Think Obamacare – on a whole new level.

by Mihir Khubchandani

If you ask someone for the definition of microfinance, typically the answer you would get is “small loans that are given to people with low incomes, with no collateral involved”. While this is the true definition of microcredit, the realm of social entrepreneurship related to microfinance is much broader. As of late, one of the newest buzz-words about social financing is microinsurance. Just like Obamacare intends to offer affordable healthcare to all, microinsurance is insurance designed to be affordable to all with low monthly fees and small coverage values. Yet it appears that this might be one of the most valuable steps towards developing the financial services sector for low-income communities, and could be very important in bringing about change in these states. 

A women’s microinsurance group in India. Photo courtesy of Forbes

A women’s microinsurance group in India. Photo courtesy of Forbes

Microinsurance works in a very similar way to your standard insurance schemes. Customers purchase insurance products, and pay the fees on a monthly or periodic basis. The amount collected is stored in a ‘pool’ by the insurance company, to be used as and when a customer makes a claim. The key difference is that the amount of premium to be paid is much lower. For instance, the minimum monthly fee for South African microinsurance organization AllLife is just $15. This gives rise to one of the main characteristics of microinsurance: it reaches those who are typically neglected by traditional insurance.

Those who would purchase these microinsurance schemes have certain other traits that make this type of insurance be specially tailored to them. Firstly, these people are typically seen to have higher vulnerability, due to poorer living conditions and the high risk environment in which they live and work. Further, the typical microinsurance buyer does not have substantial financial knowledge, and is likely not to trust institutions with handling their money as they may have been misled in the past.

However, perhaps the most significant characteristic is that whilst the small repayment amounts seem meaningless to us the repayments represent a significant amount to the typical microinsurance client. For instance, consider a low-income farmer (the typical target of microinsurance), who is able to produce enough every week to sustain his family for just that period. However, if there is any shock to the yield of his farm, such as a drought, a riot, or even heavy rains in the week, the farm will not produce enough and the family would have to go hungry. The same applies to health insurance – if the farmer is ill just for one week, his family will struggle to eat. As such, in situations where people make less money, they tend to rely on it heavily to get by. As such, even a small change in income has profound impact on their wellbeing. If the farmer were to have insurance, in the event of a shock, the reclaimable payment would be enough to sustain the family, at least for some period of time – to him, this is significant, valuable enough to warrant considering schemes such as life-insurance, property insurance, or old age insurance (some of the most commonly purchased schemes, according to a World Bank report on rural Ghana in 2008).

Microinsurance customers are very vulnerable to external shocks. Even low value insurance is thus significant in abetting the risks of such shocks. Photo courtesy of Oracle ThinkQuest

Microinsurance customers are very vulnerable to external shocks. Even low value insurance is thus significant in abetting the risks of such shocks. Photo courtesy of Oracle ThinkQuest

It is almost intuitive that the benefits of this are profound. At a surface level, such insurance allows the buyer to take more risks. This translates to being able to send the children of the family to school rather than having to work on the lands, as insurance removes the risk of a poor yield. Or, in the same vein, farmers can widen the variety of crops they grow, so as to be able to sell different products – and once again, the risk of a crop failure is insured. Furthering this idea of agricultural insurance, the provision of such services means that the reliance on GMOs for improved crop yield is reduced, thus improving the quality of produce for others in the community or even for trade.

Microinsurance and its reach do not stop there. In a situation where living conditions are poor with minimal hygiene and sanitation, the risk of falling ill is high. The typical low-income earner would not be able to afford even basic medical care. Health insurance helps enable such people to reach out and obtain such services, at least on a basic level. AllLife, for example, offers insurance to HIV/AIDS and diabetes patients at a minimal cost, despite preexisting conditions. In this way, basic statistics of life expectation and longevity increase for the nation as a whole. On a level closer to the ground though, the provision of simple healthcare enhances quality of life, and improves livelihood at what we often consider the most fundamental level.

Whilst all this sounds great, there are several difficulties with implementing microinsurance, which is still in its teething phase. Firstly, it is very difficult for insurers to be able to meet the tender balance of charging an amount that is affordable yet significant enough to cover the great risks the typical customer faces. Aside from this, the lack of financial awareness on the side of the buyers means that customers will be slow to purchase this product. Lastly, there is the issue of distributing the funds when a claim is made. Many of the clients to a microinsurance firm live in regions that are not easily accessible, and therefore sending money to them in a secure manner is a challenge. Several organizations have adopted methods to pay ‘in kind’, through phone credits or other such avenues of repayment.

