We’re looking for a good option for U.S. donors interested in supporting microfinance. We’ve been examining the largest, most prominent U.S.-registered charities in this area: Grameen Foundation, Unitus, Accion, Women’s World Banking, Opportunity International and FINCA. All of these are large organizations that list a variety of “partner” microfinance institutions.
One thing that might surprise a donor in this area is that sometimes the “partnerships” overlap. For example, Women’s World Banking lists Enda Inter-Arabe in its network, and so does Grameen-Jameel (which itself is a joint venture of the Grameen Foundation). Neither organization’s profile mentions the other.
Grameen Koota lists the Grameen Foundation and Unitus (among others) as donors and lists Unitus and Accion as consultants. Unitus’s page on Grameen Koota doesn’t mention Accion; Accion’s doesn’t mention Unitus; the Grameen Foundation sounds like its relationship is currently more consultant-like than donor-like.
As you can see from the profiles linked above – and as we’ve found from talking to the large microfinance charities – most (not all) of their activities consist of consulting or “technical assistance,” rather than founding, directly supporting or investing in microfinance institutions. The relationship between them and their “partners” often appears relatively limited, and it’s difficult to pin down who’s responsible for what.
Focusing on technical assistance and consulting isn’t necessarily a bad thing – perhaps U.S. expertise is just what these institutions need to serve more clients and serve them better. But we aren’t sure this is the case – it’s also possible that the U.S. charities have sprung up because of strong donor demand for the “story” of microfinance, and are consulting because they have more than they can productively spend on investing and creating.
What we know is that it’s inherently hard to gauge a charity’s impact when its main activities consist of free (or heavily subsidized) technical assistance. Even if we had all the information we want about the partner MFIs themselves, we’d still need to understand the extent to which help with business planning or product design made a difference to them.
So far, we haven’t seen many signs that the U.S. charities are critically asking this question, or making it possible to hold them accountable for the answer.