State of the Microcredit Summit Campaign Report 2012 Jan P. Maes Larry R.

Reed

Microcredit Summit Campaign Co-Chairs

HONORARY CO-ChAIRS Her Majesty, Queen Sofa of Spain Former Prime Minister of Japan, Tsutomu Hata COUNcIL CO-ChAIRS COUNcIL OF HEADS OF STATE AND GOVERNMENT *Manuel Zelaya, Former President of Honduras COUNcIL OF ADVOcATES *Chief Bisi Ogunleye, Chair, Country Womens Association of Nigeria, Nigeria Joanne Carter, Executive Director, RESULTS, USA Premal Shah, CEO, Kiva, USA COUNcIL OF BANKS AND COMMERcIAL FINANcE INSTITUTIONS Eugene Ludwig, Managing General Partner, Promontory Financial, USA Andrew Krieger, Managing Director, Elk River Trading LLC., USA COUNcIL OF BILATERAL DONOR AgENcIES *Soraya Rodrguez Ramos, Secretary of State for International Cooperation, Spain COUNcIL OF CORPORATIONS Franck Riboud, CEO, Groupe Danone, France COUNcIL OF EDUcATIONAL INSTITUTIONS Ned Hill, Former Dean, Marriott School of Management, Brigham Young University, USA COUNcIL OF FOUNDATIONS AND PhILANThROPISTS Pamela Flaherty, President, Citi Foundation, USA COUNcIL OF INTERNATIONAL FINANcIAL INSTITUTIONS *Kanayo F. Nwanze, President, International Fund for Agricultural Development (IFAD), Italy Janamitra Devan, Vice President, Financial & Private Sector Development, The World Bank Group, USA COUNcIL OF NON-GOVERNMENTAL ORgANIZATIONS Margaret Catley-Carlson, Chair, ICARDA and Global Water Partnership, Canada Mazide Ndiaye, President and CEO, Forum for African Voluntary Development Organizations (FAVDO), Senegal COUNcIL OF PARLIAMENTARIANS Wakako Hironaka, Member of the House of Councilors, Japan Dr. Aziz Akgl, Former Deputy for Diyarbakr, Parliament of the Grand National Assembly, Turkey COUNcIL OF PRAcTITIONERS Ela Bhatt, Founder, Self Employed Womens Association, India *John Hatch, Founder, FINCA International, USA Ingrid Munro, Founder and Managing Trustee, Jamii Bora Bank, Kenya Carmen Velasco, Co-Founder and Director, Pro Mujer, Bolivia *Muhammad Yunus, Founder, Grameen Bank, Bangladesh COUNcIL OF RELIgIOUS INSTITUTIONS William Vendley, Secretary General, World Conference on Religion and Peace, USA Dr. D. Veerendra Heggade, Dharmadhikari, Sri Kshetra Dharmasthala Rural Development Project, India COUNcIL OF UNITED NATIONS AgENcIES Noeleen Heyzer, Under Secretary General of the United Nations and Executive Secretary of the Economic and Social Commission for Asia and the Pacific, Thailand *Juan Somavia, Director General, International Labour Organization, Switzerland
Those indicated with an * are also members of the Microcredit Summit Campaign Executive Committee

Published in 2012 by the Microcredit Summit Campaign (MCS) 1730 Rhode Island Avenue, NW, Suite 400 Washington, DC 20036 United States of America Copyright 2012 Microcredit Summit Campaign All rights reserved ISBN # 978-0-9763704-7-5 Layout by Dawn Lewandowski Photos courtesy of: Front (L-R): MCS Sabina Rogers Pro Mujer Back (L-R): Sabina Rogers MCS Al Rafah Bank

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Written by Jan P. Maes Larry R. Reed Compiled by Sam Daley-Harris D.S.K. Rao Sabina Rogers Camille Rivera With assistance from Anna Awimbo Sterenn Bodennec Kristopher Budi Sue Casey Ayesha Datwani Fabiola Diaz Anna Garriott Jeanne Gessa Lisa Laegreid Laura Lalinde Jesse Marsden Dalia Palchik Sheila Rao Camila Rodrguez Campo Xochitl Sanchez
Jan Maes is an independent microfinance and enterprise development consultant. He specializes in knowledge management and learning related to sustainable livelihoods and inclusive markets for households living in extreme poverty. Larry Reed is the former CEO of the Opportunity International Network. His current work involves industry-wide initiatives to protect clients and expand the transformational impact of microfinance. On January 1, 2012, Larry Reed will become the director of the Microcredit Summit Campaign.

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Table of Contents
Introduction Executive Summary Growth, Competition, and Harm to Clients: The Case of Andhra Pradesh Box 1: Th  e Impact of the Crisis by Bob Annibale, Citibank, and Asad Mahmood, Deutsche Bank Box 2: A Major Turning Point Box 3: M  icrofinance Banana Skins 2011: Losing Its Fairy Dust by Philip Brown, Citi Microfinance Box 4: RCTs and Other Forms of Evidence by Guy Stuart, Harvard University

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Microfinance on the Defense

Recovering the Soul of Microfinance Step 1: Do No Harm Box 5: Smart Campaign Client Protection Principles (revised July 2011) Step 2: Know Your Client Step 3: Encourage Savings Step 4: Promote Financial Literacy Step 5: Monitor and Reward Social Performance Step 6: Be Transformative Step 7: Recognize Excellence Box 6:  Reflections on the Seal of Excellence for Poverty Outreach and Transformation in Microfinance by Sam Daley-Harris, Microcredit Summit Campaign

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Survey Methodology Number of Clients Reached Verification Process Growth Resulting from Institutions Reporting for the First Time Distribution of Clients by Institution Size Women Clients Reached The Use of Poverty Measurement Tools Regional Data Conclusion Afterword Acknowledgements Endnote 1:  Institutions and Networks that Assisted in Collection of Institutional Action Plans Appendix I: Verified Microfinance Institutions Appendix II: List of Verifiers Appendix III: Institutions and Individuals that Submitted an Action Plan in 2011

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

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Tables and Figures

Table 1: Figures as of December 31, 2010 Table 2: Biggest Risks and Fastest Risers Table 3: Results of the Verification Process, 12/31/99-12/31/10 Table 4: G  rowth in Poorest Clients from Institutions Reporting for the First Time, 2000-2010 Table 5: Progress in Reporting, 1997-2010 Table 6: Reporting Institutions by Size Table 7: Regional Breakdown of Microfinance Data Figure 1: Competition and Cooperation of MFIs Figure 2: Assessment of Client Indebtedness by the MFI Figure 3: Leading and Average Risk Scores Figure 4:  How Social Performance Initiatives and Actors Are Connected Figure 5: Growth Trajectory of Poorest Clients Reached, 20052015 Figure 6:  Growth of the Number of Poorest Women Reached in Relation to Total Poorest People Reached Figure 7: Regional Breakdown of Access to Microfinance

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Introduction
[Our clients] think about whether they have food or not first. Second thing they think about [is] their shelter. But when you ask, Are you happy? And what is the next step? In which stage do you want to see yourself? they say, I am fine if all the children can get an education; if all of them can earn, then Im happy.
Saiful Nahid, BRAC Uganda

I took loans from various microfinance institutions, such as Spandana, SKS, L&T, Anapurna, Sharda, and Dove. It was a good experience borrowing from them; however, a few borrowers living here did not pay up their loan amount and refused to come forward to pay the outstanding balanceAt the moment, were doing no work because we havent received any loans. We want the MFIs to start the process of lending, so that we are able to pay up our childrens school fees.
Bhagya Rekha, a microfinance client in Hyderabad, India

This has been a challenging year for microfinance. We have faced difficulties before: natural disasters wiping out the businesses of clients in Bangladesh and the Philippines, markets overheating in Morocco and Bosnia, and governments cracking down on microfinance institutions (MFIs) in Nicaragua or on microfinance clients in Zimbabwe. But, over the last year, we have been shaken as we watched rapid growth in a major market, India, turn into a major collapse in one portion of that market, Andhra Pradesh, which has brought real harm to clients we sought to help. At a time like this, it is important that we listen to clients and the people who work most closely with them and know them best. We need to approach the field from the clients vantage pointasking what it is that they are looking for when they utilize financial servicesand redouble our efforts to ensure that the tools we provide will enable them to achieve what they most desire for themselves and their families. I would like to have my own house, have my children become professionals, and be in good health, says Betty Valda, a microfinance client in Bolivia. Saiful Nahid, financial analyst at BRAC Uganda, finds that most of his clients are looking for the same three things: food, shelter, and an education for their children. Iris Lanao, executive director of FINCA Peru, agrees with Saifuls list, adding, When you actually see the data and you tabulate the information, where [our clients] were focusing was to be free of violence, to have a harmonious life. And of course to have your children go to school, but not only to school, but maybe [a] professional calling. For this years report, we interviewed several leaders of MFIs with reputations for knowing their clients needs. We asked these leaders about their clients hopes and dreams. Perhaps we shouldnt have been, but we were surprised by how similar

Where [our clients] were focusing was to be free of violence, to have a harmonious life. And of course to have your children go to school, but not only to school, but maybe [a] professional calling. Iris Lanao, FINCA Peru

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

their responses were. Its the big three, said John de Wit, managing director of the Small Enterprise Foundation in South Africa, education for the children, food, and shelter. Anne Hastings, director of Fonkoze in Haiti, emphasized the importance of secure shelter for people who had recently seen their shelters destroyed. Gilbert Maramba of the Negros Women of Tomorrow Foundation in the Philippines told us that questions about long-term plans might be difficult for some clients: If you are talking about thepoorest segment, the question is, do they really see themselves in the long run? Do they have dreams? My experience [is that] most of them dont. The only thing that concerns them is the day to day, how they will survive today and tomorrow. So when we start talking to them, we really have to put an effort into trying to extract this from them, trying to let them talk about their dreams and that they have that ability to get to that dream, that they can start to hope again, and that they have this ability to get to where they want to goOf course, we do have clients that are not that poor, so its easier to talk about their dreamsIts always education, better housing, and higher income.

[Clients] want regular meals for the whole family, a secure and safe place to live, and education that gives their children a better life.

We see the current challenges in the microfinance community as a chance to refocus our efforts on what our clients most want to achieve. They want regular meals for the whole family, a secure and safe place to live, and education that gives their children a better life. When we use those standards as our measuring stick, when we design our financial services and other support systems so that our clients can achieve these objectives, then we will be providing a tool that our clients can use to help free themselves from the shackles of poverty.

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Executive Summary
As of December 31, 2010, 3,652 microfinance institutions reported reaching 205,314,502 clients,1 137,547,441 of whom were among the poorest when they took their first loan. Of these poorest clients, 82.3 percent, or 113,138,652, are women. Institutional Action Plans (IAPs) were submitted by 609 MFIs in 2011. Together, these 609 institutions account for 56.5 percent2 of the poorest clients reported: this means that 56.5 percent of the data reported is current, less than one year old when this report is published. Assuming five people per family, the 137.5 million poorest clients reached by the end of 2010 affected some 687.7 million family members.

As of December 31, 2010, 3,652 microfinance institutions reported reaching 205,314,502 clients, 137,547,441 of whom were among the poorest when they took their first loan.

Table 1: Figures as of December 31, 2010

Data Point Number of MFIs Reporting (data from 12/31/9712/31/10) Number of MFIs Reporting in 2011 (data from 12/31/10) Percent of Poorest Clients Represented by MFIs Reporting in 2011 Total Number of Clients (as of 12/31/10) Total Number of Women (as of 12/31/10) Total Number of Poorest Clients (as of 12/31/10) Total Number of Poorest Women (as of 12/31/10) Finding 3,652 609 56.5% 205,314,502 153,306,542 137,547,441 113,138,652

Among the organizations reporting in 2011, the Campaign was able to verify3 data from 328 institutions, representing 72,385,972 poorest families: this means that 53 percent of the total poorest reported is both current and verified. A complete list of the institutions verified for this report can be found in Appendix I. With an average client family consisting of five members, loans to 137.5 million poorest clients affect a total of 687.7 million people. This represents more people than the total population of the European Union plus Russia. Although microfinance is no longer micro in its reach, poverty still persists. The Microcredit4 Summit Campaign has two goals: 1) W  orking to ensure that 175 million of the worlds poorest families, especially the women of those families, are receiving
1

When we collected the data in early 2011 (covering the year ending December 31, 2010), clients in Andhra Pradesh were still on the MFIs books and treated as active borrowers. Although recoveries were not forthcoming, their loans were still counted because they were less than 90 days overdue. For this reason, we have included those clients in our total numbers. However, as of August 31, 2011, the situation in Andhra Pradesh has not yet improved. Repayment rates of MFIs in Andhra Pradesh are recorded as low as 10 percent and as high as 55 percent. We prefer to be conservative in our figures; therefore, in this footnote we have deducted 90 percent of Andhra Pradesh numbers from our calculation of global total, poorest, and poorest women clients. If 90 percent of the clients of Andhra Pradesh are deducted from the 205,314,502 total clients reached, the number would be reduced to 199,881,282; if 90 percent of poorest clients from Andhra Pradesh are deducted from the 137,547,441 poorest total clients reached, the number would be reduced to 132,459,207; and if 90 percent of the poorest women clients from Andhra Pradesh are deducted from the 113,138,652 poorest women clients reached, the number would be reduced to 108,231,760. This percentage is significantly lower than in previous years reports because, as of August 31, 2011, when we closed our data collection, Indias National Bank for Agriculture and Rural Development (NABARD), whose fiscal year ends March 31, 2011, was still collecting data from their regional offices and was unable to provide the Campaign with a final tally. Therefore, the current data in this report is missing a figure that has grown from 10 percent of the poorest clients reported in the 2002 report to 41 percent in the 2011 report. If we had received NABARDs numbers and they were equal to the numbers submitted last year, then 94.8 percent of our data in this report would have been current and the remaining 5.2 percent one or more years old. The NABARD numbers included in this report are from March 31, 2010, which means that 94.8 percent of the data in this report is 18 months old or less. By verification, the Campaign means that the verifier has visited the program, met the senior officials, been provided with numbers, and believes that the institution and the numbers provided are reliable and credible. For the purpose of this report and the Summits 19-year fulfillment campaign, any mention of microcredit refers to programs that provide credit for self-employment and other financial and business services (including savings and technical assistance) to very poor persons.

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credit for self-employment and other financial and business services by the end of 2015 2) W  orking to ensure that 100 million families rise above the US$1.255 a day threshold, adjusted for purchasing power parity, between 1990 and 2015 We are on track for achieving the first goal by the 2015 deadline, although the setbacks in such places as Andhra Pradesh put our steady growth at risk. When we set the second goal in 2006, we knew it would be the most difficult to achieve for two reasons: 1) it presents a vast measurement challenge, and 2) at its heart, the second goal requires transformation. A woman moves from mere subsistence to having confidence that she can provide a better life for herself and her family. An empowered woman is no longer as susceptible to external shocks because her family now has increased its assets and income. It is also likely that she now belongs to a rich social network that provides support in difficult times. The challenge of measuring this empowerment, this transformation in the lives of clients, stems from a lack of poverty-level baseline data from 1990 or from whatever year a client starts. While the Campaign still struggles with collecting and verifying data that measures movement out of poverty, it has tried to address this challenge by commissioning nationwide surveys in the worlds two largest microfinance markets: Bangladesh and India. In the State of the Microcredit Summit Campaign Report 2011, we presented the results from the Bangladesh study, led by Sajjad Zohir of the Dhaka-based Economic Research Group. The study found that over the past 19 years (1990 2008), on net, almost 2 million microfinance households in Bangladesh, including nearly 10 million family members, had moved above the $1.25 a day threshold in Bangladesh.

The [India] study shows that, on net, nearly 9 million households involved in microfinance, including approximately 45 million family members, rose above the $1.25 a day threshold between 1990 and 2010.

In August 2011, the Campaign released findings from a similar study conducted in India by Shubhashis Gangopadhyay of the India Development Foundation. The study shows that, on net, nearly 9 million households involved in microfinance, including approximately 45 million family members, rose above the $1.25 a day threshold between 1990 and 2010. The report estimates that in India 37 percent of clients were living below the $1.25 a day poverty threshold when they joined a program. The survey was largely completed before the microfinance crisis in Andhra Pradesh erupted at the end of 2010, which has greatly reduced the number of households served. With India and Bangladesh representing more than half of the total number of microfinance clients reported to the Campaign this year, these studies show by extrapolation that the second goal will almost certainly not be reached by 2015. This is a humbling realization for the Campaign, and this report attempts to explain why the achievement of this goal seems to be out of reach, and what role microfinance can play in making progress toward it. In this years report, we discuss the threats facing the microfinance sector around the world and, especially, the current crisis in South India. After a period of unprecedented growth and competition, dangerous levels of client overindebtedness have resulted, followed by increased credit risk and reputational risk. We also look at some of the exciting initiatives addressing these challenges.

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Hereafter, $ denotes U.S. currency.

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Growth, Competition, and Harm to Clients: The Case of Andhra Pradesh

Over the last five years, India has accounted for 68 percent of the growth in clients reported to the Microcredit Summit Campaign. Many of these clients live in the state of Andhra Pradesh, home to what were the four largest MFIs6 in the country, as well as a state-supported program that promotes self-help groups (SHGs) and links them to formal financial institutions. By November 2010, SHGs were reaching over 17 million clients in the state and MFIs were reaching more than 6 million. Many clients had loans from several different sources, putting the average microfinance debt per household in Andhra Pradesh over $1,700, compared to less than $150 per household in the other states of India.7 One study found that 83 percent of microfinance clients in the state had loans from more than one source, and many had four or more loans at the same time.8 A report from the Consultative Group to Assist the Poor (CGAP) sums up: The picture that emerges from the data suggests that households in Andhra Pradesh [had] too many loans and [more] debt than [seemed] supportable considering their income levels and ability to repay.9 In July 2010, SKS Microfinance Ltd (SKS), the largest of the Indian MFIs (with more than 7 million clients at the time), held an initial public offering (IPO). The IPO raised $155 million for SKS and valued the company at $1.5 billion. Existing shareholders also sold $195 million worth of their shares in the offering, netting handsome profits at a share price that was four times greater than the book value of the company.10 Press reactions to the SKS IPO came in many flavors. Some praised the success of the offering as signaling a future with unlimited sources of funds for microfinance in India. Others focused on the wealth gained by the investors and founders at SKS, while juxtaposing allegations of abusive collection practices. The real bombshell arrived when allegations of suicides by microfinance clients in Andhra Pradesh were reported. In October 2010, the state government responded with An Ordinance to protect the women Self Help Groups from exploitation by the Micro Finance Institutions in the State of Andhra Pradesh.11 This ordinance, among other things, sets a limit on the amount that MFIs can lend to their clients, requires that loan repayments be made monthly rather than weekly, and requires that all repayments be made at local government offices. As a result, reported Mathew Titus, chief executive officer (CEO) of Sa-Dhan, an Indian network of microfinance providers, microfinance operations in Andhra Pradesh have come to a grinding halt.12
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The picture that emerges from the data suggests that households in Andhra Pradesh [had] too many loans and [more] debt than [seemed] supportable considering their income levels and ability to repay. CGAP Focus Note, no. 67

SKS Microfinance Ltd, Asmitha Microfin Ltd, Share Microfin Ltd, and Spandana Sphoorty Financial Ltd. N. Srinivasan, Microfinance India: State of the Sector Report 2010 (New Delhi: Access Development Services, Sage Publications, 2010), http://www.microfinanceindia.org/uploaded_files/publication/1311572030.pdf. D. Johnson and S. Meka, Access to Finance in Andhra Pradesh (Tamil Nadu, India: IFMR Research, 2010), http://www.ifmr.ac.in/cmf/publications/wp/2010/CMF_Access_to_Finance_in_Andhra_Pradesh_2010.pdf. CGAP, Andhra Pradesh 2010: Global Implications of the Crisis in Indian Microfinance, Focus Note, no. 67 (Washington, DC: CGAP, 2010), 3, http://www.cgap.org/gm/document-1.9.48945/FN67.pdf. G. Chen et al., Indian Microfinance Goes Public: The SKS Initial Public Offering, Focus Note, no. 65 (Washington, DC: CGAP, 2010), http://www.cgap.org/gm/document-1.9.47613/FN65_Rev.pdf. http://indiamicrofinance.com/wp-content/uploads/2010/10/Andhra-MFI-Ordinance.pdf. We wrote this report in the summer of 2011.

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There have been no fresh sanctions of loans from MFIs to the clients. The loan recovery rate has come down to less than 10 percent. Willful default has also set in, fueled by local political elements misguiding the clients for apparent political mileage. MFI field staffs are unable to discharge their collection duties, owing to perceived punitive action under the new state act. Small MFIs face the threat of closure of operations due to the liquidity issue and poor recovery of loans.

Sa-Dhan found that, among the 100 MFIs they surveyed, most lacked guidelines on lending to clients of other MFIs and did not have systems in place for measuring a clients level of indebtedness.

In the spring and summer of 2011, Sa-Dhan surveyed its members, clients, and other stakeholders (government officials, investors, and the media) to learn more about the causes of the Andhra Pradesh crisis and the implications for the sector. Sa-Dhan found that, among the 100 MFIs they surveyed, most lacked guidelines on lending to clients of other MFIs (Figure 1) and did not have systems in place for measuring a clients level of indebtedness (Figure 2).13

Figure 1: Competition and Cooperation of MFIs

n No Interaction with other MFIs in the same area Guidelines on serving clients of other MFIs Guidelines on recruiting staff from other MFIs Targeting unserved/ underserved areas 0% 20% n Yes 47% 53% 62% 38% 61% 39% 39% 61% 40% 60% 80%

Percent of MFIs

Figure 2: Assessment of Client Indebtedness by the MFI

n No Appraisal to avoid client over-indebtedness Assessing client indebtedness to other institutions 0% 20% n Yes 37% 63% 61% 39% 40% 60% 80%

Percent of MFIs

Sa-Dhan and others have worked with the government of India to develop a microfinance bill that would put MFIs under the regulatory authority of the Central Bank. Titus told us, The present version of the bill (August 2011) appears to be a comprehensive piece of legislation that purports to resolve the longstanding challenges that the microfinance sector has faced. The bill proposes
13

M. Titus, Report from Sa-Dhan to the Microcredit Summit, Campaign unpublished document commissioned by the Microcredit Summit Campaign, Washington, DC, 8/10/11.

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

holistic services that can be rendered by MFIs including thrift, remittances, pension, insurance, and other services. As of this writing, the bill has been introduced to the Indian parliament and is pending approval. We spoke with two bankers to give us some perspective on the Andhra Pradesh crisis and its implications for the microfinance industry. In Box 1, Citibanks Director of Microfinance, Robert Annibale, and Managing Director of Global Social Investment Funds, Asad Mahmood, at Deutsche Bank address the crisis in Andhra Pradesh. Annibale stresses the need for clarity in regulation and the need for a structure that supports the sector, including credit bureaus, payment systems, and the like. Mahmood calls on us to look honestly at the role that MFIs, donors, and investors played in the crisis and says we must pay greater attention to basic building blocks, such as client protection, interest rate transparency, and social performance.

