As a non-profit dedicated to poverty reduction, client welfare has been central to BRAC’s mission since its inception in 1972. In Bangladesh in general, almost all microfinance institutions are non-profits, and so microfinance has always been seen as a tool for alleviating poverty in the country.
The integration of mobile money into microfinance operations is one of the most exciting yet challenging prospects facing microfinance providers today. Mobile money presents a fast, cost-efficient and flexible alternative delivery channel through which money can be transferred, loans can be repaid and savings can be deposited.
You’d be forgiven for thinking microfinance has gone wildly out of fashion. The “development caravan”—defined as the wagon train of poverty interventions that excite donors—has pulled away from micro-lending, drawn to more powerful things like BRAC-style graduation programmes (which aim to “graduate” people from extreme poverty into a sustainable livelihood) and bKash-like mobile money, according to recent coverage in The Economist.
In April, BRAC, Access to Information (a2i), fhi360, USAID and IFMR LEAD jointly organised an event named ‘Digital financial inclusion: Innovations from Bangladesh’ to invite local stakeholders to discuss their experiences and emerging solutions (see a recent write-up by IMFR LEAD summarising the event).
What comes to your mind when you think of microfinance? To me it’s 'easy access'- a key factor that has enabled the sector to reach 34 million poor people in Bangladesh, essentially bringing financial services to their doorstep.
What are some of the most effective innovations taking place in South Asia, the region that is bearing the brunt of climate change? How does one go about building resilience and from then to scaling? This post is the third in a series of blogs that will share BRAC’s lessons on building and scaling resilience to climate change.
Poverty is opportunity. Sure, one can take a kaleidoscopic peek into the word's denotation, but poverty instigates and propels action intended for positive change. Today, around 700 million people are thought to live in extreme poverty, defined as surviving on less than USD 1.90 a day. In 1990, that statistic was more than 1.9 billion.
2015 was an important year for the world of financial inclusion. Starting with the publication of the six randomised controlled trials results in January that sparked debate on the impacts of microcredit, the sector went on to celebrate (and question) an increase of 700 million people with access to financial services since 2011, with the publication of the 2014 Global Findex.
“I can’t thank BRAC enough for standing beside me when I needed help the most,” Rahela, 24, a microfinance borrower and recipient of BRAC’s credit shield insurance, tells us. She borrowed USD 385 in January 2015 to invest in a small clothing business. Recalling her experience, she reveals, “My husband was not interested initially in having a joint insurance policy, but when the customer service assistant explained it in detail, we decided that we should pay the small premium.”