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Annual Report 2012

World Education Australiabuilding skills, changing lives

Our Vision is a world without poverty where people have access to resources and opportunities to improve their own lives.

Our Mission Through microfinance and skills development we enable the poor to improve their incomes and change their lives forever.

Microfinance is the provision of financial services to the poor. Microfinance services are not just loans (microcredit), but include savings, micro insurance and money transfer products. The desire and capacity to save represent a critical step towards economic self-sufficiency.

Skills Building Literacy and numeracy are essential if human beings are to extend their natural capability. Those who want to run any type of enterprise also need basic financial literacy, to understand book keeping, budgeting, borrowing and saving options. Livelihood skills are the vocational and technical know-how that enhance a person’s productivity.

We believe no one deserves a life of poverty.

ContentsOur Mission 2

From the Chair & CEO 4

Where We Work 6

Good Return 8

Our MFI Partners 9

Sustainable Livelihoods 10

Sustainable Energy 12

Social Performance Management 14

Update on Vanmai SCU, Laos 16

Our First Field Ambassador 17

Australian Programs 18

Board of Directors 19

Governance 20

Concise Financial Report 21

Thank You to Our Supporters 262

The objective of the Australian Government aid program, delivered by the Australian Agency of International Development (AusAID) is to assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest. World Education Australia is one of 42 non-government organizations accredited with AusAID.

World Education Australia is a member of the Australian Council for International Development (ACFID). We are a signatory to the ACFID Code of Conduct and committed to upholding it. Our summary financial reports comply with the standards set out by the ACFID Code of Conduct. The Code requires non-government development organizations to meet high standards of corporate governance, public accountability, and financial management.

More information about the Code can be obtained from ACFID. Visit www.acfid.asn.au.

Haydee Moleno’s StoryHaydee runs a sari sari (variety) shop in the Philippines, and her husband is a rickshaw driver in the local village. They’re a typical family in the Philippines that only needed a small loan to greatly improve their lives.

Haydee took out a $75 loan through Good Return to plant a rice paddy and buy fertiliser. She used some of her profits to help pay for her eldest son’s college tuition.

While repaying her loan, Haydee participated in a financial literacy class provided by Good Return. She learned how to track her expenditures and income and manage her debt. Her loan is now repaid, and she is sharing her knowledge with her daughter and daughter-in-law.

Haydee also heard about Good Return’s sustainable energy program, and has started selling solar lamps to her customers as an additional source of income.

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Letter from the Chair & CEOConsolidation and growthAs we look back on 2012, it was pleasing to see our organisation come of age. Now nine years since incorporation, this report shows World Education Australia (WEAL) has consolidated both its financial position and operational capabilities. And in a year of solid growth, our flagship program Good Return further extended its delivery of sustainable training and microfinance solutions to the poorest in our region. The milestone in March of having supported 2,000 vulnerable women across the region was one we are proud to have achieved.

This maturity was rewarded at the end of the year when the Commonwealth agency AusAID accorded WEAL full accreditation status. In addition to endorsement of high standards of operation and governance, this means WEAL is eligible for significantly more government grant support than before. With this extra leverage, we are better resourced than ever to lend a hand to those striving to escape a life of poverty.

Good Return deliversWhile WEAL remains our institutional name, Good Return is now firmly our public face. Its website provides a highly effective means of engaging with the Australian public. This ability to rally so many to the war on poverty in turn attracts corporate partners, who are making the Good Return brand and its message a core part of their social responsibility effort.

WEAL is committed to education, in basic and financial literacy and vocational skills, as the key to empowering people. Donations and donated loans supported our Sustainable Livelihoods program to deliver training to 6,215 women in East Timor, Nepal, Tonga, Laos and the Philippines.

An all too common feature of economic hardship is energy poverty. Our Sustainable Energy initiative operates in six countries, where it has encouraged supply chains that allow the rural poor to access solar power and re-designed

cooking stoves. While still in its build phase, our ‘green loans’ have already helped many households acquire these renewable and energy efficient appliances.

During the year, we continued to work with MFI partners to extend their focus from simply financial outcomes to include social performance and environmental benchmarks. To that end, WEAL has become a signatory to The Smart Campaign, a global agenda to improve transparency and accountability in the microfinance sector. This report provides further information on our achievements this past year.

