MICRO FINANCE

Microfinance is the provision of financial services such as loans, savings, insurance, andtraining to people living in poverty. It is one of the great success stories in the developing world in the last 30 years and is widely recognized as a just and sustainable solution in alleviating global poverty. The industry began by providing small loans to emerging entrepreneurs to start or expand businesses. Opportunity International was one of the first nonprofit organizations to recognize the benefits of providing capital to people struggling to work their way out of poverty. Over the years, with Opportunity leading the way, the microfinance sector has expanded its financial service offerings to better meet client needs. Along with providing more flexible loan products and business and personal development training, Opportunity offers savings and insurance to help clients effectively navigate the daily hardships they face. Without these services, clients are continually at risk of slipping back into poverty because of unforeseen circumstances. Microfinance organizations make it a priority to serve the particular needs of women, since a staggering 70 percent of all those living in extreme poverty are female. Women are often excluded from education, the workplace, owning property and equal participation in politics. They produce one half of the worlds food, but own just one percent of its farmland. Nearly 85 percent of Opportunitys loan clients are women. While Opportunity gladly extends loans to men, the organization believes the greatest opportunity for interrupting cycles of extreme poverty come from microfinance programs that target female entrepreneurs. When women improve their circumstances, they also improve the lives of their children. By investing in nutrition and education, they help to create a better future for their children and their communities. Despite the success of life-transforming microfinance services, the World Bank says that the industry is not close to meeting the demand. Five hundred million people living in poverty could benefit from a small business loan and only one-third of the worlds population has access to any kind of bank account. The lack of access is particularly severe in sub-Saharan Africa where the World Bank estimates that microfinance is reaching only a small percentage of the economically active population. In sub-Saharan Africas poorest countries, less than 10 percent of the population has an account with a financial institution. In response, Opportunity has committed to building scalable, sustainable and accessible banks throughout the developing world to provide loans, training, savings and insurance products tailored to the specific needs of each region. As the microfinance industry continues to mature, there is a danger that it will drift toward a more secure client base. It is critical that microfinance organizations continue to focus on those with the greatest needsthose who have been displaced, those in rural areas, those who traditional institutions consider unbankablethe most marginalized people. Maintaining that focus, microfinance can help create a world in which the underserved have fair access to economic opportunities and the hope to move beyond poverty.

(((((Nobel Peace Laureate Muhammad Yunus, 'Father of Microfinance,' to Speak Sunday at U-Hall
September 15, 2009 Muhammad Yunus, the Nobel laureate known by many as the "father of microfinance," will speak Sunday at the University of Virginia's University Hall. Doors open at 1 p.m., and Yunus' talk free and open to the public is scheduled to begin at 2:30 p.m. The Bangladeshi economist is credited with helping to alleviate poverty in his South Asian nation by making small loans to the poorest of entrepreneurs, most of them women. "He created the whole concept of social entrepreneurship," said Gowher Rizvi, vice provost for international programs at U.Va. Yunus launched Grameen Bank in 1976. Since then, millions of people have lifted themselves out of poverty with the help of tiny, collateral-free loans, and the concept of microfinance has become a global movement. Yunus and the bank were jointly awarded the Nobel Peace Prize in 2006. The Nobel committee called Yunus "a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries."

In August, Yunus was invited to the White House along with 15 others and awarded the Presidential Medal of Freedom, which is the nation's highest civilian honor. Yunus is the guest of Rizvi, who has known the Nobel laureate for many years. University Hall can accommodate 7,000 people. Free parking will be available in the John Paul Jones Arena and University Hall parking lots. )))

MUMBAI: Professor Muhammad Yunus, the father of microfinance and chairman of the Yunus Centre in Bangladesh, has finally found a taker for his brand of social businesses in India. He is joining hands with the Indian Institute of Management, Ahmedabad (IIM-A) to float a Rs 50-crore fund to seed social ventures. He will help raise the corpus and mentor social entrepreneurs. "I am in talks with several industrialists (in India)," Yunus said. He met some of Mumbai's biggest industrialists during his visit to the city this week. For the uninitiated, Yunus defines a social business as one that pays no dividend to shareholders, but ploughs all profits back into the company whose purpose is to serve social needs. "It's a new class of non-dividend business done in a serious way to solve social problems," he said. Yunus has pioneered many such social businesses, including a JV with Danone that sells fortified yoghurt to poor children for 6 Bangladeshi Taka; Veolia that sells clean water to 100,000 people across five villages for 1 taka (for 5 litres); and a third JV with chemicals multinational BASF that sells long-lasting insecticidal nets and multi-micronutrient sachets to the poor. His alliance with IIM-A fructified after one year of discussions with its Centre for Innovation Incubation and Entrepreneurship (CIIE). STRONG MENTORING NETWORK We are exploring a collaboration with Yunus to build a stronger ecosystem to support fledgling entrepreneurs who are creating innovative solutions in the social sector," Rakesh Basant, chairperson of CIIE and professor of economics at IIM-A, said. The CIIE has been involved in incubating early-stage enterprises across the healthcare, education and livelihood space. They will collaborate with the Mumbai-based arm of Grameen Creative Lab (GCL). GCL, which seeds social businesses, is a joint venture between the Yunus Centre and circ-responsibility, a consulting company in Germany. The CIIE and Yunus will collaborate to create a strong mentoring network, an incubation program to be designed by GCL to help entrepreneurs identify and build viable social business options. The CIIE's initial idea was to raise a Rs 5-10 crore fund, Basant said. But Yunus raised the bar with the proposal for a Rs 50-crore fund. "Fund-raising has not started yet and we don't yet know how much we will be able to raise," he added. This is the Nobel Laureate's second visit to India in the past 26 months. He has been building the case for Indian industrialists to start social enterprises that do not return profits to shareholders. None has responded yet. Hence, the plan for a Rs 50-crore fund. Yunus hopes to raise the corpus from Indian corporate and philanthropic foundations.

"Rich industrialists in India prefer charity than investing in business without any return expectations," says Vineet Rai, founder and CEO of Aavishkaar, which invests in social impact enterprises with a profit motive. India as a country has only now started discovering the risk-reward paradigm and it will be a few more years before the Yunus model will find takers, he said. Anu Aga, director on the board of Thermax, a $1-billion engineering solutions company, who met the professor in Mumbai last Sunday, is intrigued by the model but is not yet ready to try it out. There are some exceptions, though. Recently, Piramal Group Chairman Ajay Piramal and Dr Reddy's Laboratories Founder K Anji Reddy independently started working on social businesses similar to the Yunus model. Reddy's project provides villagers with pure drinking water. Piramal has a low-cost healthcare delivery model and a rural BPO. Both do not expect returns, but plough profits back to scale up the businesses. Yunus' personal journey in this sector has been long, and controversial in the recent past. On April 2011, Bangladesh's highest court dismissed Yunus as managing director of Grameen Bank, the path-breaking microfinance institution he founded. But Yunus is undeterred and has set up three international joint ventures and about eight social business enterprises over the last five years.