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Lean DataSM Insights from BRAC International Microfinance clients tell a story of resilience and growth
The late founder of BRAC, Sir Fazle Hasan Abed, was once asked how he knew which programmes to develop. He answered, “Well, I go to the communities and sit down with the women there and ask [them what] they need.” Listening and learning directly from the people has been part of BRAC’s modus operandi since the beginning of its journey.
As part of systematic efforts to learn directly from its clients, BRAC International Microfinance (BI MF) conducted baseline impact assessments in 2019 to see whether its services are creating positive client outcomes and to inform the setting of ambitious five-year impact targets.
Using Lean DataSM methodology in partnership with 60 Decibels (60db) and with support from Global Partnerships, BI MF spoke to 1,976 group loan clients, all of whom are women and who make up 95% of BRAC’s clientele. Spanning five countries (Myanmar, Liberia, Sierra Leone, Tanzania, and Uganda), the surveys focused on client profiles, their level of satisfaction with BRAC, the challenges they faced, and their reported social outcomes.
This exercise complements BI MF’s ongoing social performance management (SPM) and client protection (CP) initiatives. While SPM and CP ensure BI MF have the management practices and policies in place to manage their social bottom line, the Lean DataSM surveys measure the achievement of the social bottom line.
The results provide direct accounts of how microfinance remains a critical tool for people living in poverty, particularly women, to improve lives and livelihoods, and build resilience. These results impel and encourage the socially-focused microfinance sector to continue to stand beside their clients, who are among the most vulnerable to the impacts of the COVID-19 pandemic and help them weather the economic fallout from the crisis.
“BRAC was able to look at me then trust me and give me [my first loan]…. I can’t get that money from anybody.” Overall, 83% of respondents reported that they could not easily access a good alternative to BRAC, indicating that BRAC is reaching people who are underserved, thereby filling a critical market gap in these countries. 96% of clients surveyed reported that their quality of life has either ‘very much’ or ‘slightly’ improved because of BRAC. The results also show that in countries where BRAC is reaching more people living in poverty, the perceived positive impact is also higher [figure 1].
“Before, it was difficult for me and my family to eat even three square meals per day, but since I started working with BRAC Sierra Leone, there’s enough to eat and more to save for the next day.” The survey results tell a story of resilience: in every country, BRAC’s clients report a reduction in financial vulnerability after working with the organisation. Greater ability to use one’s own funds to pay for emergency expenses is a reliable indicator of improved financial resilience. On average, 83% reported using savings to pay for an emergency expense after working with BRAC, compared with only 44% before. Clients have also reported that their ability to save more (91%), and better plan their finances (84%) have increased as a result of working with BRAC.
“As a single parent, it is from the loan I survive with my child… My husband left me almost empty-handed but it is the loan that has improved my life.” The impact stories from these surveys highlight women’s economic empowerment and challenge some of the prevalent assumptions that microfinance does not empower women. 96% of the women surveyed reported earning more and 69% reported contributing to family decisions more frequently. BRAC loans have also helped manage day-to-day cash flow and improve household wellbeing. Clients, especially in Africa, reported frequently using loans to pay for school fees, medical expenses, and other household expenditures. On average, 62% eat more and better meals, 75% spend more on the home, 59% have better access to healthcare, and 72% spend more on children’s education.
“I was nobody among my people but now I am somebody there.” Overall, BI MF is achieving its mission to create self-employment opportunities, build financial resilience and economically empower women. For internal targeting and monitoring, BI MF has created impact metrics of weighted indexes across five impact areas – Quality of Life, Financial Resilience, Women’s Economic Empowerment, Self-Employment & Livelihood Opportunities, and Household Welfare [figure 2]. While all outcome results are complimentary, quality of Life improvements showed the strongest relative performance.
“For clients who are using BRAC for a long time, please increase the loan amount.” These surveys have been a powerful tool to understand what BRAC’s clients truly care about. When asked to suggest areas of improvement, increasing the loan amount was the most common response in 4 of the 5 countries. On average, 90% of BRAC’s clients described the loans as inexpensive or fairly priced, and over 90% of clients across all countries want to continue working with BRAC in the coming years.
These results support what many practitioners already know to be true – access to financial services builds resilience and improves the lives of women living in poverty – as told by the women themselves. In the midst of this global pandemic, we may not be able to sit down with our clients today as our Founder used to, but we will continue to listen to them, ask them what they need, and continue to invest in their resilient futures.
About BRAC International Microfinance
BRAC International Microfinance (BI MF) currently has over 640,000 clients across six countries (Myanmar, Liberia, Sierra Leone, Rwanda, Tanzania, and Uganda), with 97% of its clients women and 57% rural as of December 2019. BI MF has a mission to provide a range of financial services responsibly to people at the bottom of the pyramid. BI MF particularly focuses on women living in poverty in rural and hard to reach areas to create self-employment opportunities, build financial resilience, and harness women’s entrepreneurial spirit by empowering them economically.
Upoma Antara Husain, Senior Manager, Client Impact and Product, Microfinance; BRAC International Holdings. B.V.