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Volume 8, Issue 8Fall 2007

INSIDE:President’s Message 2 | Donor Spotlight: One Entrepreneur Helping Another 5 | Powering UpGrameen Koota 6 | A Conversation with Udaia Kumar, CEO of SHARE 7 | Diary from Morocco 8

Sub-Saharan Africa’s countriesspan an astounding cultural, linguistic, and natural diversity. Yet, forall its rich resources, it still faces manychallenges, with 300 million people liv-ing on less than $1 a day. To address thegrowing crisis, Grameen Foundationlaunched its Africa Strategy, a bold planto expand into 10 Sub-Saharan coun-tries, serving 350,000 microfinanceclients by 2008.

The plan will serve more individuals like Victoria Ubebeof Nigeria. Her family, like many in Nigeria, could only afford her primary school education. When she became aparent herself, she wanted to make sure her children couldattend university. So she sought to expand her roadsidebusiness selling snacks, but had no collateral to lend from local moneylenders. She heardabout Grameen Foundation’s partner LAPO who does not ask for collateral and offersdrastically lower interest rates. With her loan, she’s now able to offer a wider selection offoods and has a refrigerator to sell cold drinks. Her monthly profit averages 14,000 Naira(USD 111), and she is able to put about $2 in savings every day.

CONNECTIONSCONNECTIONSCONNECTIONS

Continued on next page…

Children of microfinance clients in Uganda gain better healthand education as the profits of their parents’ businesses grow.

AFRICA UPDATE

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our “impact footprint,” my answerwould have been emphatic—Africa. We had gained confidence by workingin the continent’s most populated coun-try—Nigeria—to help our local partnerLift Above Poverty Organization(LAPO) grow from 15,000 clients tomore than 96,000 as of June 2007.Taking further action, my colleague DebBurand led a team of volunteers andstaff to map out a bold new strategy forSub-Saharan Africa, setting ambitiousgoals including reaching 350,000 addi-tional poor families. In this issue, you’llfind a special section dedicated to ourprogress in the plan’s first year. Africa isalready benefiting from an expansion of

our Village Phone initiative, Growth Guarantees program andworld class technical assistance team of staff and volunteers.

In the middle of our tenth anniversary year, GF shows nosigns of slowing down. We are partnering with Sing for Hope,which was co-founded by Monica Yunus, featuring the talents of artists from across the country. The event takesplace on October 12 in New York City and promises to be a celebration of microfinance, education, and a future wherethere is no poverty. To get involved, please visitwww.grameenfoundation.org/singforhope.

In this issue, you can also read about the volunteer effortsof entrepreneur Joseph Noble, learn how Mifos is revolution-izing the way MFIs do business, and follow the travels oflong-time GF volunteer Meera Gandhi on her trip to aMoroccan MFI. Altogether, this issue is filled with new devel-opments, exciting news and plans for progress toward an endto poverty.

Sincerely,

Alex CountsPresident and CEO

I’m continually moved by how microfinance changes the lives of womenlike Sadiyah, (far right), who I met this spring in Indonesia. I was joinedby Amilia Hasbullah (center), from our local partner YKBS.

Dr. Muhammad Yunus, founder of GrameenBank and his daughter Monica, an award-winning soprano with the Metropolitan Operain New York

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If you asked me one year ago where I hoped we would grow

PRESIDENT’S MESSAGE

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Assisting more women like Victoria willrequire what Malini Tolat, RegionalCoordinator for Africa, calls a “three-tieredapproach” in the region. GF will work onlocal (micro) issues such as strengthening individual microfinance institutions. In addi-tion, mid- and macro-level issues will be addressed, such as ensuring government regulations are friendly to microfinance andbuilding the health of professional associa-tions that support the industry. To assist increating and implementing the Africa expan-sion, GF formed an Africa Advisory Council,a group of volunteers and experts on the region. We invite you to read through our special Africa Update to learn more aboutour progress in the continent.

PHONES FOR MILLIONS MORE PEOPLEImagine walking to your neighboring townor community each time you needed to exchange basic information, such as makinga doctor’s appointment or figuring out whattime a store closes. Most of us would simply pick up ourcell phones rather than lose time walking to the busi-nesses to speak in person. However, the latter scenariois all too real for millions of Africans due to unreliable,unaffordable or nonexistent phone service.