Box 1: The Impact of the Crisis

Bob Annibale: Clarity Will Bring Stability The Andhra Pradesh microfinance crisis has made all the more obvious the need for clarity in regulation. As we have seen in other markets, whenever you have a lack of clarity in the regulatory environment, combined with rapid growth, something usually goes wrong. In this case, it has almost wiped out the microfinance industry in a large state of a very important country, and it will probably lead to a lot of collateral damage to institutions all across the country. In India, we saw an industry that rose above the radar and was reaching 30 million people. [That industry] now needs to be seen as a formal part of the whole spectrum of financial services in India. It doesnt matter if credit is provided through a non-governmental organization (NGO), a bank, a non-bank financial institution, or a mutual guarantee society; it needs to come under the same regulatory framework. Regulatory clarity allows the market to work even when the regulation may not be the best. Even environments with interest rate caps can have vibrant markets because the financial institutions and investors know what the rules are and how they can operate. Lack of clarity is the worst thing that can happen to a market. We are seeing this now in India. With new legislation before the [national] parliament, investors are starting to make investments again [in] MFIs operating outside of Andhra Pradesh. But, inside the state no one is investing. There is still no clarity on whether the state or federal regulations have preeminence. As a result, clients that used to have access to a variety of microfinance providers now have to go back to the money lenders to get loans. In addition to clarity in regulation and supervision, financial markets need an appropriate architecture to support them, things like credit bureaus and payment systems. With these things in place, then you have the supervisory systems and reporting structures that will help bring more prudence to the system. At Citibank, we work with microfinance in 40 countries. We seek to share the best practices and lessons learned in each of these markets, so that they can be applied to local situations. As part of their due diligence, our local operations will be looking at whether there is the clarity in regulations and the supportive financial continued on next page

Lack of clarity is the worst thing that can happen to a market. We are seeing this now in India. As a result, clients that used to have access to a variety of microfinance providers now have to go back to the money lenders to get loans. Bob Annibale, Citibank

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Box 1: The Impact of the Crisis, continued

architecture needed to support [healthy] growth in microfinance. Bob Annibale is director of microfinance at Citibank and is based in the United Kingdom. (This comment was written in the summer of 2011.)

Asad Mahmood: The Truth Will Set You Free Many people see the Andhra Pradesh microfinance crisis as primarily a political issue. I disagree. While there are definitely political dimensions to it, the problem is much bigger, and a large part of the problem starts with MFIs and the investors and donors that support them. If we as an industry are going to learn from this crisis and improve microfinance as a result, then we need to look at the truth about ourselves. The truth is that too many microfinance institutions had no connection to their clients. transparency of executive pay. Most importantly, the social aspect of what we do needs to be inextricably intertwined with the financial side. The social part of microfinance means paying attention to the customer, and that can only be good for business. At Deutsche Bank, we have and are willing to [continue to] put our money where our mouth is. We are in the process of putting together a $100 million fund to be invested in MFIs that can demonstrate good customer service and product innovation. To qualify for this fund, MFIs must participate with the Smart Campaign and MicroFinance Transparency. We also want to use our name and role in the industry to create a platform where we can talk openly about our problems as an industry and what we can do together to solve them. This is probably the first major crisis we have faced as an industry. Now is not the time to abandon the work. Rather, now is the time to face the truth honestly so that we can free ourselves to serve our clients better in the future. Asad Mahmood is managing director of Global Social Investment Funds at Deutsche Bank and is based in the United States. (This comment was written in the summer of 2011.)

Many MFIs focused on growth and they used a cookie-cutter approach to increase the pace of their growth. They rushed to commercialize and neglected the social side of their business in the process. Asad Mahmood, Deutsche Bank

Many MFIs focused on growth and they used a cookie-cutter approach to increase the pace of their growth. They rushed to commercialize and neglected the social side of their business in the process. And those of us who are donors and investors fueled this addiction to growth with our funding and our expectations. We have seen these sorts of things happen before in microfinance, yet many within the industry havent taken the steps necessary to prevent it from happening again. What should we be doing? Lets start by developing basic building blocks, like the Smart Campaign for client protection and MicroFinance Transparency [for transparency in interest rate pricing]. We need to develop scorecards that show [an institutions] social performance, the strength of their governance, and the

We also spoke with a panel of North American network leaders from Womens World Banking (WWB), Vision Fund, Opportunity International, FINCA, and ACCION, who told us that they were not seeing significant changes in their donors perceptions about microfinance (see Box 2). In many cases, the crisis has led to some longer conversations with their private donors and, for the most part,

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

they were able to show what their networks were doing to try to prevent harm from being done to their clients. While many of their donors may have heard about the situation in India or may have read something about the academic studies that questioned the effectiveness of microcredit, this did not seem to affect their overall support for microfinance. On the other hand, they were having trouble getting the same enthusiastic response from social investors as before. Now the social investors are coming back to us, said Mary Ellen Iskenderian, CEO of WWB, and saying, We thought this was a place where we could do good and make a little money. Now we are really worried about the reputational risk of investing in this sector.

Box 2: A Major Turning Point

We spoke individually with the leaders of five international microfinance networks, together serving over 8 million clients, about how their global operations have been affected by all that has happened in Andhra Pradesh. How has the crisis affected your ability to raise money from donors and investors? Mary Ellen Iskenderian, CEO, Womens World Banking: We were in the middle of raising an investment fund for our members that were transforming into banks. Now we are getting lots of questions from social investors who had shown interest in our fund. The stories about client suicides did enormous damage to those who were playing at the edge of that social investor space and are now not willing to run the risk of doing harm with their investment. On the donor side, we have not seen much impact. This may have something to do with who our donors are and their investment in what we stand for. Rupert Scofield, CEO, FINCA: We havent seen much impact on the donation side, but we have heard from some of our investors that, for the first time, they are seeing some redemptions to their microfinance fundsalthough these still seem to be offset by new investors. In Germany, apparently, the media has severely attacked microfinance and, as a result, it is difficult to raise new microfinance funds thereAnd then there is academia turning its jaundiced eye on microfinance, alleging at best no impact on clients. Scott Brown, CEO, Vision Fund: We have been pushing hard on social performance and client protection for a long time. Now, we are glad that we took those steps before the crisis hit. We are known not just as an investor but as a social investor. On the donor side, we are having a lot more conversations, but these are not bad conversations. We can explain our principles and systems for measuring social impact. Bill Morgenstern, CEO, Opportunity International: We hear lots of questions. The tone has been more, What makes you different? What I point out is that, with us, the money doesnt leave the tent. If we make money on our investments, it gets put back into the business. Were a non-profit. We dont have an exit strategy. Were there for the long haul. Were not looking for an IPO or to make a lot of money from dividends. Most people get that. Donors look for reasons to give and look for reasons not to give. The economy was one reason not to give, and just when it looks like things might get better, then we started getting the bad news about microfinance. That gave people a reason to think about maybe not giving or giving to something else. Year on year, we are about where we thought we would be. continued on next page

The stories about client suicides did enormous damage to those who were playing at the edge of that social investor space and are now not willing to run the risk of doing harm with their investment. Mary Ellen Iskenderian, Womens World Banking

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Box 2: A Major Turning Point, continued

Michael Schlein, CEO, ACCION: We have not seen a drop-off in fund raising. Where it does have an impact is that I have to spend a lot of time explaining what is going on. There is no real short way to describe what went on in [Andhra Pradesh]. People have read about suicides, so Ive got to explain it. What is your network doing in response to the Andhra crisis? Iskenderian: We have spent a lot of time looking at what we stand for as a network and who we want to be a part of our network. When we did this, we realized that we faced the same problems that Sa-Dhan and MFIN [Micro Finance Institutions Network]* in India faced, that membership agreements only allowed for disaffiliation for reasons of performance. But, what about reputational risk? What if a member is operating in a way that is against the best interests of the industry or of the network? We are trying to come up with some rules that will give us more of a voice when this is happening, but its not easy. Scofield: This is now our second time through this sort of thing [following the global economic crisis] and we are taking great care to put our own house in order. Building on our own lengthy history of focusing on social performance, we have signed up for the Smart Campaign, MicroFinance Transparency, and the Social Performance Task Force. Were taking steps to make sure these are implemented in all our countries. Our board has also mandated the creation of a social performance audit committee, which enjoys equal stature with our regular audit committee, but focuses on measuring the impact of our products and services on our clients. We know it will be a long, hard road back to restoring the luster in the crown of microfinance, but we know there is still a lot of good work to be done. We think that if we continue to do good work and demonstrate results, then the donors will come back. There is still the question about whether you can have a real impact with just microfinance or whether you need other social interventions as well. FINCA is starting to work in these areas and I am quite enthusiastic about the prospects of microfinance providing a platform that might also be able to deal with other government and market failures, like education and health care. This is an area where social entrepreneurs can [have a big] impact. Brown: We will continue to make social performance and client protection a key part of our relationship with our partners. We will continue to measure performance against our standards in these areas. This crisis has shown us just how important it is to measure the social side of our work as much as the financial. Morgenstern: We are in the relationship lending business. What this crisis shows is that it is more important than ever to have a good relationship with the client. When things get bad, you want to have the type of relationship with the client that they [will] want to pay you back, so that they can keep the relationship going. You want the client to know that you are going to be there for them over the long haul, so they need to protect their relationship with you. Schlein: This has triggered a good deal of soul searching in the industry that I hope will be a turning point. While Andhra Pradesh has been the spark, I think the issues go much deeper and have been going much deeper for years. What are the real concerns? The real questions center on over-lending, bad collection practices, prices and continued on next page
*Sa-Dhan and MFIN are both microfinance networks in India.

We are in the relationship lending business. What this crisis shows is that it is more important than ever to have a good relationship with the client. Bill Morgenstern, Opportunity International

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Box 2: A Major Turning Point, continued

fees, and impact. Those are good questions to be wrestling with. If these are the issues, then I think the solutions are in strong consumer protection, greater transparency, and some industry-wide uniform way of measuring social performance. I think if everybody adopted Smart Campaign, [MicroFinance Transparency], and some agreedupon standard on social performance, then we will have addressed the substance of the issues.

A few years ago, India showed great promise as a rising star in the microfinance community, rapidly scaling to reach millions of women who sought to educate their children, feed their families, and provide secure shelter. In one state Andhra Pradeshhowever, the rapid expansion came at a cost as MFIs focused more on their own success and growth than on that of their clients. Today, many millions of women struggle to find the access to finance that they once had.

Microfinance on the Defense

Microfinance practitioners around the world have felt the reverberations from the microfinance crisis in Andhra Pradesh, and this has been captured in Microfinance Banana Skins 2011, a survey of the risks facing the microfinance industry. Every 18 months since 2008, the Centre for the Study of Financial Innovation (CSFI) has published Microfinance Banana Skins, and this year CSFI received survey responses from 533 microfinance stakeholders in 86 countries. In his introduction to the report, Andrew Hilton, director of CSFI, writes, A lot of peoplewell-meaning, thoughtful people who are in the microfinance industryare now worried that microfinance has taken a wrong turn, that it has drifted away from its original mission, that is had been co-opted (or even corrupted) by the pursuit of size and profitability.... This is new and...it leaves microfinance and individual MFIs at a tipping point. Will the industry continue to evolveto grow, to offer new products, to move up marketuntil it is essentially indistinguishable from conventional financial institutions (banks, consumer finance companies, etc.)? Or will it rediscover its roots as a more modest source of small-scale credit to a relatively limited market amongst lower-income groups in generally poor countries? In Box 3, Philip Brown, managing director for risk at Citi Microfinance and manager of the Banana Skins project, compares the current Banana Skins report with the two previous issues and with risks in the finance industry as a whole. The current report shows that the top three risks as perceived by the industry are credit risk, reputational risk, and political interference.

The current [Banana Skins] report shows that the top three risks as perceived by the industry are credit risk, reputational risk, and political interference.

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Box 3: Microfinance Banana Skins 2011: Losing Its Fairy Dust

We spoke with Philip Brown, who worked with the CSFI team on the Banana Skins report. We asked Philip to put this third report in the context of the first two and the events going on in the industry as the surveys were being completed at the end of 2010. The Banana Skins survey reflects the sectors continued growth and evolution; it highlights the need for an increased focus on clients needs and related credit risk, as opposed to the institutional risks that dominated earlier surveys. While the immediate risks posed by the global economic crisis have receded, they have been replaced by larger concerns about the future direction of the sector. Credit risk remains the top risk in the 2011 survey. Economic stress remains a factor, but competition, multiple lending, weak internal controls, and political interference, coupled with shifting client behavior, have all contributed to rising credit risk and increased concern about borrower over-indebtedness. Table 2 below compares the biggest risks and the fastest risers of the 24 risks covered in the survey in the 2011 and 2009 reports.

Credit risk remains the top risk in the 2011 survey. Economic stress remains a factor, but competition, multiple lending, weak internal controls, and political interference, coupled with shifting client behavior, have all contributed to rising credit risk and increased concern about borrower overindebtedness. Philip Brown, Citi Microfinance

Table 2: Biggest Risks and Fastest Risers

Biggest risks Credit risk Reputation risk Competition Corporate governance Political interference Position in 2011 1 2 3 4 5 Position in 2009 1 17 9 7 10 Fastest risers Competition Credit risk Reputation risk Political interference Mission drift Position in 2011 1 2 3 4 5 Position in 2009 3 1 11 7 13

The dominance of credit risk, defined as borrowers failing to repay, largely reflects a growing and widespread perception of the problem of over-indebtedness. Respondents identified many causes of over-indebtedness, but the intensity of competition, the number 3 risk overall and the fastest rising risk in 2011, dominates with a high ranking in most regions. The top five risks this year largely go together. Credit risk is the result and needs to be managed for business and reputational reasons. Reputation risk, at number 2, has numerous angles, with many linked to growth and business model transformation.

The Big Movers

UP Reputation Risk: the good name of microfinance increasingly under attack Competition: undermining business and ethical standards Corporate governance: showing weakness under stress Political interference: backlash against MFI lending practices Inappropriate regulation: failing to provide a healthy environment

continued on next page

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Box 3: Microfinance Banana Skins 2011: Losing Its Fairy Dust, continued
Competition is perceived as both positive and negative for the client, increasing MFI risk-taking and weakening lending practices and policy adherence. This is reflected in concerns over the quality and effectiveness of corporate governance. Many now fear that government responses to these issues may cause even more problems for the sector, leading to political interference and inappropriate regulation.

The Big Movers

DOWN Macro-economy: ebbing concern about the global crisis Liquidity: cash shortages easing Too little funding: investors returning to the market Foreign exchange: currency wars not a major concern Interest rates: lower and less volatile
page 7, Microfinance Banana Skins 2011: Losing its Fairy Dust (New York: CSFI, 2011)

Figure 3: Leading and Average Risk Scores

4.5 4 Score 3.5 3 2.5 2 2008 2009 2010 Management Quality Credit Risk Credit Risk

Top Risk Average Score

page 8, Microfinance Banana Skins 2011: Losing Its Fairy Dust (New York: CSFI, 2011)

As shown in Figure 3, overall risk scores reflecting anxiety levels continue to rise as compared with previous surveys. This increasing level of concernthe Andhra Pradesh crisis was only just unfolding when the survey took placeand the resultant questioning is undoubtedly healthy, but as one respondent wrote, Whatever the reason, the industrys reputation will never be the same. The survey provides a snapshot of the rapidly changing landscape of the microfinance sector. Its value is not in any specific conclusions but in raising debate around the risks at a time when hard questions are being asked about the future of the

sector. The responses demonstrate the significant differences in perspective both between regions and practitioners, investors and observers. The survey reflects the breadth of the sector, as well as its continued growth and outreach. It also signals that the microfinance sector is now faced with some of the same forces that we have historically seen in the broader financial sector. Philip Brown is managing director for risk at Citi Microfinance and is based in the United Kingdom. He is manager of the Banana Skins project.

Overall risk scores reflecting anxiety levels continue to rise as compared with previous surveys. This increasing level of concernthe Andhra Pradesh crisis was only just unfolding when the survey took placeand the resultant questioning is undoubtedly healthy, but as one respondent wrote, Whatever the reason, the industrys reputation will never be the same. Philip Brown, Citi Microfinance

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The news from Andhra Pradesh also comes in the wake of a recent spate of academic studies on microfinance, questioning the claims that microfinance consistently moves clients out of poverty. According to Nathanael Goldberg, policy director at Innovations for Poverty Action (IPA) and an academic researcher involved with some of these studies, Randomized evaluations of microfinance are showing mixed results, with credit clearly not the panacea it has sometimes been made out to be, and savings looking promising. Both credit and savings, however, are showing evidence for helping households manage their financial portfolios: to smooth consumption or invest in enterprises.14 The results of these studies have also cast doubt on the methods used to study impact. One of the chief methods, the randomized control trial (RCT), measures the impact of an intervention, such as microcredit, by comparing a group of people who receive a loan with a similar group of people having the same basic characteristics, but who do not receive a loan. These evaluation methods bring new rigor to microfinance assessment, but they also have their own weaknesses. Christopher Dunford, president of Freedom from Hunger, points out that the results [from RCTs] are reported in terms of the average experience of borrowers, which obscures the variety of experience. A large proportion, although still a minority, are investing their loans in real businesses and often doing very well as a result. The majority seems to be benefiting only modestly, primarily from the consumption smoothing effects, and only a small minority is suffering as a result of borrowing.15

Maddeningly, the anti-poverty impact evaluation craze is precariously close to inflicting an unrealistic hegemony over social change. The professions conceit is that, until an academic evaluator evaluates it, every anti-poverty program is under suspicion. Jonathan Lewis, MicroCredit Enterprises

Dean Karlan and Jacob Appel wrote More Than Good Intentions16 to show how RCTs and behavioral economics can guide decisions about where and how to invest limited resources to help reduce global poverty. This book has been praised in Forbes magazine and The Wall Street Journal, but also criticized by those who think it attributes more discerning powers to academic studies than their results justify. Jonathan Lewis, founder of MicroCredit Enterprises, writes in the Huffington Post, Maddeningly, the anti-poverty impact evaluation craze is precariously close to inflicting an unrealistic hegemony over social change. The professions conceit is that, until an academic evaluator evaluates it, every anti-poverty program is under suspicion. In the closed world of evaluation, what cannot be measured is invisible. What cannot be validated by an evaluator should not be funded.17 Box 4 contains an excerpted review of More than Good Intentions by Guy Stuart, independent consultant and fellow at the Ash Center, Harvard University, on the Center for Financial Inclusion Blog, June 14, 2011.18

14

N. Goldberg, A Deeper Look at Programs that Work with the Ultra-Poor: From Safety Net Programs to Other Innovations, unpublished paper commissioned for the 2011 Global Microcredit Summit, Valladolid, Spain, 11/1417/11. From Dunfords comments at a World Affairs Council event, San Francisco, CA, USA, 6/7/11. See http://www.itsyourworld.org/assnfe/ev.asp?ID=2974&SnID=967198496. http://www.poverty-action.org/book/index.html J. Lewis, Social Impact Evaluation: Useful? Utopian? (Part 1 of 4), Huff Post Impact, 6/21/11, http://www.huffingtonpost.com/jonathan-lewis/social-impact-evaluation-_b_881296.html. G. Stuart, More Than Good Intentions by Dean Karlan and Jacob Appel Book Review by Guy Stuart http://centerforfinancialinclusionblog.wordpress.com/2011/06/14/more-than-good-intentions-by-dean-karlan-and-jacobappel-book-review-by-guy-stuart/.

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16

17

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Box 4: RCTs and Other Forms of Evidence

Karlan and Appels book More Than Good Intentions is an easy, and often compelling, read The stories that really drive the chapters forward, and make the book compelling, are the ones which start with Karlan describing how he teamed up with people with good intentions people trying to deliver goods and services to poor individuals and families in developing countries, to gather data in an effort to address a problem they both want to solve. In essence, this is the strength of the work Karlan and Appel describe in this book: For researchers to help in efforts to solve the problems confronting poor people, they have to begin with the problems they and the people who are trying to help them face, and gather evidence regarding what works and what does not work in solving those problems so that they then can act on that evidence. Despite the books many strengths, the book has some weaknesses. One is their view of what constitutes credible evidence in development work. Karlan and Appel want us to believe that randomized control trials (RCTs) are an essential tool in identifying solutions to problems through research. In fact, there is clear evidence that they think this is the only way to do research. They continuously, and condescendingly, equate rigor with the use of RCTs, which begs the question: Are all the people, who generate evidence about what works and what does not work without using RCTs, not doing rigorous work? Are RCTs the only way to get to the truth of the matter? Given how much we know about what works and what does not work in microfinance in the absence of RCTs, we are forced to ask what insights do RCTs add? Lets dig deeper into the discussion of peer lending. As Karlan and Appel note, the evidence from Karlans RCT on group lending shows that the joint liability requirement of peer lending is not essential to risk managementin the absence of its enforcement, the lender is still able to collect. Those who have been in this field for some time already know joint liability is not always enforced fully because of the real concerns of practitioners that it puts too much pressure on the borrowers. Furthermore, as Karlan and Appel note, one of the main proponents of this requirement, Grameen Bank, dropped the practice in 2002, when they instituted their Grameen II reforms. Did they do so in the wake of the findings from an RCT? No, Grameen did not use an RCT to make that decision. Nor was it facing a catastrophic cascade of losses as one group after another collapsed under the weight of the joint liability, which is something that Karlan and Appel argue is a likely consequence of the joint liability requirement. Rather, Grameen talked to its clients and its employees and worked out that individual loans in a group setting could work and would better serve its clients. Though this process of deciding how to change the product Grameen was offering its clients did not involve an RCT, it was evidence-based. But was this evidence good evidence? Did Grameen just get lucky that Grameen II worked? Maybe, but more likely, it was able to generate an accurate picture of the needs of the clients and the potential dynamics ensuing from its product changes, and on this basis made the changes. The ability to be accurate is not a given. First, it requires having the data, which, in this case, were based on years of experience of being in daily contact with clients. Second, it requires that the organization is willing and able continued on next page

Are all the people, who generate evidence about what works and what does not work without using RCTs, not doing rigorous work? Are RCTs the only way to get to the truth of the matter? Guy Stuart, Harvard University

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Box 4: RCTs and Other Forms of Evidence, continued

to learn from its data. Note how these two requirements are key to what Karlan and Appel are arguing for: Have the data and analyze and learn from it. The only thing that is different is the nature of the data experience versus differences in measured results for a treatment and control group. The main lesson for me [from this book] was to reaffirm the importance of continuously engaging in the development process as a series of problems to be solved using concrete evidence to determine what works and what does not. The authors want us to believe that RCTs are the only way to produce concrete evidence, but clearly their own writing suggests that there are other ways. Furthermore, they want to scale up the use of RCTs. It is not obvious that this should be done by expanding the work of organizations like IPA. Rather, they should be in the business (and I believe IPA would argue it is in the business) of training people in developing countries to do this work. I would go one step further and specify that those being trained in these methods in these countries should be midlevel managers in development organizations, who should be inculcated in the ideas of sound data collection and in the efficacy of a learning organization that is not afraid to test its ideas. Furthermore, I would recommend that individual and institutional donors look for organizations that are continuously engaged in working to solve the problems faced by the poor in developing countries and are set up to learn from their mistakes. Guy Stuart is an independent consultant and fellow at the Ash Center at Harvard University and is based in the United States.

It is not obvious that [scaling up the use of RCTs] should be done by expanding the work of organizations like IPA. Rather, they should be in the business (and I believe IPA would argue it is in the business) of training people in developing countries to do this work. Guy Stuart, Harvard University

First, the academic studies showed that microfinance did not consistently result in clients moving out of poverty. Then the Andhra Pradesh crisis showed that too rapid growth of microfinance in one area can cause real harm to clients. This has been a sobering year for the microfinance community. As Michael Schlein of ACCION said, This has triggered a good deal of soul searching in the industry that I hope will be a turning point. While Andhra Pradesh has been the spark, I think the issues go much deeper and have been going much deeper for years. What are the real concerns? The real questions center on over-lending, bad collection practices, prices and fees, and impact. Those are good questions to be wrestling with. If those are the issues, then I think the solutions are in strong consumer protection, greater transparency, and some industry-wide, uniform way of measuring social performance.

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Recovering the Soul of Microfinance

At a time when the microfinance sector is under fire, a number of initiatives have emerged to address the fields challenges. These initiatives include n values of responsibility (for example, the Smart Campaign on client protection and MicroFinance Transparency on transparent interest-rate pricing), n corporate ethics, and n social performance management. Over the last 18 months, the Microcredit Summit Campaign has been working with stakeholders from these and other initiatives to build on and complement this work by introducing a Seal of Excellence for Poverty Outreach and Transformation in Microfinance. This Seal of Excellence will recognize both those finance institutions with significant outreach to poor and excluded households, and those that have developed a clear strategic approach to support the transformation of these clients. Below, in Figure 4, is a graphic representation mapping how the family of social performance initiatives and actors complement one another. The Seal of Excellence will build on the work of the Smart Campaign and the Social Performance Task Force (SPTF), using their standards as basic requirements to be considered for the Seal of Excellence. It will help identify and recognize those institutions that reach significant numbers of poor people and can show movement by their clients away from poverty. In doing this, the Seal of Excellence performs a service for that segment of the microfinance community that wants to focus on poverty reduction and learn from those institutions with proven records in this area.