Thanks to the teamAusAID’s positive feedback during the accreditation process was a well-earned boost to the team. It reflects the progress of recent years, and the effort of staff, paid and volunteer, in helping build a professional management framework. So to all our volunteers and supporters, as well as our corporate partners, we offer grateful thanks. We appreciate and look forward to their continuing support as together we pursue a shared vision of a world without poverty.

Neild McIntoshChairman

Guy WinshipChief Executive Officer

I am so pleased that the Foundation has been able to support a project that has had as much impact as Skills for Life, an initiative which is truly transforming the lives of thousands of people across Asia Pacific, helping them to fight poverty and environmental degradation by teaching them skills, sustainable farming practices and providing access to microfinance.

– Derek Young, Accenture Australia Foundation

Thank you to our corporate partnersWorld Education Australia’s corporate partners have provided us with invaluable support. This support is in many forms; funding, pro bono work, skilled volunteering, and employee engagement.

We would like to extend a particular thank you to:

• Accenture Australia Foundation• Origin Energy Foundation• Westpac Group• Clayton Utz• Deloitte Foundation

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Mary Ann and her husband were in debt and had difficulty supporting their family. He didn’t have a regular income and she was caring full time, for her kids and for her bedridden mother-in-law who lives with them.

She decided to take out a loan to help earn money for the family. Mary Ann started with a Php 2,500 loan ($60 AUD), which she ploughed into creating a business, a small shop out of her house selling herbal medicines. She also profited by selling food in her village, repackaging crackers bought in bulk into smaller quantities.

“Life was hard for us since my husband did not have a regular job and we had a hard time making ends meet,” she says about life before the loan.

But even while they were struggling, Mary Ann believed they could live a better life. “I really wanted to do something to help improve our situation,” she says.

Once she had the loan, things became more hopeful. “I felt that life got better. Having a loan helped me to work harder, especially as I need to pay for it every week,” she says.

That start in business from a loan, and the need to pay it off, changed Mary Ann’s life. She was able to make a financial contribution to her family. “Life is different – I became more creative in looking for new ways to earn money,” she says.

Alongside the microfinance loan, Mary Ann participated in financial literacy education offered by Good Return, given through a number of lively sessions which include practical knowledge and experiential learning. For Mary Ann, the most useful lesson was debt management training, which helped her to understand what it meant to be in debt and how to be more astute about money. “I was struck by the story of Sara and I kind of reflected to myself that I don’t want to be

like Sara, who was drowning in debt. I felt that way because during that time, I realized I had lots of debts. I told myself after that day, that I will pay off my loans,” she says. “Today I am happy that I paid some of it and I can sleep soundly at night. Though I still have debt and borrowed money, I only borrow when really needed and I only take out a loan to use for business so I can earn more income.”

Mary Ann also learned to pay attention to cash flow, how to keep records, and to identify expenses that can be reduced. What she learned, she passed on to her husband and two children. “Every time I got home from the training, I would tell my husband and my kids what happened, what I learned and realized from the training. Then I was surprised one day when my husband gave me some money out of his savings,” she says.

Now that she’s repaid several loans and has a successful business, Mary Ann has become a financial literacy trainer in her own village, coaching women on budgeting. She has also become a village agent and sells solar lamps and fuel efficient stoves. “It greatly helped me to pay for the school fees of my daughter in college. I also look at it as a business opportunity. So whenever I do the budgeting sessions, I bring with me sample products so I can present it to potential buyers,” she says.

For someone who only finished high school, the ability to become a trainer has enriched Mary Ann’s life, boosting her confidence and affording her the social status that comes with teaching. “I never had thought about being able to teach others… It’s great to see and hear other clients tell you how they appreciated the training sessions you conduct and that they have learned something from the training. And some of them call me Ma’am!”

