Tags >> Microfinance
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Posted by: Elizabeth Israel
Tagged in: Technology , Poverty , Microfinance , Investments , Impact , Environmental Sustainability , Environment , Energy , Eco-Systems , Climate Change , Carbon Offsets , Agriculture
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La Mosquitia, one of the last remaining tropical forest areas left in Central America, is the most impoverished region in Honduras. Local communities, including the indigenous Miskito (or Mosquitia) people, have struggled to keep alive their distinctive cultural heritage while dealing with the threats of environmental and economic uncertainty.
Through a carbon-neutral biofuel initiative, the MOPAWI (from Mosquitia Pawisa) seek to generate equitable social development through sustainable microenterprise utilizing palm oil that is used for a variety of purposes. This approach will provide financial, social, and environmental returns in order to:
- Increase local employment while decreasing out-migration;
- Lower the cost of production and with lower agricultural labor;
- Reduce waste and increase product yield; and,
- Decrease emissions and deforestation.
“The beauty of this enterprise,” says David Hircock, Senior Advisor for Estée Lauder, “is the multidimensional, entrepreneurial approach. Many elements of this approach can bring much-needed cash into the economy and also negate the need for cash. For example, the indigenous community may not need to purchase diesel. Additionally, the enterprise incorporates important elements affecting local security issues, such as food, water, land and economics. Perhaps most importantly, this enterprise could show that the Mosquitia people are integral to the sustainable development of the area and local economy of Puerto Lempira, whereas at the moment they are so often marginalized. Now they can have a much-needed voice.”
Microfinance and Climate Change: Can MFIs Promote Environmental Sustainability The Summary was authored by our own Betsy Teutsch, GreenMicrofinance, Director of Communication. Great work, Betsy!
This report summarizes key themes and “lessons learned” from the “Microfinance and Climate Change: Can MFIs Promote Environmental Sustainability?” Speaker’s Corner, held November 18-20, 2008. Nearly 200 participants from over 40 countries participated in this discussion hosted by GreenMicrofinance, allowing participants to connect and learn about each other's activities.
Energy-Efficient Cookstove
Monday night GreenMicrofinance and Jamii Bora announced their intent to work together on the Jamii Bora gamechanger: Kaputei, its eco-village outside Nairobi, eventual home to 10,000 Jamii Bora members. This microfinance institution, which has grown to nearly a quarter million borrowers in just a decade, is headed by the indefatigueable Ingrid Munro. Here you see her (she's on the left) and GMf's Elizabeth Israel, putting their heads together, strategizing about how poverty can be alleviated, families strengthened, education provided, and health improved, all while taking good care of planet Earth. These two wise women have some fantastic answers to those perplexing questions! (And hats off to Ingrid as she addresses the Clinton Global Initiative tomorrow.)
“We’re coming together, two organizations that have been working toward the same goals, Jamii Bora and GreenMicrofinance,” said Munro.
“The needs we’ve seen in Kenya are the tip of the iceberg,” said Ira Wagner, of GreenMicrofinance. “We hope to use Kaputiei as a model for interventions aimed at ameliorating such growing environmental problems as the 885 million people who rely on polluted, contaminated drinking water, a result of the absence of sanitation.”
Why Women's Rights Are the Cause of our Time
New York Times Magazine
August 23, 2009
WHY DO MICROFINANCE organizations usually focus their assistance on women? And why does everyone benefit when women enter the work force and bring home regular pay checks? One reason involves the dirty little secret of global poverty: some of the most wretched suffering is caused not just by low incomes but also by unwise spending by the poor — especially by men. Surprisingly frequently, we’ve come across a mother mourning a child who has just died of malaria for want of a $5 mosquito bed net; the mother says that the family couldn’t afford a bed net and she means it, but then we find the father at a nearby bar. He goes three evenings a week to the bar, spending $5 each week.
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Reflection on the NY Times Article....
WHY IS MICROFINANCE AND THE ENVIRONMENT important to women today? How can micro-finance be used for Energy Meeting Women's Needs?
 Barh Koh ESDA in Chad approaches poverty relief through environmental protection, working to provide environmentally safe alternative energy sources to the disadvantaged inhabitants and refugees in the region of Maro in southern Chad. The group's focuses on cooking and indoor lighting, to help reduce dependence on firewood, thereby reducing deforestation.
