The following guest post was written by Lauren Dillon, a co-chair of the Chicago chapter of Young Ambassadors for Opportunity (YAO) who works at Illinois-based nonprofit Oasis International.
Innovation is at the heart of microfinance. It’s also the engine that propels it. Innovation is packed with chance, risk, fun, adventure! And, when coupled with microfinance, it helps bring opportunities to the people who need it most.
Last week, a dozen of my fellow YAO members attended the 7th Annual Chicago Microfinance Conference at the University of Chicago to listen to a conversation between industry professionals on a range of hot topics in microfinance. One morning panel was between Ellen Carmichael, Field Coordinator for CARE; Greg Casagrande, Founder and Managing Director of MicroDreams; and Opportunity International’s very own Simona Haiduc, Vice President of Program Management. The topic at hand: innovation. What has innovation looked like for these organizations over the years?
Each organization had their own timeline and model for how they sought and implemented innovations. Savings accounts, mobile banking, remittances, the use of biometrics, human resource development, and microinsurance were all creative solutions in a quest to provide people living in poverty with financial services. Savings initiatives were among the most exciting breakthroughs for each organization. For so many of the economically poor, formal savings accounts were out of reach. Savings looked like stashing a few bills under a mattress or in a tin can placed in the ground. It was a challenge to keep money in a place that was secure and yet accessible in times of need.
Today, each of these organizations makes available interest-bearing savings programs. CARE expanded their group lending model to include savings, wherein each member is required to save some each week, contributing the lot to the group bank (a small wooden box that Carmichael brought in for us to see). Lending then takes place among peers from this pool of stored cash. MicroDreams partners with local commercial banks to provide savings programs.
Opportunity offers savings to approximately 788,000 clients worldwide. In this panel, Haiduc highlighted their bank in Malawi, which offers a savings-based program that reaches not only urban but rural clients through technological innovations. Opportunity’s program in Malawi especially focus on agricultural finance clients and also couples savings with insurance and lending. Moreover, Opportunity is implementing tuition savings accounts to help parents pay for school fees to ensure their child completes an education.
Today, biometrics, mobile banking, and partnerships with central banks make savings a reality for millions who live outside of urban areas, geographically distant from formal commercial banking services. I, for one, am so pleased to be part of Opportunity’s engagement with people living in economic poverty, whose resourcefulness, tenacity, and determination to reach for a better life inspires me each day.
Lauren Dillon is the Director of Investor Relations for Oasis International, a social innovation organization that provides affordable books and Bibles on a sustainable basis to places within English-speaking Africa. She is also a graduate student at DePaul University, working on an advanced degree in International Public Administration Management. As co-chair of YAO-Chicago, she spends her nights and weekends engaging with YAO members at coffee shops, restaurants, parks, and lectures around Chicago.