Opportunity International Canada

Welcome to the final post of our August blog series, the 'ABCs of Microfinance'. Throughout the month, we've introduced you to the concept of microfinance, how it works, why it's important and some of the extra support systems we've put in place to promote healthy loan management, business practices and positive community contributions. To conclude this series, we thought it would be nice to highlight a relatively new initiative of Opportunity - one we like to call 'Banking on Education'.

Education is one of the most powerful tools available to help alleviate poverty, spur economic growth and promote social change. People who are more educated tend to have higher income and to create jobs for themselves or others; they also have lower participation in criminal activity and reduced incidence of HIV/AIDS. But even primary education is limited across the developing world, further embedding existing poverty cycles.

To respond to this need, motivated teachers across the developing world are building schools right in their own communities. Opportunity supports these educational entrepreneurs with loans ranging from $500 to $25,000 for one- to five-year terms. Some teachers decide to build schools from scratch; others are improving the infrastructure of existing schools. Whatever the specific need, Opportunity provides relevant training and capacity building as a part of the loan package.

To improve school enrolment, Opportunity is also providing school fee loans and tuition savings accounts for low-income families. Our tuition savings accounts earn interest and can also be used to provide for a child who loses his or her guardians.

Since the start of Banking on Education, Opportunity has disbursed over 450 loans to school-building entrepreneurs in economically-disadvantaged neighbourhoods across Ghana, Malawi, Uganda, the Dominican Republic, and India.

Some Highlights:

• Over 125,000 children have been given the opportunity go to school
• In India, many girls only receive a primary school education. We've designed a scholarship program that covers school fees for girls to attend secondary school and community college.
• We are halfway toward our goal to expand Banking on Education into 10 countries. Expansion is currently being planned for Romania and Mozambique. Eventually, Rwanda, Colombia and Kenya will also join the program.

Help teachers open sustainable schools in underserved neighbourhoods! Opportunity International has a goal to provide education to at least 250,000 children through a total of 1,000 schools over the next two years.

Thanks for following our 'ABCs of Microfinance' blog series! We hope you enjoyed it. Subscribe to our blog feed so you don't miss out on future blog series like this one.

Distributing loans and offering ongoing support to our clients all over the world is a lot of work - definitely more work than our small team in Canada can do by ourselves! To meet the needs and demands of our clients, Opportunity has grown a global team of over 11,500 staff members who support clients in more than 20 countries. The great thing about this is that most of our staff are local - meaning that they grew up in the same place where they work.

Hiring local staff means that local dialects and business customs come naturally, but more importantly, by providing training, opportunity for advancement and competitive pay and benefits, Opportunity is equipping local staff to become leaders in building the economies of their own communities.

At the heart of our operations are 6,515 locally-based loan officers who are the 'foot soldiers in the war against poverty' – visiting dozens of clients every day and making it possible for them to flourish in their businesses and lives. Many of our loan officers owned businesses in the same communities in which they serve, giving them a seasoned perspective on the local business climate. Nohemy is one such client-turned-staff-member. Read her story below.

Nohemy Vivas Ocana, Branch Manager in Nicaragua:

"I grew up in a very poor family. We had a small house, with a dirt floor and one bedroom for my six siblings, my mother and my father. ... When I was eight years old I started my first business. I would go to the beach, collect seashells and make necklaces to sell to the tourists. With this money I would buy my school books and pay for all my school supplies. I always prayed as a little girl that God would give me an important job one day so that I could help people.

I graduated from high school with an accounting specialization. For the next 12 years, I had a steady job with the government. Then suddenly, because of circumstances beyond my control, I lost my job.

For three years I struggled to provide for the family and then I decided to launch a business selling cooked fish to the tourists. Shortly thereafter, I heard about Opportunity International. It was not long before I joined a Trust Group and received my first loan of $100.

After two years, Opportunity International asked me to become a loans officer. I became responsible for 15 Trust Groups. Soon I was promoted to supervisor, and in that same year I was promoted to branch manager. Now 1,300 families and 18 employees depend upon my good administration.

As a little girl I dreamt that I would have an important job, but I never imagined that I would be able to help others realize their potential in business. I always had an entrepreneurial spirit, and now I get to share that with others—what could be better?"

