Comments on: Two charities, one microfinance institution http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/ Exploring how to get real change for your dollar. Thu, 17 May 2012 07:28:30 +0000 http://wordpress.org/?v=2.0.7 by: Holden http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-95082 Tue, 29 Dec 2009 16:02:17 +0000 http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-95082 Hi Ben, a couple responses: <ul><li>In digging into these organizations' activities and discussing with them, we've come to the conclusion that they can't be categorized as neatly and simply as you imply. FINCA is a possible exception (they declined to apply for funding from us and have shared no information with us). The others appear to be carrying out a wide variety of activities, all including technical assistance of one kind or another, their "headline descriptions" notwithstanding. <li>I agree with you that technical assistance cannot be fully "free" and that using grants to create sustainable institutions may be a great investment if done right. But even with these points in mind, I believe (a) the technical assistance is still heavily subsidized (b) it is important that the organizations behind it make a strong case for their impact to the people they're asking for donations.</ul> Hi Ben, a couple responses:

  • In digging into these organizations’ activities and discussing with them, we’ve come to the conclusion that they can’t be categorized as neatly and simply as you imply. FINCA is a possible exception (they declined to apply for funding from us and have shared no information with us). The others appear to be carrying out a wide variety of activities, all including technical assistance of one kind or another, their “headline descriptions” notwithstanding.
  • I agree with you that technical assistance cannot be fully “free” and that using grants to create sustainable institutions may be a great investment if done right. But even with these points in mind, I believe (a) the technical assistance is still heavily subsidized (b) it is important that the organizations behind it make a strong case for their impact to the people they’re asking for donations.
]]> by: Ben http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-94957 Tue, 29 Dec 2009 03:24:31 +0000 http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-94957 This is a pretty awful summary of microfinance institutions and networks. First, let's get a few things clear: 1. Grameen Foundation, ACCION, WWB, and FINCA, and Opportunity International are networks. Unitus is a market accelerator. 2. FINCA and OI tend to own all of their MFIs. They become FINCA Uganda, FINCA Tanzania, Opportunity Ghana, etc. 3. Different networks provide different types of technical assistance. Grameen Foundation is very strong in social performance, ACCION is great on investor preparedness, Unitus is wonderful and scaling organizations and helping them manage growth. What are the "costs" to the free TA? Ask any MFI and they will tell you that the reporting entailed in any network relationship is hardly free. There is a feedback loop in organizations evading certain networks (I've seen as much in the field) because the cost-benefit analysis isn't sufficiently favorable. Finally, networks moved to technical assistance in large part to strengthen organizations so that they could attract non-subsidized commercial financing. Pump priming with grants to make an organization sustainable and scalable in the long term may be a great investment, if done right. This is a pretty awful summary of microfinance institutions and networks. First, let’s get a few things clear:
1. Grameen Foundation, ACCION, WWB, and FINCA, and Opportunity International are networks. Unitus is a market accelerator.
2. FINCA and OI tend to own all of their MFIs. They become FINCA Uganda, FINCA Tanzania, Opportunity Ghana, etc.
3. Different networks provide different types of technical assistance. Grameen Foundation is very strong in social performance, ACCION is great on investor preparedness, Unitus is wonderful and scaling organizations and helping them manage growth.

What are the “costs” to the free TA? Ask any MFI and they will tell you that the reporting entailed in any network relationship is hardly free. There is a feedback loop in organizations evading certain networks (I’ve seen as much in the field) because the cost-benefit analysis isn’t sufficiently favorable.

Finally, networks moved to technical assistance in large part to strengthen organizations so that they could attract non-subsidized commercial financing. Pump priming with grants to make an organization sustainable and scalable in the long term may be a great investment, if done right.

]]> by: Rahmadhita http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-88954 Sat, 28 Nov 2009 15:56:50 +0000 http://blog.givewell.org/2009/11/20/two-charities-one-microfinance-institution/#comment-88954 One way to give donations for the continuation of microfinance programs is the rotational contribution. Why? Because the funds obtained can be used for one person, and then after that played for other people in a group. Evenly so that each member of the group will benefit from the contributions given. This is a micro finance scheme in the small scale One way to give donations for the continuation of microfinance programs is the rotational contribution. Why? Because the funds obtained can be used for one person, and then after that played for other people in a group. Evenly so that each member of the group will benefit from the contributions given. This is a micro finance scheme in the small scale

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