Grameen Foundation Insights

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At Grameen Foundation, our goal is to spur innovation in the global movement to eliminate extreme poverty. Part of that work is to develop better solutions and share them with people like you.

On GF Insights, we share lessons learned from our leaders in the field, news about efforts to expand access to financial and information services for the poor, and how poverty-focused organizations are using data to improve the way they work.

Latest Posts

05/20/2010 by

Lydia Namubiru is the Marketing & Communications Analyst for Grameen Foundation's Community Knowledge Worker initiative in Uganda.

In early 2009, Grameen Foundation went to Uganda with the idea of creating a fluid and effective two way communication channel between rural farmers and the world of agricultural experts, development agencies, traders and commercial players. Through this loop, rural small holder farmers would be given livelihood saving agricultural information generated by the experts and the big players would keep informed on conditions on the farm from adoption of best practices to available produce for sale.

This poster educated people on the benefits of sending a text message like "My bananas are sick!"

04/28/2010 by

Alyssa Jones is a student at Point Loma Nazarene University. Along with her friends, Alyssa lived on $2/day for 3 days to raise awareness about poverty and raise money for Grameen Foundation.

Students live on $2/day to raise awareness for poverty

Alyssa and her friends camped out in cardboard boxes for 3 days

04/21/2010 by

Alex Counts is the President and CEO of Grameen Foundation.

Grameen Foundation’s recent trip to Kenya was a watershed event.  Our founding director Professor Muhammad Yunus joined us at our Board meeting, held for the very first time in Africa.  In addition, and members of our Board and our staff participated in the Africa-Middle East Regional Microcredit Summit, the largest microfinance convening in Africa’s history.  Several of us presented Grameen Foundation’s work to the assembled delegates at some of the event’s sessions.  Staff members Camilla Nestor, George Conard, and Julia Assaad (of our joint venture Grameen-Jameel Pan Arab Microfinance) presented to scores of delegates eager to learn from our experts.  Most of the presenters, however, were African microfinance leaders including several who are long-standing partners of ours. 

04/21/2010 by

Sandra Adams is Grameen Foundation’s Vice President of External Affairs.

During the first week of April several Grameen Foundation board members, other staff and I traveled to Kiambu, Kenya—about 45 minutes outside Nairobi—to see how local organizations are making a difference in the lives of poor families. Staff at the microfinance institution Kenya Entrepreneurship Empowerment Foundation (KEEF) and some of the MFIs ambitious borrowers welcomed us and shared their triumphs and challenges in the fight against poverty in their communities.

Upon arrival, we had the pleasure of meeting the “Bright Vision” borrower’s circle. What a perfect name for a group on their way up out of poverty! They told us that they began as a small, informal borrowers circle (called a “merry-go-round” in Kenya) that provided loans and a place to put savings.

04/16/2010 by

Alex Counts is President and CEO of Grameen Foundation.

Wednesday’s front-page article in the New York Times by Neil MacFarquhar raised some important issues facing the microfinance industry, but, unfortunately presented a distorted picture.  I had the opportunity to challenge the author about his assertions on the Takeaway radio program.

[caption id="" align="aligncenter" width="270" caption="Ibu Yusnaini is a beneficiary of microfinance"]Ibu Yusnaini[/caption]

His sweeping generalizations about interest rates, while focusing on just two countries, could lead the average reader to believe that rates above 80 percent are the norm.  This is far from the truth, as evidenced by a recent report by the Consultative Group to Assist the Poor that found that, on average, sustainable microlenders were charging 26 percent. (Grameen Bank, our model for microfinance efficiency, charges rates from 8% to 20%, and gives interest-free loans to the ultra-poor as a transitional strategy to get them ready for regular borrowing.)  The same report also noted that rates have been falling by 2.3 percent annually and that less than one percent of microfinance clients worldwide actually pay rates as high as those cited in the article. Moreover, in most of the 36 countries studied, microfinance interest rates were below the rates charged on consumer credit cards, which is an appropriate benchmark.

Most microfinance involves substantial direct contact with clients in remote locations and this can be costly.  However, we believe that interest rates will continue to fall, getting closer to the rates charged by the Grameen Bank and other efficient lenders, as more institutions are able to lower their operating costs. These costs are largely driven by local factors, and this is something the article didn’t adequately address.  For example, in taking aim at LAPO (full disclosure: Grameen Foundation has worked with LAPO  for nearly a decade), the article ignored the high costs of doing business in Nigeria and omitted the fact that it actually charges the one of the lowest interest rates among Nigerian MFIs (something that was acknowledged by the client that was interviewed).

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