Tomorrow will mark the last blog post from our 'ABCs of Microfinance' series. Make sure you come back to read it. We'll be taking a look at how we're successfully impacting future community leaders even earlier in life. You won't want to miss it!

------------------------------------------------------------------------------------------------------------------------

Did you enjoy this post? Share it with your friends by clicking 'like' below! 

Welcome to the last week of blog posts in our August 'ABCs of Microfinance' series. We'll be wrapping up this series by taking a look at some of the educational opportunities we provide our microfinance clients with, starting with today's look at the training our clients receive.

AIDS education in Ghana, inventory management in the Philippines, family values in Colombia – Opportunity provides transformative training and development modules to cover topics that are helpful and important to the large variety of clients we serve around the world. Today, we have more than 400 different modules available for our loan officers to use with Trust Groups.

Since there are low literacy rates and an unfamiliarity with banking services in most of the places we work, access to microfinance is often not enough to help our clients lift themselves out of poverty. They must also receive financial training to learn basic skills related to earning, spending, budgeting and borrowing money. In addition to our training and development modules teaching people how to manage money wisely, they also give clients access to information on health, leadership, self-esteem, gender, communication, work-life balance, civic responsibility and more.

Our training work has revealed that increasing clients’ financial literacy through educational modules and videos helps them to:

• Better understand the wide range of financial services available to them
• Increase their use of savings accounts and insurance products
• Better manage their credit
• Diversify their assets

Tomorrow we'll take a look at how our training has extended to the provision and development of thousands of locally staffed jobs in the countries we work in. Stay tuned!

_________________________________________________________________________

Did you find this information helpful? Click the 'like' button below to share it on your facebook page today!

In Tuesday's blog post, we introduced the concept of microinsurance and listed Opportunity International subsidiary MicroEnsure as the world’s first (and now largest) microinsurance provider. MicroEnsure's affordable insurance helps provide a secure safety net for more than 3.5 million people in nine countries around the world.

Some of the unique insurance packages MicroEnsure provides include:

• Life insurance policies covering persons infected with HIV/AIDS, including those previously diagnosed
• Affordable health insurance for the economically marginalized. Premiums of just $8 per year can provide inpatient hospital treatment on a cashless basis for India’s most impoverished families. This insurance covers pre-existing illness and allows clients to pay premiums weekly.
• Weather-indexed crop insurance that mitigates the devastating consequences of drought or flooding. In the event of extreme weather conditions, farmers receive payouts scaled to local meterological data, protecting them from the economic hardship of crop failure.

MicroEnsure's insurance provision has been so effective and successful that The Bill & Melinda Gates Foundation recently provided a generous grant to enable the agency to expand into additional countries and insure millions more people.

Watch the video about to hear from some of the people who are directly impacted by microinsurance.

Stay tuned! Next week (our final week of the ABCs of Microfinance blog series) will give you a look at the training we provide to local staff on the ground in the countries we work in. See you then!

_________________________________________________________________________

Like this post? Share it on your facebook wall by clicking the 'like' button below.  

Welcome to week 4 of The ABCs of Microfinance! This week we'll be looking at insurance and how helpful it is when it's made available to microfinance clients.

Why sell insurance to people living in poverty?

At first glance, offering insurance to people with few material assets seems unnecessary. But experience has shown that it takes much more than a loan to lift someone from extreme poverty. A multitude of risks threaten to derail any progress made on the road to economic stability. One crop failure or one injury can decimate a family’s savings and push them over the brink.

Microinsurance helps protect those living in poverty against these very real perils. Until recently, it was next to impossible for the economically marginalized to obtain insurance through a bank or insurance company. Even when insurance solutions were available, they were usually too complicated and expensive.

In response to this need, MicroEnsure was launched in 2002 as a subsidiary of Opportunity International. MicroEnsure is the world’s first (and now largest) microinsurance provider. Today, MicroEnsure offers relevant and affordable insurance that covers a range of risks like death, disability, loss of health, loss of livestock, fire, flood and drought. These policies help provide a secure safety net when an unexpected hardship or disaster occurs.

In tomorrow's blog post we'll take a closer look at MicroEnsure - what exactly it provides and how many clients are using it. We'll also show you a video that introduces you to some of these clients. Stay tuned!

