Economic Inspiration for the New Year – the 2017 European Microfinance Week

The 2017 European Microfinance Week was held in Luxembourg in early December and top industry executives joined forces to discuss and debate the challenges and opportunities facing Microfinance Institutes (MFIs) and the microfinance industry. This annual event is a unique opportunity for diverse sectors in the industry to come together, network, and think of ways to help drive change and innovation within the industry. With over 490 participants from 66 countries there were representatives from investment firms, MFIs, NGOs, national development agencies and service providers. Plenary sessions, specialized action groups and talks were held throughout the event discussing topics as varied as green finance, rural finance, empowerment of women and SME finance.

Main Topics

The plenaries and workshops sought to examine several aspects of the industry as well as congratulate the winners of the European Microfinance Award 2017 on Microfinance for Housing. Women’s rights and the empowerment of women through microfinance was one of the key areas of discussion during a session moderated by Yasmin Bin-Humam of CGAP, with speakers Bobbi Gray of Grameen Foundation, Anna Zanghi of Mastercard, Imran Matin of Innovations for Poverty Action, and Bdour Al-Hyari of Microfund for Women (Jordan). The key takeaway from this fascinating debate was that outreach to female clients increases the empowerment of women as long as it is conducted with understanding of women and their needs within the environment in which they live.

The workshops during the event were focused on six key areas: green microfinance, digital innovation, rural finance, social performance, investors and donors relations and fundraising. With over 110 speakers at 30 workshops, discussions were held on rural youth and agriculture, financial education, social performance in FinTech, asset finance and finance for refugees. A TED-style talk discussed digital and customer-centric solutions for diverse markets.

European Microfinance Award 2017

As part of a ceremony held at the European Investment Bank, three excelling microfinance programs were introduced as finalists for the 2017 award. The proud winner was Cooperativa Tosepantomin of Mexico, which offers loans for housing in combination with technical assistance to clients in rural areas. The program was nominated for its innovation in customer support and for providing architecture planning, budgetary guidance and ongoing assistance during the building process. The two runners-up were Mibanco of Peru, for its three distinct housing products that include an incremental home improvement loan and sanitation connection product, and First MicroFinance Bank (FMFB) Afghanistan, for its customer-centric products offering ongoing technical support and construction assistance through a partnership network.

Closing Plenary: Optimism and Cautionary Tales

The closing plenary of the European Microfinance Week was a heated debate on the future of the microfinance industry, asking the question, “where is the sector heading in the next five to ten years?” Renée Chao-Béroff, of PAMIGA argued that MFIs that see themselves as a means and not an end will be the ones to make the most significant impact in the next decade. John Alex of Equitas Small Finance Bank, noted that specialization would become key to success, citing the massive demand for a “high level of specialization and synchronicity” experienced in India. Overall it was noted that the current trend among digital providers was to extract value rather than give added value that would uplift communities. MFIs will face new challenges ahead, but innovation based on core values and principles can set the industry apart from traditional commercial finance.