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Anna Awimbo Discusses New Book and Microcredit Summit Campaign's 'Seal of Excellence'

Anna Awimbo, a Five Talents board member, directs two projects at the Microcredit Summit Campaign and recently released the book New Pathways Out of Poverty, available at Kumarian Press. Here, she gives us her take-away from the 2011 Global Microcredit Summit, which was held in Spain in mid-November, and discusses the new book.

bookimageYou weren't able to attend the 2011 Global Microcredit Summit, but you were heavily involved in planning and supporting it. Considering the broader context of microfinance in late 2011, how was this year's Summit different than previous ones?
The 2011 Summit was unique because it was the first opportunity for the Microcredit Summit Campaign to bring together a large group of its members since all of the scrutiny last year [due to] the problems that occurred in Andhra Pradesh, India. The sector was tarnished by Indian microfinance institutions (MFIs) allegedly over-lending and, in some cases, using aggressive collection tactics. And so the Summit in Spain presented an opportunity for everyone to get together and collectively address the challenges presented to the industry and more clearly highlight the fact that there are key differences between the profit-maximizing MFIs, many of whom ran into these kinds of problems, and those MFIs that are more focused on maximizing their own ability to transform the lives of clients, their families and their communities where they work.

What was the mood coming out of the Summit? Are people optimistic?
I think people are very optimistic, and what went on in India has actually, in large part, led to a new initiative where a core group of microfinance networks and leaders in the field have come together to develop what we are calling a 'seal of excellence' for poverty outreach and transformation in microfinance. One of the most important chapters in the book focuses on developing the seal of excellence. We're going to come up with core indicators that can be related to the contribution of microfinance to development. MFIs could then be ranked according to these indicators within the context of the seal of excellence.

What was your own favorite moment to come out of the Summit?
One of the things I most enjoy about the Summit is hearing the numerous stories of how microfinance has made it possible for clients to transform their lives and support their families. [At the Summit], there's always an opportunity to present [these stories]. At the beginning of every session, we highlighted videos of clients from Asia, Africa, and Latin America just sharing, in their own words, how access to microfinance has changed their lives, and how in many cases made it possible for their children to go to school and be more healthy. I'd like to encourage everyone to take some time to watch some of the videos that were shown at some of the sessions. They are available through our website. I think people will be as inspired by them as I am.

You have co-edited two books – the second of which was released at the Summit in Spain. It's titled New Pathways Out of Poverty. Are there more "pathways out of poverty" today than there were 20 years ago?
The title of the book refers to the many more clients we have been able to reach over the years. The Microcredit Summit Campaign was launched in 1997, and, at that time, we were reaching 13 million clients, 7.6 million of whom were among the very poor, which is actually the focus of the Campaign. You'll usually see when the Campaign publishes its annual report that there are two columns. One is for 'total clients reached'; the other is for 'total poorest reached'. The Campaign is most interested in the 'total poorest' clients column. This year at the Global Microcredit Summit in Spain, we launched our 2012 report and that showed that there were 205 million clients who were reached, of whom 137.5 million were among the poorest. So when you look at the numbers, they have increased significantly, and I consider each of these loans that were made available to clients as a "pathway out of poverty". So there are definitely new products that have come out – and many more MFIs reaching millions more clients, so my answer to your question would be yes, there are many more pathways out of poverty.

Can you recommend a favorite chapter from the book for people to focus on?
I would want to point people to chapter 6 in the book. It's a call to action [for MFIs and other leaders in the field] to be part of shaping an industry that they would like to see in the next ten years.

Many MFIs now see the need to provide non-financial services in addition to savings and lending opportunities. How important is this development?
We actually recognized this need for additional non-financial services a while back. At the Microcredit Summit Campaign, one of the non-financial services that we promote through our Financing Healthier Lives project is health education and, in some cases, health services. One of the reasons we started this project was because one of the key risks that MFIs face all around the world is that their clients or someone in the clients' households will fall sick. Such illness often takes away from the time and the resources that clients can devote to their businesses or enterprises. Health issues are especially serious in areas where there are high incidences of HIV and AIDS. We've found that with pretty basic health education and services MFIs have been able to mitigate this risk. For example, clients are educated on what they can do when they experience symptoms that may be linked to HIV and AIDS. Or how best to treat a child that has diarrhea. We found through different studies that when provided in combination with financial services, such guidance about health issues (as a non-financial service) greatly enhanced the impact of microfinance on the clients lives. They were able to be more productive just by having this basic health education.

You recently joined the board at Five Talents - US after serving for years on the Program Review Committee. As an expert in the field of microfinance, what impresses you most about Five Talents' programs? What are the organization's strengths?
I've been very familiar with the work of Five Talents for close to ten years now and I continue to be impressed. There are two major strengths that I see: One, they intentionally attempt to set out into regions where no one else is working. Regions around the world where there is a lot of demand that has not been met by other microfinance initiatives. They are working in regions where it's not very easy, and they are working with clients who are more than likely left out of the process of gaining access to finance. And earlier I was talking about this commitment to working with microfinance institutions that are driven less by profit and are more client-centered. And I see that Five Talents is definitely committed to that cause. They are more interested in seeing transformation in the lives of clients than they are in seeing rapidly increasing profits.