Figure 4: How Social Performance Initiatives and Actors Are Connected* Social Performance
Client Protection Principles
Smart Campaign SPTF Universal Standards Seal of Excellence for Poverty Outreach and Transformation

The Seal of Excellence willhelp identify and recognize those institutions that reach significant numbers of poor people and can show movement by their clients away from poverty.

Institutional Commitment

MicroFinance Transparency

Different Actors

Investor Principles for Inclusive Finance

Responsible Finance (Do No Harm)

Improve Clients Lives

* Adapted from a presentation made by Laura Foose to the International Network CEO Retreat, Tarrytown, NY, USA, March 1113, 2011.

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In the following sections, we examine seven steps that we as a community can take to ensure that we do not harm our clients and that our work results in them and their families having greater ability and opportunity to climb their way out of poverty.

Step 1: Do No Harm
Like sex, microfinance can be safe if practiced responsibly, writes Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION International. Recently, however, weve seen that not all participants in the microfinance industry are practicing safe microfinance. As happens with that other risky activity, the players in microfinance face temptations that lure them away from healthy long-term relationships. One need look no farther than Andhra Pradesh, India, where the temptation for lenders to grow very fast in order to win market share, prestige, and profits caused them to woo many clients into excessive debtwith predictably bad consequences for both clients and lenders.19

The widespread support for these [client protection] principles comes in part in response to some of the abuses that have occurred, but ultimately because protecting clients is not only the right thing to do, it is the smart thing to do. Smart Campaign website

So how do we practice microfinance safely to ensure that we are not harming our clients? The Smart Campaign, a global initiative to promote client protection in the microfinance industry, recently revised its principles to better make sure they applied to the full range of financial services provided to clients (see Box 5 below). Over 2,000 individuals and organizations have endorsed these principles, including more than 500 MFIs and more than 100 donors and investors, making them the most commonly accepted guidelines for practitioners in microfinance. The widespread support for these principles comes in part in response to some of the abuses that have occurred, but ultimately because protecting clients is not only the right thing to do, it is the smart thing to do.20

Box 5: S  mart Campaign Client Protection Principles (revised July 2011)

n Appropriate product design and delivery Providers will take adequate care to design products and delivery channels in such a way that they do not cause clients harm. Products and delivery channels will be designed with client characteristics taken into account. n Prevention of over-indebtedness Providers will take adequate care in all phases of their credit process to determine that clients have the capacity to repay without becoming over-indebted. In addition, providers will implement and monitor internal systems that support prevention of over-indebtedness and will foster efforts to improve market-level credit risk management (such as credit information sharing). continued on next page

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E. Rhyne, Three Secrets of Safe Microfinance, Huff Post World, 1/20/11, http://www.huffingtonpost.com/elisabeth-rhyne/three-secrets-of-safe-mic_b_811586.html. See smartcampaign.org, About the Campaign, Campaign Mission & Goals, http://smartcampaign.org/about-the-campaign/campaign-mission-a-goals.

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Box 5: Smart Campaign Client Protection Principles (revised July 2011), continued
n Transparency Providers will communicate clear, sufficient, and timely information in a manner and language clients can understand, so that clients can make informed decisions. The need for transparent information on pricing, terms, and conditions of products is highlighted. n Responsible pricing Pricing, terms, and conditions will be set in a way that is affordable to clients, while allowing financial institutions to be sustainable. Providers will strive to provide positive real returns on deposits. n Fair and respectful treatment of clients Financial service providers and their agents will treat their clients fairly and respectfully. They will not discriminate. Providers will ensure adequate safeguards to detect and correct corruption, as well as aggressive or abusive treatment by their staff and agents, particularly during the loan sales and debt collection processes. n Privacy of client data The privacy of individual client data will be respected in accordance with the laws and regulations of individual jurisdictions. Such data will only be used for the purposes specified at the time the information is collected or as permitted by law, unless otherwise agreed with the client. n Mechanisms for complaint resolution Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients and will use these mechanisms both to resolve individual problems and to improve their products and services.
Source: http://www.smartcampaign.org/ storage/documents/20110802_Client_ Protection_Principles_FINAL_.pdf

In a paper21 commissioned for the November 2011 Global Microcredit Summit in Valladolid, Spain, Rhyne describes the process that the Smart Campaign and its partners will go through to verify that individual MFIs operate in compliance with the client protection principles. The Smart Campaign has not only developed tools for self-reporting but also mechanisms for external assessments and external ratings by independent rating agencies. Donors and investors will soon begin requiring external assessments based on these principles as part of their due diligence process.

Step 2: Know Your Client

The Smart Campaign principles provide a minimum standard for those microfinance practitioners who want to provide financial services to low-income clients in an ethical manner, ensuring that their clients are not harmed. However, in order to make certain that their services meet clients needs and ambitions,

The Smart Campaign principles provide a minimum standard for those microfinance practitioners who want to provide financial services to low-income clients in an ethical manner, ensuring that their clients are not harmed.

21

E. Rhyne, What Is the Low Bar and What Is the High Bar on Client Protection? unpublished paper commissioned for the 2011 Global Microcredit Summit, Valladolid, Spain, 11/1417/11.

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MFIs will need to invest in getting to know their clients. In a recent presentation before the French Senate, Michael Schlein, president and CEO of ACCION International, noted that those who sell [microfinance] products [and services] have a special duty to know their customers and to design and sell products that are suitable to their needs. Thats even more important when your clients are at the bottom of the pyramid.22 More than ever before, the microfinance sector has the tools and research available to understand their clients needs and ambitions. This allows them to understand, in a much more nuanced way, the impact that access to different kinds of financial services can have on different people. We regularly describe clients lives on an income continuum, with particular focus on those hovering at the $1.25 a day or the $2 a day line, but clients dont talk about the $1.25 poverty line nor do they set a goal of lifting themselves out of poverty. They talk about the state of their roof, their hopes for this years crop yield, or how they will be able to afford school uniforms for their children. MFIs that develop systems for listening to and learning from their clients are able to devise products and support systems that can both help meet their clients immediate needs and their plans for the future. By doing this, they build a loyal customer base that helps them attract new clients. Clearly, poor people, just like other market segments, want a full range of financial services to meet their needs. Portfolios of the Poor, by Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven, makes clear that the worlds poor have three broad financial goals: 1) to transform irregular flows of money to the household into smooth and more predictable flows; 2) to better cope with emergencies, particularly health and natural disasters; and 3) to raise useful lump sums for school fees or investment in enterprises. How those goals are met may varyMFIs need to understand their clients needs and aspirations in order to turn those broad financial goals into useful products.23 Carmen Velasco, one of the co-founders of Pro Mujer, described to us how important listening to clients has been for developing appropriate products and services. She says,

From the very first years...we tried to to listen very carefully to the clients needs. Thats why we have been fighting all years, day to day, not to drop the social performance of Pro Mujer. Carmen Velasco, Pro Mujer

One of the things that we have done, from the very first years that we began our work, is that we tried to listen very carefully to the clients needs. Thats why we have been fighting all these years, day to day, not to drop the social performance of Pro Mujer. Not to drop the training, not to drop the womens empowerment as our first and main objective of the program. We offered microfinance as a way to empower our client members. We included health training. We included day care for their children when they came to Pro Mujer. We included primary health provisionall of this was to make sure that we were putting our mission into practice, to make sure that we were very close to the clients needs and not what we thought, in a very academic way, was the best way to run the institution. We

22

Remarks by Michael Schlein at the French Senate, Palais du Luxembourg, Paris, 7/8/11. D. Collins et al., Portfolios of the Poor: How the Worlds Poor Live on $2 a Day (Princeton, USA: Princeton University Press, 2009).

23

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were pushed and tempted to drop the health component and the training components and to gear all our efforts on the microcredit component. We were very stubborn. Why did we stick with our integrated approach? It was because we were sure. We could see from the clients responses that they did appreciate the institution because they realized that they were receiving real answers to real needs. Other microfinance institutions have been just as stubborn as Pro Mujer, letting their clients needs shape their services: n In Haiti, Fonkoze employs social impact monitors, who work in the branch offices interviewing clients and conducting focus groups and exit surveys all the time. By doing this, they learned that their clients want peace of mind. Anne Hastings, director of Fonkoze, explained, They dont want to always have to worry that theres going to be another hurricane, and weve really worked hard this year [to offer] micro-insurance for catastrophes, and weve got that implemented now. There was a big rain, and already its paying [off] for them. n In Uganda, BRAC has developed a savings product for young girls, which is tied to livelihood training they offer at their youth center. Through this, they hope to address the issue of sexual abuse and teenage pregnancy. Fonkoze in Haiti is adapting and piloting this same program. n In the Philippines, the Negros Women for Tomorrow Foundation has developed a tool to help women clients identify their business goals and measure progress against them, helping the clients chart their own paths out of poverty. Understanding clients also means knowing their business opportunities, their cash flows, and the types of financial services that they are most likely to need. Comprehensive market research conducted by Oliver Wyman,24 the global management consulting firm, compares microfinance supply versus potential demand based on a segmentation of the worlds poor by primary livelihood. The study estimates that, of the 1.6 billion working-age poor people (those living on less than $2 a day), only about 180 million people have a microenterprise as their main livelihood source. A much larger group of poor adults (610 million) are dependent on farming as their primary livelihood; another 80 million are pastoralists or fishermen. Unemployed and casual laborers account for 465 million, and the remaining 300 million are low-wage salaried employees. Turning to the 610 million farmers, standard microfinance loans are not typically designed with them in mind, but microfinance has an opportunity to play a much bigger role in meeting the needs of this group. In a paper to be presented at the 2011 Global Microcredit Summit,25 Sir Fazle Abed, founder of BRAC and chair of its board, and his co-authors focus on how microfinance, when combined with services and products to bolster agricultural and rural livelihoods, can help the rural poor by ensuring that agriculture remains the main source of food security and income for families.
24

Microfinance, when combined with services and products to bolster agricultural and rural livelihoods, can help the rural poor by ensuring that agriculture remains the main source of food security and income for families.

Oliver Wyman, Global Microfinance Supply, Demand and Gap Analysis, internal analysis prepared for the Bill & Melinda Gates Foundation, 2008. S. Davis et al., Using Microfinance Plus Agricultural Services to Improve Rural Livelihoods and Food Security, in New Pathways out of Poverty, ed. S. Daley-Harris and A. Awimbo (Sterling, VA, USA: Kumarian Press, forthcoming 2011).

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Microfinance and agricultural services are a potentially potent combination in the quest to alleviate rural poverty and ensure food security, write Abed et al. The market-oriented financing mechanisms of MFIs may be a superior, more sustainable source of funding, relative to official development assistance grants and loans and charities. There are many potential synergies between MFIs and the agricultural sector. MFIs can contribute to agricultural development in three broad ways: 1) [providing] financial services, 2) [offering] education and training, and 3) [serving as] a conduit through which other players in the agricultural value chain can more effectively distribute their products. The paper goes on to outline the many ways in which MFIs are adapting their products to support agricultural finance, including seasonal repayments, crop insurance, value chain financing, and links to other service providers, including agricultural extension services.

Step 3: Encourage Savings

Knowing your client means knowing they need good, safe places to save as much or more than they need access to credit. MFIs that have regulatory approval to accept savings and offer appropriate savings services often have many more savers than borrowers. The Opportunity International Bank of Malawi has 45,000 borrowers and 250,000 savers. Equity Bank in Kenya has 715,000 borrowers and 4 million depositors. In 2001, Grameen Bank opened up savings facilities for non-borrowers. As of July 2011, it had over $1.4 billion in deposits, which is 145 percent of its outstanding loan portfolio of $965 million. In some parts of the world, however, it is still too costly to extend regulated savings services to people living in remote areas. It is in these areas that savingsled microfinance has taken root, using informal savings groups as a means of providing needed financial services in places where there are no banks or MFIs. The savings-led microfinance movement argues that the credit-led microfinance industry is not equipped to reach the hundreds of millions of people with the least financial resources26 and insists that savings groups (SG) are a better mechanism to provide access to the financial services they need. The big advantage that SGs have over most MFIs is that these groups offer savings as the entry service, and not loans, which some see as too risky for the poor and very poor, especially if they dont have microenterprises to invest them in.

[Savings groups] are often the only cost-effective financial services delivery mechanisms in sparsely populated areas with weak infrastructure, as is the case in many African countries.

Savings groups offer loans to members as well, albeit in a very different way than MFIs. The groups pool their savings into a loan fund, where all interest revenue accrues to group members themselves rather than to an external institution. As such, they are often the only cost-effective financial services delivery mechanisms in sparsely populated areas with weak infrastructure, as is the case in many African countries. A number of international non-profit organizations, including CARE, Catholic Relief Services, Oxfam America, Plan International, Aga Khan Foundation, and World Vision, have been promoting this kind of microfinance. Modeled after

26

CARE, 2011 Microfinance in Africa: State-of-the-Sector ReportClosing the Gap, http://www.care.org/getinvolved/advocacy/access-africa/.

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traditional rotating savings and credit groups, modern SGs receive training that helps them become more transparent, more democratic, safer, and better managed. SG performance is measured by the same ratios as MFIs, including portfolio and asset management, portfolio quality, profitability (sustainability), and efficiency (cost per member assisted), and their performance is reported on and publicly accessible at SAVIX, the Savings Group Information Exchange.27 While the agencies that promote SGs depend on donor funds to form, train, and monitor SGs, the groups themselves earn positive returns. For instance, CAREs village savings and loan associations report an average return on assets of 47 percent and an average cost per member assisted of $26.20.28 The self-help groups in India are different in that they are typically linked to formal financial institutions and, unlike most SGs, do not periodically distribute the entire group fund to members. Indias National Bank for Agriculture and Rural Development (NABARD) has been promoting SHGs since the 1990s, enabling the poor and poorest to save and lend among themselves. These NABARD-promoted SHGs have reached 68 million clients, accounting for 33 percent of all clients reported to the Microcredit Summit Campaign last year (data as of December 31, 2009).29 Malcolm Harper, chair of M-CRILs board, proposes an overhaul of the SHG model in the wake of the difficulties faced by MFIs operating in India. He recommends that SHG membership become a route to financial inclusion, with banks providing individual savings accounts for all SHG members. Then SHGs can become a cost-effective accumulation and distribution system for a wide range of financial products, including pensions, transfers, and loans.30 Whether through regulated banks, informal savings groups, or some arrangement that links the two, savings play a key role in helping people with low and irregular incomes hold on to the surpluses they acquire, so that funds are available when they need them.

Savings play a key role in helping people with low and irregular incomes hold on to the surpluses they acquire, so that funds are available when they need them.

27 28

http://savingsgroups.com/. CARE, 2011 Microfinance in Africa. NABARD has played a central role for more than a decade in pioneering the self-help group movement in India, through which poor and poorest women organize themselves into savings groups. SHG members save and lend among themselves and also manage the affairs of their groups. Mature SHGs are linked to the formal banking system, which has an extensive branch network throughout the country to bolster their resources. Year Total Clients Poorest Clients 1997 146,166 58,613 1999 560,915 224,927 2001 3,992,331 1,600,925 2003 10,760,400 8,608,300 2005 24,277,140 19,421,070 2007 40,949,622 32,759,697 2010 67,914,000 54,330,000

29

28

Some of NABARDs partners (banks and NGOs) are also members of the Microcredit Summit Campaign and submit institutional action plans. In order to avoid double counting, a portion of the figures reported by these agencies has been subtracted from NABARDs figures. After these calculations, NABARD accounted for 65,876,580 total clients, 52,701,264 of whom were among the poorest when they started with the program. These updated calculationsfirst performed in 2002, updated in 2006, and again in 2011are based on data collected from institutions in India that overlap with NABARD. These institutions were asked what percentage of their SHGs were bank-linked (i.e., included in NABARDs figures). On the basis of this research, a 3.15% reduction of NABARDs figures was taken into account when calculating total clients, total women, total poorest clients, and total poorest women. M. Harper, The Microfinance Meltdown: Crisis or Opportunity for Savings Groups, Savings-Revolution.org, 7/27/11, http://savings-revolution.org/blog/2011/7/27/the-microfinance-meltdown-crisis-or-opportunity-for-savings.html.

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Step 4: Promote Financial Literacy

As important as good client protection principles and strategies are in improving the delivery of microfinance services, they are not sufficient to empower clients to make the right decisions when it comes to managing their money or deciding how to use a loan or savings product. Nor will they ensure client loyalty. Financial education aims to help clients learn how to make appropriate, responsible financial decisions and evaluate the value and suitability of products offered by financial service providers. This is the next step in bringing about client-centered services. A leader in this area is the Global Financial Education Program (GFEP), funded by Citi Foundation and led by Microfinance Opportunities and Freedom from Hunger.31 GFEP has developed a financial education curriculum to address the topics of greatest importance to microfinance clients, including budgeting, debt management, savings, understanding bank services, managing remittances, accessing appropriate services for youth, risk management, insurance, and consumer protection. Today, the curriculum is used in over 60 countries and has been adapted to a wide range of delivery channels.

When the delivery of key messages [through financial education] is relevant and frequent and combined with the opportunity to practice new behaviors, increased levels of savings and higher loan repayment rates result. Monique Cohen, Microfinance Opportunities

The creativity used to convey the key messages to diverse market segments continues to amaze me, said Monique Cohen, president of Microfinance Opportunities. The measurement of the effectiveness of financial education is still a challenge, the field is young, and good programs scarce. However, we are beginning to learn what works; emerging results are positive. Cohen also noted that when the delivery of key messages is relevant and frequent and combined with the opportunity to practice new behaviors, increased levels of savings and higher loan repayment rates result. Financial education can also pave the way toward consumer self-help mechanisms and microfinance consumer associations. This becomes more important as many microfinance programs move more to individual lending, which does not build the kind of social capital inherent in the group-lending system. Financial education gives clients the ability to make wise choices about the financial tools that are most appropriate for them. It helps to redress the knowledge imbalance between clients and financial service providers, helping clients to understand what they should expect from their financial institution and what to do if they are not getting it.

Step 5: Monitor and Reward Social Performance

While there has been some concern that microfinance, which started as a social movement, has become too fixated on financial returns and scale, the remedy may be the realignment of institutions in favor of social returns on investment. The social performance movement continues to gain momentum and starts from a set

31

http://www.globalfinancialed.org/.

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of principles outlined by the Social Performance Task Force (SPTF)32 as defining social performance as the effective translation of an institutions social goals into practice and recognizing that financial performance is insufficient to achieve [the] goal of serving and improving the lives of increasing numbers of poor and excluded people sustainably.33 The social performance movement attempts to redress mission drift by microfinance institutions and instill a new awareness in CEOs, boards, and investors that, if they adopt a social bottom line, they must be as committed to it as to their financial bottom line. Carmen Velasco, co-founder and director of Pro Mujer, spoke of this at the opening of the 2010 SPTF meeting in Bern, Switzerland, noting, We say we are committed to fairness, transparency, and accountability. Butwhile I believe the intention may genuinely be therewe need to close the gap between our rhetoric and our practice.34 Social performance goes beyond client protection measures and even clientfocused microfinance. It requires microfinance practitioners not just to commit to positive change for their clients but to develop clearly defined client outcomes and to measure the clients progress toward achieving those outcomes. It is an ambitious goal, one that strives to bring a higher level of transparency and client focus to microfinance practitioners. However, it too faces challenges in implementation. SPTF members have not yet agreed on a set of proposed universal social performance indicators on which they will report. At their annual meeting in Den Bosch, The Netherlands, in June 2011, some argued that universal standards should set a low bar, while others would rather see them as aspirational. SPTF has worked with the Microfinance Information Exchange (MIX) to develop a set of indicators for MFIs to include with their regular financial reporting to the MIX. The 11 indicators cover such topics as client retention, poverty outreach, transparency, and governance. Currently, about 400 of the 2,000 MFIs reporting to the MIX report on these social indicators. Another challenge, faced by MFIs that desire to manage for social performance and use the double bottom line to measure performance, is making sure that their governing boards understand and use social performance indicators as part of their decision-making process. If board members listen more to investors than to the clients, the financial bottom line will prevail at the cost of an institutions social ambitions. The social performance movement is important to enable MFIs to respond to client needs as much as to investor demands. If, as Velasco urges, the microfinance industry matches rhetoric to action by committing to rigorous reporting on a set of social indicators, individual institutions will have a clear incentive to maximize social outcomes in a financially sustainable fashion. Currently, however, the financial bottom line still takes precedence for many institutions, but we hope the balance will shift. And when it does, managing for social performance will

Social performance requires microfinance practitioners not just to commit to positive change for their clients but to develop clearly defined client outcomes and to measure the clients progress toward achieving those outcomes.

32

The Social Performance Task Force brings together MFIs, international and national networks, donors, investors, and rating agencies to help define social performance and develop methods to manage for and measure social performance. See Social Performance Task Forces Declaration of Principles, http://sptf.info/sp-task-force/declaration-of-principles. C. Velasco, Welcome Address, SPTF Annual Meeting, Bern, Switzerland, 6/30/107/1/10, http://sptf.info/images/welcomeaddresscarmenvelasco2010.pdf.

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allow microfinance institutions to provide more value to their clients, as well as facilitate increased access to products and services offered by them or other actors (government, non-profit, and for-profit sectors) with a view toward eradicating poverty.

Step 6: Be Transformative
For some MFIs, using social performance indicators has helped them see other challenges that their clients face that may keep them ensnared in poverty. In an interview earlier in this report, Rupert Scofield, CEO of FINCA, said, There is still the question about whether you can have a real impact with just microfinance or whether you need all these other social interventions as welllike education and health care. He is not alone. A number of MFIs have done this for decades, offering more value to their clients beyond access to financial services. Much progress has been made in leveraging microfinance services with improved access for poor clients to health and health financing services. According to Sheila Leatherman, research professor at the University of North Carolina, and Christopher Dunford, president of Freedom from Hunger, collaboration with microfinance providers could tap into existing, mostly self-financing distribution channels to reach millions of unserved and underserved households. Microfinance service-delivery systems offer unique opportunities for distribution of health education and services, as well as provision of healthcare financing options to millions of the hard-to-reach poor worldwide.35 The Campaigns own experience with training MFIs in India to integrate health education and access to health services reveals that, while MFIs are initially skeptical, once they have piloted integrated services, they quickly expand them to more and more branches, as they realize the benefits for their clients and themselves. Adding non-financial services and products can increase value to the clients, but can also be advantageous to the service provider, especially when the added service increases the clients ability to repay, it represents a new profit opportunity for the institution (e.g., health loans) or generates increasing client loyalty. But, not all MFIs have the ability to offer non-financial services that may be beneficial for clients, either because they do not have the expertise and skills in house to do so or because they cannot provide such services and cover their cost. In that case, even social-mission microfinance providers might do better to focus on sustainable delivery of client-focused financial services, while leaving other services to providers who have a comparative advantage and expertise in providing them. Moreover, its not about stacking just any non-financial services on top of the financial services but about identifying the ones that clients really need and finding a way to deliver them powerfully. In a similar fashion, Alex Counts, president of the Grameen Foundation, suggests that microfinance can have a much larger impact on client lives by leveraging its human and physical infrastructure, market knowledge, and client relationships to create value for clients: MFIs can provide access to welfare-enhancing products

[Microfinance can have a much larger impact on client lives by] leveraging its human and physical infrastructure, market knowledge, and client relationships to create value for clients. Alex Counts, Grameen Foundation

35

S. Leatherman and C. Dunford, Why Integrating Microfinance, Health Education, and Other Forms of Health Protection Is Good for Your Clients and Good for Your MFI, and How Can You Incorporate It, unpublished paper commissioned for the 2011 Global Microcredit Summit, Valladolid, Spain, 11/1417/11.