In spite of these difficulties that plague microinsurance, I firmly believe that this is an avenue that definitely offers a lot of potential in helping nations develop. The great benefits of enabling clients to take risks in terms of crop production, providing healthcare at a basic level to those who often need it most, and the increased lifestyle flexibility with the ability to send children to school are amongst the many valuable benefits of such services that truly empower those of lower incomes. It appears to me that this is a project and realm of development that has not been explored to its fullest, and some support behind such schemes would certainly ensure empowerment and an improvement of lifestyle for those in need.

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA.

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Value of College Community Service

– By Sagar Doshi

As the sun sets, the entire stadium rests in silence. The wind has settled and the moment lays timeless. Children attempt to climb on parents’ shoulders for a peek and the elderly rise in respect of those fallen. All eyes are focused on the stadium bleachers, and as expected, a single light from the distance ignites. Steadily another light appears, and then another; the public starts to cheer. The reflection of a well-lit candle can be seen from each eye and a smile appears on the faces of many. The lights fall in a pattern, gradually forming a four letter word. Everyone stands in awe, taking in the moment which will forever be remembered in their hearts. One word. One mission. One dream. HOPE.

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For all four years of high school I participated in Relay For Life – an event that raises funds and awareness for the American Cancer Society – and still, every year this moment seems to revive my passion for supporting the community. After participating in Relay For Life as a student council member my freshman year, I finally started to realize that one person can make a difference. It was simple to me: I donated $100.00 and that money was going to help somebody. Although my peers and I were not required to participate in this event, we chose to because our teachers highly recommended it to us. Four years later, I felt honored organizing Relay For Life at my school as student council president. I wished to see more participants of my generation join an event that not only contributed to a cause we believed in, but which instilled a new appreciation for life. More than a mere high school service project, this community event still laid the foundation for our participation in service events for the future. We came to acknowledge that community service is instrumental in making our world a better place at a young age. Acknowledging that I was an upperclassman in high school and potential college student, I was in the prime of my life to have an opportunity to make a large impact towards the well-being of others. Now as a rising junior in college, I am involved with organizations and clubs that focus on helping the needy and fundraising for proper research such as University of Maryland’s Relay For Life and Students Helping Honduras. I value community service because I had the experience of a lifetime at Relay For Life. But now I wonder: Has everyone else in college had this “experience” which enables them to value community service? If not, should community service be an essential component of the college education which possesses the universal mission to educate its students on “improving society?”

There is undoubtedly a tremendous amount of positive upside generated from participating in community service. Aside from the monetary contributions, participating in community service can positively affect an individual’s personal, social, and cognitive mindset. Developing an opinion concerning community involvement is more plausible during college since these students are just beginning to be true participants in their local community. For example, in a study of service learning requirement for college students, “students who provided community service as part of a one credit ‘community service laboratory’ showed a significant increase in their belief that people can make a difference, that they should be involved in community service and particularly in leadership and political influence, and in their commitment to perform volunteer service the following semester.” These college students also tended to be “less likely to blame social service clients for their misfortunes and more likely to stress a need for equal opportunity.” As students grow and mature in their college years, they tend to realize what is important in life and prioritize their actions accordingly. This can be applicable to coursework, social life, and community service. When a student has an experience such as taking this one credit community service laboratory, they then have the capability to draw conclusions on the importance of community service.

Another example can be found with students from Columbia University who participated in an alternative Spring Break trip to Mullens, West Virginia. The students are described as lining in an area where “rural poverty can seem distant, unimportant, and unworthy of our consideration.” However, after these “16 Columbia University students rebuilt porches, repaired roofs, literally shoveled mud from the side of a mountain,” they came to realize a responsibility they hold. Although these students were not originally familiar with rural poverty, after physically experiencing the conditions they have learned that they can “make tangible differences in places like Mullens.” Similarly, community service in college allows more students to partake in matters that are relevant to not just the local college community, but the global community. If certain community service activities such as alternative spring breaks or one credit community service laboratories were requirements of the college education, how beneficial would that be in developing the mindset of every single college student?

On the other side, typical college students have many tasks to worry about. From mid-term exams to part-time jobs, college students have a lot of responsibilities when it comes to their college education. Research reports that 70-80 percent of students work while they are enrolled in college and an overall 62.4 percent of students participate in extracurricular activities. Would making community service an essential component of the college education over-stress students on their path to graduation? These students may not have the time, money, or energy to participate in a mandatory community service event. It could quite possibly become overwhelming to students if they participated in service learning programs that required a full focus and effort.