_________________________________________________________________________

Like this post? Share it on your facebook wall by clicking the 'like' button below. 

Yesterday's blog post talked about how important access to banks are for the poor. Today we're going to dig deeper, looking specifically at savings accounts and the impact they alone can have on a family.

Because of how hard it is for many of the world's poor to open a bank account, many individuals resort to hiding money at home, burying it in the ground or investing it in livestock. These informal methods of saving prove very unreliable. A recent study of 1,500 Ugandans showed that 99 percent of respondents failed to reach their savings goals when using informal methods, either because the money was stolen or lost, or because they were too tempted to spend the money when it was stored as cash in their home.

Opportunity International is one of the very few microfinance organizations that offers secure and accessible savings accounts to the poor. Working with our clients, we have designed interest-bearing savings accounts that require no minimum deposit or expensive identification papers. In the last decade, Opportunity has built 17 banks across the developing world that provide savings accounts to people who never had access to them before.

So, why is access to a savings account so important?

Savings bring stability to families facing crisis and help entrepreneurs prepare for new business opportunities. Medicine for a sick child can be purchased with a few dollars in the bank. A business can expand to a second location with sufficient savings in their account. A randomized control trial in Western Kenya found that women who had access to a formal savings account were able to save and invest 45% more into their businesses after six months, which led to increased purchasing power for food and personal expenditures. Additionally, Opportunity can use the funds deposited in savings accounts as loan capital for other local entrepreneurs – putting the money back to work in the community.

Microsavings has become Opportunity's fastest-growing sector, multiplying six fold since 2006. Opportunity International currently provides 562,101 clients with a secure place to save and grow their earnings.

Want to know more about how savings accounts impact the poor? Check out these statistics from the Bill & Melinda Gates Foundation.

And stay tuned! Tomorrow's blog post is going to be a video one - giving you an up-close and personal look at the bank building Opportunity International is doing in Africa.

_________________________________________________________________________

Did you like this post? Help us out by sharing it on your facebook page. Click 'like' below!

Welcome to week 3 of The ABCs of Microfinance! This week we'll be looking at the important role that banks and savings accounts play in microfinance projects.

How often do you use your bank? Do you manage your accounts online daily? Maybe you only visit your branch twice a month to deposit your paycheque. Either way, do you ever think about what life would be like without access to banks?

It may be hard to imagine for most of us in Canada, but in other parts of the world, only 10% of the 2.5 billion of people living on less than $2 per day have access to a bank account. This is because:

• banks won't accept their small deposits
• they can't prove their identity
• banks are located far from where they live and work

Recognizing the disadvantage this presents to so many people, Opportunity International is going beyond local microfinance start-ups to building nation-wide banks for the economically marginalized. Since 2000, we have built 17 banks in Africa, Asia, Eastern Europe and Latin America. Opportunity bank branches now reach places where the locals don't even have a word for 'bank'.

So, why build banks and not just non-profit organizations?

• Sustainability - microfinance banks "scale up" rapidly and become fully self-supporting.
• Range of Services - in many countries, only financial institutions like banks can legally accept savings deposits. Non-profits can typically only offer microloans.
• Growth - microfinance banks leverage commercial loans and savings deposits to further expand their services.
• Efficiency—high-tech information systems lower transaction costs at our banks, allowing us to serve more clients

Opportunity banks offer the professionalism and security of a commercial bank, but with a singular focus on those living in poverty. Our banks have become part of the economic infrastructure of many developing countries, opening a lasting door of opportunity to those who were previously excluded.

Are we a for-profit bank?

No. Opportunity is a non-profit organization. Opportunity International's primary motivation has always been the desire to empower people living in poverty by giving them access to microfinance, not to maximize profits and deliver shareholder value.

Therefore, all Opportunity bank partners are majority owned by Opportunity's charitable trusts and not individual shareholders. The only reason any of our microfinance institutions is for-profit is to achieve bank status, allowing us to provide many services, such as savings, that banks can offer to those living in poverty. Local laws often require banks to have a for-profit status. Any profits are reinvested to expand our service and reduce costs for our clients.