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and services, such as improved cook stoves or knowledge about improved farming techniques and financing mechanisms to make these affordable. The reverse is possible, too, where microfinance is added to an already existing delivery structure as a way to bridge the last mile marketing challenge in reaching rural remote and poorest customers with much needed services.36 Yet another approach to combining access to financial services with other products and services, previously unaffordable or unavailable to them but desperately needed to improve their welfare, is the social business model developed by Nobel laureate and founder of Grameen Bank, Muhammad Yunus. In a plenary paper for the 2011 Global Microcredit Summit in Spain, he defines a social business as a non-loss, non-dividend company with a social objective.37 Investors can recoup their initial investment, but, after that, profits can only be invested back into the company. Yunus proposes that microfinance institutions should operate as social businesses, and he urges microfinance executives worldwide to engage in partnerships to establish social businesses and tackle poverty issues (related to health care, nutrition, safe water, energy, and so on) in a sustainable way, just as Grameen Bank has done through its partnerships with global companies, such as Danone, Adidas, Yukiguni Maitake, and several others. These are all examples of some of the leading edges of innovation in microfinances contribution to poverty reduction. As microfinance continues to mature and overcome its challenges, it will be able to improve its financial services and leverage its infrastructure to facilitate access to other services as well. But, what about people without any source of income, who may also face physical or emotional challenges that limit their ability to engage in productive activities? Can microfinance also serve this group? Based on the success of BRACs Challenging the Frontiers of Poverty Reduction: Targeting the Ultra Poor (CFPR/TUP) program, CGAP and Ford Foundation (with technical assistance from the BRAC Development Institute) are piloting 10 graduation programs in partnership with local organizations in eight countries.38 The main building blocks of these programs consist of consumption support for a fixed time period, provision of financial services (usually savings) and a productive asset, enterprise training, close handholding support (by a field assistant), and health support (often by linking with government services or another NGO health-care provider). The idea is to create ladders out of extreme poverty by first reducing extreme vulnerability (due to food insecurity, ill health, and lack of assets) and then gradually building up sustainable livelihoods that link to value chains with growth potential. Randomized evaluations of several pilot programs are in progress and preliminary results from one program show that after 18 months, treatment households have 15 percent greater consumption of food than control households, increased the time spent working by one hour a day tending livestock, were more likely

[Mohammad Yunus] defines a social business as a nonloss, non-dividend company with a social objective. Investors can recoup their initial investment, but, after that, profits can only be invested back into the company.

36

A. Counts, Toward Reinventing Microfinance through Solving the Last Mile Problem: Bringing Clean Energy Solutions and Actionable Information to the Poor, in New Pathways out of Poverty, ed. S. Daley-Harris and A. Awimbo (Sterling, VA USA: Kumarian Press, forthcoming 2011). M. Yunus, Social Business and Microfinance: Building Partnerships with Corporations and Other Entities to Speed the End of Poverty, in New Pathways out of Poverty, ed. S. Daley-Harris and A. Awimbo (Sterling, VA, USA: Kumarian Press, forthcoming 2011). Haiti, India, Pakistan, Honduras, Peru, Ethiopia, Yemen, and Ghana.

37

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to report primary income from non-agricultural activities, reported lower food insecurity, received less food support from other households, saved more in their bank accounts, had greater health knowledge and improved perception of health over the past year, and had decreased symptoms of mental distress than those in control households.39 Syed Hashemi, one of the architects of CGAPs graduation programs, explains more of the thinking behind the program. Most of the poorest really require food aid, shelter, and livelihood support. The development instruments that make the most sense are safety nets, food or cash transfers, and guaranteed employment. However, often such safety nets do not provide the needed support to enable the poorest to create a pathway out of extreme poverty. So, while such safety nets are required to stabilize their lives, additional interventions are needed to create economic opportunities they can engage in to improve their conditions. Credit can be introduced only at a later pointIf a program is effectively implemented through rigorous targeting and close monitoring, and if quality partnerships can be provided with strong financial institutions and health care providers, then over a two-year period significant numbers of the poorest can graduate out of extreme poverty and continue economic livelihood, without going back to requiring safety or welfare support.

Step 7: Recognize Excellence

Since its earliest beginnings, microfinance was about more than financial inclusion and providing valuable, affordable services to the poor. The pioneers of microfinance were committed to reducing poverty and seeing clients transform their lives. In a paper commissioned for a 1999 Microcredit Summit Meeting of Councils in Abidjan, Ivory Coast, Susy Cheston, senior advisor at the Center for Financial Inclusion, and Larry Reed, incoming director of the Microcredit Summit Campaign, defined transformation as a deeply rooted change in beliefs, values, attitudes, actions, relationships, and structures manifested in a sustained higher level of existence of an individual and/or community.40 At the 2006 Global Microcredit Summit in Halifax, Canada, the Microcredit Summit Campaign adopted a goal specifically related to transformation: to ensure that 100 million families rise above the $1.25 a day threshold, adjusted for purchasing power parity, between 1990 and 2015. Earlier in this report, we described the difficulties we face in measuring and reaching this goal of movement out of poverty. We continue to believe that microfinance has an essential role to play in eradicating poverty and in achieving the Millennium Development Goals (MDG), especially MDG 1,41 which calls

We continue to believe that microfinance has an essential role to play in eradicating poverty and in achieving the Millennium Development Goals (MDG), especially MDG 1, which calls for the eradication of extreme poverty and hunger.

39

N. Goldberg, A Deeper Look at Programs that Work with the Ultra-Poor, 2011. S. Cheston and L. Reed, Measuring Transformation: Assessing and Improving the Impact of Microcredit, paper commissioned for the Microcredit Summit Meeting of Councils, Abidjan, Ivory Coast, 6/2426/99. http://www.microcreditsummit.org/papers/impactpaper.pdf. http://www.un.org/millenniumgoals/poverty.shtml.

40

41

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for the eradication of extreme poverty and hunger. In order for microfinance to fulfill this role, we need to be able to identify and lift up those institutions that are reaching the very poor and are having success in helping their clients move out of poverty. With the Seal of Excellence for Poverty Outreach and Transformation in Microfinance, we hope to redefine a microfinance sector that is responsible, genuinely inclusive (including the poor), and contributing to positive change. Through the Seal of Excellence, we will recognize MFIs that combine financial sustainability and responsible practices with significant poverty outreach and a strategic approach to poverty reduction and transformation for clients. The idea of the Seal of Excellence was initiated by the Microcredit Summit Campaign 18 months ago. Frances Sinha, managing director of EDA Rural Systems in India, describes its aim as both practical and aspirational, and as inquiring beyond systems and processes to actual results in microfinance. She also notes that a Seal of Excellence will require responsible and ethical practices at all levels of the institution, as well as a financially sustainable bottom line. The Seal of Excellence would be for those who aspire to do moreand is intended to serve as an inspiration and as recognition of what microfinance can achieve.42 The Microcredit Summit Campaign has reached out to hundreds of people within the industry to get their input on the methods and indicators used to assess the Seal of Excellence. Based on this, the Interim Steering Committee has developed a draft set of indicators that are being used in beta tests in several MFIs. Through this process, the Seal of Excellence will develop an assessment mechanism that helps an MFI determine whether its intentions are being realized in the lives of its clients. Sam Daley-Harris co-founded the Microcredit Summit Campaign 16 years ago with FINCA founder John Hatch and Grameen Bank founder Muhammad Yunus.43 Some 31 years ago, Daley-Harris founded the citizen lobby group RESULTS. In Box 6, he describes the founding of the Seal of Excellence for Poverty Outreach and Transformation in Microfinance. Ultimately, the Seal of Excellence will help us identify and learn from those microfinance institutions that help clients achieve their dreams: education for their children, health for their family, decent housing that keeps the rain and cold out, and regular, nutritious meals.

With the Seal of Excellence for Poverty Outreach and Transformation in Microfinance, we hope to redefine a microfinance sector that is responsible, genuinely inclusive (including the poor), and contributing to positive change.

42

F. Sinha, Beyond Ethical Financial Services: Developing a Seal of Excellence for Poverty Outreach and Transformation in Microfinance, in New Pathways out of Poverty, ed. S. Daley-Harris and A. Awimbo (Sterling, VA, USA: Kumarian Press, 2011). Daley-Harris will leave the Campaign in 2012 to launch the Center for Citizen Empowerment and Transformation.

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Box 6: R  eflections on the Seal of Excellence for Poverty Outreach and Transformation in Microfinance
The Seal of Excellence for Poverty Outreach and Transformation in Microfinance has its origins at a visioning dinner held during the AfricaMiddle East Regional Microcredit Summit in Nairobi, Kenya, in April 2010. The facilitator, Dave Ellis of the Brande Foundation, asked the group this question: Where do you want the field to be in 10 yearsnot where do you predict the field will be, but where do you want it to be? People came to the microphone and shared their visions for the field. One participant spoke about the moral vacuum left in the United States civil rights movement by the assassination of Martin Luther King Jr. and the need to take a moral stand within the microfinance field. Did you see the article? one asked. Whats wrong with microfinance? queried another. Dont you have a seal of approval? a third wondered in disbelief. The gulf between my vision of microfinance for redemption and these painful questions was almost too great to bear. I sent my remarks in Spain to several leaders in the field. I asked for a phone call to discuss the negative article in the Times, juxtaposed with my call for a model of microfinance as a means of restoring peoples honor and worth and setting them free. Six of us met in April 2010 and, even though the group has expanded, we havent missed a month since. Our discussions immediately focused on the possibility of creating some kind of seal of approval or seal of excellence. It was clear from the beginning that, if this was to move forward, we needed to partner with the Smart Campaigns work on client protection, the work by the Social Performance Task Force, and others. Redemption morphed briefly into spiritual transformation and finally settled on a Seal of Excellence for Poverty Outreach and Transformation in Microfinance. Frances Sinha of EDA Rural Systems in India was commissioned to write a concept note. The concept note has gone through four drafts and will be discussed in plenary at the Valladolid Summit. Funders have stepped forward and the Interim Steering Committee will grow into a Permanent Steering Committee. We have a chance to establish an aspirational vision for the field that will help identify practitioners who are doing the most to reach the poor and very poor, and who create a transformation in the lives of their clients. The difficulty continued on next page

I know it sounds farfetched, but I love the idea of microfinance that aspires to restore peoples honor and worth and sets them free. Sam Daley Harris, Microcredit Summit Campaign

I had been deeply moved by the work of Jamii Bora, an MFI in Kenya, in helping gang members turn their lives around and found myself at the microphone saying, I envision microfinance for redemption, defined as restoring ones honor and worth and setting one free. I know it sounds far-fetched, but I love the idea of microfinance that aspires to restore peoples honor and worth and sets them free. I spoke about microfinance for redemption at the Regional Microcredit Summits closing dinner and again two days later at the launch of the National Host Committee for the upcoming Global Microcredit Summit in Valladolid, Spain. That night in Spain, over dinner with Muhammad Yunus, a colleague and I read aloud to Yunus a negative article on the front page of The New York Times. The article described the interest rates of some MFIs that hovered around 125 percent in Nigeria and Mexico, and other challenges faced by the field. Two nights later I was home in Princeton, NJ, attending a friends party. It seemed that everyone had read the Times article. More than 10 people came up to me.

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Box 6: Reflections on the Seal of Excellence for Poverty Outreach and Transformation in Microfinance, continued
difficulty will come in establishing indicators to measure the poverty of clients and their movement out. It is clear that there must be third party verification for any institution receiving the Seal of Excellence. This State of the Microcredit Summit Campaign Report is the 13th and final report with which I have been associated. The 2011 Global Microcredit Summit in Valladolid is the 15th and final Summit I will help organize. After founding RESULTS, the citizen lobby on ending global poverty 31 years ago and co-founding the Microcredit Summit Campaign 16 years ago, I look forward to launching the Center for Citizen Empowerment and Transformation in 2012. After some 15 years at each organization, I believe it is time to move on. So I asked myself this question, What have I done that lights me up the most and yet is least adopted, least realized in the world? It was obvious that it was my work to create structures of support that inspire and empower citizens and allow them to create champions in the media and in Congress on such issues as ending poverty and resolving climate issues. I want to bring the work that a number of us initiated at RESULTS to other organizations through the Center for Citizen Empowerment and Transformation. I urge all who read this report and all who attend the Valladolid Summit to ask themselves these questions: What is it that lights me up in my work? What is it that lights me up in microfinance? I believe the answers to those questions will be aspirational. We can either lower our sights to what is easy or doable, or fulfill our deepest vision for the field and for the world. It really is up to us. Let us hope that the idea birthed at a visioning dinner in Nairobi, Kenya, for the Seal of Excellence for Poverty Outreach and Transformation in Microfinance will be an essential vehicle for the highest aspirations in microfinance and a clear example of Victor Hugos statement that nothingis so powerful as an idea whose time has come. Sam Daley-Harris is founder of RESULTS and the Microcredit Summit Campaign and will launch the Center for Citizen Empowerment and Transformation in 2012. He is based in the United States.

I urge all who read this reportto ask themselves these questions: What is it that lights me up in my work? What is it that lights me up in microfinance? I believe the answers to those questions will be aspirational. Sam Daley Harris, Microcredit Summit Campaign

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Survey Methodology
The Microcredit Summit Campaign has collected data for the State of the Microcredit Summit Campaign Report for 14 years and began verifying that data in 2000. The process consists of 1) the circulation of Institutional Action Plans (IAPs) to thousands of practitioners, requesting their most recent data; 2) a phone campaign to more than 500 of the largest MFIs in the world to encourage submission; 3) a verification process seeking third-party corroboration of the data submitted by the largest MFIs; 4) data compilation and analysis; and 5) the writing and publication of the report. This process has, for more than a decade, produced the largest primary-source collection of data from MFIs available. In most cases, the data presented in this report is submitted by individual institutions. Some data, however, comes from network or umbrella institutions. To prevent double counting, the Campaign analyzes the data from these institutions to identify any potential duplication from their partners. Whether data from network or umbrella institutions is counted or not, they continue to play a critical role in facilitating data collection from their affiliates, and the Campaign is extremely grateful for this support. For a complete list of the networks and other institutions that provided crucial assistance in the collection of data this year, go to Endnote 1.

The 609 practitioners that submitted an IAP in 2011 had 56.5 percent of all the poorest clients reported. This means that the data in this report is 56.5 percent current and the remaining 43.5 percent is one or more years old.

Among the thousands of institutions and individual supporters in the Campaigns 16 councils, as of August 31, 2011, a total of 3,652 MFIs from 147 countries were members of the Council of Practitioners and have submitted an action plan at least once since 1998. In 2011, 609 practitioner institutions submitted an IAP, including 70 that had previously never done so. The 609 practitioners that submitted an IAP in 2011 had 56.5 percent of all the poorest clients reported. This means that the data in this report is 56.5 percent current, and the remaining 43.5 percent is one or more years old. To view a complete list of the institutions and individuals that submitted an IAP in 2011, go to Appendix III. Practitioners were asked to furnish data that is critical in measuring progress toward fulfilling the Campaigns two goals. The IAP outlines a common set of strategic objectives and creates an easy way for institutions to share their plans and accomplishments. The IAP is the basic building block of the Campaign. In this years IAPs, the data provided comes from questions, such as 1) what is the total number of active clients (clients with a current loan) and 2) what is the total number of active clients who were among the poorest when they received their first loan. We requested answers to these and other questions for the following time periods: December 31, 2010 (actual), December 31, 2011 (proposed) and December 31, 2012 (proposed). In 2007, the Campaign began asking for the number of clients who have crossed the $1.25 a day threshold. Due to a more rigorous strategy for collecting and verifying this data, it was only in last years report that we began to present initial findings for this indicator. For further information on our work to measure movement above the $1.25 a day threshold, go to page 4. Each year, the Campaign emphasizes that all data is self-reported. However,

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Microcredit Summit Campaign staff review all practitioner IAPs received. Any institution with questionable data is asked to clarify its responses, and, if the issues are not resolved, the questionable data is not included in the report. In addition, there is a third-party verification process, which is described below.

Number of Clients Reached

By December 31, 2010, a total of 3,652 MFIs44 reported reaching 205,314,502 clients with a current loan. Of these clients, 137,547,441 were among the poorest when they joined their respective programs. Approximately 91.3 percent of the poorest clients reported are in Asia, a continent that is home to just over 66 percent of the worlds people living on less than $1.25 a day.45

By December 31, 2010, 3,652 MFIs reported reaching 205,314,502 clients with a current loan. Of these clients, 137,547,441 were among the poorest when they joined their respective programs.

Verification Process
In 2000, the Campaign began independently verifying aspects of the data covering the previous year. The largest institutions provide the Campaign with names of donor agencies, research organizations, networks, or other institutions that can verify the total number of clients reached, the percent of all clients who are women, the number of poorest clients, and the percent of poorest clients who are women. A letter is sent to potential verifiers asking them to confirm the data submitted by a given MFI. The letter says, By confirm, we mean that you have visited the program, met with senior officials, reviewed aspects of the operation, they have provided you with numbers, and you believe that the institution and the numbers listed below are reliable and credible. For a complete listing of verified institutions, go to Appendix I. In the State of the Microcredit Summit Campaign Report 2000, 78 institutions, representing 67 percent of the poorest clients reported, had their data verified by a third party. This year, data from 328 institutions was verified, representing 53 percent of the total poorest clients reported, or 72,385,972 poorest families (Table 3).

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Of these 3,652 institutions, 609 sent in IAPs in 2011. The 3,043 remaining institutions, which represent 43.5 percent of the total poorest clients reported this year, sent data in previous years, and the Secretariat has included those numbers in this report. According to PovcalNet, the on-line tool for poverty measurement developed by the Development Research Group of the World Bank, 1.4 billion people live below the $1.25 a day threshold in the developing world. Of these, 912 million (or 66.4%) reside in Asia (http://iresearch.worldbank.org/PovcalNet/povDuplic.html).

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This year, data from 328 institutions was verified, representing 53 percent of the total poorest clients reported or 72,385,972 poorest families.

Table 3: Results of the Verification Process, 12/31/99-12/31/10

Date 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/09* 12/31/10 Number of Institutions Verified 78 138 211 234 286 330 420 327 284 327 328 Number of Poorest Clients Verified 9,274,385 12,752,645 21,771,448 35,837,356 47,458,191 58,450,926 64,062,221 79,181,635 84,916,899 119,490,847 72,385,972 Percent Verified of Total Poorest Clients Reported 67 66 81 86 87 88 78 85 80 93 53 Total Number of Poorest Clients Reported 13,779,872 19,327,451 26,878,332 41,594,778 54,785,433 66,614,871 81,949,036 92,922,574 106,584,679 128,220,051 137,547,441

* In 2009, for the first time in a decade, the Campaign did not collect or verify data nor did we release a State of the Microcredit Summit Campaign Report, which is why there are no December 31, 2008 figures.

Growth Resulting from Institutions Reporting for the First Time

Each year, the Campaign makes a concerted effort to include institutions that have previously not submitted Institutional Action Plans. In 2001, 57.8 percent of the growth in poorest clients reached came from institutions reporting for the first time, covering data from December 31, 2000 (Table 4). A significant portion of the growth that year came from NABARD, which had expanded dramatically over the previous four years. As mentioned on page 23, NABARD is the apex development bank in India promoting Self-Help Groups (SHGs), many of which are linked to formal banking institutions. In this years data, 10.4 percent of the growth is a result of institutions reporting for the first time, covering data from December 31, 2010.

Table 4: G  rowth in Poorest Clients from Institutions Reporting for the First Time, 2000-2010
Date 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/09 12/31/10 Percentage 22.0 57.8 33.8 27.5 5.8 6.6 6.8 4.1 6.5 10.4

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The growth from 7.6 million poorest at the end of 1997 to 137.5 million poorest at the end of 2010 represents a growth of 1,710 percent during this thirteen-year period (Table 5).

Table 5: Progress in Reporting, 1997-2010

Date 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/09 12/31/10 Number of Programs Reporting 618 institutions 925 institutions 1,065 institutions 1,567 institutions 2,186 institutions 2,572 institutions 2,931 institutions 3,164 institutions 3,133 institutions 3,316 institutions 3,552 institutions 3,589* institutions 3,652 institutions Total Number of Clients Reached 13,478,797 20,938,899 23,555,689 30,681,107 54,932,235 67,606,080 80,868,343 92,270,289 113,261,390 133,030,913 154,825,825 190,135,080 205,314,502 Number of Poorest Clients Reported 7,600,000 12,221,918 13,779,872 19,327,451 26,878,332 41,594,778 54,785,433 66,614,871 81,949,036 92,922,574 106,584,679 128,220,051 137,547,441

The growth from 7.6 million poorest at the end of 1997 to 137.5 million poorest at the end of 2010 represents a growth of 1,710 percent during this thirteen-year period.

* The small increase in the number of institutions reporting December 31, 2009 data is due, in part, to the fact that we subtracted from the list of practitioners more than 88 Networks who assist with the collection of practitioner action plans but have no clients themselves.

Figure 5 shows the actual growth in number of poorest clients reached since 2005, projected growth until 2015, and growth required to reach 175 million of the worlds poorest families by 2015.

Figure 5: Growth Trajectory of Poorest Clients Reached, 20052015

200 Poorest Clients Reached (Millions) 175 150 125 100 75 2005 2006 2007 2008 2009 2010 Year 2011 2012 2013 2014 2015 Actual Required Projected

Distribution of Clients by Institution Size

Of the 137.5 million poorest clients reached in 2010, 122.5 million of them (89 percent) are being served by the 85 largest institutions and networks reporting to the Campaign, all with 100,000 or more poorest clients. Table 6 shows the breakdown by size of the 3,652 institutions whose data are included in this report.

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Table 6: Reporting Institutions by Size

Size of Institution (in terms of poorest) 1 million or more 100,000 - 999,999 10,000 - 99,999 2,500 - 9,999 Fewer than 2,500 Networks* Number of Institutions 13 64 361 558 2,648 8 Combined Number of Poorest Clients 40,267,670 17,095,196 10,877,810 2,731,044 1,470,448 65,105,273 Percentage of Total Poorest 29.28 12.43 7.91 1.99 1.07 47.33

*Networks include umbrella organizations providing financial support (Ananya Finance for Inclusive Growth and Foundation for a Sustainable Society, Inc.), technical support (ACCESS Development Services, Association of Asian Confederation of Credit Unions, and All India Association for Micro Enterprise Development), promotion and development support (NABARD), and large Government sponsored programs (Bangladesh Rural Development Board and Mahila Arthik Vikas Mahamandal).

Poorest Clients Reached (Millions)

Of the 137.5 million poorest clients reached at the end of 2010, 82.3 percent (113.1 million) are women. The growth in the number of very poor women reached has increased from 10.3 million at the end of 1999 to 113.1 million at the end of 2010. This is a 1,001 percent increase in the number of poorest women reached from December 31, 1999 to December 31, 2010. The increase represents an additional 102.9 million poorest women receiving microloans in the last 11 years.

Women Clients Reached

Of the 137.5 million poorest clients reached at the end of 2010, 82.3 percent (113.1 million) are women. The growth in the number of very poor women reached has increased from 10.3 million at the end of 1999 to 113.1 million at the end of 2010. This is a 1,001 percent increase in the number of poorest women reached from December 31, 1999 to December 31, 2010. The increase represents an additional 102.9 million poorest women receiving microloans in the last 11 years. Figure 6 shows the growth in the number of poorest women reached in relation to the total number of poorest people reported as receiving microloans in the last 11 years.