Grameen Foundation’s Village Phone (VP) programis aimed at making telecommunications readily available

in rural and devel-oping areas. Theprogram gives aperson a microloanto purchase a cellphone and othermaterials to set up apay phone business.The borrower thencollects fees for callsmade on her cellphone. Grameen

Foundation has successfully deployed VP in Uganda andRwanda, and the program has sprouted an offshoot calledVillage Phone Direct (VPD). It provides all of the benefits of the traditional Village Phone program, butallows microfinance institutions the option to choose the

telecommunications provider, an option that was notavailable under the traditional Village Phone program.

Fonkoze in Haiti has had very encouraging early results in piloting Village Phone Direct. In thePhilippines, Village Phone Operators of the microfinanceinstitution Negros Women for Tomorrow (NWTF) sawtheir average earnings increase by around five to six dollars per week, in addition to a dramatic increase insales from their primary business. NWTF is poised todeploy 250 phones through its network of local branches.

For more information, please contact vpd@grameenfoundation.org and visit www.villagephonedirect.org.

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BRINGING MICROFINANCE TO MORE IN AFRICAThe countries where Grameen Foundation will expand its presencewere chosen for their high potential for outreach and impact, theexistence of a clearly unmet demand for the benefits of microfi-nance, and the opportunity to research and develop new strate-gies that can eventually be shared across countries and continents.

Village Phone Operators often providewhat is the first phone in their village.

“My wife now knows some English,because she deals with customers attimes who speak it. My daughter, who

is one year old, can also say ‘hello,’and I’m very proud of that.”

—John Bosco Kaliwa, Village Phone Operator in Uganda

Participation in Growth Guarantees presentsan opportunity for individuals or institutionsin the U.S. to make a significant impact on

the lives of microfinance borrowers in thepoorest regions of the world. Donor-guaran-tors, or participants who share GF’s vision

that microfinance is a scaleablesolution to global poverty, provide a guarantee to Citigroup.The donor-guarantors do not partwith their money, but enable theirassets to be put to valuable use asguarantees. For example, by providing a guarantee commit-ment of $2 million to the GrowthGuarantees, a donor-guarantorcould generate more than $8 million in direct financing for microfinance, or the equivalentof loans to approximately 50,000women and their families.

If you or your institution wouldlike to commit assets of at least $1million to the Growth Guaranteesprogram, please contact CamillaNestor at cnestor@grameenfoundation.org.

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$1 MILLION FOR NIGERIA’S LAPOThe Lift Above Poverty Organization in Nigeria recently became the first MFI in Sub-Saharan Africa tobenefit from Grameen Foundation’s innovative GrowthGuarantee program. With a $500,000 guarantee fromGrameen Foundation, LAPO secured a $1 million loanfrom a subsidiary of Citibank, Nigeria InternationalBank (NIB), that propels LAPO forward to reach itsgoal of serving 225,000 clients by 2008. The clients arewomen like Roseline Adamu, who runs a grocery storeand has taken five loans from LAPO. “LAPO has raisedme from zero level to a position of self-sustenance andeconomic independence,” she proudly remarks.

The guarantee to LAPO marks the first transaction between a Nigerian MFI andNIB/Citibank, and it is also LAPO's first leveraged commercial bank transaction. Previously,commercial banks were only willing to loan to MFIs if 100 percent backed by a guarantee.This development shows significant progress toward viewing microfinance as a very stableinvestment and increasing the availability of growth capital to MFIs.

One of LAPO’s borrowers, Helen Edobar, showsoff her thriving clothing store.

PIONEERING NEW SOLUTIONS IN KENYA“MIFOS OFFERS US A FLEXIBLE,

COST-EFFECTIVE MANAGEMENT

INFORMATION SYSTEM, GIVING

US THE INFRASTRUCTURE WE

NEED TO EXPAND OUR FOCUS

AND OUTREACH FROM URBAN

TO MORE RURAL AREAS. MIFOS

IS KEY TO JITEGEMEA REACH-

ING ITS TARGET OUTREACH OF

7,000 CLIENTS BY

THE END OF 2008”.

— FRANCIS KIHIKO, CEO

JITEGEMEA IS A SMALL MFI LOCATED IN NAIROBI, KENYA THAT WAS

USING A SIMPLE EXCEL SPREADSHEET TO MANAGE THE ACCOUNTS FOR

CLOSE TO 5,000 CLIENTS. A BETTER SYSTEM WAS NEEDED TO MANAGE

A GROWING RANGE OF FINANCIAL PRODUCTS AND HELP IT TRULY

EXPAND ITS REACH, SO JITEGEMEA BEGAN WORKING WITH A LOCAL

MIFOS SPECIALIST, ADEPT SYSTEMS, AND GRAMEEN FOUNDATION TO

DEPLOY THE MIFOS SOFTWARE THIS YEAR.