Mary Ann Arevalo’s Story

Mary Ann’s cashflow diary.Mary Ann in red, leading a warm-up activity at a financial literacy class. 5

Nepal

Laos

Australia

Philippines

Cambodia

East TimorFiji

Tonga

Kalimantan, Indonesia

East Timor Programs Good Return, Skills for Life, Sustainable Energy

Partners Moris Rasik, Hivos, INFUSE / UNCDF, Irish Aid

Key Activities Microfinance, financial literacy, training team capacity building, MFI capacity building, renewable energy technologies

West Kalimantan, Indonesia Programs Good Return, Skills for Life, Sustainable Energy

Partners Credit Union Keling Kumang, World Education Indonesia, Solidaridad, Stichting DOEN Foundation

Key Activities Microfinance, financial literacy, sustainable agriculture, renewable energy technologies, training team capacity building, social performance management

Nepal Programs Good Return, Skills for Life, Sustainable Energy

Partners Nirdhan Utthan Bank Limited, World Education Nepal

Key Activities Microfinance, livelihoods skills building, basic literacy and numeracy, financial literacy, renewable energy technologies, social performance management

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Nepal

Laos

Australia

Philippines

Cambodia

East TimorFiji

Tonga

Kalimantan, Indonesia

Where We Work

PhilippinesPrograms Good Return, Skills for Life, Sustainable Energy

Partners Saint Elizabeth Community Development Program (SECDEP)

Key Activities Microfinance, financial literacy, training team capacity building, renewable energy technologies, sustainable agriculture, social performance management

CambodiaPrograms Good Return, Skills for Life,

Partners Thaneakea Phum Cambodia, World Education Cambodia

Key Activities Partnership establishment, energy needs assessment

Laos Programs Vanmai Savings & Credit UnionPartners World Education Laos

Key Activities MFI capacity building, sustainable agriculture, gender awareness training

Australia Programs Good Return, ConnectEd

Partners Traditional Credit Union, World Education International, YWCA New South Wales

Key Activities MFI capacity building, training team capacity building, youth employment training

Tonga & Fiji Programs Good Return, Sustainable Energy

Partners South Pacific Business Development Microfinance Ltd.

Key Activities Microfinance, financial literacy, renewable energy technologies, training team capacity building

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Good Return: Our Major InitiativeThe Good Return website is designed to engage Australians to learn more about poverty in our backyard – the Asia Pacific, where two thirds of the world’s poor live. We connect Australians to individuals who need loans to lift themselves out of poverty.

This year has seen robust growth of the Good Return community. We reached the milestone of fully funding 2,000 loans to women by the end of March. We ran four main campaigns: Anti-Poverty Week, Christmas, International Women’s Day, and Mother’s Day. Good Return was featured in media such as ABC Radio, mX, and the Big Issue.

We strive to educate and engage Australians on issues such as microfinance, poverty, sustainable energy, financial literacy, and other topics around poverty alleviation. We do this through our blog, Facebook, Twitter, LinkedIn, and other social media channels. We also maintain a YouTube channel which features videos about what, where, and with whom we work.

Good Return has become a meaningful and personal way for Australians to make a difference in fighting poverty.

Visit the Good Return Website:www.goodreturn.org

Good Return Highlights• 2,591 fully funded loans to women

• 12,955 family and community members benefited through flow-on effects

• 6,215 individuals participated in skills training and financial literacy classes (98% women)

• 654 microfinance institution staff participated in capacity building training (55% women)

• 99.9% repayment of all loan funds

Why I lend...I am thrilled to be able to make a direct, tangible difference to the lives of people across Asia by helping them to start their own business and ultimately lift themselves out of poverty. It’s especially rewarding to think about the knock-on effect the program is having as the women we help can now pay for their children’s education and pass their skills on to the next generation.

– Gabriella, Sydney

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Our Microfinance Institution PartnersWorld Education Australia and Good Return work with microfinance institution (MFI) partners to ensure funds raised through Good Return assist the working poor.

We conduct a thorough selection and due diligence process with all partners. We assess the integrity of the microfinance institution and look for it to share our commitment to transparency and helping the poor.

This year saw the start of two new partnerships with MFIs in Cambodia and Indonesia. All our partners undertake to:

• Push the frontiers of microfinance by reaching out to poorer, marginalised people

• Consider client satisfaction and adjust services to meet client needs

• Strive to improve their efficiency and effectiveness and to pass on cost savings to members

• Share knowledge and be transparent in their dealings with clients, staff, and community

SECDEP, PhilippinesIn the Philippines, our partner is St. Elizabeth Community Development Program (SECDEP) which currently serves its primarily women members from 6 branches on the island of Panay. From its start as a food program, SECDEP has evolved to provide microfinance, education and health-related programs to its members. Good Return helps SECDEP deliver sustainable farming and small business training, and finance for sustainable energy products.