Their plan of action shows the many ways clean technology can transform life in off-grid villages - providing power and preserving habitat. It's always good to read about clean energy's impact on the ground! As a northern city dweller, protection from reptiles is not something I've ever needed to contend with! (#3)
1) Providing solar cookers/ovens to poor rural families.
Solar cookers cost approximately $40 while solar ovens are in the vicinity of $300; which constitute a very small investment to help relieve poverty and save the environment at the same time. Solar cookers and stoves are safe; they cause no danger of fire, burns or smoke inhalation associated with wood burning.
2) Providing solar lanterns for poor families and students. A set of two solar lanterns can cost around $40 to $60, including shipping and handling. Solar lanterns are eco-friendly and will reduce the risks of fire hazards associated with kerosene lamps and firewood burning. A solar lantern will also enable a rural student to study and do homework after sunset. Solar lanterns also provide indoor lighting in the otherwise dark rural dwellings.
3) Providing solar flashlights to poor families and students. A single solar flashlight could save lives in a rural family that spends its evenings and nights in perpetual darkness, subject to all sorts of insects, reptiles and other elements. A solar-powered flashlight costs between $20 to $30 and can make a significant difference in a rural villager's life.
(H/T to DevelopmentCrossing).
Teasing out the meaning of "sustainable microfinance"
"There is nothing intrinsic about microfinance that makes it green. The author’s assertion is simply incorrect and ’sustainable’ in the business sense does not necessarily equate to environmental sustainability. A microentrepreneur may use chemicals that are bad for the environment, they may use farming techniques that create run-off, they may cook on inefficient stoves, they may use mobile phones that are difficult to recycle, and they may drive taxis that spew pollutants into the air. It will take a concerted effort by microfinance providers to adopt and enforce environmental lending criteria into the approval process and they will need to work more closely with environmentalists and green technology providers for there to be a significant role for microfinance in improving the environment. I am all for this."
- Elizabeth Wallace
On June 10th, GreenMicrofinance’s William Yager, Director of Sustainable Microenterprise Development, participated in the panel, “How MFIs and Their Clients Can Have a Positive Impact on the Environment,” moderated by Muhammad Yunus at the 2009 Latin America-Caribbean Regional Microcredit Summit in Cartagena de Indias, Colombia. Upon his safe return, Bill imparts his experience and reflections from the conference:
GMf: What are some of the key underlying ideas reinforced by the Colombia Summit?
WY: This particular context was not emphasized during the conference, but kept coming to mind as I listened to a truly remarkable succession of presenters. The background data are stark and unforgiving – the absolute number of poor is actually growing, since more than nine out of every ten births occur in what we know as the "third world"; to call it the "developing" world is, in most cases, truly euphemistic. Global aid programs are overwhelmed. In the wake of the global economic crisis perpetrated by the rich, giving has been reduced dramatically. The poor suffer inordinately in such an atmosphere and have no power to affect their fate. Income (if there is any) is down and prices are up drastically. The gap between the rich and the poor is growing wider, illustrating decisively the human capacity for delusion and short-term self-aggrandizement.
Nevertheless, microentrepreneurship, and the enabling support of microfinance institutions, has emerged from the periphery to the mainstream, not only contributing substantially to country economies but also contributing immeasurably more to human well-being.
GMf: How do you see microenterprise development as a tool in combating global poverty and having a positive impact on the environment?
WY: As outlined elsewhere, microenterprises have the potential to enhance self-esteem, intellectual development, discipline and a spiritual connectedness, as well as economic self-sustainability. For those who may not have the entrepreneurial bent, there is the new potential of employment in successful and hopefully growing enterprises.
This phenomenon of microenterprise as a powerful tool in combating global poverty was given significant impetus by the awarding of the Nobel Peace Prize to Muhammad Yunus and the Grameen Bank. We were indeed privileged to have Professor Yunus as a plenary speaker at several sessions and especially to have him as the chair of our panel on "How MFIs and Their Clients Can Have a Positive Impact on the Environment." The audience was swelled at least as much to be in his presence as to absorb more on the topic.
Professor Yunus, in his characteristically succinct style, said that our polluted environment is "a mess" created by humans, and in need of human innovation to solve the problem.
Consequently, the relevance of the mission of GreenMicrofinance is undeniable.
GMf: What thoughts do you have now as you reflect on meeting those at the conference who are dedicated to microenterprise development as an answer to ending poverty?