The team at Jitegemea preparesfor their switch to GrameenFoundation’s Mifos system.

AFRICA UPDATE continued1

HOW CAN YOU PARTICIPATE IN GROWTH GUARANTEES?

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DONOR SPOTLIGHT: ONE ENTREPRENEUR HELPING ANOTHER

“When I heard aboutGrameen Foundation, itmade me think back to

starting my own businessand how much a chance to

succeed meant to me.”

Joseph Noble approached Grameen Foundation and organized a highlysuccessful benefit event.

YOU CAN BECOME PART OF THEMOVEMENT TO END POVERTY:

IF YOU TOO WOULD LIKE TO BE PART OF THE

GRAMEEN FAMILY, WORKING TOWARD A FUTURE

WITHOUT POVERTY, HERE ARE SOME WAYS YOU CAN

GET INVOLVED:

ORGANIZE A “FRIEND”RAISER: RAISE AWARE-

NESS AND FUNDS FOR GF BY HOSTING A FUN EVENT

FOR YOUR FRIENDS.

DONATE: MAKE A CONTRIBUTION TO A

LONG-TERM SOLUTION TO EXTREME POVERTY BY

SUPPORTING OUR WORK. VISIT WWW.GRAMEEN

FOUNDATION.ORG/GIVE

SPREAD THE WORD: SEND A FREE GRAMEEN

FOUNDATION E-CARD, OR BLOG ABOUT US TO LET

OTHERS KNOW ABOUT THE WORK WE DO.

FOR MORE INFORMATION ON THESE AND OTHER

WAYS TO SUPPORT GF, PLEASE VISIT WWW.GRAMEEN

FOUNDATION.ORG/GET_INVOLVED/

Joseph Noble embodies the idea that the fortunate have a respon-sibility to give back to those in need. He founded Joseph Noble,Inc, a successful textile company, 27 years ago. As a self-madebusinessman, Noble strongly identifies with microfinance. Hevividly recalls the initial struggle he experienced when starting hisown company, and appreciates how microfinance gives that sameopportunity to millions of entrepreneurs across the world.

This past summer, Noble organized an event to debut his newline of textiles, and generously donated all proceeds to GrameenFoundation. Held at the elegant Museum of Contemporary Artin Chicago, this beautiful event was a hit and was supported bysome eighty guests, including designers, suppliers and students.

What sets GF apart in Noble’s mind? He appreciates that avery small sum of money to most Americans can dramaticallychange the life of someone living in one of the developing coun-tries where GF’s partners work. “When I heard about GrameenFoundation, it made so much sense. It’s so simple yet effective. Italso made me think back to starting my own business and howmuch a chance to succeed meant to me,” says Noble.

4 Suresh Krishna, Chief Operating Officer atGrameen Koota, faced a problem familiarto microfinance institutions around theworld. The organization was on a growthpath toward their target of serving 100,000clients and beyond. Krishna needed an affordable data storage system to managethe complex business of delivering financialservices to the very poor and serve its clientsbetter in the process. “We looked at off-the-shelf products and even considered havingsomeone build a customized system for us,”he said, “but we didn’t want to reinvent the wheel.” Local technical assistance to support the new system would be crucial.

Enter Grameen Foundation’s Mifos initiative, a dynamic open source technol-ogy solution aimed at revolutionizing howMFIs manage their businesses. GrameenKoota, a Grameen Foundation partner, wasthe first pioneering MFI to adopt Mifos andis nearing completion in installing the adapt-able software across its 44 branchnetwork. The resources savedthrough an automated system likeMifos unlocks the potential for anMFI to increase its outreach to servemore poor people. Also, since Mifosis open source, it “gives us control

of the development of our system and weare not at the mercy of any particular technology provider,” says Krishna. Alongwith Grameen Koota, four other MFIs are inthe process of implementing Mifos, with interest growing worldwide.

See p.4 “Pioneering New Solutions inKenya,” to see how Mifos is going in Kenya.

Grameen Foundation congratulatesGrameen Koota, winner of the 2007 Pioneerin Microfinance Award.

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POWERING UP GRAMEEN KOOTA

LAUNCHING THE MIFOS PORTALTO STRENGTHEN THE COMMUNITY AROUND GRAMEEN

FOUNDATION’S MICROFINANCE OPEN SOURCE (MIFOS)

PROJECT, MIFOS.ORG WAS RECENTLY LAUNCHED. THE WEB

SITE IS A ONE-STOP SHOP FOR MFIS WHO WANT TO USE

MIFOS, FOR LOCAL IT EXPERTS INTERESTED IN SUPPORTING

MFIS AND FOR DEVELOPERS THAT ARE FREQUENTLY

ENHANCING AND MAINTAINING THE SOFTWARE.