Another issue that forms with compulsory community service as a portion of the college education is the true appreciation of volunteerism. The true internal passion for volunteering and supporting others could potentially be in danger if students are obligated to be civically engaged. For instance, a survey conducted with 273 college student non-volunteers, required volunteers, and non-required volunteers concluded that “non-required volunteers reported stronger commitment to and satisfaction with their university as well as stronger internal and weaker external motivation to volunteer than did required volunteers.” Some students tend to be active in the community simply for resume enhancement or personal profit, and therefore the possible “experience of a lifetime” potentially becomes a false highlight of character on a resume.

So what should colleges really do? Should they simply attempt to deal with the possible negative aftershocks of including community service as a component of the student education? Or should they take a more passive role, and hope that students find the self-satisfaction of civic engagement on their own? Ideally, if the well-being of others truly means something to every student then no requirement would ever be needed. Maybe the best answer lies in college students themselves.

 

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA.

My Feminism

By Tanya Eleftheriou

Sometimes I feel like I’m the only feminist, or at least the only person willing to assume this label. In a recent Vogue interview with former French First Lady Carla Bruni, she boldly states, “My generation doesn’t need feminism.” For me, as a woman of the next generation, this is an extremely frustrating and absurd statement. She goes on to say that she is happy being a mother and spending time with her family; yet, in the midst of this statement, she has a new album and headphone line debuting.

So doesn’t she seem to “have it all?” A happy home life: check. And a successful career: check.

My view on feminism advocates and supports women in this way. However, there is clearly a stigma attached to the word “feminism,” even to this day. The word seems to only bring up memories of the Second Wave movement’s shortcomings, which alienated women who refused to throw down their aprons and rush to join the workforce. The word somehow became equated with “man hater” and “bra burner.”

The feminism that I identify with is revamped for the 21st century. It is about empowerment through choice: choice to pursue any and all of your life’s aspirations, including that of staying home to raise a family. So while Bruni says she doesn’t need feminism, it is feminism and women in and before her generation that allow her to make the choice of being a mother, wife, and successful career woman. I believe feminism is changing the rhetoric from what we “should” be doing to what we “can” do.  It is this feminism – the power of choice – that will allow for Madame Bruni’s son and daughter to grow up as equals.

My definition of feminism doesn’t just stop there, however. Feminism should further seek to rid the world of all gender binaries and not allow for them to be perpetuated in our everyday life.  We need to realize that it’s 2013 and we shouldn’t be defining men and women by two separate and confining categories based on ancient stereotypes. While Melissa S. Fisher asserts in her ethnography Wall Street Women that the first generation of women to enter Wall Street in the 70s “broke glass ceilings,” they only managed to climb deeper into the glass box. These women entered Wall Street under patriarchal gender codes and used these gender binaries as a strategy for personal success. Fisher implies that these women’s work was empowering. However, to have women use their positions of power, whether on Wall Street or in Washington, to promote these gender binaries, is a step backwards for women and society in my opinion. This is where the issue of inclusion versus influence comes in.

So what really is the difference between inclusion and influence? The concept of inclusion seems to, ironically, acknowledge even more pockets of society where women are excluded for the large part. This is particularly visible in the American political sphere. We have multiple women in politics today and with this year’s election alone, more women are in Congress than ever before. People would argue that this is breaking barriers and changing gender norms, but is it that significant? If we broaden the spectrum and look at all the other numbers and statistics, women still do not make up a significant amount of the population voted into positions of power.  According to the Center for American Women and Politics, women hold 98, or 18.3%, of the 535 seats in the 113th US Congress; 20, or 20.0%, of the 100 seats in the Senate and 78, or 17.9%, of the 435 seats in the House of Representatives. If they remain in the minority, how much influence can they really have? Female presence does not imply power, just as inclusion doesn’t always lead to influence. While women are actively included in the political arena, it often seems that they, as well as the issues they support, are not heard and have little influence.

Women realize this and are now using social enterprise as an avenue to advance themselves as a gender and fight for the rights and respect they deserve.  They are choosing to start business to not only empower themselves but alleviate cultural, political and economic problems for their children and families. Wendy Kopp, founder of Teach for America, started the non-profit to eliminate educational inequity by hiring recent college graduates and professionals to teach in low-income communities throughout the US. Paola de la Rosa, the general director of Fábrica Social, built her enterprise to create opportunities and empower indigenous women artisans in Mexico. Through design workshops, basic business and marketing training, Fábrica Social provides access to technical training, business skills, and markets which would otherwise be out of reach for these women. Paola expresses the initiative for her enterprise by stating, “You don’t need to be angry, but you do need to be very discontent with the status quo!”