Figure 6: G  rowth of the Number of Poorest Women Reached in Relation to Total Poorest People Reached
160 140 120 100 80 60 40 20 0 1999 Total Poorest Poorest Women

2000

2001

2002

2003

2004 Year

2005

2006

2007

2009

2010

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The Use of Poverty Measurement Tools

The Microcredit Summit Campaigns greatest challenge lies in bridging the gap between our commitment to reaching the poorest families and the lack of a sufficient number of quality poverty measurement tools in use. Beginning in 2000, the Campaign asked practitioners to indicate what poverty measurement methodology they used, if any, to target or identify poorest clients. Of the institutions reporting that year, 66.6 percent (341 of 512 institutions submitting an IAP in 2000) reported using a tool other than an estimate. Of the 609 institutions submitting data this year, 553 reported the number of their clients living on less than $1.25 a day. Of those 553 IAPs received, 346 institutions (62.7 percent) reported using a poverty measurement methodology other than an estimate. One of those tools, the Progress out of Poverty Index (PPI), a client poverty assessment and targeting tool, provides objective poverty-level data for organizations to use within their social performance management system. It is an inexpensive and easy-to-collect scorecard (10 questions) that assesses simple, non-financial indicators. The Grameen Foundation, in collaboration with CGAP, the Ford Foundation, and other donors, commissioned Microfinance Risk Management, L.L.C. to develop PPIs globally. The PPI provides information that enables users to better understand their clients needs and evaluate the effectiveness of their programs and products. In the past five years, the Grameen Foundation, in partnership with global and regional microfinance networks and industry leaders in the social performance community, has offered training, resources and support to promote adoption of the PPI. Currently, Grameen Foundation is aware of 106 different organizations globally using the PPI. Another valuable tool, the USAID Poverty Assessment Tool (PAT), is a short and simple household survey (albeit typically a bit longer than the PPI) used to measure the prevalence of poverty among a population. Each PAT includes a short, country-specific survey (1025 questions) that takes less than 20 minutes to conduct. The survey collects a variety of information, including household member characteristics, housing conditions, and ownership of durable assets. The data gathered from these surveys is then entered into a data-entry template, from which specific software (CSPro or Epi Info) processes the data to calculate simple statistics and estimates the share of households living below several poverty lines. The basis for the PAT surveys is 10 to 25 indicators that have been identified as the best predictors of the poverty levels. These indicators were selected with statistical methods from a large pool of potential indicators derived from data from nationally representative household surveys. PAT implementers are supported by a wide variety of free resources, including country-specific user guides, an implementation manual, in-person and online trainings, an online forum and a help desk. By mid-September 2011, PATs will be available for 38 countries; currently 25-30 organizations are using them.

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Regional Data
Of the 3,652 microfinance institutions that have reported to us since 1998, 1,009 are in sub-Saharan Africa, 1,746 are in Asia and the Pacific, and 647 are in Latin America and the Caribbean (Table 7). When collecting regional data from the Middle East and North Africa, Eastern Europe and Central Asia, and North America, the Campaign uses the figures provided by three large institutions. Beginning in 2006, the report included the total number of clients from the Middle East and North Africa, provided by the Sanabel Network; from Eastern Europe and Central Asia, provided by the Microfinance Center (MFC); and from North America, provided by the Aspen Institute. The data from these institutions does not include information on poorest clients reached. Some of the networks partner MFIs are also members of the Campaign and submit Institutional Action Plans. In order to avoid double counting, we deduct the total number of clients reported by those MFIs from the total numbers received from Sanabel, MFC, and the Aspen Institute. The data reported by Sanabel represents 68 members of which 31 have reported to the Campaign. The data reported by MFC represents more than 80 members, of which 17 have reported to the Campaign. The Aspen Institute represents 42 organizations, none of which has reported to the Campaign since 2005 (therefore, we have not deducted any numbers from their data).

Table 7: Regional Breakdown of Microfinance Data

Region Number of programs reporting 1,009 1,746 647 91 Number of total clients in 2009 10,776,726 156,403,658 12,257,181 4,552,387 Number of total clients in 2010 12,692,579 169,125,878 13,847,987 4,290,735 Number of poorest clients in 2009 6,360,861 117,178,142 2,834,742 1,492,322 Number of poorest clients in 2010 7,248,732 125,530,437 2,919,646 1,680,181 Number of poorest women clients in 2009 3,935,808 97,385,541 1,935,685 1,217,113 Number of poorest women clients in 2010 4,783,256 104,752,430 2,363,100 1,165,358

Sub-Saharan Africa Asia & the Pacific Latin America & the Caribbean Middle East & North Africa Developing World Totals North America & Western Europe Eastern Europe & Central Asia Industrialized World Totals Global Totals

3,493 183,989,952 199,957,179 127,866,067 137,378,996 104,474,146 113,064,144 86 73 159 148,628 5,996,500 6,145,128 155,254 5,202,069 5,357,323 109,318 233,810 343,128 41,809 126,636 168,445 56,651 163,318 219,969 12,214 62,294 74,508

3,652 190,135,080 205,314,502 128,209,195 137,547,441 104,694,115 113,138,652

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Figure 7 shows the relationship between the number of families living in absolute poverty in each region (i.e., those living on less than $1.25 a day adjusted for purchasing power parity) and the number of poorest families reported that were reached with a microloan in each region at the end of 2010.

Figure 7: Regional Breakdown of Access to Microfinance*

200 180 Number of Poorest Families (Millions) 160 140 120 100 80 60 40 20 0 Asia and the Pacific Africa and the Middle East 11.2% Coverage 8.93 9 32.4% Coverage 3.4 2.92 3.7% Coverage 0.13 79.8 68.8% Coverage 125.53 182.4 # of Poorest Families MFI Outreach

Latin America and the Caribbean

Eastern Europe and Central Asia

*F  igure 7 compares the regional outreach of microcredit with data on people living on $1.25 a day found in the World Banks 2011 World Development Indicators (http://data.worldbank.org/data-catalog/world-development-indicators/wdi-2011) and further verified with PovcalNet (http://iresearch.worldbank.org/PovcalNet/povDuplic.html).

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Conclusion
I noticed some books on an overhanging plank tied by a rope from the ceiling. Who reads those? I asked. Jorimon replied that she and her husband were both illiterateblindBut she was not going to keep her children in darkness. She wanted to educate them so that they can take their rightful place among worthy people. They will then be honored in society.
Excerpted from Jorimon and Others by Muhammad Yunus (1991)

Jorimons story was written nearly 30 years ago, and her vision of a hopeful future awaiting her children made possible by her experience with the Grameen Bank Project still inspires today. Equally inspiring is Beatriz de Chavarra, a client of CRECER, an MFI in Bolivia. She told interviewers, I dream about having a parcel of land for my children. If Im able, thats my wish. Im working towards that goal by saving, and with my childrens help, Ill probably be able to make my wish come true. Both women have such humble dreamsdreams made possible, in part, by access to financial services that fit their needs. Yet Jorimon and Beatriz are honest with themselves about the responsibility that comes with the credit. Credit helps considerably. If its invested, then its good, but if its misspent, its not good. You need know what you will invest in, insisted Beatriz. Furthermore, client stories do not always end happily. Elena Melo, another CRECER client, shared her story of when microfinance went wrong: Five years ago, I received credit from three banks and couldnt pay back because my business didnt provide enough money to pay. I just couldnt make any sales. I ended up having to sell my car to fulfill my loan obligations. Another reason for these problems has to do with my husbands alcoholismthat is why I failed. I hoped he would improve, but there was no cure for his problem. With that bad experience, I learned a real lesson and never take loans from many MFIs. I now take less, not more. I recovered and, you know, you have to continue until you make it.

Working together, we can normalize client protection principles, set universal standards for social performance, and then, for those who share that vision, push the limits of innovation toward an aspirational model of microfinance for poverty outreach and transformation.

Sometimes misfortune drags clients down and sometimes clients make decisions that leave them overextended. But, as weve seen throughout the report, MFIs share in the responsibility for the success and failure of their clients. And MFIs are not lone actors in this: investors, donors, government officials, networks, and advocates, all have to provide incentives that encourage MFIs to put their clients first. Working together, we can normalize client protection principles, set universal standards for social performance, and then, for those who share that vision, push the limits of innovation toward an aspirational model of microfinance for poverty outreach and transformation. In this report, we have set out seven steps as a framework for addressing the challenges we face in microfinance. These steps are not new concepts, and they already have a great deal of support and momentum. What we are advocating is a

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comprehensive approach to refocus our attention on the clients needs, to not shy away from aspirational goals. We applaud and support the work of the Smart Campaign, MicroFinance Transparency, and the Social Performance Task Force in establishing standards and practices for the industry to follow. But, client protection, transparency, and social performance alone will not ensure that we are reaching poor people and helping those people move out of poverty. With the Seal of Excellence for Poverty Outreach and Transformation in Microfinance, we hope to recognize and learn from those organizations and individuals that are taking on the challenging task of supporting clients living in poverty to risk dreaming again, and begin to attain those dreams. The dreams of our clientsregular meals for the entire family, a home that provides shelter from the cold and rain, an education that gives children a chance to live a better life than their parentsthese are things that many of us take for granted. But, for over a billion people around the world, these basic elements remain dreams rather than realities. Our dream is to see microfinance become an ever more powerful tool for helping our clients achieve theirs.

Our dream is to see microfinance become an ever more powerful tool for helping our clients achieve [their dreams].

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Afterword
Sam Daley-Harris organized the first the Microcredit Summit in 1997, an outgrowth of the RESULTS citizens lobby he founded to pressure governments to take action against global poverty. That first Summit gathered 2,900 people, representing 1,500 institutions from 137 countries, in Washington, D.C., to launch a campaign to reach 100 million of the worlds poorest families, especially the women of those families, with credit for self-employment and other financial and business services by the year 2005. As he explains in Box 6, this will also be the last report with Sam Daley-Harris serving as the director of the Microcredit Summit Campaign. Next year, he takes up the new challenge of launching the Center for Citizen Empowerment and Transformation. As we conclude this report, we want to take a moment to reflect on the work that Sam has done to help galvanize a movement and focus it on serving the worlds poorest. Sams efforts have played a key role in bringing microfinance to the world stage, letting the worlds government and business leaders know that they can play a part in giving opportunity to people with low or no incomes to provide for themselves and their children. In another State of the Microcredit Summit Campaign Report, Sam quoted Mahatma Gandhi, who said, Whenever you are in doubtapply the first test. Recall the face of the poorest and weakest man [sic] whom you may have seen, and ask yourself if the step you contemplate is going to be any use to him. Will he gain anything from it? Will it restore him to a control over his own life and destiny? True development puts those first that society puts last. These are the questions that Sam has used to guide the work of the Microcredit Summit Campaign. Putting those first who society puts last guides us now as we call on microfinance to reclaim its vision of helping the poorest provide a better life for themselves and their families. Because wherever there are women struggling to keep their children in school, to put food on the table and to have a safe place to live, we will continue working to achieve Sams vision. We ask you to join us.

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Acknowledgements
This year, more than 1,000 people and institutions contributed to the production of the State of the Microcredit Summit Campaign Report. More than 700 institutions and individuals submitted an institutional action plan in 2011 and they are listed in Appendix III. The Microcredit Summit Campaign recognizes that without these institutions and the individuals within them, especially the practitioners, there would be no report. As always, network institutions have played a crucial role in facilitating data collection from their members and affiliates. Given the number of networks that have provided support, we have again listed them in Endnote 1. Another activity that is critical to this report is the verification of data. Over 160 individuals and institutions have responded to our request for verification; they are listed in Appendix II. Their assistance gives us confidence to report the data found in this report. Furthermore, we want to thank Sam Daley-Harris for giving us the opportunity to write this edition of the report during his last year as director of the Microcredit Summit Campaign. We wish him the best of luck with the launch of the Center for Citizen Empowerment and Transformation. We are grateful to Sam and Sabina Rogers for their invaluable support, through multiple rounds of interviews, conducting a number of the interviews and making sure that we accurately represent the vision of the Campaign and the progress that has been toward the Campaigns goals and core themes. The following people provided interviews and/or written contributions for this report: Lukas Alube, Robert Annibale, Philip Brown, Scott Brown, Monique Cohen, Sam Daley-Harris, Sankar Datta, John de Wit, Christopher Dunford, Nathanael Goldberg, Malcolm Harper, Syed Hashemi, Anne Hastings, Mary Ellen Iskenderian, Iris Lanao, Vijay Mahajan, Asad Mahmood, Gilbert S. Maramba, Bill Morgenstern, Md. Saiful Islam Khan Nahid, Beth Porter, Elisabeth Rhyne, Michael Schlein, Rupert Scofield, Mathew Titus, and Carmen Velasco. We also wish thank Alex Counts, Muhammad Yunus, Susan Davis, Sir Fazle Abed, Mahabub Hossain, Rod Dubitsky, Elizabeth Rhyne, and Frances Sinha, who have written insightful and provocative papers for this years Summit, from which we have quoted in this report. And the following people took the time to interview peers and clients or share their own insights with us: Ranya Abdel-Baki, Parveen Asghar, Davy Serge Azakpame, Aban Haq, Anuj Jain, Rubina Kasur, Vikash Kumar, Mary Jane Macapagal, Ansar Parveen, Paul Ripley, Norma Rosas Lizrraga, Guillermo Sempertegui, Roinel Vargas, Kim Wilson, Muhammad Zafar, Roshaneh Zafar, and Shabana Zulfiqar. We are grateful for their input to this report and for their ongoing contributions to the microfinance sector overall. Nisha Singh took time out of her busy schedule to review a late draft and give helpful suggestions for improvements. Janet Heisey provided important editing support and helped develop a clear structure of our narrative.

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Microcredit Summit Campaign staff and interns have spent enormous amounts of time collecting, entering, and tabulating the data; calling practitioners and verifiers around the world; and reviewing drafts of the report. In addition to Sam and Sabina, we are especially grateful to D.S.K. Rao, Lisa Laegreid, Anna Awimbo, and Camille Rivera for the multiple ways they have contributed to this years report. We would also like to thank Campaign staff members Sue Casey, Fabiola Diaz, Jesse Marsden, Dalia Palchik, Sheila Rao, and Xochitl Sanchez for their contribution to this work. Interns played a key role in the call campaign, so we would like to thank Sterenn Bodennec, Kristopher Budi, Ayesha Datwani, Anna Garriott, Jeanne Gessa, and Laura Lalinde. Melanie Beauvy (S&B International) and Eliana del Castillo de Gottschalk translated these reports in French and Spanish, respectively, and we are grateful for their contribution to this effort. Kristin Hunter copyedited the report and Dawn Lewandowski (Partners Image Coordinators) executed the layout. The Microcredit Summit Campaign has a long list of funders who believe in our mission. Our gratitude goes to those individuals and organizations listed inside the back cover of this report, without their financial commitment, reaching our audacious goals would not be possible. Citi Foundation provided the support necessary to bring this document to life. We are truly grateful for their support. This report is the result of the contributions and experiences of many people who shared them generously. The decisions about what got put in and what got left out were ours, and we take full responsibility for any errors that are found in this report. Jan Maes Westmoreland, NH, USA August 17, 2011 Larry Reed Oak Park, IL, USA

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Endnote 1: I nstitutions and Networks that Assisted in Collection of Institutional Action Plans
Name Credit and Development Forum (CDF) Grameen Trust Palli Karma-Sahayak Foundation (PKSF) Asociacin de Instituciones Financieras para el Desarrollo Rural (FINRURAL) Association Professionnelle des Institutions de Microfinance (APIM) au Burkina Faso Rseau des Institutions de Microfinance (RIM) au Burundi Cambodia Microfinance Association National Association of Microfinance Institutions in Cameroon (ANEMCAM) Dveloppement international Desjardins (DID) Red Financiera Rural (RFR) Sanabel The Microfinance Network for the Arab Countries Ghana Microfinance Institutions Network (GHAMFIN) Red de Instituciones de Microfinanzas de Guatemala (REDIMIF) Association Nationale des Institutions de Microfinance (ANIM) dHati Katalysis Red Microfinanciera Centroamericana Red de Microfinancieras de Honduras (REDMICROH) ACCESS Development Services Ananya Finance for Inclusive Growth Pvt. Ltd. National Bank for Agriculture and Rural Development (NABARD) Sa-Dhan Small Industries Development Bank of India (SIDBI) Gema PKM Indonesia Rural Microfinance Development Centre Ltd. (RMDC) Red Centroamericana de Microfinanzas (REDCAMIF) LAPO Microfinance Bank Limited Pakistan Microfinance Network (PMN) Pakistan Poverty Alleviation Fund (PPAF) Consorcio de Organizaciones Privadas de Promocin a la Pequea y Microempresa de Per (COPEME) Federacin Peruana de Cajas Municipales de Ahorro y Crdito (FEPCMAC) Peoples Credit and Finance Corporation (PCFC) Association of Microfinance Institutions of Uganda (AMFIU) CARE USA Catholic Relief Services CHF International Freedom from Hunger Grameen Foundation Opportunity International Country Bangladesh Bangladesh Bangladesh Bolivia Burkina Faso Burundi Cambodia Cameroon Canada Ecuador Egypt Ghana Guatemala Haiti Honduras Honduras India India India India India Indonesia Nepal Nicaragua Nigeria Pakistan Pakistan Peru Peru Philippines Uganda USA USA USA USA USA USA

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ENDNOTE 1

Institutions and Networks that Assisted in Collection of Institutional Action Plans

Name Plan International Pro Mujer / Pro Women International World Relief World Vision International Vietnam Bank for Social Policies (VBSP)

Country USA USA USA USA Vietnam

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Appendix I: Verified Microfinance Institutions

This is the eleventh year that the Microcredit Summit Campaign conducted the verification process in order to confirm the data reported by our largest members.46 Practitioner MFIs that submitted a 2011 Institutional Action Plan reporting more than 2,500 poorest clients were asked to provide the Campaign with the names of donor agencies, research institutions, networks and/or other institutions that could corroborate their data. Verifiers were asked to confirm the following data points: 1) total number of active clients; 2) percent of total active clients who are female; 3) total number of active clients who were among the poorest when they receive their first loan; and 4) percent of poorest clients who are female. As in past years, the Campaigns greatest challenge is bridging the gap between its commitment to reaching the poorest and the lack of effective poverty measurement tools. Therefore, every use of the term poorest in these appendices should be read within the context of this dilemma.47 The data from 328 practitioner MFIs was corroborated by at least one external organization (found in Appendix II). These 328 institutions reported reaching 72.4 million poorest clients by the end of 2010, or 53 percent of the total number of poorest clients reported.
Poorest Clients as of 31 Dec. 2010
8,340,000 6,965,250 6,020,684 5,132,479 4,188,655 3,617,057 3,350,623 3,340,000 2,552,208 2,329,783 1,483,737 1,403,385 1,338,608 1,244,582 1,212,601 1,184,355 755,099 667,000 630,704 564,630 529,961 470,893 457,951

Institution

Country
Bangladesh Thailand India Bangladesh India Vietnam Bangladesh Bangladesh India India India India India Philippines India India Bangladesh Vietnam India Bangladesh India India Bangladesh

% Poorest Clients that are Women

96 56 100 70 89 52 90 99 100 100 100 100 100 99 100 75 100 45 100 99 100 100 99

Total Active Clients as of 31 Dec. 2010

8,340,000 7,660,720 6,663,252 5,438,000 4,188,655 8,166,287 4,467,497 5,450,000 2,552,208 3,009,907 1,561,828 1,403,385 1,673,261 1,244,582 1,212,601 1,315,950 755,099 1,450,000 734,133 705,788 529,961 470,893 457,951

% Total Women Verified by

96 57 100 70 89 52 89 95 100 100 100 100 100 99 100 75 100 45 100 99 100 100 99 128 31 44 4 44 42 19 19 44 105 44 130 67 146 9 92 19 76 48 110 145 143 132

ASIA and the PACIFIC

Grameen Bank Association of Asian Confederation of Credit Unions SKS Microfinance Ltd. Bangladesh Rural Development Board Spandana Sphoorty Financial Ltd. Vietnam Bank for Social Policies ASA Bangladesh BRAC Share Microfin Ltd. Bandhan Financial Services Pvt. Ltd. Asmitha Microfin Ltd. Equitas Micro Finance India Pvt. Ltd. Ananya Finance for Inclusive Growth Pvt. Ltd. CARD MRI Grama Vidiyal Micro Finance Ltd. Sri Kshetra Dharmasthala Rural Development Project BURO Bangladesh Central Peoples Credit Fund of Vietnam Mahila Arthik Vikas Mahamandal Ltd. ASA International Working Womens Forum CASHPOR Micro Credit Shakti Foundation for Disadvantaged Women
46

By verification, the Campaign means that the verifier has visited the program, met the senior officials, been provided with numbers, and believes that the institution and the numbers listed are reliable and credible. Poorest in developing countries refers to any of the 1.4 billion who live on less than $1.25 a day adjusted for purchasing power parity, or families whose income is in the bottom 50 percent of all those living below their countrys poverty line, when they started with their respective programs. (Based on the 2011 World Development Indicators, http://data.worldbank.org/data-catalog/world-development-indicators/wdi-2011)

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47

APPENDIX I

Verified Microfinance Institutions

Institution
Grameen Financial Services Pvt. Ltd. Samurdhi Authority of Sri Lanka National Rural Support Programme Thengamara Mohila Sabuj Sangha Khushhali Bank Ltd. Islami Bank Bangladesh Ltd. Cauvery Kalpatharu Grameen Bank PADAKHEP Manabik Unnayan Kendra TSPI Development Corporation State Ministry of National Family Planning Coordinating Board, Indonesia (BKKBN) Karnataka Regional Organisation for Social Service BSS Microfinance Pvt. Ltd. Kashf Foundation Jagorani Chakra Foundation United Nations Development Program Microfinance Project Executed by Pact Institute in Myanmar RDRS Bangladesh Caritas Bangladesh Professional Assistance for Development Action Palli Daridro Bimochon Foundation BWDA Finance Ltd. Proshika Manobik Unnayan Kendra Angkor Mikroheranhvatho (Kampuchea) Co., Ltd. Swanirvar Bangladesh Mitra Bisnis Keluarga Ventura South Malabar Gramin Bank United Development Initiatives for Programmed Actions Foundation for a Sustainable Society, Inc. National Bank of Cambodia The First Microfinance Bank Ltd. Sanghamithra Rural Financial Services Resource Integration Centre Madura Micro Finance, Ltd. ASA Philippines Foundation, Inc. Chhimek Bikas Bank Ltd. Bangladesh Extension Education Services Nirdhan Utthan Bank Ltd. Palli Mongal Karmosuchi ESAF Micro Finance and Investments Pvt. Ltd Village Financial Services Pvt. Ltd. Integrated Development Foundation Eco-Social Development Organisation Manabik Shahajya Sangstha HOPE Foundation

Country
India Sri Lanka Pakistan Bangladesh Pakistan Bangladesh India Bangladesh Philippines Indonesia India India Pakistan Bangladesh Myanmar Bangladesh Bangladesh India Bangladesh India Bangladesh Cambodia Bangladesh Indonesia India Bangladesh Philippines Cambodia Pakistan India Bangladesh India Philippines Nepal Bangladesh Nepal Bangladesh India India Bangladesh Bangladesh Bangladesh India

Poorest Clients as of 31 Dec. 2010

377,013 360,000 349,246 329,800 325,523 319,859 314,070 299,166 281,780 278,088 250,000 234,860 234,000 228,408 207,391 190,269 189,106 185,800 175,000 155,843 142,959 142,175 138,955 137,427 123,115 120,350 119,743 116,486 113,648 112,000 110,890 110,597 98,603 96,972 91,985 91,321 82,245 80,000 79,548 78,025 75,497 71,275 71,000

% Poorest Clients that are Women

100 40 54 98 25 82 95 86 100 95 100 100 100 97 99 89 77 100 95 85 67 85 90 100 65 94 90 80 35 99 90 100 100 100 93 100 100 99 100 100 99 100 100

Total Active Clients as of 31 Dec. 2010

382,466 720,000 432,769 515,370 325,523 319,859 314,070 334,566 282,920 278,088 250,000 234,860 312,146 285,511 345,652 253,692 218,513 195,600 600,000 458,362 1,191,332 250,930 463,027 211,155 820,750 203,984 149,679 1,020,784 151,531 124,569 114,830 276,493 299,433 97,646 110,017 91,321 108,385 326,069 243,756 82,132 118,611 108,658 81,000

% Total Women Verified by

99 65 54 98 25 82 95 86 100 95 100 100 100 95 99 89 77 100 98 86 64 86 90 100 35 89 85 80 34 99 90 100 100 100 93 100 100 99 100 100 97 100 100 119 13 16 19 3 19 68 19 43 78 147 163 15 19 97 111 19 80 19 106 19, 156 155 19 11, 126 121 110 47 153 3 122 19 104 164 141 19 83 19 79 22 19, 96 19 19, 96 124

