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Ensuring access to microfinance services for people with disabilities
-Workshop for stakeholders
from the disability and microfinance sectors
Day 1
Workshops rules
• Confidentiality
• Respect for the opinions of others
• Listening
• Speaking freely
• Co-responsibility
• Punctuality
• Photographs
Disability&
Inclusive Development
Definition
Persons with disabilities include those who have long-term physical, mental, intellectual or sensory impairments which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.
(Art. 1 - UNCRPD)
International Convention
• The Convention on the Rights of Persons with Disabilities received its 20th ratification on 3rd April 2008, triggering the entry into force of the Convention and its Optional Protocol 30 days later.
• This marks a major milestone in the effort to promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms of persons with disabilities, and to promote respect for their inherent dignity.
Disability is a Human Rights Issue
• Disability is an unavoidable and universal part of human diversity
• There has been a change in the way the person with disabilities is viewed: From being seen as an object of charity
and a burden = approach of assistance To a subject of law = approach based on
the respect of all human beings
Shift from a charitable to a rights-based approachwhereby the individual is respected and
empowered
• In light of this change, four core human rights values take on particular importance in the context of disability :Dignity: respect for a person’s physical and moral
integrityAutonomy: capacity for self-directed action,
decision and behaviourEquality: no discriminationSolidarity: social support
Everybody has the same rights and should have the same access to their rights
The problem is within the individual: the disability is the direct result of the person’s impairment
Disability is only a health (thus medical) issue
Solutions are designed by « medical experts » on the basis of a medical diagnosis
Focus: elimination or cure of disability ; normalisation
Reference to people with disabilities as an oppressed minority
The environment of people with disabilities is the problem
Disability is the result of barriers linked to the physical environment, attitudes, information and communication. This leads to unequal access to opportunities
Focus: elimination of barriers linked to physical space, attitude and information/communication
Disability viewed as an individual pathology
MEDICAL MODEL
Disability viewed as a social pathology
SOCIAL MODEL
Contrasting disability models
Adapted from Rioux, 1997 - Cité par Interactif déc 2002 - Understanding disability : look, then act
SOCIAL PARTICIPATION
Environmental factors
Interaction
Personal factors
Human development model (RIPPH, 1996)
Intrinsic Extrinsic
HUMAN DEVELOPMENTAL MODEL
Personal factorsPersonal factors
Life HabitsLife Habits
HUMAN DEVELOPMENTAL MODEL
Facilitator - Obstacles
Environmental Environmental FactorsFactors
CapabilitiesAbility – Funct. impairment
Organic systems Integrity - Impairment
Social Participation - Disabling Situation
Interactions
Adapted from the Disability Creation Process, Fougeyrollas et al., 1997
Approach that respects the full human rights of every person, acknowledging diversity, eradicating poverty and ensuring that all
people are fully included and can actively participate in the development process and in activities, regardless of age, gender, disability,
state of health, ethnic origin or any other characteristic.
Inclusive development
Specific services
Access to mainstream services
whenever necessary
For an « equal enjoyment of all human rights and fundamental freedoms »
Twin-track approach !
United Nations Convention on the Rights of Persons with Disabilities - 2006
whenever possible
TWIN TRACK APPROACH
Specialised services(direct rehabilitation services for
PwD)
• Physiotherapy• Occupational therapy• Prosthetic + Orthotic
services• Sign language• Corrective surgery• Information leaflets in
Braille• Care-givers, etc…
Mainstream services(non-specialised services for society in
general)
• Awareness campaigns to change communities’ attitudes towards disability (positive attitude)
• Removal of physical barriers• Accessible information
/communication• Access to livelihood
opportunities• PwDs included in mainstream
MFI targets, etc…A principle :access to mainstream services whenever possible, and a specialised approach whenever necessary
Disability, povertyand livelihoods
General figures…
10% - 12% of the world’s population has some form of impairment disability (over 600 million people)
80% live in low-income countries
82% of people with disabilities live below the poverty line
80% of people with disabilities of working age are unemployed
… & Facts
Women with disabilities are generally worse off than men with disabilities
The majority of people with disabilities in developing countries live in rural areas
There is a higher rate of unemployment among people with disabilities than among the rest of the population
Link between poverty and disability
Sources : DFID
Disability: a dormant factor…
… which does not affect people facing severe and chronic poverty.
Sources : National disability survey in Afghanistan - 2005
The impact of being a person with disabilities is felt when the situation
starts improving
The situation in Afghanistan
Livelihood opportunities
• Employment
• Social security resources / safety net
• Self-employment
Lack of opportunities in the job market
Exist in only some developed countries
Most often the only option available : 80% of disabled people who have an economic activity are self-employed
Conclusion ✓ People with disabilities suffer from high poverty levels and high rates of unemployment; yet employment is essential to earning a living, helping to support the family and improving self-esteem.
