When Muhammad Yunus, Ingrid Munro and other microfinance pioneers, got together in the first Microfinance Summit in 1997, they adopted what for many was an impossible goal: to reach 100 million people living with less than $1 per day by 2005.  Although the deadline was missed, the 100 million mark was reached in 2007, an incredible feat nonetheless.

The Microcredit Summit Campaign groups microfinance institutions with the common goals of reaching the poorest and of empowering women. In their State of the Microcredit Summit Campaign Report 2009, they confirm that, having double-checked 80% of the figures of their member microfinance organizations (totaling 3,552 organizations in 2007), the 100-million-poor mark was reached by the end of 2007. Just to get a feeling of the figures involved: it is estimated that these 3,552 microfinance organizations reached more than 150 million clients, of which more 106 million were "poor."

Of these poor clients, 83.4% were women (or nearly 89 million). Assuming five persons per family (a relatively low family size in many developing countries), the more than 106 million poorest clients in turn had an effect on around 533 million family members. More than half a billion. Talk about the scalability of a business model.

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Guest Blogger Sergio Guzmán currently works for the Center for Financial Inclusion at ACCION International from Bogota, Colombia. He graduated from the George Washington University with majors in History and International Affairs.

A Spanish version of the following post can also be found in NextBillion en Español.

By Sergio Guzmán

Nearly 2,000 people convened at the International Symposium on Microfinance as a Tool for Peacebuilding last week in Cali, Colombia, to discuss how microcredit could be used to rebuild the social and economic fabric in post conflict areas of the country.  When it comes to financial services many of the rural municipalities in Colombia are either completely lacking (67 municipalities) or have only the most rudimentary services.  

The country's ongoing political, social and economic conflict, which has lasted over 45 years, has severely damaged the country's social tissue and broken trust between people. This makes it hard for any endeavor, microfinance included, to be successful.

Sponsored by the Alvaralice Foundation, the symposium highlighted various state projects, public-private partnerships, and private projects working on many of these issues, funded by domestic and foreign sources. A myriad of NGOs and regulated financial institutions like WWB Colombia, Finamérica, Banco Caja Social and Bancamía provide financial services to the poor.  From the director of a small NGO in conflict ridden Barrancabermeja to a Miami based NGO called Give to Colombia that channels funding for projects in Colombia from US-based companies who invest there, participants analyzed what it takes to succeed in tough conflicted areas.

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Position: Vice President of Business Development and External Affairs

Location: Cambridge, Massachusetts with travel up to 35 percent of the time

Organization: Root Capital is a nonprofit social investment fund that provides credit and financial education to grassroots organizations—such as farmer and artisan associations as well as private businesses—in developing countries that have socially and environmentally responsible practices.  Headquartered in Cambridge, Massachusetts, Root Capital currently has field offices in Costa Rica, Guatemala, Mexico, Nicaragua, Peru and Kenya.  By offering loans and financial training to small and growing businesses in rural areas of the developing world, Root Capital aims to fill the "missing middle" of finance—serving organizations caught in the gap between microfinance and traditional banking.  Root Capital’s support enables borrowers to take advantage of good business opportunities and rising demand for their products by providing loans and technical assistance needed to grow operations, invest in infrastructure, or manage cashless periods before harvest time.

Description: Reporting directly to the Founder/CEO, the Vice President will lead the business development and external affairs functions both strategically and operationally.  The Vice President’s specific responsibilities will include fundraising, representing Root Capital externally, developing internal management and information systems to help make Root Capital’s fundraising more effective, broadening its donor and investor base, and increasing revenues.  S/he will manage an eight-member team that includes individual and institutional fundraisers, marketing and communications professionals, and impact assessment staff.  The ideal candidate will be creative and resourceful, with an established reputation in impact investing, social enterprise, international economic development, financial services, and/or corporate social responsibility.

See the attached job description for more details, including information on how to apply.  More information on working with Root Capital can be found on their web site.

The major players of the Microfinance industry will convene in Colombia this year, not once but twice. Two major venues are set to take place in the country quite soon.