Subject to injustice in the past and even present, women understand the struggle and are choosing to use social enterprise in order to fight some of the most prevalent and challenging issues today. This is why our generation still needs feminism, Mrs. Bruni.

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA.

 

Shin For The Win

– By Sagar Doshi

He did not have an S on his chest, he did not have super speed, and he did not have a mask. He was not an inch over five feet, he was always found in a simple t-shirt and shorts, and he did not even have any hair to flip back. However, heroes are admirable for what they do, not what they look like they can do. Say hello to my hero: Shin Fujiyama.

Shin Fujiyama and me at the work-site in Honduras. 01/07/2013

Shin Fujiyama and I at the work-site in Honduras. 01/07/2013

This past winter break I took a service trip to Honduras with the University of Maryland, College Park and its chapter of Students Helping Honduras (SHH). It was my first ever service trip and I was excited to take advantage of the opportunity to give back to the global community. The week-long trip is something I will remember for the rest of my life. The people I met, the everyday struggle I discovered, and the innocence I witnessed will live with me for years to come. On the first day of the trip, the entire volunteer group was welcomed by Shin Fujiyama. When he began to tell us his story, my view on life was forever changed.

Shin is a philanthropist who founded Students Helping Honduras in 2007. According to SHH’s mission statement, the organization leads projects to build local schools “to mobilize students in a massive and focused effort to empower orphaned and at-risk children in Honduras to reach their full potential.” He visited Honduras on a service trip during his college years at The University of Mary Washington and fell in love with everything about the country. Upon graduating from college with a Bachelor’s degree in International Affairs and Pre-Medicine, Shin made a courageous step and decided he owed humanity his life. Although he had the opportunity to continue his studies at a premier medical school, he chose to go back to Honduras and create an organization entirely devoted to fostering social change. The people of Honduras had touched his heart, and Shin vowed to help a country overcome poverty. Shin started the first chapter of this non-profit organization at his college, The University of Mary Washington, but with immense difficulties. Fundraising was his first step and he took the simple plan of standing outside his cafeteria with a money jar. I will always remember the small amount Shin made that first day: $29.00.

Giving up was easy and frustration kicked in for Shin who did not have any fundraising ideas for the children of Honduras. Shin wanted to give millions to his project, but could not even start off with a couple hundred dollars. However, with his inner will and the assistance of some friends, Shin never lost hope. He believed the children of Honduras had the right to be educated. In the coming months, Shin organized a walkathon that raised over $100,000 and found a matching offer from a generous donor. SHH was up and running and many chapters gradually opened in colleges all over the east coast. Shin could not believe what he was witnessing. A mission that started off with $29.00 continues today with millions being fund raised all over the world for projects in Honduras.

After hearing this emotional story from Shin, I was curious to see how interactive Shin would be with all the volunteers throughout the trip. I truly believed that we would see him signing papers behind a desk and giving directions to the rest of the volunteers, just as any other highly respected service leader would. This was an individual that was recognized as a CNN Hero and was featured in a variety of world news outlets. However, to my surprise, Shin was at the work-site, lifting heavy materials alongside us and building the school too. During the week, he organized salsa lessons and led a martial arts class for all the volunteers to relax and learn about the culture of Honduras. I was astonished to see someone as highly regarded as Shin Fujiyama act as just another volunteer during the entirety of the trip. Shin truly appreciated every volunteer that came to Honduras to build a school and personally continued his trend of going above and beyond the call of duty when helping out.

However, Shin did not simply stop there in getting to know all the volunteers. Throughout the week and during all the activities, Shin attempted to speak to every volunteer about their experience so far on the trip. Shin not only wanted to know why someone came on the trip or what they hoped to gain from the trip, but actually cared about their input on how to improve SHH. I admire the effort Shin made to create a personal relationship with each volunteer because he made us feel important. He gave each one of us attention, even remembering that I was celebrating my birthday that week.