SPBD, Tonga and FijiSouth Pacific Business Development (SPBD) is part of a network of microfinance institutions working in Fiji, Samoa, and Tonga. It is committed to eradicating poverty by giving women in villages the opportunity to start and grow sustainable enterprises. SPBD also provide its clients with a range of services to support home improvements and education. Of all loans distributed, 99% go to women, 80% to clients in rural areas, and some 40% to single mothers. This year marked our Sustainable Energy Program’s expansion into Fiji.

Nirdhan Utthan Bank, NepalNirdhan Utthan, the bank “for uplifting the poor,” was established in 1998 and is now a regulated microfinance bank. It aspires to be a bank with a social conscience that enables the poor to contribute equally to a prosperous, self-reliant rural society. Nirdhan is now Nepal’s largest microfinance development bank, with some 125,000 clients, primarily from rural villages.

Moris Rasik, East TimorMoris Rasik means “independent and dignified life” in Tetun, and it works exclusively with women savers and borrowers. Moris Rasik was established in 2000 as a specialised microfinance institution, and has grown by offering saving services and loans to micro-entrepreneurs in the district capitals as well as rural areas without banks. It is now the largest MFI in East Timor.

CUKK, West Kalimantan, IndonesiaWe began a relationship with Credit Union Keling Kumang (CUKK) this year. Keling Kumang refers to a folk story about a “strong husband and strong wife” who work together to build a resilient community. From humble beginnings, the members of Keling Kumang have made their own folk story – growing to a community of over 110,000 strong. It is based in West Kalimantan, Indonesia.

TPC, CambodiaAnother new partner, Thaneakea Phum Cambodia (TPC) has a social vision and a business orientation that provides poor women with the economic opportunities to transform the quality of their lives and communities. Its name means ‘village bank Cambodia’ in Khmer. Established in 1994, TPC now has 40 branches and 95% of its clients live in rural areas. More than 40% of its clients are under the national poverty line, and 85% of loans go to women.

All the best to Moris RasikWe are pleased to announce that Moris Rasik has begun its transformation to a regulated financial institution. It has received funding from the World Bank’s International Finance Corporation (IFC) to do so. Funding from NZAid means the financial literacy program, piloted by Good Return, will continue.

It has been our pleasure to have worked with Moris Rasik over the past three years. Together we funded 530 loans to women who wanted to start or grow a small business, and provided 1,423 participants with financial literacy training.

As it takes the next step in its development, we wish Moris Rasik well in its mission to serve families in East Timor.

I would like to thank Good Return for all the great support provided to Moris Rasik in preparing our institution for transformation to a regulated financial institution. I learned a lot personally from our partnership, especially thanks to the huge contribution of Guy [Winship].

– Lola dos Reis, Managing Director of Moris Rasik 9

Sustainable LivelihoodsGood Return strives to ensure that access to finance leads to positive outcomes for the poor. Money used well can help a family escape poverty, whereas money used badly can lead to further indebtedness and despair. To succeed in a market economy, one needs the basic skills and competencies to manage money effectively. Good Return supports the clients of our microfinance partners to develop these skills.

We help to establish a client training unit within the partner microfinance agency, build the training and management skills of the staff, conduct assessments of training needs, and develop training programs based on identified needs. By building local capacity in this way, the microfinance partner can continue to deliver training to its members long after Good Return support has ended.

We develop practical courses that focus on crucial skills such as:

• Basic literacy and numeracy• Household finance: budgets and cash flows• Introduction to savings and credit• Understanding interest rates• Debt management

Converting loans to income requires many skills. Good Return works with local partners to help the poor to

develop the vocational and business skills, knowledge and experience needed to improve their livelihoods. We provide training in:

• Small business management – including how to assess the market, create a business plan, manage finances and market products and services;

• Sustainable agriculture – using proven methods to improve yields and returns in an environmentally sustainable manner.

Clients who participate in a financial literacy or small business management course will develop an understanding of how to calculate profits from their business. They also learn how to make a savings plan for the future, including setting aside something for emergencies. In practical terms, borrowers are better able to manage their money from both a household and a business perspective – meaning they are more informed and can utilise MFI services effectively to lift themselves out of poverty.