The first is the Microfinance as a Tool for Peace Building conference, scheduled for next week in Cali and organized by Fundacion Alvaralice, a local NGO. Many of the key actors in the Latin American microfinance community will be part of the discussion, including people like Carmen Velasco from Bolivia's ProMujer, Maria Otero from ACCION and John Hatch from FINCA International.

What's even more interesting about this event is its emphasis on discussing the role microfinance can play in conflict resolution and peace building. The Government Agency in charge of reintegration programs aimed at former guerrilla and paramilitary combatants will play a major role and it will surely be interesting to learn not only about development but also reconciliation through enterprise.

(Side note: While writing the last paragraph, Shurush came to mind. It is a microfinance program aimed at fostering business relationships between Arabs and Israelis thorough small business in the West Bank and Gaza. Talk about timeliness. It was founded by Uri Pomerantz, a former Stanford GSB/ KSG dual degree student whom I met a while ago.)

Later in the year the Microfinance Summit Campaign will also touch ground in Colombia, this time in Cartagena. The exact details and registration are not yet available but delegates from over 50 countries are expected to attend, including Dr. Muhammad and representatives from novel and increasingly relevant organizations like Unitus.

We won't be able to head over there but will do our best to cover both venues through guest posts. Stay tuned for that.

NextBillion left off in 2008 with Rob's post about Kiva and I'll pick up in the new year where Rob left off.  I recently sat down with Matt Flannery, Founder of Kiva, to chat about BOP Source and Kiva's work in Asia. I wanted to share a brief update on the latter and point you to Matt's blog, which provides great insight on the triumphs and challenges of running a global organization like Kiva.

Part of Kiva's success is due to the outstanding Microfinance Institutions (MFIs) they partner with, an aspect of Kiva that also requires a lot of due diligence and a lot of staff. Taking a look around their offices in the Mission district of San Francisco, I said to Matt, "Wow, you have a large staff!" He said, "That's because of all the due diligence we do."

Matt has openly blogged about early tribulations with MFI partners in Africa that led to tighter due diligence. Kiva has approximately 15 people on staff solely dedicated to due diligence and monitoring. Additionally, Kiva is hiring local staff in Southeast Asia, Africa, and South America to augment the work of Kiva's staff in San Francisco. In May of 2007, Kiva received a $345,000 grant to expand its due diligence operations.  Ernst & Young has also donated up to $1 million in audits.

That said, Kiva will be expanding its presence in Asia in the near future and has already identified promising partners and high-impact regions to work in.

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It's the holiday season in the United States, which means many bloggers are talking about gifts, giving, philanthropy and the state of the world.  All this gift-blogging got me thinking about one of my favorite gifts (to give and to receive) - Kiva gift certificates.  If you need to pick up a last minute stocking stuffer, you could do a lot worse.  (Don't know Kiva?  We've written about them before, including interviews with founders Matt and Jessica, as well as a comparison between them and MicroPlace, a P2P microfinance competitor.)

There's another way to give Kiva, but it won't fit in a stocking: you can give yourself.  That's right: if you're looking to get involved in microfinance very personally, Kiva has a Fellowship program that allows volunteers to spend anywhere from 10 weeks to a year working for a microfinance organization.  According to their web site:

The Kiva Fellows Program offers individuals a rare opportunity to travel abroad and witness firsthand the impact and realities of microfinance, by working directly with a host microfinance institution (MFI). The Kiva Fellow is an unpaid, volunteer based position designed to increase Kiva's impact and to offer participants a unique insider experience. Past participants have found the fellowship to be a great first step in a career in microfinance or international development.

All the details are available on their web site.  I've been keeping my eye on the Kiva Fellows program for the past few months, especially as the financial crisis unfolded here in New York.  I wondered, what are all these newly-unemployed finance pros going to do with their time?  Maybe some of them are going to want to give back - but how?  A Kiva Fellowship is a good place to start.

