EFI goes to Washington!
By Ben Allen, TA Microfinance Research, Catholic Relief Services
The SEEP Network Annual Conference, usually held in Arlington, VA, is always an excellent forum for networking and learning about our own and peer organizations’ work in the field of microfinance, specifically on the promotion of savings groups. But this October, CRS’ four-country Expanding Financial Inclusion in Africa (EFI) project, in partnership with the Mastercard Foundation, put on something special: a half-day, deep-dive into EFI’s ambitious design and outreach, extensive learning agenda, and extraordinary success.
The day kicked off with brief introductions by EFI Chief of Party Amy Davis, as well as a fluid discussion of the centrality of EFI’s accomplishments to CRS’ overall agency strategy and values by CRS CEO Sean Callahan.
Detailed discussion of EFI followed, starting with a panel featuring the four Country Program Managers: Angela Kalambo/CRS Zambia, Godfrey Kalemera/CRS Uganda, Daouda Sonko/CRS Senegal, and Jacques Kabore/CRS Burkina Faso. (Full disclosure: I hosted the panel!) Daouda expressed pride in Senegal’s current partnership with myAgro, as a result of EFI Senegal’s outreach, which helps smallholder farmers to save for the purchase of agricultural inputs. Angela explained that EFI provided CRS Zambia with the opportunity to work in areas that CRS had never reached before, and was pleased with her country program’s partnership with FSD Zambia’s Women in Finance project. Godfrey spoke of CRS’ coordination with government, financial service providers (FSP) and mobile-network operators, to promote mobile-money integration in EFI Uganda. And Jacques was pleased by Burkinabes’ enthusiastic embrace of SILC, telling the audience that it’s not uncommon to see 2-3,000 SILC members come together to celebrate SILC as well as address a variety of local issues.
Following the PM discussion panel, Julie Lawson-McDowall, EFI’s Research Coordinator, presented how EFI has measured and achieved its poverty outreach goals. She began by explaining EFI’s innovative pro-poor strategy, which recognized that the saving is a challenge for the poorest, who have a greater chance of being financially excluded than their wealthier peers. In response, EFI designed and implemented a suite of activities, called the Pro-Poor Package (PPP), in an attempt to reach the poorest of the poor in roughly two-thirds of the project’s coverage areas, including working through other pro-poor institutions, adjusting the SILC model to remove barriers to participation and meet their needs, recruiting and training PSPs to become social entrepreneurs – men and women motivated to reach poorer people – and adjusting market areas and fee-for-service pricing. Poverty outreach and inclusion results were measured across all four countries using the Progress out of Poverty Index (PPI, recently renamed the Poverty Probability Index), and studied further in Zambia using the Financial Diaries, and with in-depth ethnographic research in Senegal and Uganda.
Guy Stuart, the Executive Director of Microfinance Opportunities, one of EFI’s research partners, led us through EFI’s PPI results. The PPI figures showed increasing poverty inclusion in SILC groups in select PSPs’ market area over time, and in all countries (though not with all implementing partners), with the average percent of SILC members coming from the poorer segments of their villages exceeding EFI’s targets: Across the four countries, two-thirds of SILC members came from the poorest segment. The EFI team was justifiably proud of this accomplishment. However, while the PPI results were positive, when the research team compared quantitative results from areas treated with the Pro-Poor Package (PPP) to non-PPP areas, the PPP outreach results were not significantly different from those achieved in non-PPP areas.
So Julie’s team dove deeper, undertaking an in-depth ethnographic study in Uganda and Senegal to understand the factors that attract poor households to SILC – or put them off. From the field study, the team learned that while members valued the flexibility in SILC practices provided in the approach, in some villages there was competition to the EFI SILC model from other highly subsidized programs. The study also revealed that members of the poorest households feared they did not have enough labor capacity or income to reach even the minimal savings requirements. The PPI and ethnographic findings then prompted a lively discussion between Julie, Amy, and Guy Stuart, of how quantitative and qualitative data can complement each other in interpreting EFI’s poverty outreach results.
CRS’ Technical Advisor for Microfinance, marc bavois, then explained two additional components of EFI’s research agenda: the project’s embedded comparison of flat and proportional fee-for-service pricing, and results from the team’s PSP livelihood study. (Full disclosure: I was a principal author of the PSP livelihood questionnaire.) With respect to PSP pricing, the survey conducted by the team found that 54% of SILC members thought the PSP’s fees were ‘just right,’ and another 39% thought they were a ‘great value.’ The study found support for both flat and proportional pricing, and marc concluded that each may be applied in different contexts. Finally, the PSP livelihood study revealed that most PSPs are principally motivated to help the community, as well as earn income. Whatever the motivation, PSP work is lucrative compared to other income-generating activities, with 83% of PSPs earning income from training communities in SILC. In Burkina Faso, Senegal, and Uganda, most PSPs stated that PSP work was their primary income generation activity. Given the findings around EFI’s innovations, marc recommended that CRS move forward in future SILC projects with an ‘inclusive saturation’ approach, comprising the Pro-Poor Package and proportional pricing (where appropriate).
As if all of this great knowledge, communicated clearly and in an entertaining manner to the audience, weren’t enough, the EFI event concluded with us wandering from one table to the next in the hallway, interacting with key EFI PMs and researchers, and learning in greater detail about the Financial Diaries study, Uganda’s challenges with mobile-money integration, CRS’ PSP model, and the Pro-Poor Package. Finally, Ruth Dueck-Mbeba, Mastercard Foundation’s Senior Program Manager for Financial Inclusion, closed the event with an appreciative talk on how EFI’s results have contributed to MCF’s strategic priorities, and influenced where MCF plans to go from here.
Since lunch was included, the day was both filling and fulfilling, and I was pleased to see a great, multi-country, innovative savings-group project share its successes, challenges, and lessons openly and honestly with the savings-led microfinance community. I look forward to more such events, whether hosted by CRS or another organization, at future SEEP conferences.