Interested in learning more? Stay tuned! Tomorrow we'll be taking a closer look at savings accounts and some of the specific benefits they provide to the poor.

________________________________________________________________________

Did you find this post interesting? Help us out by sharing it on your facebook wall. Click the 'like' below today! 

Building on yesterday's blog post introduction to Trust Groups, watch the video above to hear stories directly from Trust Group meetings in Rwanda, Uganda, Kenya and Colombia.

The stories that come out of Trust Groups are inspirational and the benefits are clear:

Trust Groups:

• Build community
• Help people achieve their goals
• Give women an identity
• Enhance dignity
• Give hope

Reflecting on Trust Group members in the video, Henriette Isaac, Business Development Officer with Opportunity India states,"They start feeling like nothing is impossible to achieve. Starting off with not even having dreams of their own, it's amazing how they start dreaming of things for their country - how they want to see changes happen in society."

Interested in knowing more? Stay tuned! Next week, our August blog series will take a look at how savings accounts and new banks also play a role in enhancing opportunities for our microfinance clients.

_________________________________________________________________________

Like this post? Share it on your Facebook wall by clicking the 'like' button below! 

As part of our ABCs of Microfinance blog series, today's post is on Trust Groups. Trust Groups play a key role in allowing us to provide loans with low interest rates to our clients, requiring no collateral. Not only that, but Trust Groups strengthen community relationships and provide motivation and a learning environment for participants.

Take a look at the chart above to see how a Trust Groups starts and progresses. Once a Trust Group is established in a local neighbourhood, the members support one another as they repay their loans and learn new skills together. They also commit to guarantee each other’s loans. For example, if one woman’s business falters, the others chip in for her loan repayments until she returns to profitability.

Trust Groups have proven to be the secret behind our high loan repayment rates and remain an essential ingredient in growing the next generation of entrepreneurs.

Trust Group meetings also provide Opportunity with insights into the unique challenges facing the people we serve. Many of our financial services and training modules are a direct result of feedback from Trust Group meetings.

Want to learn more? Tomorrow we'll be posting a great video about some Trust Groups in Africa. Stay tuned!

_________________________________________________________________________

Like this post? Share it on your Facebook wall for us by clicking the 'like' button below!

As we kick off Week 2 of our August blog series, we ask the question: Why do people living in poverty need loans?

Many households in the developing world operate small businesses on the margins of society, scraping by on whatever they can make or sell to neighbours. These entrepreneurs would like to grow their businesses, but often lack the capital to pursue their ambitions because it is either far too risky to obtain or completely unavailable. They could visit a local loanshark – but the repayment costs are extreme. No business can flourish paying 10% interest per day. Some moneylenders even require child labour as repayment. The more reputable commercial banks usually consider people in poverty to be “unbankable” because they don’t have any collateral.

Opportunity sees things differently. We know that there are millions of people who have the skills, creativity and work ethic to become increasingly self-reliant, and we want to help! Instead of charging astronomical interest rates, we invite ambitious people in poverty to band together and form a Trust Group. They then become part of a group of 10-30 entrepreneurs who co-guarantee one another’s loans, while also receiving weekly training and support. In this way, we can provide skilled, creative people with the skills and capital they need to climb from the depths of economic poverty.

When clients build businesses with Opportunity loans and other support, monumental changes are often set in motion: family income rises; children get better nutrition and go to school; homes are improved; and women gain status. For clients around the globe, transformation can take place every day – beginning with loans as small as $60. Better still, the repayment rate on our loans is around 95%, meaning that a single loan is recycled and multiplies into the community for years to come.

Stay tuned! Tomorrow's blog post will take a closer look at Trust Groups. Subscribe to this blog series feed - you won't want to miss it!

_________________________________________________________________________

Like this post? Share it on your Facebook wall for us by clicking the 'Like' button below!

Blog post #3 in our August Education series looks at some of our microfinance statistics and one of the individuals who helps make them...

It can be easy to lose sight of the individuals impacted when we talk about microfinance statistics, but the truth is, our statistics really do represent real people.