WY: On reflection, I would leverage that diagnosis to include global poverty as well. The greed and thinly disguised motivations of the wealthy have continued to marginalize and exploit the poor. The inescapable conclusion is that the stubbornly elusive solution to poverty lies within the human capacity not only for compassion and empathy, but perhaps more importantly for the justice and empowerment that can come from microenterprise development.
Beyond hope, the tangible implementation of real progress was palpable in this group of dedicated people from all over the world. The conference participants seemed to be bathed in a vision for the future – that poverty could actually be eliminated. Their reported experience on the ground was striking, yet they actually entertained the feasibility of ending the phenomenon, having existed for all of recorded history, called poverty…
The unleashing of the human spirit and tapping of fundamental human potential will leapfrog anything that anyone thought possible. What a gift to be sitting among over a thousand of like-minded individuals, from at least 47 countries, many of whom experienced over long periods of time, in the trenches working directly with the poor, with all the frustrations and realism that test anyone’s idealistic commitment! The Summit was goal oriented, experienced, realistic, and without platitudes – inspiring.
(Please see Sarah Ban's blog post on June 18!)
Portfolios of the Poor How the World’s Poor Live on $2 a Day
By Daryl Collins, Jonathan Morduch, Stuart Rutheford, & Orlanda Ruthven
Princeton University Press
Indispensable for those in development studies, economics, and microfinance, Portfolios of the Poor will appeal to anyone interested in knowing more about poverty and what can be done about it.
A thought-provoking read that reminds us to dig deeper, and empathetically, when we contemplate the intricacies of the poor's role in microfinance. The Poor and their Money: Microfinance from a twenty-first century consumer's perspective by Stuart Rutherford is revised and available at http://tinyurl.com/maz43h
Read the summary below, as printed on their site:
"The Microfinance revolution is usually considered to have been led by the NGOs, donor agencies, and more recently banks who offer poor people financial services. But what can we learn from the ways that poor people already manage their money? What are the essential elements that they prize so much that they are willing to pay high interest rates to money lenders, or spend time and energy setting up elaborate savings clubs? The poor and their money emphasizes the pivotal role of savings in the lives of the poor, and in so doing overturns the common misconception that they are 'too poor to save'. Building on the huge acclaim that followed its first publication, the second edition of The Poor and Their Money brings readers up to date with microfinance developments in the twenty first century, including India's self-help group movement, village banks, and microfinance on Wall Street. It also describes the most detailed accounts to date of poor people's day-to-day financial strategies - their financial diaries. The book's clarity and avoidance of jargon make it appealing not only to microfinance students and practitioners, but to general readers as well."
Practical Action Publishing (formerly ITDG Publishing) The Schumacher Centre for Technology and Development, Bourton on Dunsmore, Rugby, www.practicalactionpublishing.org
We want to hear your comments on the book!
MICROCREDIT SUMMIT CAMPAIGN CARTAGENA, COLOMBIA
GreenMicrofinance has organized four panels for the Microcredit Summit Campaign...
from Halifax, Chile, Bali and now Colombia!
GreenMicrofinance appreciates the support of USAID, microLINKS, and the Microcredit Summit Campaign in collaborating with us over the past years in promoting 'environmentally sustainable microfinance'.
GreenMicrofinance Director, Dr. William Yager, joined Dr. Muhammad Yunus, Nobel Laureate 2006, on a panel focused on "microfinance and the environment" at the Microfinance Summit in Cartagena Colombia.
Dr. Yager, with the support of USAID, was one of the 1,000 delegates attending the Summit.
Dr. Yunus chaired the panel, entitled "How MFIs and their Clients can have a Positive Impact on the Environment!"
Dr. Yager commented on the environmental risks facing microfinance clients. With a new paradigm shift, he emphasized that paying attention to the environment = enhanced productivity!
Dr. Yunus closed the session with the following key points:
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Global Warming was created by us, we can solve it just by stopping what we are doing wrong.
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The Poor are not the cause of Global Warming, they are the victims.
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Technology is key.
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Government can do more harm: Subsidies stifle creativity and market sustainability, taxing ecological solutions.
City Dump - Guatemala Hotel Waste Bio-gas Plants - India
Nobel Laureate 2006
Microcredit Summit Webcast - Colombia
microLINKS Blog - Colombia
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