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Guest blogger Karen Lynn Vincent, a serial social benefit entrepreneur, is the co-founder and current chief operating officer at Resdida, a hybrid social business distributing content via mobile devices to the rural poor. She also works with the Global Social Benefit Incubator (GSBI) in the Center for Science, Technology and Society at Santa Clara University.

She sent us the following post from Santa Clara, California, where the Transformative Changes through Science and Technology: The Role for Social Benefit Entrepreneurs conference took place last week.

By Karen Lynn Vincent

During his morning address, 2006 Nobel Peace Prize winner, Muhammad Yunus of the Grameen Bank said that the integration of the many Grameen companies occurs not in structure or organization but with the woman in the village.  The Grameen companies are separate entities that converge in their compassion and empathy for the rural poor. 

Compassion and empathy were the recurrent themes of the day at the Transformative Changes through Science and Technology: The Role for Social Benefit Entrepreneurs conference, presented by the Center for Science, Technology and Society at Santa Clara University in on November 13, 2008.  This conference was held following and in conjunction with the Tech Awards Gala on the evening of November 12 at the Tech Museum in San Jose and brought the many sponsors and laureates together for a highly inspirational day.

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Guest blogger Roxanne Miller is a 2nd-year MBA student at the Haas School of Business at UC Berkeley, focusing her studies on the intersection of international development, social enterprise and technology.  She spent this past summer interning at Unitus and working on an ICTD health care project in Uganda.  Prior to Haas, Roxanne was a Kiva Fellow in Tanzania and spent several years in marketing roles at Yahoo! and American Express.  She is a graduate of the University of Pennsylvania with a degree in Communications.

By Roxanne Miller

I was very excited to listen to the speakers as I walked into the "Beyond Microfinance" panel at the Social Capital Markets Conference. I had read about the Clinton Global Initiative commitments that both Root Capital and Leapfrog Investments made last month; it was also an opportunity to hear about the work I had seen unfold while working for Unitus this past summer.

The panelists, led by moderator Betsy Zeidman of the Milken Institute, discussed new services and financial structures being designed to help the people at the base of the pyramid. Jim Roth of Leapfrog Investments spoke about the emerging area of microinsurance,  Derek Streat of Unitus discussed how insights from the microfinance industry could be leveraged to other sectors and William Foote of Root Capital talked about the innovative ways he is working to bring capital to small and growing businesses.

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With three weeks to go before the U.S. presidential election, it’s no surprise that there’s a lot of interest in democracy here at the Social Capital Markets conference.  Fortunately, the conversation has (thus far) steered clear of moose burgers and the Weather Underground.  After all, the democracy we’re discussing here at SoCap08 is actually related to democratic capital, not democratic governance.  

What is democratic capital, and why should the base of the pyramid community care?  Well, on a very basic level, the democratic capital panel is all about giving investors and borrowers the power to connect directly, without the intermediation of too many financial institutions.  This person-to-person connection takes the shape of four panelists and their social enterprises:

• Robert Chatwani, WorldofGood
• Mads Kjaer, MyC4
• Premal Shah, Kiva
• Tracey Pettingill-Turner, MicroPlace

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Guest blogger Sofia Leon is currently the Senior Program Coordinator at the Center for Financial Inclusion at ACCION International. Her passion is sustainable social enterprise, specifically seeking to scale BOP energy delivery without subsidies.

By Sofia Leon

Following an all-star Opening Plenary, I walked upstairs at the 2008 Clinton Global Initiative to see Chris Crane of Opportunity International, Elizabeth Littlefield of CGAP, and Maria Otero of ACCION International. I work in microfinance and was clearly excited to hear this panel, but I walked into a packed room whose attention was set on the microfinance discussion at hand.

Track director Jane Wales introduced the panel, and after individual project updates from each of the three panelists, Jane asked Maria Otero to announce a new CGI Commitment spreading across the microfinance industry: The Campaign for Client Protection in Microfinance.

Maria Otero set the stage, describing how the growing interest from commercial lenders in serving the markets at the BoP make it essential for MFIs, MFI networks, and in general, institutions serving low income markets to proactively embrace client protection rather than having it forced upon them by governments, donors, or as a compliance matter by investors.

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