Evelyn Pendon of Gerona, Philippines, is one of the very real 1,357,828 active loan clients who saw her monthly income increase after receiving her first microloan. Already an entrepreneur, Evelyn used to make lanterns using bamboo, crepe, Japanese paper and coloured plastic, but soon realized that lanterns made from native capiz shells would increase her sales. She worked hard at the business and hoped to continue expanding, but was discouraged by low sales and bouncing cheques.

However, after receiving her first loan and adding her name to our list of 1,183,207 clients who have received specialized business training from us, new doors opened for Evelyn. Her business now employs five apprentices and she regularly encourages them to create their own lantern designs and develop their own approach to the craft—just as she has.

84% of our loans are provided to women like Evelyn and 95% of our clients repay their loans on time and experience the satisfaction of being in control of their own financial future. With over 14 million loans dispursed since 1971, this is truly something to celebrate!

Stay tuned! Week 2 of our Education series will be taking a closer look at microloans and the benefit of Trust Groups.

_________________________________________________________________________

Like this post? Share it on your Facebook wall for us by clicking the 'Like' button below! 

Post number two in our August blog series looks at answers to five of the most common questions we receive about microfinance. Got more questions? Leave them in the comment section below and we'll answer them in our next post!

1. How does microfinance alleviate poverty?
Microfinance directly addresses one of the primary root causes of chronic poverty: underemployment. Not only does it help create or expand a single job, but the training and income from this employment improves housing, education, and health care for a whole family.

2. Why don't people in poverty get loans from regular banks?
Almost two-thirds of the world's population have no access to financial services. When financial services are available, they rarely favour those living in poverty because the poor don't have the kinds of assets that banks look for. Without fair microloan options, entrepreneurs must borrow from loan sharks who can charge up to 10% interest per day or require outrageous collateral.

3. What interest rates do we charge on our loans?
Interest rates and repayment structures for microloans vary and are set by each local Opportunity affiliate in the countries we work in to reflect the different economic, social, political and regulatory environments there. Interest rates are charged to match these pre-existing economic conditions and to allow our affiliate partners to cover operating costs used to support our clients. Learn more about our interest rates here.

4. What percentage of our loans get paid back?
Historically, between 95-98% of our loans get paid back. This is largely due to the Trust Group model that our clients follow. Trust Groups will be explained further in an upcoming August blog post.

5. How do you help clients from getting into too much debt?
We build relationships with all our loan clients through our loan officers. By knowing each individual and situation, we are able to meet our clients' specific needs and help them when difficulties arise. We also provide financial training to our clients to help them manage their money wisely.

Stay tuned! Our next Education series post will feature a client story and some inspiring statistics about the impact microfinance is having on poverty.

_________________________________________________________________________

Like this post? Share it on your Facebook wall for us by clicking the 'Like' button below! 

August is 'Education Month' here at OpportunityCan. Instead of blogging about news updates, we're going to lay out the ABCs of microfinance for our readers. What it is, why it's neccessary, how it works and more. We hope you'll find it helpful!

To begin with, here's a brief overview of microfinance and how it works:

Microfinance is based on the radical notion that small-scale entrepreneurs can be big change agents in overcoming global poverty. Rather than send aid overseas in hopes that the benefits trickle down, microfinance finds the next generation of entrepreneurs at the bottom of the economic pyramid and starts there. Basic financial tools like small business loans and savings accounts unleash the capacity of the poor to work their own way out of poverty.

When a woman stands in line to receive a handout, she exchanges a portion of her dignity for the chance to survive. If instead she’s given the financial tools and training to start her own business – her dignity is enhanced. Our clients often tell us, “No one ever believed in me before."

Microfinance is one of the only development methods that people living in poverty are asking for. Throughout the developing world, there are millions of people with the dreams, abilities and willingness to work their way out of poverty, but the odds are against them when they lack access to capital, a secure place to put their earnings and insurance to help them recover from unexpected calamity. These are the gaps that microfinance helps to fill.

In the last 40 years, an estimated 150 million people have received microloans and begun to leave poverty behind. Still, only 10% of the developing world currently has access to microfinance. We believe reaching the remaining 90% in the 21st century is possible.

Stay tuned! Our next blog post will focus on how microfinance actually alleviates poverty and how clients pay back their loans.

_________________________________________________________________________

Like this post? Share it on your Facebook wall for us by clicking the 'Like' button below!