressed successfully.

It was disappointing there weren't more people at the session, but the people who were there were amazing, as is the work Grameen Shakti is doing in Bangladesh and ESAF in India.  The Managing Director, Dipal Barua showed me his daily solar panel installation count, more 300 yesterday.  When I visited Shakti in 2003 they were doing less than 20 installations a day.  There really is a demand for energy!

This afternoon I did interviews with five amazing women; Gita and Silvia from Indonesia, Maree and Rebecca from Australia and Maaike from the Netherlands via Australia.  All had fascinating stories about their current work and their path to the Microcredit Summit.  The discussions ranged far and wide, but focused on renewable energy and microfinance's role in getting clean energy into the hands of the those at the "Base of the Pyramid'!

Dan will be editing these interviews and will have them on the blog shortly!

 It is interesting to note the shift in energy as the President and Governors move on and the delegates ‘do their thing;' much more ‘laid back' and relaxed!  The opening session is in a smaller room and people are arriving much later, of course that might have something to do with their activities after the meetings yesterday.

 

 

Last night we went to a reception sponsored by Unitus to announce their move into for-profit funding.  The reception was in a beautiful garden between the hotel and the beach; warm gentle breeze, soft sounds of the surf, good food and great conversation.  It is venues like this where the real benefits of a meeting like this are realized. 

I spent a considerable amount of time talking to a young woman who wants to work in Haiti and with an older woman from the UK who has lived in India for the past 25 years; she married an Indian.  She works on social performance measurement (they ask the question: Are MFIs really changing people's lives?) and knows many of the people I do from Fonkoze in Haiti.  She also told me about the Social Performance Taskforce's efforts to incorporate environmental impact into their measurements - I love it when synchronicity happens! 

This morning I rode to the convention center with a man from BRAC in Bangladesh working in Afghanistan and an American working in Beijing.  In Afghanistan, conditions have improved in Kabul over the past three years but degenerated markedly in the provinces and yes, the pollution is as bad as everyone says in Beijing!

We had to arrive at the Convention Center an hour early today because of security; it is everywhere!  The President and First Lady of Indonesia were part of the opening ceremony.    While waiting, I had a chance to discussion technology and education with a young woman from Microsoft (I'm not sure why I continue to gravitate to the corporate types), saw a beautiful Indonesian dance performance, heard more of the exotic music of Bali and was reminded with a video, why we are here. 

Jodiman was married at 10 in 1962, had her first child at 15 and was living in abject poverty when she first heard of the Grameen Bank and microfinance in 1980.  She took out her first loan for $10, despite warnings from friends she would be killed by the bank if she couldn't repay the loan, purchased a rice husker and to is still a Grameen client.  Today, she and her children and her grandchildren enjoy a level of prosperity never dreamed of when she first joined Grameen.  A perfect example of why 98%+ of microfinance borrowers are women.

All the opening speakers addressed the current fuel and food crisis in someway but Professor Yunus summed it up the best.  In his comments he told us of the progress that has been made in alleviating poverty, mainly in Asia but also listed "bad omens of terrible things coming up".  These he said include "rising oil and food prices, the slowing economy, climate conditions and environmental degradation."  He then went on to say "microcredit can be a strong help in addressing these issues by extending agricultural credit and focusing on women."

Given the work we've been doing in Haiti with 2^nd generation biofuels (jatropha curcas), I couldn't agree more.  Agriculture policies in the US and EU have caused some of the problem, it is now time for them to be part of the solution. 

As President Yudhoyono said "microcredit is a tool to promote peace, stability and political development" and without a concerted efforts on the part of developed countries, 100 million people are in danger of slipping back into poverty according to the World Bank.   

Flying USA to Bali is one of the longest flights possible on the planet, at about 20 hours in flight. Any further and it's quicker to come around from the other side. It was then great to see a familiar face during the layover in Hong Kong - it turns out Sam Daley-Harris and Eileen White Read of the Microcredit Summit Campaign were also on my flight!

While waiting to process an entry visa, I had a chance to chat with a tourist from Australia about current events. She was excited about Obama, with comparisons to Ronald Reagan and John F. Kennedy and the possible impact of his campaign. That led to a conversation about microfinance and the difference between 'trickle-up' vs. 'trickle-down' approaches to addressing economic, social, and environmental challenges. Our conversation concluded with the idea that government policy plays a large role, however local actions driven by economic incentives can bring the broadest impact.

After a Rp. 50,000.00 taxi ride (that's $5US) In Bali on the way to lunch with Denise Hughes today we ran into Mr. Bambang Isamawan of Gema PKM, Professor Muhammad Yunus of Grameen Bank, and Sam Daley-Harris.
  (from left: Katheleen, Mr Isamawan, Professor Yunus, Sam, Elizabeth, and myself)
Tomorrow the summit begins. We're excited to see where microfinance is going. Please share your thoughts in the comments below. Stay tuned!

Elizabeth and I arrived last night from the states around 11pm after a 27 hour long transit to be greeted with lush tropical breezes and the sounds of light surf in the background. The musicians had all gone to bed and we had to wait until today to experience the ethereal traditional Balinese music; which we did multiple times.

 Speaking of a long time, I’ve waited many, many years to visit Bali; the Air Force scheduled me to fly a trip to Bali and before leaving the states told me I didn’t need a passport – Wrong! But military intelligence is a whole different subject.

On our first day here, Bali is more than living up to its billing; a land of contrasts and beauty. We ran into Prof. Yunus and Sam Daley Harris in the lobby of the convention hotel, got a sneak preview of a really exciting announcement that will be coming from the microcredit summit tomorrow – sorry but I’m sworn to secrecy. And thanks to Dan, we tracked down the elusive Solar Power Indonesia which has lots of cool technology including a wind turbine on the roof and a sun tracking solar panel in the parking lot. We plan on returning later in the week to learn more about their clients and why they are looking for clean energy.

Please note the lack of comments about the beautiful beaches and pools; while we have seen a number of them, duty has called and I have yet to avail myself of their warmth and charm! And so it goes!

 I can speak for us as a team and say we are thrilled to be blogging daily from the Asia-Pacific Microcredit Summit in Bali, Indonesia.

Our team in Bali includes Elizabeth Israel, Kathleen Robbins, and myself, Dan Lundmark. Back in the USA we have Betsy Teutsch, Thomas Israel, and Joan Hall holding down the fort.

Elizabeth and Kathleen will be presenting at the summit, you can find them here:

Presenting - Tuesday, July 29 * Jakarta Room A
Panel Presentation 11:15 - Microfinance, Their Clients and Clean Energy
Associated Session 18:30 - Financing Clean Energy: A Case Study

In addition to presenting and blogging, we will be filming interviews and recording for an ongoing GMf documentary film project, upcoming podcasts, and educational materials. A special thanks to USAID and MicroLINKS for making this possible.

Got a topic of discussion you would like to see here? Leave a comment with your suggestion. Visit daily here on the GreenMicrofinance blog as we bring a bit of Bali to you.  See you in Bali!