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  • 1.Giving the Poor a Working Chance:How Microfinance Transforms the Lives of the PoorPresented By: Peter Thorrington

2. The Need 3 billion people half theworlds population live onless than $2 a day Every day, 25,000 people dieof hunger and hunger-related illnesses 90% of these deaths occurwhere food is availablebut the poor cant afford tobuy it 3. Poverty IQ : How much of the world populationis living on $2 per day?50% (2.8 billion) 4. Poverty IQ : Can you fill in the numbers? The combined assets of the worlds3 wealthiest ________ people=equals the total annual income of48the poorest _____________ nations. (1/4 of worlds countries) 5. Poverty IQ :How many AIDS orphans in Africa do we anticipate bythe end of this decade?25 million. 6. Poverty IQ :What is the average life expectancy in countries in southern Africa?46 years. 7. Poverty IQ : Do you thinkthat there is currently enough food availablein the world to provide every person with abalanced diet?Yes there is!No there is not. 8. Poverty IQ : According to the World Bank, microfinance could benefit 500 million families worldwide How many of these currently have access to microfinance?10% 9. Voices of Hopeon Hope, not Hate I was in Pakistan and I was talking to a farmer and I hadheard that he had sent his son to a hate school. I said, Well, why do you do that? They teach hate about theUnited States and Western nations. He said I am kind of embarrassed butI am poor. I have no money. They feedmy child, and they give him free school-ing. Its one less mouth that I have to feed. -- Ambassador Tony Hall 10. Voices of Hopeon Peace and Poverty People who live in extreme poverty, they constitute breeding ground for violence, for recruitment for violence... unless we improve the quality of life at the very bottom, stable peace will not be ensured.--Professor Muhammad Yunus Nobel Peace Prize Laureate 11. Voices of Hopeon Education In Army intelligence, we believe that people must have aninvestment in their society to create an orderly civil society. Economic deprivation and hunger lead to lack of education andilliteracy, which leads to powerlessness and despair and socialchaos. Doors open for radical leadership ready to take advantage ofpeople who can be told what to think, because they have not beentaught how to think. Education is the defense of the bullied from the bullies. The prerequisite for a childs education is the parents ability to earn the money needed to send the child to school. -- Lieutenant General Claudia J. Kennedy, U.S. Army 12. Voices of Hope We will not solve the problem of poverty orglobal peace or stability unless we change ourperception of poor people fromthe object of charity to the asseton which you build a better world.-- James WolfensohnFormer World Bank President 13. Voices of HopeIt is demonstrated that those people who cater toviolence or can be swept into violence are those who areexcluded. And the people who are most excluded arethose who cant walk into banks once they feel a partof [the financial system], then the reason to rebel against the systemno longer exists.One of the wonderful things about microcredit is that it is a first stepinto that broader world which they obviously want to be part of. Itreaches out to poor people. It tells them, I trust you.Microcredit goes way beyond just giving people credit.It gets into the very thing of human solidarity and peace. --Peruvian Economist Hernando de Soto 14. Where Does the $295 Billion Go?Unallocated Giving (6.2%) International Affairs (2.5%)Environment/Animals (3.4%)Religion (35.8%)Arts, Culture & Humanities (5.2%)Public/Society Benefit (5.4%) Education (14.8%)Health (8.7%) Foundations (8.3%) Human services (9.7%) Source: AAFRC Trust for Philanthropy/Giving USA 2006 15. Back into the Area of Least Need 98% 98%2% $295 billion$260 billion 16. Bottom-Up vs. Top-Down Where has the money gone? $2.3 trillion in foreign aid Economic growth in Africarelatively flat The poor are the solution to poverty Business notgovernment/politics Grassroots or communityplanning rather than centralplanning 17. Hand Up vs. Hand Out Treat the poor as masters of their lives, not objects of our charity.Conquer poverty with capitalism and theinnate human hunger for dignity. Self-sufficiency will flourish. 