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Verified Microfinance Institutions

APPENDIX I

Institution
HEED Bangladesh Sajida Foundation Swabalamban Laghubitta Bikas Bank Ltd. Christian Service Society Ad-din Welfare Centre - Jessore Centre for Development Innovation and Practices China Foundation for Poverty Alleviation Asomi Finance Pvt. Ltd. Coastal Association for Social Transformation Trust SKS Foundation Negros Women for Tomorrow Foundation WAVE Foundation Network of Entrepreneurship & Economic Development BRAC Sri Lanka Sonata Finance Pvt. Ltd. Gram Utthan ASA Pakistan Ltd. Jeevan Bikas Samaj Rural Reconstruction Foundation Palli Progoti Shahayak Samity ASHRAI Mahasemam Trust Adhikar Forum for Rural Women Ardency Development Ansar - VDP Unnayan Bank Nerude Laghubitta Bikas Bank Ltd. Small Farmers Development Foundation Centre for Self-Help Development Thardeep Rural Development Program The Institute of Rural Development Society for Social Service Bangladesh Association for Social Advancement Holy Cross Social Service Centre ChildFund India Society Development Committee Aakay Ang Milamdec Microfinance Foundation, Inc. PAGE Development Centre Assistance for Social Organization and Development ATMABISWAS Mitra Dhuafa Foundation (Koperasi Mitra Dhuafa) Kazama Grameen Inc. Uttara Development Program Society

Country
Bangladesh Bangladesh Nepal Bangladesh Bangladesh Bangladesh Peoples Republic of China India Bangladesh Bangladesh Philippines Bangladesh India Sri Lanka India India Pakistan Nepal Bangladesh Bangladesh Bangladesh India India Nepal Bangladesh Nepal Bangladesh Nepal Pakistan Bangladesh Bangladesh Bangladesh India India Bangladesh Philippines Bangladesh Bangladesh Bangladesh Indonesia Philippines Bangladesh

Poorest Clients as of 31 Dec. 2010

70,012 68,953 67,340 65,940 62,099 61,080 60,517 59,616 58,541 55,243 54,855 54,059 53,835 53,000 52,498 52,335 51,768 51,228 51,120 48,956 48,490 48,329 47,723 46,271 41,960 41,800 41,727 39,100 38,087 34,186 34,000 33,528 32,900 32,300 31,668 30,091 29,836 29,382 29,055 28,435 28,000 27,811 26,000

% Poorest Clients that are Women

97 94 100 96 99 95 84 99 99 97 100 99 99 90 100 100 100 99 100 99 99 100 100 100 100 65 100 63 100 70 98 100 98 100 77 98 99 100 100 96 100 99 100

Total Active Clients as of 31 Dec. 2010

72,188 98,504 67,340 115,919 95,538 71,859 67,241 59,616 69,036 58,151 93,331 85,808 92,125 59,281 65,607 130,837 69,957 85,380 51,120 212,576 48,490 48,329 79,539 67,059 41,960 97,158 41,727 68,430 38,182 34,186 50,000 279,931 86,600 32,300 34,800 48,534 29,836 62,517 55,418 29,930 38,124 27,811 104,000

% Total Women Verified by

97 94 100 95 99 92 84 99 99 96 99 99 99 90 100 100 100 99 100 98 99 100 100 100 100 70 100 72 100 70 98 96 98 100 77 94 99 98 100 96 100 99 99 19 19 141 160 19 19 72, 166 23, 140 19 19 19 14 107 80 93 79 5 3 141 19 19 19 149 44 141 19 141 19 141 16 19 156 19 66, 144 5 19 14 19 19 19 39 61, 96 19

Muslim Aid UK - Bangladesh Field Office (Muslim Aid Bangladesh) Bangladesh

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APPENDIX I

Verified Microfinance Institutions

Institution
Peoples Oriented Program Implementation Ujjivan Financial Services Pvt. Ltd. Bandhu Kallyan Foundation Al-Falah Aam Unnayan Sangstha Akhuwat Shishu Niloy Foundation Srizony Bangladesh Heifer Project International China Village Education Resource Center Sewa Bank Social Advancement Through Unity Gram Unnayan Karma MAMATA Development Initiative for Social Advancement Somaj O Jati Gathan Enterprise Bank, Inc. Gono Kallayan Trust Peoples Bank of Caraga, Inc. Joypurhat Rural Development Movement Shariatpur Development Society Centre for Mass Education in Science Bangladesh Environment Development Organisation Vayalar Memorial Youth Club Orix Leasing Pakistan Ltd. Pally Bikash Kendra Nabolok Parishad Ad Jesum Development Foundation, Inc. PROGRESS (Akti Samaj Unnayan Mulak Sangstha) Hilful Fuzul Samaj Kallyan Sangstha Grameen Jano Unnayan Sangstha BRAC Pakistan National Development Programme Nowabenki Gonomukhi Foundation Women Cooperative Society Ltd Sabalamby Unnayan Samity Funding the Poor Cooperative - Chinese Academy of Social Sciences MANUSHI Annesha Foundation SETU Alalay Sa Kaunlaran Sa Gitnang Luzon, Inc. Capital Aid Fund for Employment of the Poor - Ho Chi Minh City Bina Swadaya

Country
Bangladesh India Bangladesh Bangladesh Pakistan Bangladesh Bangladesh Peoples Republic of China Bangladesh India Bangladesh Bangladesh Bangladesh Bangladesh Bangladesh Philippines Bangladesh Philippines Bangladesh Bangladesh Bangladesh Bangladesh India Pakistan Bangladesh Bangladesh Philippines Bangladesh Bangladesh Bangladesh Pakistan Bangladesh Bangladesh Nepal Bangladesh Peoples Republic of China Nepal Bangladesh Bangladesh Philippines Vietnam Indonesia

Poorest Clients as of 31 Dec. 2010

25,914 24,635 24,242 23,596 23,292 23,062 22,725 21,000 20,000 20,000 19,816 19,778 19,165 17,940 17,500 16,272 15,784 15,743 15,734 15,716 14,978 14,362 13,110 12,500 12,408 12,369 12,352 12,305 12,055 12,035 12,000 12,000 11,804 11,370 11,339 10,450 10,331 9,732 9,427 9,057 8,974 8,932 8,930

% Poorest Clients that are Women

100 100 90 99 21 99 100 39 98 100 100 100 91 86 44 98 40 95 91 87 100 68 91 100 97 98 99 90 98 55 100 100 100 98 100 100 80 100 98 99 19 76 100

Total Active Clients as of 31 Dec. 2010

165,553 821,173 30,303 29,495 25,880 23,295 37,304 26,156 43,158 25,000 64,194 86,722 29,370 21,765 35,922 46,826 26,306 22,491 39,335 26,605 42,795 16,827 15,423 12,500 17,476 38,367 15,425 13,672 30,139 14,714 20,900 83,797 47,217 33,442 11,339 30,136 15,894 9,732 16,060 43,418 48,094 164,400 27,102

% Total Women Verified by

99 100 85 99 33 99 96 40 98 100 92 96 92 95 39 95 48 96 91 86 100 73 91 100 95 98 99 90 98 55 100 100 99 91 100 99 93 100 98 99 78 76 84 19 12, 34 19 19 87 19 19 49 19 101 156 110,156 37 19 19 61 3 19 61 19 19 19 19 165 3 19 131 7 19 19 19 3 19 19 24 19 96 141 19 19 14 96 148

Sindh Agricultural and Forestry Workers Coordinating Organization Pakistan

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Verified Microfinance Institutions

APPENDIX I

Institution
GHASHFUL Proyas Manobik Unnayan Society MOUSUMI Serviamus Foundation Incorporated Centre for Advanced Research and Social Action OPP-Orangi Charitable Trust Fund for the Encouragement of Self-Reliance Grameen Development Services Jinnah Welfare Society Grameen Manobik Unnayan Sagstha Young Power in Social Action Nav Bharat Jagriti Kendra Solidarity World Concern Bangladesh Alternative Development Initiative Community Support Concern Samadhan Dushtha Shasthya Kendra BASTOB-Initiative for Peoples Self-Development Guidance Society for Labour Orphans and Women Dak Diye Jai Self-Help and Rehabilitation Programme Gono Unnayan Prochesta Community Women Development Centre Anannyo Samaj Kallyan Sangostha - Pabna Samannita Unnayan Seba Sangathan Concern for Environmental Development and Research Palashipara Samaj Kallayan Samity Dhaka Ahsania Mission Sagarika Samaj Unnayan Sangstha Association for Rural Advancement in Bangladesh

Country
Bangladesh Bangladesh Bangladesh Philippines Bangladesh Pakistan Vietnam India Pakistan Bangladesh Bangladesh India Bangladesh Bangladesh Bangladesh Pakistan Bangladesh Bangladesh Bangladesh India Bangladesh Bangladesh Bangladesh Nepal Bangladesh Bangladesh Bangladesh Bangladesh Bangladesh Bangladesh Bangladesh

Poorest Clients as of 31 Dec. 2010

8,700 8,500 8,475 8,451 8,200 8,186 8,116 8,100 7,683 7,420 7,390 7,356 7,115 7,094 7,000 6,990 6,857 6,821 6,758 6,500 6,331 6,276 6,000 6,000 5,733 5,505 5,354 5,207 5,093 5,000 1,653

% Poorest Clients that are Women

99 100 96 100 97 14 89 100 93 86 96 85 92 92 85 100 89 100 90 100 99 100 95 100 100 98 95 98 100 90 100

Total Active Clients as of 31 Dec. 2010

28,609 14,037 14,853 10,563 9,131 45,478 15,434 10,000 13,719 24,258 12,742 9,163 8,894 14,596 19,216 11,673 13,713 99,218 8,448 9,010 34,074 17,330 16,195 6,000 36,867 7,224 6,692 14,878 42,438 27,757 18,946

% Total Women Verified by

99 100 96 99 97 10 88 100 95 88 90 80 93 92 91 90 89 99 90 100 94 98 98 100 92 98 94 93 93 90 100 19 19 19 14 19 16 114 80 16 19 19 116 19 19 19 3 19 156 19 44 19, 85 156 19 141 156 19 107 19 19 19 156

EASTERN EUROPE and CENTRAL ASIA

Microcredit Foundation EKI Vision Fund AzerCredit LLC AgroInvest Bosnia and Herzegovina Azerbaijan Serbia 24,497 10,764 6,115 41 40 59 41,605 35,880 33,183 41 41 59 77 28 95

LATIN AMERICA and the CARIBBEAN

AgroAmigo - Banco do Nordeste do Brasil S/A Banco de Ahorro y Crdito ADOPEM, S.A. Consorcio de ONGs Promocin de la Mujer y la Comunidad CrediAmigo - Banco do Nordeste do Brasil, S.A. Pro Mujer - Bolivia Brazil Dominican Republic Peru Brazil Bolivia 652,643 118,199 115,451 91,863 87,256 47 80 91 74 93 652,643 131,332 138,846 737,826 89,362 47 75 91 66 93 64, 123 129,132 59 40 33

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APPENDIX I

Verified Microfinance Institutions

Institution
Crdito con Educacin Rural Banco de las Microfinanzas Bancama, S.A. Banco FIE, S.A. Plan International - Region of Americas and Caribbean Fondo para el Desarrollo Social de la Ciudad de Mxico Compartamos Banco Banrural Grameen Microfinanzas Fundacin Mundo Mujer - Popayn Fundacin para el Desarrollo Integral de Programas Socioeconmicos Fonkoz - Fondasyon Kole Zepl Pro Mujer - Nicaragua Fundacin Diaconia FRIF Central Cresol Baser Unin Catlica de Apoyo al Desarrollo Comunitario (UCADE) Organizacin de Desarrollo Empresarial Femenino Friendship Bridge Asociacin de Familia y Medio Ambiente Fundacin de Asesoria Financiera a Instituciones de Desarrollo y Servicio Social (FAFIDESS) Fundacin Gnesis Empresarial Microfinanzas Arariwa FUNED VisionFund OPDF

Country
Bolivia Colombia Bolivia Panama Mexico Mexico Guatemala Colombia Guatemala Haiti Nicaragua Bolivia Brazil Ecuador Honduras Guatemala Honduras Guatemala Guatemala Peru Honduras

Poorest Clients as of 31 Dec. 2010

74,529 71,094 63,382 58,804 50,080 36,033 35,198 30,000 29,600 29,370 25,701 22,978 14,700 14,454 13,420 13,000 11,373 10,868 10,127 9,450 8,527

% Poorest Clients that are Women

90 58 55 56 71 100 100 67 73 100 95 75 5 76 68 100 70 97 73 60 80

Total Active Clients as of 31 Dec. 2010

108,013 341,100 146,819 74,417 62,800 1,961,995 35,198 352,592 39,555 50,638 28,557 50,856 45,023 21,263 26,960 13,000 13,380 14,491 130,514 14,538 14,212

% Total Women Verified by

90 61 55 75 71 98 100 67 73 99 96 60 18 76 62 100 69 98 70 75 54 33 75 29 6 60, 133 98 96, 138 132 157 154 125 33 26 18 56 91 158 58, 134 32 103 56

Asociacin Costa Rica Grameen World Relief Honduras Asociacin Benfica PRISMA Cooperativa de Ahorro y Crdito de Santander Ltda Asociacin de Mujeres en Desarrollo - MUDE Microcrdito Para el Desarrollo Fundacin D-MIRO Misin Alianza

Costa Rica Honduras Peru Colombia Guatemala Peru Ecuador

8,187 7,500 6,526 6,471 5,069 4,231 2,918

100 100 30 54 90 98 69

10,234 12,544 21,019 28,872 5,640 7,016 36,463

100 80 69 57 93 98 62

73 56 103 62 137 103 74

MIDDLE EAST and NORTH AFRICA

LEAD Foundation Alexandria Business Association - Small and Micro Enterprise BRAC Microfinance Afghanistan Al Tadamun Microfinance Foundation enda inter-arabe Dakahlya Businessmens Association for Community Development Salaf Albaraka FONDEP Turkish Grameen Microcredit Project Jordan Micro Credit Company (Tamweelcom) BRAC Southern Sudan Development and Employment Fund / Reyada Microfund for Women Egypt Egypt Afghanistan Egypt Tunisia Egypt Morocco Turkey Jordan South Sudan Jordan Jordan 169,228 136,633 127,749 103,658 83,133 78,433 45,000 42,306 39,139 18,498 12,188 11,163 91 70 100 100 83 69 42 100 90 100 74 100 194,392 174,569 155,279 103,658 156,854 105,691 132,419 42,306 46,046 18,498 25,376 62,408 82 55 82 100 71 54 52 100 97 100 59 97 168 168 54 17 17 168 63 17 17 45 1 1

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Verified Microfinance Institutions

APPENDIX I

Institution Al Amal Microfinance Bank Middle East Microcredit Company National Microfinance Bank Lebanese Association for Development (Al-Majmoua) Association de Microfinance Oued Srou Ameen s.a.l. Catholic Relief Services Sudan North Catholic Relief Services Sudan South

Country Yemen Jordan Jordan Lebanon Morocco Lebanon Sudan South Sudan

Poorest Clients as of 31 Dec. 2010 11,007 10,068 7,355 6,500 3,000 2,624 2,047 705

% Poorest Clients that are Women 62 66 90 62 90 56 99 84

Total Active Clients as of 31 Dec. 2010 14,730 12,703 24,521 23,417 3,000 13,476 3,412 1,174

% Total Women Verified by 61 54 92 44 90 26 99 84 50 167 70 35 94 167 162 162

SUB-SAHARAN AFRICA
Amhara Credit and Savings Institution Oromia Credit & Saving Share Company Dedebit Credit and Saving Institution Share Company COWAN African Responsive Banking Micro Finance Bank Kafo Jiginew Equity Bank Ltd. Bank of Agriculture Oxfam America in Mali Farmers Development Union BRAC Tanzania CARE International in Uganda Social Development Fund Grooming People for Better Livelihood Centre Sinapi Aba Trust Crdit Rural de Guine, S. A. CARE International in Kenya CARE International in Tanzania Malawi Union of Savings and Credit Cooperatives Centre for Grassroots Economic Empowerment The Small Enterprise Foundation CARE International in Rwanda PRIDE Microfinance Ltd. (Uganda) Centenary Bank Wisdom Microfinance Institution, S.C. Fdration des Caisses Populaires du Burkina Crdit du Sahel, S.A. Concern Universal Microfinance Operations Caisse Cooprative dEpargne et de Crdit Mutuel BRAC Uganda Asha Microfinance Bank Ltd. Wasasa Microfinance Institution, S.C. Catholic Relief Services Kenya CARE International in Mali Ethiopia Ethiopia Ethiopia Nigeria Mali Kenya Nigeria Mali Nigeria Tanzania Uganda Gambia Nigeria Ghana Guinea Kenya Tanzania Malawi Nigeria South Africa Rwanda Uganda Uganda Ethiopia Burkina Faso Cameroon Malawi Burundi Uganda Nigeria Ethiopia Kenya Mali 654,470 458,762 381,461 345,000 273,736 267,161 195,234 132,110 128,646 116,358 95,669 94,500 93,022 83,702 76,050 63,948 61,849 59,459 53,793 53,400 52,072 47,159 43,000 40,647 39,499 39,000 37,894 37,675 37,052 35,959 32,776 31,629 30,540 65 30 56 90 29 53 25 100 90 100 66 70 99 92 43 83 71 25 100 100 81 41 9 65 100 29 82 74 100 100 60 84 100 659,636 458,762 415,146 360,000 288,143 510,146 780,936 220,184 157,159 119,116 307,616 105,000 93,022 104,628 101,406 137,228 173,246 102,517 65,578 69,333 91,515 65,898 121,000 46,721 164,583 42,500 44,845 43,354 107,708 35,959 43,702 52,714 47,719 65 30 54 90 28 53 26 100 89 98 66 70 99 92 43 83 71 25 100 99 81 41 9 65 48 44 82 74 99 100 45 84 100 46 2 100 53 161 108 51 84 71 86 41 139 27 57 38 41 41 169 51 142 41 21 21 135 120 69 36 112,132 21 53 102 162 41

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APPENDIX I

Verified Microfinance Institutions

Institution UM-PAMECAS FUCEC - TOGO Crdit Communautaire dAfrique LAPO Microfinance Bank Ltd. Catholic Relief Services Uganda Catholic Relief Services Tanzania Systme Financier Dcentralis ASUSU, S.A. Rseau des Caisses dEpargne et de Crdit Nysigiso A Self-Help Assistance Program, Zimbabwe Plan International - Region of East and Southern Africa CARE International in Malawi CAURIE-Micro Finance Union des Clubs dEpargne et de Crdit du Mayo-Kebbi de Pala CARE International in Mozambique Molyn Credit Ltd. ASA Ghana Micro Start - Action des Femmes pour le Dveloppement Grandissons Ensemble ASBL Catholic Relief Services Rwanda Institution de Micro finance Hekima CAMEC Nationale Union des Baor Tradition dEpargne et de Crdit Catholic Relief Services Benin CARE International in Ethiopia BRAC Microfinance Ltd. Sierra Leone CARE International in Sierra Leone Kraban Support Foundation BRAC Liberia Microfinance Company Ltd. Catholic Relief Services Malawi Association des Caisses de Financement la Base Catholic Relief Services Ethiopia Rseau des Caisses Communautaires Rurales du Bnin Catholic Relief Services Zimbabwe Catholic Relief Services Burundi CARE International in Ghana Catholic Relief Services Ghana Catholic Relief Services Mali Catholic Relief Services Burkina Faso CARE International in Lesotho Catholic Relief Services Senegal OMAKONSULTS Microfinance Institution Aidez Small Project International

Country Senegal Togo Cameroon Nigeria Uganda Tanzania Niger Mali Zimbabwe Kenya Malawi Senegal Chad Mozambique Kenya Ghana Burkina Faso Democratic Republic of Congo Rwanda Democratic Republic of Congo Mali Burkina Faso Benin Ethiopia Sierra Leone Sierra Leone Ghana Liberia Malawi Benin Ethiopia Benin Zimbabwe Burundi Ghana Ghana Mali Burkina Faso Lesotho Senegal Nigeria Ghana

Poorest Clients as of 31 Dec. 2010 30,000 29,815 29,230 28,440 25,473 25,198 25,000 24,131 21,005 19,948 19,321 18,967 16,174 15,469 15,000 14,246 14,003 13,000 12,998 12,684 11,745 11,500 11,379 10,110 8,704 8,480 8,017 8,012 6,478 6,438 6,005 4,461 4,104 4,033 4,011 3,938 3,550 3,429 3,222 2,940 2,800 2,770

% Poorest Clients that are Women 90 100 69 20 70 61 67 21 81 6 80 100 31 74 58 100 98 70 68 94 56 70 74 70 100 66 98 100 79 96 68 100 75 62 75 86 91 80 83 80 100 3

Total Active Clients as of 31 Dec. 2010 75,806 77,899 63,121 355,502 42,455 41,997 38,555 24,812 21,005 128,568 36,872 41,770 17,971 28,024 20,000 40,702 18,924 13,000 21,663 13,213 20,824 13,900 18,965 22,874 16,837 12,080 9,606 20,559 10,796 28,905 10,008 5,577 6,841 6,721 14,072 6,563 5,916 5,715 5,722 4,900 3,586 3,864

% Total Women Verified by 61 64 62 92 70 61 75 43 81 53 80 99 31 74 55 99 91 90 68 94 37 58 74 70 99 66 98 99 79 85 68 97 75 62 75 86 91 80 83 80 98 97 120 89 55, 115 99 162 162 20, 88 30 81 117 41 65 112 41 82 57 127 109 162 90 30 52, 152 162 41 25 41 8 150 162 159 162 136 162 162 41 162 162 162 41 162 150 10

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APPENDIX I

Institution Imo Self Help Organization Catholic Relief Services Cameroon Catholic Relief Services Democratic Republic of Congo Catholic Relief Services Sierra Leone CARE International in Madagascar Catholic Relief Services Madagascar Catholic Relief Services Lesotho Catholic Relief Services Nigeria Catholic Relief Services Zambia Catholic Relief Services Central African Republic CARE International in Liberia Catholic Relief Services Liberia Catholic Relief Services Niger Catholic Relief Services Eritrea

Country Nigeria Cameroon Democratic Republic of Congo Sierra Leone Madagascar Madagascar Lesotho Nigeria Zambia Central African Republic Liberia Liberia Niger Eritrea

Poorest Clients as of 31 Dec. 2010 2,500 2,037 1,945 1,592 768 541 521 437 357 354 353 280 153 46

% Poorest Clients that are Women 95 79 73 63 54 55 76 81 85 79 81 55 54 100

Total Active Clients as of 31 Dec. 2010 3,500 3,395 3,241 2,654 1,118 902 868 728 595 590 441 467 254 76

% Total Women Verified by 95 79 73 63 54 55 76 81 85 75 81 55 54 100 118 162 162 162 41 162 162 162 162 162 41 162 162 162

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Appendix II: List of Verifiers

Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Name of Verifier Abdel-Baki, Ranya Abdula, Kelifa Ahmed, Syed Mohsin Ali, Zulfiquar Alok, Deepak Alvarez, Leonardo Amata, Gondelina Amoa-Bosompem, Magnus Anandkumar, T.S. Andah, David O. Andriesse, Gauke Annadanam, Veena Yamini Anthony, Emil Aquino Jr., Carlos H. Arbab, Amjad Ashfaq, Yasir Assaad, Julia Auerbach, Paula Awal, Md. Abdul Ba, Aminata Baguma, David Banerjee, Tarun Bhandari, Aditya Bhattarai, Sangya Bin Seraj, Faisal Bittencourt, Gilson Alceu Bouan, Maxime Brown, Chris Calle, Dalila Camara, Ibrahim Cameron, Derek Canek Pinelo, Maritza Castro, Nestor Chegu, Rajiv Chehade, Nadine Chilumpha, Fletcher Chowdury, Hossain Cond, Kmo Connor, Erin Cortes Neri, Marcelo Coulibaly, Abdoul Karim Dam, Tran Van Daniels, Mark Das, Vijayalakshmi Institution Sanabel The Microfinance Network for the Arab Countries Self Help Africa Pakistan Microfinance Network (PMN) Bangladesh Institute of Development Studies (BIDS) M2i Consulting Plan International - Region of Americas and Caribbean National Livelihood Development Corporation ASSFIN ICICI Bank Ghana Microfinance Institutions Network (GHAMFIN) Cordaid MicroSave Consultant Microfinance Council of the Philippines, Inc. (MCPI) Shore Bank International Pakistan Poverty Alleviation Fund (PPAF) Grameen-Jameel Pan-Arab Microfinance Ltd. Banco Interamericano de Desarrollo (BID) Credit and Development Forum (CDF) Agence de Rgulation du Secteur de la Micro Finance Association of Microfinance Institutions of Uganda (AMFIU) ACCESS Development Services Incofin Investment Management Nepal Investment Bank Ltd. BRAC West Africa Programme - Research and Evaluation Unit Secretaria de Poltica Econmica, Ministrio da Fazenda Blue Orchard Finance CB Consulting Microfinanza Rating APIM-Mali Canadian Co-operative Association Fondo de Desarrollo Local para Guatemala - Cooperacin Sueca ASDI Asociacin de Instituciones Financieras para el Desarrollo Rural (FINRURAL) Michael & Susan Dell Foundation Planet Rating Financial Inclusion in Malawi (FIMA) Project Grameen Trust Banque Centrale Grameen Foundation Fundao Getlio Vargas Access Africa - CARE USA Vietnam Bank for Agriculture and Rural Development Opportunity International Australia Ananya Finance for Inclusive Growth Pvt. Ltd. Country Egypt Ethiopia Pakistan Bangladesh India Thailand Philippines Ghana India Ghana Netherlands India Sri Lanka Philippines Pakistan Pakistan United Arab Emirates Ecuador Bangladesh Niger Uganda India India Nepal Sierra Leone Brazil Switzerland Azerbaijan Ecuador Mali Canada Guatemala Bolivia India France Malawi Bangladesh Guinea USA Brazil Tanzania Vietnam Australia India

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APPENDIX II

Number 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

Name of Verifier Data, Charles Dean, Debra Diokno-Villaviray, Aurora Luz Dsouza, Judith Du, Xiaoshan Dueb, Nasser Ehigiamusoe, Godwin Ehlinger, Aude Fabamwo, Olufemi Fakiri, Katrin Fanche, William Flores, Indiana Fosu Quaye, Clara Galo Vanegas, Yoselin Garca Bedregal, Luis Garrido Noguera, Celso Generoso, Edgar Gmez, Wilson Grine, Abderrahim Guadagnin, Joo Luiz Gueye, Absa Gupta, Bhawani Shankar Gupta, Sanjay Halemane, Nanda Hamadou, Ibrahima Hamdan, Marwan Hansen, Katja He, Guangwen Hernndez, Carlos Herrera, Jessica Higuera, Claudio Hung, Dao Van Ibrahimpasic, Maja Ismawan, Bambang Jain, Jayesh Jain, Vinod Kakono, Tafirenyika Karanja, Carol Karki, Sanjay Karlan, Dean Kashem, Md. Abdul Kewe, Sosthenes Khan, Ather Azim Kiepin Toy, Amina

Institution Southern Sudan Microfinance Development Facility Grameen Foundation Department of Finance IFAD Rural Development Intuition AGFUND LAPO Microfinance Bank Ltd. SOS Faim Central Bank of Nigeria Microfinance Investment Support Facility for Afghanistan (MISFA) Afriexchange Red de Microfinancieras de Honduras (REDMICROH) Ghana Microfinance Institutions Network (GHAMFIN) REDCAMIF Freedom from Hunger Universidad Autnoma Metropolitana Azcapotzalco Peoples Credit and Finance Corporation (PCFC) AECOM Internacional KPMG Ministrio do Desenvolvimento Agrrio APSFD Sngal Support Dvc Colony, Hazaribag Jharkhand SIDBI Prasthuthi Fonds Provincial de Refinancement Delta Informatics Evangelischer Entwicklungsdienst (EED) Center for Rural Finance & Investment Research, China Agriculture University Oikocredit Red Financiera Rural Emprender y Presidente Asomicrofinanzas Policy and Development Institute USAID-Sida FIRMA Project Yayasan Bina Swadaya Grameen Foundation Trust Consulting, Lucknow CARE International Association of Microfinance Institutions (AMFI) Kenya Mercy Corps Nepal Innovations in Poverty Action at Yale University Palli Karma-Sahayak Foundation (PSKF) Financial Sector Deepening Trust University of Central Punjab Association Professionnelle des Systmes Financiers Dcentralises du Niger (AP/SFD Niger)

Country Germany USA Philippines India Peoples Republic of China Saudi Arabia Nigeria Luxembourg Nigeria Afghanistan Cameroon Honduras Ghana Nicaragua Peru Mexico Philippines Colombia Morocco Brazil Senegal India India India Cameroon Jordan Germany Peoples Republic of China Costa Rica Ecuador Colombia Vietnam Bosnia and Herzegovina Indonesia India India Zimbabwe Kenya Nepal USA Bangladesh Tanzania Pakistan Niger

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APPENDIX II

List of Verifiers

Number 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132

Name of Verifier Kpizing, Esodong H. Kreger, Michelle Kuhn Fraioli, Lisa Kumar, N. Manmath Kurera, Niroshan Lamrini, Rida Landmann, Lucretia Latifee, Huzzat I. Lwin, U Aye Martnez Rojas Rustran, Jess A. Marx, Michael Mees, Marc Mehta, Anjali Mensink, Mariel Meza, Jorge Mogilshetty, Shilpa Mohan, Brij Moris, A. John Mridha, Md. Abdul Hye Mugwanga, Trevor Mukalayi, Toussaint Nabi, Md. Atiqun Nath, Bhabatosh Ndayishimiye, Cyprien Ngamine, Jean Nguyen, Nhien Niebou, Achille Aim Nilesh, Arya Norgah, Samuel Ochekwu, Amedu Andrew Ohri, Chandni Oudraogo, Alpha Padmakumar, K.P. Paramasivaiah, N.T. Peraci, Adoniram Sanches Perumal, Sai B. Puglielli, Laura Purnama, Frans Raginel, Laetitia Rahman, Hossain Zillur Ramos, Kenia Rao, D.S.K. Roy, Michael A. Ruf, Rebecca

Institution Ministre de lEconomie et des Finances, Cellule dAppui et de Suivi des Institutions Mutualistes ou Coopratives dEpargne et de Crdit Kiva Freedom from Hunger Vijaya Bank Etimos Lanka Pvt. Ltd. INMAA Symbiotics Research & Advisory S.A. Grameen Trust UNDP McBride Corp. Food and Agriculture Organization (FAO) SOS Faim Indian School of Microfinance for Women Terrafina Microfinance COPEME Consultant ACCESS Development Services M/S A. John Moris & Co., Chartered Accountants Institute of Microfinance MicroSave CRONGD - KINSHASA INAFI Asia and Bangladesh Responsive to Integrated Development Services (RIDS) Rseau des Institutions de Microfinance (RIM) Burundi Caritas Suisse Center for International Cooperation Cabinet A. NIEBOU Sa-Dhan Plan International - Region of East and Southern Africa Centre for Microenterprise Development Grameen Foundation Confdration des Institutions Financires (CIF) NABARD Malappuram Navachetana Microfin Services Pvt. Ltd. Food and Agriculture Organization (FAO) mFinstreet Global Partnerships Indonesian Microfinance Association Entrepreneurs du Monde Power and Participation Research Centre Fundacion Codespa Microcredit Summit Campaign Local Government Engineering Department Womens World Banking

Country Togo USA USA India Sri Lanka Morocco Switzerland Bangladesh Myanmar Mexico Italy Luxembourg India Netherlands Peru India India India Bangladesh Kenya Democratic Republic of Congo Bangladesh Bangladesh Burundi Chad Vietnam Cameroon India Kenya Nigeria India Burkina Faso India India Brazil India USA Indonesia Burkina Faso Bangladesh Dominican Republic India Bangladesh USA

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APPENDIX II

Number 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169

Name of Verifier Ruiz, Clemente Ruiz, Daniel Ryan, Johanna Salifou, Moussa Snchez, Ral Sansone, Philip Senghor, Bai Sharma, Abhijit Shrestha, Shankar Man Simanowitz, Anton Singh, Saneesh Singh, Sarjeet Srinivas, T. Balaji Stack, Kathleen Stanley, Francis Joseph Sumarta, Harya Sundar, Paul Taiwo, Kehinde Tamba II, Kollie S. Tassembedo, Moussa Thy, Yuthear Toohig, Jeff Torres, Olga Touhid, Gulam Turiel, Daniel Valenzuela, Cesar Van de Voorde, Herman Van Middelkoop, M.B. Vandeweerd, Luc Vanmeenen, Guy Venkatanarayana, G. R. Villiagas, Socrates Vineethkumar, V. S. Xiao, Rong Zain, Shaimaa Zayat, Rizkallah Zulu, Mathews

Institution Universidad Nacional Autnoma de Mxico REDIMIF VisionFund International Axes de Dveloppement Consulting (AD Consulting) Red Katalysis Whole Planet Foundation Central Bank of The Gambia Indian Institution of Bank Management Rural Microfinance Development Center Ltd. (RMDC) Institute of Development Studies Dia Vikas Pvt. Ltd Support for Sustainable Society Lakshmi Vilas Bank Freedom from Hunger Skills for Progress (SKIP) Gema PKM Indonesia Habitat for Humanity India Trust Obafemi Awolowo University, Ileife Central Bank of Liberia Lessokon Amret Microfinance Institution Grameen Foundation Agora Microfinance Partners LLP Palli Karma-Sahayak Foundation (PSKF) ACTEC Espiralica Research & Consulting BRNEfonden Bnin Woord en Daad ADA Luxembourg Catholic Relief Services G.R. Venkatanarayana Chartered Accountants Catholic Church Law Quarters Give2Asia Sanabel - The Microfinance Network of Arab Countries USAID Cairo Swedish Cooperative Center

Country Mexico Guatemala United Kingdom Benin Honduras USA The Gambia India Nepal United Kingdom India India India USA India Indonesia India Nigeria Liberia Burkina Faso Cambodia USA United Kingdom Bangladesh Belgium Honduras Benin Netherlands Luxembourg Kenya India Philippines India Peoples Republic of China Egypt Egypt Malawi

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Appendix III: I nstitutions and Individuals that Submitted an Action Plan in 2011
Council of Advocates Convergences 2015, France Country Women Association of Nigeria (COWAN) Imp-Act Consortium, United Kingdom Institute for International Urban Development, United States International Association for Community Development, United Kingdom World Microfinance Forum-Geneva, Switzerland World Savings Banks Institute (WSBI), Belgium Council of Banks and Commercial Finance Institutions BancoEstado Microempresas, S.A., Chile SNS Impact Investing, the Netherlands Council of Corporations Responsive to Integrated Development Service (RIDS), Bangladesh Council of Domestic Government Agencies National Poverty Eradication Programme, Nigeria Council of Educational Institutions 10thousandgirl Campaign, Australia Centre de Formation en Management et Dveloppement Organisationnel, Democratic Republic of Congo G3 Microfinanzas, Bolivia Graduate College of Aviation, Sierra Leone International University of Business Agriculture and Technology (IUBAT), Bangladesh Mster en Microcrditos para el Desarrollo-Universidad Autnoma de Madrid, Spain Point Loma Nazarene Universitys Microfinance Club, United States Southern Illinois University, School of Social Work, United States Yunus Centre for Social Business and Health, United Kingdom Council of Foundations and Philanthropists 1to4 Foundation, Switzerland Citi Foundation, United States Fondation SenFinances, Senegal Fundacin FIDESMA, Guatemala Grameen Crdit Agricole Microfinance Foundation, Luxembourg Kamayo Mindanao Foundation, Inc., Philippines Mulchand and Parpati Thadhani Foundation, United States Council of Individual Supporters Patrick Yankey, Ghana Allison Barber, United States Joanne Sow Hup Chan, Peoples Republic of China Marta Garca Mandaloniz, Northern Mariana Islands Sheila McLeod Arnopoulos, Canada Francoise Clementi, Spain Council of International Financial Institutions Arab Gulf Programme for Development (AGFUND), Saudi Arabia Banco Centroamericano de Integracin Econmica, Honduras International Finance Corporation (IFC), United States Council of Non-Governmental Organizations (NGOs) Abundant Life Mission, Uganda Action Solidaire Pour le Dveloppement Communautaire, Burundi Asamblea de Cooperacin por la Paz, Spain ASEFED, Cameroon Banlieues du Monde Mauritanie, Mauritania Family Resources Development Motivators, Nigeria Forum des Anciens Combattants par la Lutte Contre le SIDA, Amlioration de la Sant et de lEducation, Burundi Fresh Mercy Ministries, India Friends of Farming Association, Uganda Fundacin Ayuda en Accin, Spain Fundacin Habitfrica, Spain Fundacin Iberoamericana para el Desarrollo, Spain Habari Multipurpose Cooperative Society Ltd., Kenya Janamangal Sanskrutik Anusthan, India Khosen Credit Union, Ukraine Liberia Initiative for Community Empowerment Inc. Livelihood NGO, Cameroon Microfinance Information Exchange (MIX), United States New Age Spirit International, Nigeria Rural Technology and Management Khadi & Village Industries Samiti, India SOTERMUN, Spain Tostan, Senegal Visin para el Desarrollo, Peru Women Emancipation and Empowering Group, Ghana Young Stars Cultural Troupe of Nigeria Council of Practitioners A Self-Help Assistance Program (ASAP) Malawi A Self-Help Assistance Program (ASAP) Zimbabwe Aakay Ang Milamdec Microfinance Foundation, Inc., Philippines ACCESS Development Services, India Ad Jesum Development Foundation, Inc., Philippines Ad-din Welfare Centre-Jessore, Bangladesh Addis Credit and Saving Institution, Ethiopia Adelante Foundation, Honduras Adhikar, India AGRAGATI, Bangladesh Agricultural Science Foundation, India AgroAmigoBanco do Nordeste do Brasil S/A, Brazil AgroInvest, Serbia Aidez Small Project International, Ghana Akhuwat, Pakistan Al Amal Microfinance Bank, Yemen Al Amana Microfinance, Morocco Al Tadamun Microfinance Foundation, Egypt Alalay Sa Kaunlaran Sa Gitnang Luzon, Inc., Philippines Albanian Savings and Credit Union, Albania Alexandria Business Association-Small and Micro Enterprise, Egypt Al-Falah Aam Unnayan Sangstha, Bangladesh Alliance de Crdit et dEpargne Pour la Production, Senegal Association for Micro-Entreprise Development (AIAMED), India Alternative Development Initiative, Bangladesh Amanah Ikhtiar Malaysia Ameen s.a.l., Lebanon Amhara Credit and Savings Institution, Ethiopia Anannyo Samaj Kallyan Sangostha-Pabna, Bangladesh

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Institutions and Individuals that Submitted an Action Plan in 2011

Council of Practitioners, continued Ananya Finance for Inclusive Growth Pvt. Ltd., India Angkor Mikroheranhvatho (Kampuchea) Co., Ltd., Cambodia Annesha Foundation, Bangladesh AnsarVDP Unnayan Bank, Bangladesh Apoyo Econmico Familiar, S.A. de C.V., Mexico Arohan Financial Services Pvt. Ltd., India ASA Afghanistan Ltd. ASA Bangladesh ASA Ghana ASA Initiative, Ghana ASA International, Bangladesh ASA International India Microfinance Pvt. Ltd., India ASA Pakistan, Ltd. ASA Philippines Foundation, Inc., Philippines Asha Microfinance Bank Ltd., Nigeria ASHRAI, Bangladesh Asmitha Microfin Ltd., India Asociacin Alternativa para el Desarrollo Integral de las Mujeres, Nicaragua Asociacin Benfica PRISMA, Peru Asociacin Costa Rica Grameen, Costa Rica Asociacin de Familia y Medio Ambiente, Honduras Asociacin de Instituciones Financieras para el Desarrollo Rural (FINRURAL), Bolivia Asociacin de Mujeres en Desarrollo (MUDE), Guatemala Asociacin Fondo de Desarrollo Regional, Peru Asociacin NEC RED Rural Sondondo, Peru Asociacin Nicaragense de Instituciones de Microfinanzas, Nicaragua Asociacin para el Desarrollo Integral Comunitario de Honduras Asociacin para el Desarrollo Integral Rural, Guatemala Asociacin Para Inversin y Empleo (ASPIRE), Dominican Republic Asociacin Salvadorea de Extensionistas Empresariales del INCAE, El Salvador Asomi Finance Private Ltd., India ASPADA Paribesh Unnayan Foundation, Bangladesh Assistance for Social Organization and Development, Bangladesh Association de Microfinance Oued Srou, Morocco Association dEntraide Professionnelle, Lebanon Association des Caisses de Financement la Base, Benin Association for Realisation of Basic Needs, Bangladesh Association for Rural Advancement in Bangladesh Association Nationale des Institutions de Microfinance dHati Association of Asian Confederation of Credit Unions (ACCU), Thailand Association of Cambodian Local Economic Development Agencies (ACLEDA) Bank Ltd., Cambodia Association of Development for Economic and Social Help, Bangladesh Association of Microfinance Institutions of Uganda (AMFIU) Association of Productive Entrepreneurship, Ghana Association pour le Droit lInitiative conomique (ADIE), France Association Professionnelle des Institutions de Microfinance (APIM) au Burkina Faso Association Professionnelle des Institutions de Microfinance (APIM) du Mali ATMABISWAS, Bangladesh Bank Tabungan Pensiunan Nasional Sharia, Indonesia Banco de Ahorro y Crdito ADOPEM, S.A., Dominican Republic Banco de las Microfinanzas Bancama S.A., Colombia Banco FIE, S.A., Bolivia Banco FINCA, Ecuador Banco Solidario, S.A., Ecuador Bandhan Financial Services (Pvt.) Ltd., India Bandhu Kallyan Foundation, Bangladesh Bangladesh Association for Social Advancement Bangladesh Development Society

APPENDIX III

Bangladesh Environment Development Organisation Bangladesh Extension Education Services Bangladesh Krishi Bank Bangladesh Rural Integrated Development for Grub-Street Economy (BRIDGE) Bangladesh Rural Development Board (BRDB) Bank of Agriculture, Nigeria Banque de lUnion Hatienne, S. A.Krdi Popil, Haiti Banque Tunisienne de Solidarit, Tunisia Banrural Grameen Microfinanzas, Guatemala BASTOBInitiative for Peoples Self-Development, Bangladesh BeselidhjaZavet Micro Finance, Kosovo Bina Swadaya, Indonesia BRAC Bangladesh BRAC Liberia Microfinance Company Ltd., Liberia BRAC Microfinance Afghanistan BRAC Microfinance Ltd. Sierra Leone BRAC Pakistan BRAC Southern Sudan BRAC Sri Lanka BRAC Tanzania BRAC Uganda BSS Microfinance (Pvt.) Ltd., India BURO Bangladesh BWDA Finance Ltd., India Caisse Cooprative dEpargne et de Crdit Mutuel, Burundi Caisse dAction Mutuelle dEpargne et de Crdit, Democratic Republic of Congo Caja de Compensacin Familiar de Antioquia, Colombia Caja de Crdito de Acajutla, El Salvador Caja de Crdito de Jocoro S.C. de R.L. de C.V., El Salvador Caja de Crdito de San Martn, El Salvador Caja de Crdito de Santiago Nonualco, El Salvador Caja de Crdito de Usulutn S.C. de R.L. de C.V., El Salvador Caja de Crdito de Zacatecoluca, El Salvador Caja Municipal de Ahorro y Crdito de Arequipa, Peru Caja Municipal de Ahorro y Crdito de Huancayo, Peru Caja Municipal de Ahorro y Crdito de Ica, Peru Caja Municipal de Ahorro y Crdito de Maynas, Peru Caja Municipal de Ahorro y Crdito de Sullana, Peru Caja Municipal de Ahorro y Crdito de Tacna S.A., Peru CAMEC Nationale, Mali Capital Aid Fund for Employment of the Poor (CEP) - Ho Chi Minh City, Vietnam CARD MRI, Philippines CARE International in Ethiopia CARE International in Ghana CARE International in Kenya CARE International in Lesotho CARE International in Liberia CARE International in Madagascar CARE International in Malawi CARE International in Mali CARE International in Mozambique CARE International in Rwanda CARE International in Sierra Leone CARE International in Tanzania CARE International in Uganda Caritas Bangladesh CASHPOR Micro Credit, India Catholic Relief Services, United States Catholic Relief Services Benin Catholic Relief Services Burkina Faso Catholic Relief Services Burundi Catholic Relief Services Cameroon

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APPENDIX III
Council of Practitioners, continued

Institutions and Individuals that Submitted an Action Plan in 2011

Consorcio de Organizaciones Privadas de Promocin a la Pequea y Microempresa (COPEME) de Per Cooperativa de Ahorro y Crdito de Santander Ltda., Colombia Cooperativa de Ahorro y Crdito Fernando Daquilema Ltda., Ecuador Cooperativa de Ahorro y Crdito Mujeres Unidas (CACMU), Ltda., Tantanakushka Warmikunapak, Ecuador Cooperativa de Ahorro y Crdito UCADEPadre Vicente Ponce Rubio, Ecuador Cooperativa Multiactiva de Aporte y Crdito para el Desarrollo del Autoempleo, Colombia Cooprative dEpargne et de Crdit Bolingo, Republic of Congo Cooprative dEpargne et de Crdit pour des Chrtiens Unis, Democratic Republic of Congo Cooprative dEpargne et de Crdit Pour le Dvloppement Kasai Occidental, Democratic Republic of Congo Cooprative dEpargne et de Crdit (COOPEC) TUMAINI, Democratic Republic of Congo Corporacin Accin por el TolimaActuar Famiempresas, Colombia Corporacin CORPROEM, Colombia Corporacin Viviendas Hogar de Cristo, Ecuador Council for Socio Economic Benevolent Action, India COWAN African Responsive Banking Micro Finance Bank, Nigeria CrediAmigoBanco do Nordeste do Brasil S.A., Brazil CREDIFE Desarrollo Micro EmpresarialBanco Pichincha, Ecuador Crdit Communautaire dAfrique, Cameroon Crdit du Sahel S.A., Cameroon Credit MFI, Cambodia Crdit Rural de Guine S.A., Guinea Crdito con Educacin Rural, Bolivia Dak Diye Jai, Bangladesh Dakahlya Businessmens Association for Community Development, Egypt Dedebit Credit and Saving Institution Share Company (DECSI), Ethiopia DevA Access and Empowerment International Ltd./Gtee., Nigeria Development Action for Mobilization and Emancipation (DAMEN), Pakistan Development and Employment FundReyada, Jordan Development Association for Rural Peoples, Bangladesh Development Initiative for Social Advancement, Bangladesh Development Organisation of the Rural Poor, Bangladesh Development Project Service Centre, Nepal Development Promotion Group, India Development Support Team, India Dveloppement international Desjardins, Canada Dhaka Ahsania Mission, Bangladesh Dian Bhuana Lestari Foundation, Indonesia Dunduliza, Tanzania Dushtha Shasthya Kendra, Bangladesh DWIP Unnayan Sangstha, Bangladesh EB-ACCION Microfinance S.A., Cameroon EC Bangladesh Eco-Social Development Organisation, Bangladesh Edpyme Proempresa S.A., Peru Edpyme Raz, Peru Edpyme Solidaridad y Desarrollo Empresarial S.A.C., Peru enda inter-arabe, Tunisia Ensure Development Activities for Vulnerable Underprivileged Rural People (ENDEAVOUR), Bangladesh Enterprise Bank Inc., Philippines Environment Council Bangladesh, Bangladesh Equipe Pastorale auprs des Enfants en Dtresse, Democratic Republic of Congo Equipo de Educacin y Autogestin Social, Peru Equitas Micro Finance India Private Ltd., India Equity Bank Ltd., Kenya ESAF Micro Finance and Investments (Pvt.) Ltd., India