“Mifos gives us control ofthe development of our

system and we are not atthe mercy of any particular

technology provider.”—Suresh Krishna,

COO of Grameen Koota

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SHARE Microfin Ltd, established in 1989, is one ofthe largest MFIs in India, currently serving more thanone million clients across five states. Mr. Udaia Kumaris the Chairman and Managing Director of SHARE.He recently sat down with Grameen Foundation’sMike Getubig for an exclusive interview.

MIKE GETUBIG: When did your partnership withGrameen Foundation (GF) begin?

UDAIA KUMAR: We were associated with theGrameen Foundation from its beginning. And I hadthe privilege and the opportunity to talk to AlexCounts [while he was studying at the GrameenBank], I also remember him taking an interview andpublishing a book called Give Us Credit…and itwas at that point that I came to know of AlexCounts. And when he published that book, then I realized that he was a great communicator and writer.

MG: Howelse has GFworked tosupport SHARE?

UK: Grameen Foundationhas spoken with differentstakeholders in India, andthey have helped in tryingto get a fair policy [for microfinance] in India.Grameen Foundation alsohas written good articles innewspapers about microfi-nance, not only in India, butalso outside India, and triedto share the Indian experi-ence with people who liveoutside the country. Themedia support has beenquite good. GF also provides guarantees…wherebanks can connect with MFIs, and get more comfort because a third party is introduced.

MG : What is your view on the changing landscapeof increasing competition between MFIs?

UK : Any activity which is profitable and has a goodimpact would definitely attract more individuals totake up such activity. I feel that competition is goodfor both the clients and for MFIs. If there is a monopolistic situation, then naturally the costs willbe higher…you can see that our rates have, over aperiod of time, come down, because of competition.It also helps with efficiency: providing need-basedservices to the clients, providing the right kind ofservice to the clients. Institutions will have to designthe right kind of products and reduce their operat-ing costs. So I feel that competition is somethingthat is good for everybody, and we encourage competition.

A CONVERSATION WITH UDAIA KUMAR, CEO OF SHARE

A SHARE client with her children at work.

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Udaia Kumar, CEO of SHARE and recipient of the‘Change Makers Award’ for India and also the‘Excellency in Micro Credit’ award in 2002.

50 F Street NW, 8th Floor | Washington, DC 20001Phone (202) 628-3560 | Fax (202) 628-3880 | www.grameenfoundation.org

Vikram Gandhi, a GF Board Member,and his wife Meera Gandhi are loyalfriends of Grameen Foundation. Here,Meera describes her recent trip toMorocco, where she got the chance to seemicrofinance in action.

This past June, I had the privilege of visiting FONDEP, a thriving Moroccanmicrofinance bank, whose client basehas grown by nearly four times in the lasttwo years! I witnessed how microcreditcan truly empower a person with littleor no means to realize a dream.

FONDEP benefits from exceptionally talentedmanagement and the on-the-ground operations

are just as impressive.For example, staff visitclients on foot or bybike, rather than driv-ing, to lower costs andincrease efficiency.Also, the loan officersdescribed their revolv-ing client policy, whichguards against bias inthe loan grants or collection process.

By far, the mostcompelling part of myexperience was meet-ing borrowers ofFONDEP. They wereso proud of their ventures that theydropped what theywere doing to energet-

ically describe their businesses. One borrower used her loan of $800 to openher own tailoring shop. Microcredit enabled her to quadruple her client base in justone year, and she now employs an assistant. The positive effects of microfinance also went beyondthe material. For example, one borrower admit-ted that she had originally opened her jewelrystore to gain greater independence from her husband. However, since starting her business hehas actually become more attentive and arrives atthe store every evening to help her close up andwalk her home.

One thing remained constant among all theconversations I had with these ambitious and resilient women: they all felt very secure in theircurrent situation, and were confidently lookingahead to the future. Personally, I believe thatwomen should honor their families and also pur-sue life-sustaining careers in an ever-expandingglobal economy. Microcredit can be the bridgebetween these two values for women across the world.

DIARY FROM MOROCCO by Meera Gandhi

Meera visited several borrowers, like this one (picturedcenter), with two FONDEP staffers.

Meera Gandhi on the steps of the Universityof Fez.

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