Could Mobile Banking be the innovative answer to the microfinance conundrum?

  

VSLA © CARE/Josh Estey

What do mobile phones and lendwithcare have in common?

The numbers are not conclusive but general web-consensus puts worldwide mobile phone usage at the end of 2011 at 5.6 billion. A number driven up significantly by developing giants China (>1bn) and India (>900m) but numbers are also growing in smaller developing countries like the Philippines (86m), Ecuador (15.9m) and Benin (1.6m). In fact, a Guardian piece found that two thirds of the mobile phones in use in 2009 were being used by people from developing countries.

More than Microfinance: providing training & support services

Entrepreneur: Tifa Efendic

© CARE/Jon Spaull

All microfinance is not the same

Rather, there is huge diversity in the types of microfinance institutions (MFIs) that provide financial services for low-income people. As Larry Reed writes  “… by 2011, more than 3,600 institutions reported providing loans to 205 million people. These institutions ranged from small, village-based savings and loan groups in rural West Africa to banks in Latin America valued at more than a billion dollars”. Since MFIs have differing methodologies and objectives, the impact of microfinance will also vary according to how financial services are provided and whether or not clients receive other non-financial services and support.

Why I Lend: to re-design the system

Village Savings & Loans group, Sierra Leone      

© CARE/Jenny Matthews

Why do you lend?

Like many of the services available to us in today’s ‘modern’ society, financial services are disproportionately enjoyed by the privileged.

Nearly two-thirds of the world’s adult population are left out from the existing banking world and as such, a system is being perpetuated that suits the needs of the well-off and by consequence excludes those less well-off.

Lend with care - lend for women

© CARE

Why do you lend?

It was a statistic quoted far and wide in the past month, yet it remains shocking: women do two-thirds of the world’s work, yet earn only 10 per cent of its income and own a mere one per cent of its means of production.[1] As we look back on International Women’s Month, it is important to continue to remember and support women worldwide who struggle for their livelihood year round.

77 per cent of the entrepreneurs we support at lendwithcare are women. So why is lendwithcare proud to work with so many women and why does this drive so many of our lenders?

Has the debate on microfinance made us forget about the poor?

Lendwithcare on location in Ecuador


Ines © CARE



The microfinance community can be a confusing and contradictory place. Ever growing and buzzing, it is a community built upon grand ‘for’ and ‘against’ statements, a place that is bursting at the seams with facts and figures and a place, let’s face it, that leaves even the most persistent of ‘truth-seekers’ feeling dizzied and exhausted. Which is why my recent trip to Ecuador provided a much welcomed break and refocussed my attentions on what, or more accurately whom, this is all about: the working poor.

Finding the 'right' microfinance partner

Lendwithcare on location in Ecuador

Entrepreneur: Leonor Zhingre

© CARE

When describing to a friend recently how lendwithcare works she responded ‘so it’s a bit like an online dating website for charities?’ A comparison that I instantly felt like rejecting yet one which made me think: As life in developed countries becomes more and more digitalised, whether it be how we find love, complete daily chores like food shopping, or indeed how we give to charity, are face-to-face interactions becoming a waste of time?

Microfinance is changing minds - and lives



© CARE/ Emilie Bailey

For a negative story about aid, you don’t have to look far. The media is quick to cover stories of piracy, corruption and misplaced money. Such stories encourage the public to accept that development fosters dependency, lacks accountability and wastes money. The British public can be misled by the prominence given to stories that generate such controversy. But many positive stories are there, and rarely given the coverage they warrant. One story almost unheard of in the public sphere is the story of microfinance.