Catholic Relief Services Central African Republic Catholic Relief Services Democratic Republic of Congo Catholic Relief Services Eritrea Catholic Relief Services Ethiopia Catholic Relief Services Ghana Catholic Relief Services Kenya Catholic Relief Services Lesotho Catholic Relief Services Liberia Catholic Relief Services Madagascar Catholic Relief Services Malawi Catholic Relief Services Mali Catholic Relief Services Niger Catholic Relief Services Nigeria Catholic Relief Services Rwanda Catholic Relief Services Senegal Catholic Relief Services Sierra Leone Catholic Relief Services Sudan Catholic Relief Services South Sudan Catholic Relief Services Tanzania Catholic Relief Services Uganda Catholic Relief Services Zambia Catholic Relief Services Zimbabwe CAURIE-Micro Finance, Senegal Cauvery Kalpatharu Grameen Bank, India Centenary Bank, Uganda Central Cresol Baser, Brazil Central Peoples Credit Fund of Vietnam Centre for Action Research-Barind, Bangladesh Centre for Advanced Research and Social Action, Bangladesh Centre for Development Innovation and Practices, Bangladesh Centre for Grassroots Economic Empowerment, Nigeria Centre for Mass Education in Science, Bangladesh Centre for Micro-Finance, Nepal Centre for Rehabilitation Education and Earning Development (CREED), Bangladesh Centre for Self-Help Development, Nepal Centro de Apoyo al Microempresario, I.A.P., Mexico CF FINAMERICA, S.A., Colombia CF Lanka Microfinance, Sri Lanka CHF (ACSI)-Iraq CHF International, United States CHF International ACSI, Lebanon Chhimek Bikas Bank Ltd., Nepal Chifeng Zhaowuda Womens Sustainable Development Association, Peoples Republic of China ChildFund Afghanistan Microfinance ChildFund India China Foundation for Poverty Alleviation, Peoples Republic of China Christian Service Society, Bangladesh Coastal Association for Social Transformation (COAST) Trust, Bangladesh Coastal Peoples Development Association, India Community Development Society, India Community Economic Ventures, Inc., Philippines Community Finance Resource Center (CFRC), Vietnam Community Services Trust, India Community Support Concern, Pakistan Community Women Development Centre, Nepal Compartamos Banco, Mexico Concern for Environmental Development and Research (CEDAR), Bangladesh Concern Universal Microfinance Operations, Malawi Consorcio de ONGs Promocin de la Mujer y la Comunidad (PROMUC), Peru

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STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

Institutions and Individuals that Submitted an Action Plan in 2011

Council of Practitioners, continued Esperanza Internacional, Dominican Republic European Microfinance Network, France Express Finance IFN S.A., Romania Fatire des Units Coopratives dEpargne et de Crdit du Togo (FUCEC-TOGO) Farmers Development Union, Nigeria Fdracin Peruana de Cajas Municipales de Ahorro y Crdito, Peru Fdratin des Caisses Populaires du Burkina (FCPB), Burkina Faso Fdratin des ONG du Sngal Fdratin Nationale des COOPEC du Burundi Financiera Confianza, Peru Financiera FAMA, Nicaragua Financiera Mexicana para el Desarrollo Rural, Mexico FINCA Afghanistan FINCA Azerbaijan FINCA Guatemala FINCA Haiti FINCA Jordan FINCA Mxico A.C. FINCA Per FINENZA, Spain Five Talents UK, United Kingdom Fondation Banque Populaire pour le Micro Crdit (FBPMC), Morocco Fondo de Desarrollo Microempresarial, Ecuador Fondo para el Desarrollo Social de la Ciudad de Mxico Fonds dActions Mutuelles, Republic of Congo Fonds dAppui aux Activits Rmunratrices des Femmes, Burkina Faso FonkozFondasyon Kole Zepl, Haiti Fortune Grassroots Development Initiative MFI, Nigeria Forum for Rural Women Ardency Development (FORWARD), Nepal Foundation for a Sustainable Society Inc., Philippines Foundation for Women, United States Foundation for Women Liberia Freedom from Hunger, United States Friends for Community Development and Youth Empowerment, Nigeria Friendship Bridge, United States Friendship Bridge, Guatemala Fund for the Encouragement of Self-Reliance, Vietnam Fundacin Agrocapital, Bolivia Fundacin BanIgualdad, Chile Fundacin de Asesoria Financiera a Instituciones de Desarrollo y Servicio Social (FAFIDESS), Guatemala Fundacin de Asistencia para la Pequea Empresa, Guatemala Fundacin de Investigaciones Visuales Franco Mattiello, Argentina Fundacin DiaconiaFRIF, Bolivia Fundacin D-MIRO Misin Alianza, Ecuador Fundacin ECOPETROL para el Desarrollo Del Magdalena Medio, Colombia Fundacin Gnesis Empresarial, Guatemala Fundacin Integral Campesina, Costa Rica Fundacin Mundo Mujer-Popayn, Colombia Fundacin para el Desarrollo de Nueva Segovia, Nicaragua Fundacin para el Desarrollo Integral de Programas Socioeconmicos, Guatemala Fundacin para el Desarrollo Integral Espoir, Ecuador Fundacin Unin y Desarrollo de Comunidades Campesinas, Costa Rica Funding the Poor Cooperative (FCP)Chinese Academy of Social Sciences (CASS), Peoples Republic of China FUNED VisionFund OPDF, Honduras Gambia Rural Development Agency Gasha Micro-Financing S.C., Ethiopia Ghana Co-operative Susu Collectors Association Ltd. Ghana Microfinance Institutions Network (GHAMFIN)

APPENDIX III

GHASHFUL, Bangladesh Global Bahumukhi Sahakari Sanstha (Global Multiple Cooperative Organization) Ltd., Nepal Gono Kallayan Trust, Bangladesh Gono Unnayan Prochesta, Bangladesh GP Finance, Cameroon Gram Unnayan Karma, Bangladesh Gram Utthan, India Grama Vidiyal Micro Finance Ltd., India Grameen Bank, Bangladesh Grameen Development Services, India Grameen Financial Services Pvt. Ltd., India Grameen Foundation, United States Grameen Jano Unnayan Sangstha, Bangladesh Grameen Manobik Unnayan Sagstha, Bangladesh Grameen Trust, Bangladesh Grandissons Ensemble ASBL, Democratic Republic of Congo Grassroots Health Organization of Nigeria Grooming People for Better Livelihood Centre, Nigeria Growing Opportunity Finance Pvt. Ltd., India Guidance Society for Labour Orphans and Women (GLOW), India Habiganj Unnayan Sangstha, Bangladesh Hagdan Sa Pag-Uswag Foundation Inc., Philippines Halley Movement, Mauritius Harmos Micro Enterprise Development Ltd. Vision Fund Zambia HEED Bangladesh Heifer Project International China HFC Boafo Microfinance Services Ltd., Ghana Hilful Fuzul Samaj Kallyan Sangstha, Bangladesh Holy Cross Social Service Centre, India HOPE, Bangladesh HOPE Foundation, India ID Microfinance, Haiti IMF Cra-Sol, France Imo Self Help Organization, Nigeria Institution de Microfinance Hekima, Democratic Republic of Congo Institution Marocaine dAppui la Microentreprise, Morocco Instituto de Investigaciones Socio-Econmicas y Tecnolgicas, Ecuador Instituto Hondureo de Estudio y Desarrollo Integral de la Comunidad, Honduras Integrated Development Foundation, Bangladesh INAFI International, Senegal Islami Bank Bangladesh Ltd., Bangladesh Jagorani Chakra Foundation, Bangladesh Jana Utthan Samudayic Bank Ltd., Nepal Janodaya Trust, India Jeevan Bikas Samaj, Nepal Jeevankiran, India Jinnah Welfare Society, Pakistan Jordan Micro Credit Company (Tamweelcom), Jordan Joypurhat Rural Development Movement, Bangladesh Kabalikat Para Sa Maunlad Na Buhay Inc., Philippines Kafo Jiginew, Mali Kamurj Universal Credit Organization, Armenia Kapitalmujer S.A. de C.V. SOFOM E.N.R., Mexico Karnataka Regional Organisation for Social Service, India Kashf Foundation, Pakistan Katalysis Red Microfinanciera Centroamericana, Honduras Kaunlaran Sa Kabuahayan Microcredit Corporation, Philippines Kazama Grameen Inc., Philippines Kenya Agency for Development of Enterprise and Technology (KADET) Kenya Women Finance TrustDTM

STATE OF THE MICROCREDIT SUMMIT CAMPAIGN REPORT 2012

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APPENDIX III
Council of Practitioners, continued

Institutions and Individuals that Submitted an Action Plan in 2011

National Development Programme, Bangladesh National Microfinance Bank, Jordan National Microfinance Foundation, Yemen National Rural Support Programme (NRSP), Pakistan Nav Bharat Jagriti Kendra, India Navachetana Microfin Services Pvt. Ltd., India Negros Women for Tomorrow Foundation, Philippines Nerude Laghubitta Bikas Bank Ltd., Nepal Network of Entrepreneurship and Economic Development (NEED), India New Life, India Nidan Microfinance Foundation, India Nirantara Community Services, India Nirdhan Utthan Bank Ltd., Nepal Nissi Global Pvt. Ltd., Zimbabwe Nowabenki Gonomukhi Foundation, Bangladesh NOWZUWAN, Bangladesh OMAKONSULTS Microfinance Institution, Nigeria Omo Microfinance Institution S.C., Ethiopia ONG Espoir de la Famille, Benin OPP-Orangi Charitable Trust, Pakistan Opportunity International, United States Opportunity International Bank of Malawi (OIBM) Opportunity Uganda Ltd., Uganda Organizacin de Desarrollo Empresarial Femenino, Honduras Orix Leasing Pakistan Ltd., Pakistan Oromia Credit and Saving Share Company, Ethiopia Osphen Microfinance Savings and Loans, Ghana Oxfam America, United States Oxfam America in Cambodia Oxfam America in El Salvador Oxfam America in Guatemala Oxfam America in Mali Oxfam America in Senegal PADAKHEP Manabik Unnayan Kendra, Bangladesh PADES Microfinance, Togo Pagasa Philippines Lending Company International, Philippines PAGE Development Centre, Bangladesh PAHAL, India Palashipara Samaj Kallayan Samity, Bangladesh Palli Mongal Karmosuchi, Bangladesh Palli Progoti Shahayak Samity, Bangladesh Pally Bikash Kendra, Bangladesh Panyimur Rural Cooperative Savings and Credit Society Ltd., Uganda Pashchimanchal Grameen Bikas Bank Ltd., Butwal, Nepal Peermade Development Society, India Peoples Bank of Caraga Inc., Philippines Peoples Education and Development Organisation, India Peoples Institute for Operational Research Training and Development, India Peoples Multipurpose Development Society, India Peoples Organization for Social Transformation, Philippines Peoples Oriented Program Implementation, Bangladesh PESADA (Sada Ahmo Association), Indonesia Plan International, United States Plan International-Asia Regional Office, Thailand Plan International-Region of Americas and Caribbean, Panama Plan International-Region of East and Southern Africa, Kenya Plan International-West Africa Regional Office, Senegal Port Sudan Association for Small Enterprise Development, Sudan Poverty Eradication and Community Empowerment, Ethiopia PRIDE Microfinance Ltd., Uganda PRIDE Tanzania PRISM Bangladesh

Khushhali Bank Ltd., Pakistan KIEDF, Israel Konsey Nasyonal Finansman Popile, Haiti Kraban Support Foundation, Ghana Lak Jaya Microfinance Ltd (ASA International), Sri Lanka LAPO Microfinance Bank Ltd., Nigeria Laxmi Microfinance Development Bank Ltd., Nepal LEAD Foundation, Egypt Lebanese Association for Development (Al-Majmoua), Lebanon Liberation Movement for Women, India Lithuanian Central Credit Union, Lithuania LUnion des Mutuelles du Partenariat pour la Mobilisation de lEpargne et du Crdit au Sngal (UM-PAMECAS) Madura Micro Finance, Ltd., India Mahasemam Trust, India Mahila Arthik Vikas Mahamandal Ltd. (MAVIM), India Malawi Microfinance Network (MAMN) Malawi Rural Finance Company, Ltd Malawi Union of Savings and Credit Cooperatives (MUSCCO) MAMATA, Bangladesh Manabik Shahajya Sangstha, Bangladesh Manidham Grameen Savings cum Credit Services, India Manila Community Services Inc., Philippines MANUSHI, Nepal McLevy Institute of Development Services, India Mentors Philippines Microfinance Foundation Inc., Philippines Micro Credit Company (MIKROFIN), Bosnia and Herzegovina Micro StartAction des Femmes pour le Dveloppement, Burkina Faso MicroBank, Spain Microcredit Foundation EKI, Bosnia and Herzegovina Microcrdito Para el Desarrollo, Peru Microempresas de Antioquia, Colombia Microfinance Centre for Central and Eastern Europe and the Near East (MFC), Poland Microfinanzas Arariwa, Peru Microfund for Women, Jordan Middle East Microcredit Company, Jordan Milgree Investments Pvt. Ltd., Zimbabwe Mitra Bisnis Keluarga Ventura, Indonesia Mitra Dhuafa Foundation (Koperasi Mitra Dhuafa), Indonesia Mitra Usaha Kecil Cooperative (DINARI Foundation), Indonesia Molyn Credit Ltd., Kenya Moris Rasik, East Timor MOUSUMI, Bangladesh Movimiento Manuela Ramos, Peru Muslim Aid UK - Bangladesh Field Office (Muslim Aid Bangladesh), Bangladesh Mutuelle dEpargne et de Crdit des Femmes, Niger Mutuelle de Services Financiers pour la Prosprit, Benin Mutuelle dEpargne et de Crdit dAppui pour le Dveloppement de la Femme, Democratic Republic of Congo Mutuelle dEpargne et de Crdit des Eglises des Assembles de Dieu de la Patte dOie, Burkina Faso Mutuelle des Associations Fminines dEpargne et de Crdit, Mauritania Nabolok Parishad, Bangladesh Nano Financial Services India Pvt. Ltd., India Nari Bikas Sangh, Nepal Naria Unnayan Samity, Bangladesh Narowal Rural Development Program, Pakistan National Association for Microfinance Institutions in Cameroon (ANEMCAM) National Bank Ltd., Bangladesh National Bank of Cambodia

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Institutions and Individuals that Submitted an Action Plan in 2011

Council of Practitioners, continued Pro Mujer-Argentina Pro Mujer-Bolivia Pro Mujer-Mxico Pro Mujer-Nicaragua Pro Mujer-Per Pro Mujer / Pro Women International, United States Professional Assistance for Development Action (PRADAN), India PROGRESS (Akti Samaj Unnayan Mulak Sangstha), Bangladesh Projet dAppui la Reinsertion Socioconomique des Groupes Dfavoriss, Republic of Congo Proshika Manobik Unnayan Kendra, Bangladesh Provident Mxico, S.A. de C.V., Mexico Proyas Manobik Unnayan Society, Bangladesh PUNDUTSO Micro Finance, Zimbabwe Quick One Financial Company Ltd., Ghana Rashtriya Seva Samithi, India RDRS Bangladesh, Bangladesh Red Argentina de Instituciones de Microcrdito (RADIM), Argentina Red Centroamericana de Microfinanzas (REDCAMIF), Nicaragua Red Costarricense de Organizaciones para la Microempresa (REDCOM), Costa Rica Red de Instituciones de Microfinanzas de Guatemala (REDIMIF) Red de Microfinancieras de Honduras (REDMICROH) Red Financiera Rural (RFR), Ecuador Red Latinoamericana para la Justicia de Gnero y el Derecho al Desarrollo Econmico, Peru Red Panamea de Microfinanzas (REDPAMIF), Panama Regroupement des Institutions du Systme de Financement Dcentralis du Congo, Democratic Republic of Congo Rseau Binumtontine, Cameroon Rseau des Caisses Communautaires Rurales du Bnin Rseau des Caisses dEpargne et de Crdit Nysigiso, Mali Rseau des Institutions de Microfinance (RIM) au Burundi Resource Development Foundation, Bangladesh Resource Integration Centre, Bangladesh Rural Bank of Montevista, DAVAO, Philippines Rural Bank of Pres. M. A. Roxas Inc., Philippines Rural Community Development Society, Pakistan Rural Development Bank, Cambodia Rural Microfinance Development Centre (RMDC) Ltd., Nepal Rural Reconstruction Foundation, Bangladesh Rural Unit for Health and Social Affairs (RUHSA), India Rural Women Development Centre, Nepal Sabalamby Unnayan Samity, Bangladesh Sagarika Samaj Unnayan Sangstha, Bangladesh Sajida Foundation, Bangladesh Salaf Albaraka FONDEP, Morocco Salone Microfinance Trust, Sierra Leone Samadhan, Bangladesh Samannita Unnayan Seba Sangathan, Bangladesh Samastha Lanka Praja Sanwardana Mandalaya, Sri Lanka Samurdhi Authority of Sri Lanka, Sri Lanka Sanabel - The Microfinance Network for the Arab Countries, Egypt Sanghamithra Rural Financial Services, India Santa Fe de Guanajuato A.C., Mexico Sarvodaya Economic Enterprise Development Services Ltd./Gtee., Sri Lanka Self-Reliance Economic Advancement Programme (SEAP), Nigeria Self-Help and Rehabilitation Programme (SHARP), Bangladesh Serviamus Foundation Inc., Philippines SETU, Bangladesh Sewa Bank, India

APPENDIX III

Shakti Foundation for Disadvantaged Women, Bangladesh Shangathita Gramunnyan Karnasuchi, Bangladesh Share Microfin Ltd., India Shariatpur Development Society, Bangladesh Sheva Nari O Shishu Kallyan Kendra, Bangladesh Shishu Niloy Foundation, Bangladesh Shram Unnayan Sangstha, Bangladesh Sinapi Aba Trust, Ghana Sindh Agricultural and Forestry Workers Coordinating Organization (SAFWCO), Pakistan Sindh Rural Support Organization, Pakistan SKS Foundation, Bangladesh SKS Microfinance Ltd., India Small Enterprise Development Agency, Tanzania Small Farmers Development Foundation, Bangladesh S.M.I.L.E. Microfinance Ltd., India Social Advancement Through Unity (SATU), Bangladesh Social Development Fund, Gambia Sociedad de Ahorro y Crdito Apoyo Integral S.A., El Salvador Socit Financire Africaine S.A., Cameroon Society Development Committee, Bangladesh Society for Development Initiatives, Bangladesh Society for Social Service, Bangladesh Solfi Soluciones Financieras, Mexico Solidarity, Bangladesh Somaj O Jati Gathan, Bangladesh SOMOKAL, Bangladesh Sonali Bank, Bangladesh Sonata Finance Private Ltd., India South Asia Partnership-Bangladesh South Malabar Gramin Bank, India Spandana Sphoorty Financial Ltd., India Sreema Mahila Samity, India Sri Kshetra Dharmasthala Rural Development Project (SKDRDP), India Srizony Bangladesh, Bangladesh State Commission for Regulation of Financial Services Market, Ukraine State Ministry of National Family Planning Coordinating Board (BKKBN), Indonesia Step Ahead Development Foundation, Thailand Sunflower Project (Projet Culture de Tournesol), Democratic Republic of Congo Sungi Development Foundation, Pakistan Surigaonon Rural Banking Corp., Philippines Surjamukhi Sangstha, Bangladesh Swabalamban Laghubitta Bikas Bank Ltd., Nepal Swadhaar FinServe Pvt. Ltd., India Swanirvar Bangladesh Systme Financier Dcentralis ASUSU S.A., Niger Talete King Panyulung Kampampangan Inc., Philippines Thaneakea Phum Cambodia Ltd., Cambodia Thardeep Rural Development Program, Pakistan The Aspen Institute, United States The First Microfinance Bank Ltd., Pakistan The Institute of Rural Development, Bangladesh The Small Enterprise Foundation (SEF), South Africa The Society for Development of Human Abilities and Environment (OAZOANE), India Thengamara Mohila Sabuj Sangha, Bangladesh Tinh Thuong One-Member Ltd. Liability Microfinance Institution (TYM Fund), Vietnam Totem Prestamos S.A. de C.V. SOFOM, Mexico TSPI Development Corporation, Philippines Turame Community Finance S.A., Burundi

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APPENDIX III
Council of Practitioners, continued

Institutions and Individuals that Submitted an Action Plan in 2011

Turkish Grameen Microcredit Project, Turkey UCPB-CIIF Finance and Development Corporation, Philippines UGAFODE Microfinance Ltd., Uganda Ujjivan Financial Services Pvt. Ltd., India Unin Catlica de Apoyo al Desarrollo Comunitario (UCADE), Ecuador Unin de Cooperativas de Ahorro y Crdito del Centro, Ecuador Union des Baor Tradition dEpargne et de Crdit, Burkina Faso Union des Caisses dEpargnes et Credit des Artisans, Mauritania Union des Clubs dEpargne et de Crdit du Mayo-Kebbi de Pala, Chad Union des Institutions Mutualiste Communautaire dEpargne et de Crdit, Senegal Union Nationale des Coopratives dEpargne et de Crdit (UNCOOPEC) de Cte dIvoire Union Rgionale des Caisses du Bam, Burkina Faso Union Rgionale des Coopratives dEpargne et de Crdit du Nazino, Burkina Faso United Development Initiatives for Programmed Actions (UDDIPAN), Bangladesh United Nations Development Program Microfinance ProjectPact Institute, Myanmar University of St. Thomas Social Entrepreneurship Program, Pakistan Uttara Development Program Society, Bangladesh Vayalar Memorial Youth Club, India Vietnam Bank for Social Policies (VBSP) Village Education Resource Center (VERC), Bangladesh Village Financial Services Pvt. Ltd., India Virl Microfinance, Zimbabwe Vision Fund AzerCredit LLC, Azerbaijan VisionFund, Cambodia VisionFund International, United States Vivekananda Sevakendra O Sishu Uddyan, India Wasasa Microfinance Institution S.C., Ethiopia WAVE Foundation, Bangladesh Widows Organisation International, Nigeria Wisdom Microfinance Institution, Ethiopia Women and Associations for Gain both Economic and Social (WAGES), Togo Women and Children of Hope, Democratic Republic of Congo Women Cooperative Society Ltd., Nepal Womens Finance House Botswana Working Womens Forum (WWF), India World Concern, Bangladesh World Relief, United States World Relief, Honduras Yayasan Bina Kasih Luwuk, Indonesia Young Power in Social Action, Bangladesh Zimbabwe Association of Microfinance Institutions (ZAMFI) Council of Religious Institutions Reformation Glory Ministries, Kenya

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We are grateful for the generous support of the Microcredit Summit Campaign Sponsors and Donors.

Sponsors:

Diamond: AECID * Platinum: Citi Foundation * Gold: Regional Government of Castilla y Len * Silver: Ford Foundation Fundacin ICO * Repsol YPF * Bronze: AGFUND * Freedom from Hunger * Funk Family Philanthropy / Race4Change Telefnica * Temenos / Microsoft * Entrepreneur: Grameen Foundations Bankers without Borders * IFC * Johnson & Johnson * Friend: Convergences 2015 * Clifford Chance * Craft Silicon * Gene and Carol Ludwig Grameen Crdit Agricole * Guitarras Manuel Rodrguez and Sons since 1905 * Supporter: Fern Software * Segreteria della Presidenza Ente Nazionale per il Microcredito *

* 2011 Global Microcredit Summit sponsor

Goals for 2015

Reaching 175 million of the worlds poorest families with credit for selfemployment and other financial and business services This report has been made possible by a generous grant from the Citi Foundation. Ensuring that 100 million families rise above the US$1.25 a day threshold

Microcredit Summit Campaign A Project of RESULTS Educational Fund 1730 Rhode Island Avenue, NW Suite 400 Washington, DC 20036 United States of America phone | +1.202.637.9600 www.microcreditsummit.org [email protected]