Posts Tagged ‘Accion’

Kiva Partners With Accion To Microlend In The U.S.

Monday, October 25th, 2010

Poor entrepreneurs are everywhere, so why limit U.S.-based microfinance operations to overseas customers?

  • Kiva.org, an online nonprofit that helps anyone make microloans to foreign businesses via local institutions, is expanding its scope to include entrepreneurs in the United States.
  • Through a partnership with Accion Texas-Louisiana, Kiva will start to offer microloans to new and existing business owners in those states. Kiva’s model is a kind of “crowdfunding,” which allows lots of small donors to make a big impact.
  • Microfinance helps poor entrepreneurs get access to loans. These individuals are usually seen as too risky for traditional bank loans, so microloans can greatly increase their chances of success.

Facts & Figures

  • Accion is the third U.S. microfinance institution Kiva has partnered with since October 2009.
  • Less than 1% of the borrowers featured on Kiva’s website are based in the U.S.
  • The average U.S. microloan is about $7,000.

Best Quote

“Awareness of microfinance is really low here.” – Premal Shah, President of Kiva

Becoming A For-profit Organization Is No Cup Of Tea

Friday, August 13th, 2010

Transforming a nonprofit into a for-profit company is a tricky and lengthy process that many organizations are willing to undertake.

  • The majority of micro loans dispensed around the world come from for-profit microfinance institutions. However, it is rarely known that many of these organizations began as nonprofit NGO’s.
  • Transforming a nonprofit into a for-profit organization is a long process and involves attracting investors, obtaining regulatory approval and getting a financial institution license.
  • Many organizations struggle to achieve for-profit status while maintaining their social mission – it is difficult to keep the founder, investors and stakeholders equally satisfied.

Facts & Figures

  • SKS Microfinance was funded by three rounds of venture capital and grew from nonprofit to have 4.7 billion borrowers in 2009.
  • SKS just raised another $358 million in an IPO.

Best Quote

Grameen Bank reaches 7 million clients and that’s amazing. On the other hand, it took Professor Yunus [Grameen Bank's founder] 35 years to do that… Can you imagine how many generations it will take to reach 150 million poor households in India if we took that approach? We have to scale more rapidly, and only commercial capital will meet our huge funding requirements. – Vikram Akula, Founder, SKS.

Beth Rhyne On Fighting Poverty with ACCION

Wednesday, July 21st, 2010

beth-rhyne.jpg Beth Rhyne is a true microfinance expert. In her career, she’s overseen microenterprise development at USAID and spent eight years in Kenya and Mozambique, consulting on microfinance policy and operations. From 2002 to 2008 she was the senior vice president of ACCION International, and today she’s the managing director of ACCION’s Center for Financial Inclusion. Beth earned both her master’s and her Ph.D. in public policy from Harvard, and she’s written five books on microfinance (so far). We’re impressed, and really lucky to have her answer some of our questions. You can learn more about ACCION and donate on their cause page.

TILE: What exactly is microfinance?
Beth: Microfinance is about providing financial services to poor and low income families. When people have access to microfinance they can get loans, maintain savings, buy insurance, and send money safely to loved ones. We take these services for granted, but imagine what our lives would be like if we couldn’t do that. (What would your family’s life be like without a bank account, home mortgage, car or health insurance?) Even basic services make a big difference for poor people, and today more than 2 billion poor people worldwide lack access to them.

TILE: Why not just give the money away instead of lending it?
Beth: When you give money away, it gets spent and that’s the end of that. When you use it to make a loan, it gets used over and over. We care about the dignity of the person, and making loans promotes that. When someone becomes a valued customer of a bank, they gain a pride and a sense of worth that does not come from a handout. Unlike pure charity programs that treat people as passive and unable to care for themselves, we believe that people are their own best agents for working their way out of poverty.

TILE: What motivated you to get involved with Accion/ fighting poverty?
Beth: I got involved in microfinance while living in Kenya 25 years ago. I saw microfinance as a way to create a world in which the benefits of financial services would be available to everyone, not just the elite few. I was very happy to join ACCION 10 years ago because I had watched ACCION’s pioneering work in building microfinance into something that would make a long lasting difference in Latin America. I wanted to help bring that difference to Africa and Asia.

TILE: What’s the hardest thing about working in microfinance?
Beth:The hardest thing about working in microfinance is explaining how it works to people who have never heard of it, and raising the money from them to make it work better. The best thing (one of the best things) is having friends all over the world.

TILE: How do you think young people can play an important role in the changing landscape of philanthropy, especially as it relates to poverty?
Beth: Young people can change the face of philanthropy and poverty by nurturing their own passion for social change and by learning about how to make things happen. Some adults have lost the sense that the world can be made better by individual efforts, so when a young person can speak about a solution that really works, like microfinance, it inspires adults to contribute and get involved. And when you connect with your own friends in ways that are both fun and pro-philanthropy, you can influence a wider circle of people.

TILE: What’s the best advice you would give to your teenage self?
Beth: Become a seeker on the trail to answer these two questions: What do I most love to do? How can I use that passion to make the world a better place?

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