I chose to write about Shin Fujiyama because he took that extra step. After taking this week-long trip to Honduras, the worst part of the trip was waking up at home the following morning in the United States of America and realizing that my life was going to be back to normal. No more showering in cold water, no more eating rice and beans, and no more lifting cinder blocks. However, for those people I met in Honduras, their lives were the same that next morning. They were still going to live in poverty and not have the same opportunities that I have. Shin found the inner-strength to wake up and go back to make a difference. Although that week in Honduras was humbling, today I am back to my daily routine without any communication or updates from the people I met in Honduras. On the other hand, Shin started a movement and went back for those people. No matter how passionate some individuals are regarding service, there always seems to be a limitation on what one can do for society. Shin, with an opportunity to attend medical school and become a successful doctor in the future, still decided to give up everything he had for the people of Honduras. He not only learned the language, he also built relationships with local businesses and the government. Shin wished for SHH to reach its full potential and there was no looking back. He did what none of us on my trip could do, not even me. I strive every day to have the courage to go back and dedicate the rest of my life to those people. I saw the same innocence in the eyes of children that Shin did, I talked to the same grandfather about the everyday struggle that Shin did, and I believed in these people just as Shin did. However, I am still back in my comfortable DC office writing this post. Shin found that courage many of us strive to have and gave the rest of his life to those eyes, struggle, and people. He never gave up on his program, the people of Honduras, and most importantly, himself.

Although there was a sense of disappointment upon my return, my experience in Honduras has helped me grow, change, and work to make a difference in my community. Since my trip, I have acquired a leadership position at UMD’s chapter of SHH, joined UMD’s chapter of Net Impact, and was accepted to the Social Innovation Fellows Program at the Robert H. Smith School of Business. Additionally, I am currently following my career path in micro-finance, working as the National Social Media Leader for Oikocredit USA.  Although we may not match up to the inner-will that Shin possesses, we all should still attempt to invest our efforts in something we care about. While there are people like Shin Fujiyama who make the biggest difference in this world, individually we all can reach our potential as well.

 

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA. 

Providing the Right Tools for the Right Changes

– By Sagar Doshi and Tanya Eleftheriou

Social Change. Everyone is talking about it, but what are we doing for our younger generations to implement it? Young adults need to have the proper tools to make an impact and that is why education for social change is becoming a much more prevalent topic in the college environment today. Universities across the nation have started to incorporate social impact programs and clubs for their students to participate in.  College is a great avenue to have young adults learn about social change and possibly create a new generation in which social impact is more valuable than financial impact. In this blog, we have focused on two local programs from the Washington D.C. area that empower their students to make a positive change.

Maryland got the ball rolling this year with its chapter of Net Impact. Net Impact is a nonprofit organization with 300+ chapters around the world that engages people to use their career paths to make a social and environmental impact. The Robert H. Smith School of Business’s Chapter of Net Impact exceeded expectations and received Gold Status for 2012-2013 in one semester. The rankings (Silver and Gold) were created by Net Impact to recognize chapters that go the extra mile in providing valuable opportunities for its members and local community. Smith Undergraduate Net Impact had numerous presentations lined up throughout the year with organizations such as the Northwestern Mutual Foundation and Reznick Think Energy. The chapter even created the Making a Path Career Development Program (MAP) that helped students discover their own impact career aspirations and strengths. Austin Lee, the chapter President, claimed: “Starting a Net Impact chapter has been, by far, the best experience of my college career. Being recognized as a Gold chapter is a real validation of all the hard work that our members put into building this organization.”

George Mason University in Fairfax, VA has also recently incorporated social impact on campus through the development of the Mason Center for Social Entrepreneurship (MCSE). Unlike other social enterprise programs that generally attract business majors, the MCSE welcomes all aspiring students, from every career path and discipline of study, to channel their skills and passions into the work of social entrepreneurship.  Since the launch of the Center in 2011, the MCSE has fulfilled a number of impressing achievements, including the implementation of the Social Innovation Program, an annual, six-week, summer academic course aimed at preparing and empowering aspiring social entrepreneurs; and the Accelerating Social Entrepreneurship Conference, where hundreds of leaders gather to discuss strategies to advance “the movement of social enterprise regionally, nationally, and globally.” Thanks to MCSE, George Mason has introduced their first Masters Degree Program for Social Entrepreneurship. Having been endowed with the Virginia Governor’s Award for Community Service, George Mason University clearly acknowledges the rise of social enterprise and its potential to help solve global issues.

More than ever, universities are truly gearing their efforts toward teaching and engaging in social impact. Before, students were asking themselves: “How can I combine my career focus and still give back to the world?” But now, students have an answer.

The CHiRP Program will continue to highlight some of the most innovative social impact and entrepreneurship initiatives across the country. Want us to highlight your school? Email us at sdoshi@oikocredit.org, Tweet us at @OikocreditUSA, or message us on Facebook!