Program Highlights• Active in 5 countries: East Timor, Nepal,

Philippines, Tonga, and Laos

• 627 MFI staff trained, 58% women

• 6215 borrowers completed training, 99% women

A group of women after a financial literacy class in the Philippines.

Following the basic numeracy class I know how to count and how to write numbers and how to save money. Now, before I buy something new I make a list and a plan. I have a plan to save money for emergencies and school fees. I can list expenses and income from my kiosk business.

– Training participant from Liquica, East Timor

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Financial diary mentoring in Tonga.Nepalese women at a class.

Llanie in the Philippines teaches her first module of financial literacy. Her class is pictured page 10.

A financial literacy class in East Timor. 11

Sustainable Energy ProgramOne fifth of the population of the Asia Pacific region do not have access to electricity, and many more have only intermittent access. Additionally, 3 billion people worldwide still rely on traditional, biomass solid fuels (wood, charcoal) for their basic cooking and heating needs.

Energy poverty is closely related to economic poverty. Not only does it impinge on normal human wants such as the ability to cook, light or heat a home, it represents a real barrier to social and economic development. The pressure to find fuel absorbs hours of time, usually that of women, and can be highly damaging to the natural environment.

Sustainable energy refers mainly to renewable sources (solar, biogas, wind, micro-hydro), but also energy efficient products, such as stoves that reduce the amount of fuel needed for cooking.

Good Return’s Sustainable Energy Program aims to help poor families gain access to affordable, sustainable energy products. Our approach is ‘connecting the dots.’ We assess the needs of our MFI partner’s clients; we identify potential distributors and suppliers of appropriate products; and finally we connect our partner with the distributor and work with them to develop financial and technical tools to develop a sustainable distribution network over the long term.

By combining sustainable energy with micro-loans, Good Return is able to target poorer segments of the population, who are usually more vulnerable to energy poverty or hardship. Many of these borrowers could not afford these technologies without a loan.

On top of that, microfinance clients – most of them women – are able to earn extra income by selling renewable energy products in their communities. Through training and continuous support, we help them to build their skills and develop a new ‘green’ business.

The Sustainable Energy Program is now active in six countries. We have seen good momentum in the Philippines and progress in Nepal over this financial year. More sales are expected during the next financial year as the program is fully implemented with our newer partners and additional products are included in the supply chain.

Program Highlights• Active in 6 countries: Nepal, Philippines, East

Timor, Indonesia, Tonga, and Fiji

• 350 products sold

• Products include solar lamps, built-in improved cook stoves, biogas systems, solar home systems, and movable fuel-efficient stoves

• 85 women trained as village agents (includes knowledge on use, maintenance, after-sales service, and marketing)

A solar lamp provides a home in Indonesia with affordable and effective lighting without any air pollution.

I was using a kerosene lamp before switching to the solar lamp. It has allowed me to save money by reducing how much kerosene I use. Before, I was using 1 litre of kerosene a week, and now it is only 1 litre per month. Also there is no smoke or soot with the solar lamp, so it is better for my asthma and my kids’ health!

– Village agent in the Philippines

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Launching a new fuel efficient stove in the Philippines.

A newly installed biogas system in Nepal. Elias is mixing animal dung with water to provide his home with clean energy.

Conducting an Energy Needs Assessment in Indonesia and visiting a microfinance-funded, community-managed micro-hydro plant.

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Social Performance ManagementWe strive to be an effective non-profit that creates real benefits in the lives of the MFI borrowers with whom we work. But it is sometimes difficult to measure exactly the outcomes of our programs, and empirically demonstrate positive results.

Social Performance Management (or SPM) provides Good Return and our partners with a framework to set social goals and targets that can be monitored and managed – just as more traditional accounting data are used to measure financial performance.

Good Return partners with MFIs with whom we share a common social mission: to enable the poor to improve their incomes and change their lives forever. Our SPM program will help ensure that our support is creating positive change in the lives of the poor.

As the microfinance sector develops, an increasing number of institutions are reaching profitability, thereby ensuring their services can be sustained well into the future. We are also working with partners to introduce the concept of environmental performance management as part of a wider triple bottom line approach.