18. The Hard Working Poor The chronically poor are industrious and have small businesses, but lack working capital Loan sharks exploit the poor with expensive loans and high interest rates Microloans make a difference 19. Entrepreneurs Make the DifferenceMicroentrepreneurs are the economic heroes of the developing world Business profits care for children Support average household of 5 Employ 60%-70% of the population Become leaders in their communities 20. Why Microfinance?Microfinance ServicesProvide: Which result in: Loans Increased income Savings Security for the future Insurance Protection from disaster Business training Empowerment Dignity Stimulated economy 21. A Brief History of Microfinance 1970s Prof. Yunus and Grameen Opportunity International Al Whittaker and David Bussau ACCION 22. Microfinance Today The World Bank estimates that there are now more than 7,000 microfinance institutions, serving 16 million poor people in developing countries. CGAP experts estimate that 500 million households benefit from these small loans. First commercial bank dedicated solely to microfinance: BancoSol, 1992 (ACCION) First savings and insurance program: Mid 1990s Microcredit evolved to microfinance, offering other financial services such as savings and insurance Grameen Bank and its founder Muhammad Yunus were awarded the Nobel Peace Prize for 2006 23. Opportunity International Our Mission is to provide opportunities for people in chronic poverty to transform their lives Our Strategy is to stimulate small businesses, create jobs, and strengthen communities among the poor Our Method is to work through indigenous partner organizations that provide small loans, training, and counsel Our Commitment is motivated by Jesus Christs call to serve the poor 24. The Triple Bottom LineOpportunitys triple bottom line : OUTREACH Almost 1 million active loanclients SUSTAINABILITY Opportunitys program revenuesexceeded expenses in 2006 TRANSFORMATION Opportunity not only economic,but social and spiritualtransformation as well 25. The Triple Bottom Line OUTREACH SUSTAINABILITYTRANSFORMATION 26. Sustainable Solution Opportunitys Revenue as Percentage of Cost 120% 100% 80% 60% 40% 20%0%1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 27. Trust Groups Transform Lives Opportunitys Trust Group method: 15 to 40 people guarantee each others loans Small loans ($50 - $300) Competitive interest rates and fees Short terms with weekly payments at Trust Group meetings Trainings cultivate holistic transformation 28. Loyal Loan OfficersFrontline staff meet the pooreveryday Organizing, training,and monitoring Example of Target:400 clients in 10 TrustGroups Incentives to performand grow 29. Client Story Martha 30. Focus on Women 84.13% of all loansgo to women Give a man a fish, he'll eat for a day. Give a woman microcredit andshe, her husband, her children and her extended family will eat for alifetime. Bono, The New York Times, September 21, 2005 31. Focus on Women Best clients 2 out 3 new HIV infections UbuntuThe most direct way to improve childrens survival and welfare is tostrengthen their own mothers ability to take care of them. 32. Building Banks for the Poor Opportunity has built 17 commercial microfinance institutions Building two a year in new countries By 2010, Opportunity will run 10 microfinance banks in Africa alone 33. Safe Place to Save Saving cash is a struggle for the poor Opportunitys deposit-taking banks give the poor a safe place to save 250,000 regulated, interest- bearing savings accounts 34. Microinsurance Chutes and Ladders 3.2 Million lives insuredin 10 countries Varieties: Life, Livestock,Property, Crop Derivative,Package Policy In the Works: Health,Direct to Public Products 35. Innovating for the Poor Biometric technology used to create fingerprint embedded identification cards for the poor, called smart cards Gives clients a safe and secure way to make financial transactions 36. Smart-cards 37. Opportunitys Vision Opportunitys goal is to reach 100 million poor people by 2015 To reach this goal, Opportunity must mobilize $1 billion by 2012 38. The Multiplier Effect $200$100 GIVEN LOAN FUNDS 98% Capital Mobilization loans repaid$81 3:1 2x rotation$2000 in Bank Development Debt to Equity per year hands ofthe poor$62 Bank Management $49 BankEquity 39. Make an Impact Give Pray Learn Share Work 40. Any Questions? 41. Data Sources Campaign Against Poverty: World Bank: 4753/Original/PNG0Road0Maintenance1PID0FINAL1Jan22107.doc Unicef Freedom From Hunger: KIVA: Grameen Foundation: Opportunity International: World Relief: World Vision: Microned ure_against_poverty