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA. 

Human Development in the Global South

I recently had the opportunity to review the 2013 Human Development Report by the United Nations Development Program. There is a great deal to be excited about in the realm of international development. The report features the rise of the global south, not only as a contributor, but also as the likely leader in many areas of the global economy and international affairs.

Over the last 30 years, the global south, especially countries like Brazil, China, and India, has made dramatic gains in global output and in the Human Development Index. The Human Development Index (HDI) is a composite of indicators that fall into three categories; Health, Education, and Living Standards. Central to these indicators is equity. According to the report, inequality reduces the pace of human development and in some cases may even prevent it entirely.

The report attempts to distill the major drivers of development transformation from the countries who have made the greatest gains in HDI so that their achievements can be shared with other countries still struggling. The report points to three major drivers of development transformation.

The first is a proactive, developmental state. The report finds that countries that have made the greatest strides in the HDI tend to expand basic social services, invest in their people’s capabilities, and rapidly create new quality jobs.

The second is how developing countries tap into global markets. Newly industrialized countries are successfully “importing what the rest of the world knows and exporting what it wants.” Success has also been found in developing domestic markets and integrating them gradually into the global economy instead of relying on foreign direct investment and multinational companies.

The third is a determined social policy innovation. Countries that have been successful in human development have had to balance economic growth with strong social policies that ensure that the benefits of economic growth are felt by all sectors and groups of a society. This mitigates growing income inequality and helps reduce social conflict.

Although there is much to celebrate and learn from these developments, the report points out that the majority of these achievements have been in Health and Education. Global income inequality remains high. As mentioned above, the report believes that inequality can only hinder human development. Failing to address income inequality, even in a time of rapid development, represents a huge risk to the sustainability of human development in the global south.  In my next post, I will explore how the report recommends the global south address income inequality.

-By Ryan Steinbach

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA. 

Reversing The Microfinance Setback: a Cross Sector Opportunity

The Microcredit Summit Campaign (MSC) recently released its 2013 report: Vulnerability: The State of the Microcredit Summit Campaign Report. This report is the latest update in an ongoing campaign to reach more than 175 million of the poorest families with microfinance services and ensure that 100 million of those families rise out of poverty by the end of 2015. For the first time since reporting began in 1998, the total number of clients and the number of poorest families reached by microfinance declined. This means a major setback for the campaign’s goal.

According to the report, this drop in clients reached was an unfortunate, but expected, setback in the microfinance industry for 2012. Major causes for the decline include backlash from the financial crisis in Andhra Pradesh, oversaturation of current markets and misaligned incentive structures that reward MFIs for more clients and higher returns – not a reduction of poverty. To get back on track, the report recommends that the microfinance industry further utilize technology, gain a deeper understand of end users, and use both to develop more appropriate products.

Last week, I had the opportunity to further explore the reports’ insights by joining a webinar on the report hosted by the MSC. A point of discussion that particularly struck me was the importance of group dynamics in microfinance lending groups and the potential risk that technology will hinder them. Professor Luisa Brunori, a psychology professor at the University of Bologna, explained that lending groups—which create a form of moral support for borrowers to help them repay—are not just ways to lower a microfinance institution’s costs and ensure loan repayment. They also provide a medium for intimate interaction that produces what Professor Brunori describes as, “a near infinite amount of relational goods.” These “relational goods” can take the form of a simple sympathetic gesture or support during tough times.

Through her research, Professor Brunori has found that relational goods are a key benefit of lending groups and have a positive effect on microfinance institutions. This point of discussion becomes more interesting when we consider the effect technology, especially mobile technology, has on the benefits of groups. Mobile technology is often depicted as critical to successful financial inclusion due to its wide reach and low cost. But does it rob lending groups of these relational goods in the process?

I’m struck by this point of discussion because, in a broader sense, this is a question of our time. Mobile technology has a huge positive impact on cost, time, and effort but can also have a negative impact on effectiveness and engagement. What is the right balance? This is debated in different industries all over the world. We see it in schools, at offices, and among social circles. What’s exciting is that the microfinance community can (and should) look beyond its own sector for answers.  2U is developing the best methods for delivering university-level education online. Salesforce is working to make the digital work environments more social. The innovations are out there. Let’s work across sectors to find them.

-By Ryan Steinbach

*Disclaimer: The views represented here are the opinions of the individual blog author and do not represent the views of Oikocredit USA.