✓ Self-employment is often the only option open to many people with disabilities. In most cases, it is difficult for them to find a formal job in developing countries.
Being self-employed
Non-specific to
PwD
Specific to PwD
Needs for starting
and managing a business
Non-specific to
PwD
Specific to PwD
Needs for starting
and managing a business
•Technical skills•Business management skills –experience•Conducive legal environment•Reliable suppliers – good products & services•Market – potential clients•Capital (to buy tools, equipment, supply, etc.)
•Physical access to facilities (business sites, market, suppliers sites)Absence of discrimination – community support•Adapted workstations•Self-confidence
Access to capital
Grants
Own capital (savings)
Loans
In the absence of collateral
In the absence of a source of income/business (very poor)
Existing business management capacity and technical skills
To compensate competitive disadvantages
Providing grantsIn what situations is it appropriate to provide grants?
Needs assessment of the individual situation and business plan
•Entrepreneur follow-up – combine with a loan
•Define appropriate business plan
•Develop access to other sources of capital (savings or loans)
•If in cash, require receipts/invoices and conduct follow-up visits
•If in kind, allocate resources
•Seek contributions from authorities, community, existing entrepreneurs
•Set-up clear procedures & criteria – democratic decision-making process – ensure that controls are enforced
Providing grantsAdvantages Disadvantages
•Limiting risks for the entrepreneurs
•Usually the poorest are targeted
•Tends to take responsibility away from the person concerned
•Usually limited in amount
•Usually one shot
•If in cash, could be misused
•If in kind, complex to manage
•Not sustainable for the « donor » - difficulties in raising funds for grant schemes
•System could be unfair/corrupted
Preventive & corrective measures
Existing repayment capacity (existing business or income)
Existing business management capacity and technical skills
Existing collateral or possibility of pressure
Needs assessment of the individual situation
Providing loansIn what situations is it appropriate to provide a loan?
Advantages Disadvantages
Preventive & corrective measures
Providing loans
•Motivation to succeed in business
•Once the person has a good credit record, s/he could be provided with successive and bigger loans to develop the business
•Sometime, the only source of capital accessible
•Sustainable system
•Interest to be paid
•Capital to be reimbursed – burden on the business
•System could be or become discriminating
•Not for the poorest
•Create an interest-free non-profit mechanism
•Business follow-up & counselling; provide training; support/initiate business development activities (creation of cooperatives, organisation of fair)
•Raise awareness of microfinance services providers
•Combine with a grant system
Existing saving capacity and saving
habits
Existing business management capacity
Need to develop saving habits
Using one’s own savingsIn what situations is it appropriate to use savings?
Advantages Disadvantages
•Autonomy
Using one’s own savings
•Vulnerability once savings are used up by starting one’s business
Preventive & corrective measures
•Develop/maintain saving habits
•Provide savings scheme
What ismicrofinance?
Definition• Microfinance refers to the provision of
financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services (Wikipedia)
• Microfinance offers poor people access to basic financial services such as loans, savings, money transfer services and micro-insurance (CGAP)
Objectives of microfinance services
•To increase income
•To reduce vulnerability
Loans, money transfers
Saving, micro-insurance
History
In the 70’s : the first known experiences in Brazil and Bangladesh : ACCION and Grameen
In the 80’s: development of numerous initiatives worldwide
2004: 3000 MFI and 120 million accounts.
Grameen bank, BRAC, FINCA, Prodem…
Microfinance service providers
• Formal sector: banks, cooperatives, NGOs, credit unions
Microfinance Institutions (MFI)
• Informal sector: money-lenders (usurer), self-help groups, rotating savings and credit associations
Microfinance methodologies
• Individual lending: usually a larger loan for microenterprises - collateral
• Group lending: can start from a very small amount - groups of borrowers of between 5 and 30 – peer pressure – women as priority target
• Village banking: loan to a community in charge of lending out smaller amounts
Being a MFI client
Saving may be compulsory prior to accessing credit
Collateral may be requiredCharges to be paid in addition to the capital to
be reimbursed: for opening an account, interest, on late repayments, etc.
Need for repayment capacityA good repayment record usually gives access
to bigger loans
Difficulties encountered by disabled entrepreneurs
-Supporting the entrepreneurship
of people with disabilities
Most people with disabilities…
• Prefer not to apply for microcredit, even if it is available locally
• Are able to adapt and learn quickly• Are risk-averse, afraid to lose what they
have• Consider a loan as a last resort• Do not know how to approach an MFI• Have had unhappy experiences in
approaching officesMersland - 2005
• Are misinformed about MFIs and existing MF products
• May wait for specific programmes
• Who were denied access to a loan believe it is because of their impairment (even if the real reason is business capacity)
• May have higher operational costs in their activity
Most people with disabilities…
Mersland - 2005
Difficulties-
solutions
Internal External
In accessing funding
In managing a business