Meeting the financial needs of poor people November 8, 2010

It is time that the impact of microfinance should be consistently tracked, at the community level.

MICFAC will do well to promote each poor community as its unit for socio-economic progress. Socio-economic progress should be monitored at the community level, and placed on record so that the true impact of MICFAC is there for all to see. MICFAC should recognize that the communities it will work with, though labelled “poor” actually have their own assets; MICFAC must not see poor people as being the cause of poverty, but as victims of a dysfunctional system. Poor people are known to be working very hard for very long hours but have little of value to show for it at the end of the day. Dr Yunus premise is that this situation has arisen because the system makes it impossible for them to keep much of the reward of their effort for themselves.

MICFAC’s role should include helping communities recognize their own assets and use them in the most productive ways. If the quality of life does not improve in a community doing things that seem to be sensible, then the cause/causes are external issues that are too big to handle at the local level alone. In the poor communities, the people are the most vital assets. This is where the integrated development approach to microfinance comes in: people asset can be rapidly improved through provision of better health, better education, better housing, better economic opportunity. With such backing, the people are then able to make their utmost contribution to their society, while being of benefit to themselves. The bottom line for these various improvements is that they ensure a sustained economic progress at the community level. It is important to understand and promote the roles of the vital roles of community actors particularly when building stronger micro-economic systems

 
MICFAC should see microfinance as a tool that can help address global/ regional determinants of poverty. For example there is not enough emphasis on the place of microfinance on the effects of extreme weather events on the poor. The poorest nations are the most affected by the global climate change. In order to maximize the impact of microfinance there has to be an enabling environment that enables sub-Saharan's poor to cope with the brutal impact of climate change and help their transition to clean energy economies. MICFAC has leverage at the global levels where climate mitigation strategies are decided. MICFAC’s role at that level will facilitate the enabling environment of the poor communities to remain stable and work their way out of poverty

How will MICFAC be evaluated?

MICFAC should de-emphasize focus on national level programs with planning and implementation being driven by government processes, procedures and constrained by government capacity. Instead of making the Governments its focal point of accounting and reporting, it should use the community. Instead of measuring only how much has been spent or consumed, MICFAC should look at what impact this has had on the quality of life ... or the value of the community.

Emphasis should shift to building the capacity of the people at the community level. True value metrics suggests 3 concepts that can be used

1.    The baseline, current status of the community

2.    The progress of the community, the changes in identified indicators over a period of time, and

3.    The performance of the community: the efficiency and effectiveness of its socio economic activities