Good Return is aligning its work with industry-wide initiatives such as The Smart Campaign, the Universal Standards for Social Performance Management and the use of the Progress out of Poverty Index for poverty measurement, tracking and reporting.

How we’re piloting SPMThis year marks the launch of our SPM program. We have recruited a Social Performance Specialist to implement projects in-country. We have also developed partnerships with the Smart Campaign, national microfinance networks and associations, the Social Performance Task Force Asia working group, and other industry stakeholders.

We are focusing on several initiatives with our partners:

• Conducting in-depth Client Protection Assessments and social audits (using the Cerise Social Performance Indicators tool) to inform targeted capacity building initiatives.

• Helping define social and environmental goals and targets, and embedding these in the planning processes of the institution.

• Supporting the use of poverty scorecards such as the Progress out of Poverty Index. This helps to measure the poverty level of clients and make business and strategic decisions to reduce client poverty and target new clients under a certain poverty level.

• Promoting the adoption of the Client Protection Principles and Universal Standards for Social Performance Management through staff training, industry briefings and targeted initiatives.

About the SMART CampaignGood Return has signed a partnership agreement with the Smart Campaign (ACCION International, USA) to:

• Promote the endorsement and implementation of the Client Protection Principles amongst our partners and their peers in the countries in which they work

• Undertake in-depth Client Protection Assessments of partners

• Build awareness and strengthen capacity of our partners in client protection

The 7 Client Protection Principles are:• Appropriate product design and delivery• Prevention of over-indebtedness• Transparency• Responsible pricing• Fair and respectful treatment of clients• Privacy of client data• Mechanisms for complaint resolution

Universal Standards for SPMThe microfinance sector, with the participation of stakeholders representing MFIs, donors and NGOs, has agreed on the following standards. Good Return is working with its partners to work towards achieving these standards:

• Define and monitor social goals• Ensure board, management, and employee

commitment to social goals• Treat clients responsibly• Design products, services, delivery models and

channels that meet clients’ needs and preferences• Treat employees responsibly• Balance financial and social performance

For more information, see the Good Return website.

The benefits of SPMSocial Performance Management is a powerful tool that helps our partners incorporate our shared social mission into day-to-day practice. At its heart is the core client protection goal of ‘do no harm’. By embedding social performance targets within their standard business practices, they can be true to microfinance’s original promise of improving the lives of the poor.

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James Le Compte, WEAL Microfinance Program Manager, delivering a training session in Nepal on social performance management.

Carmelita Bacasand her husband didn’t earn enough to support three children and save for emergencies. Now, they can.

It’s difficult to meet a family’s needs on just $5 a day. That’s what Carmelita and her husband earn. She receives $2 a day working as the secretary to her local council, paid monthly. Her husband makes deliveries and carries passengers on his motorcycle, and makes about $3 on a good day.

But what happens when the motorcycle breaks and school fees come due? Without any savings to meet these needs, Carmelita turned instead to Good Return, and took out a $125 loan. This boost means that her husband can make repairs and keep working, and her son can stay in college.

Carmelita has fully repaid her loan, and a second one to start a piggery. She just received a third loan to buy another pig, a good sign that her business is thriving!

In Nepal with Nirdhan Bank management working on their social performance management strategy.

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Update on Vanmai Savings & Credit Union, LaosIn late 2010, after several years of ground work by WEAL and our affiliate World Education Inc. Vanmai Savings & Credit Union (SCU) was officially launched in the southern province of Salavan, Laos. The meaning of ‘Vanmai’ is ‘new day,’ and it represents the dawn of an effort to help the rural poor of Laos access financial tools essential to escape poverty.

Vanmai SCU was conceived in 2006 in response to the lack of savings and credit services available to rural households. Recognising the importance of access to finance for economic development and poverty reduction, the goal was to create a robust, locally owned and managed institution that offered those in rural villages a safe place to save and access funds to invest in their livelihoods.

The Lao central bank approved the concept, and WEAL and World Education Inc. raised initial funding from various sources, including AusAID, the Morawetz Social Justice Fund and the Australian public.

Vanmai SCU achieved financial self-sufficiency in 2011, and we expect that it will soon qualify as a Good Return partner. This will allow Australians to support Vanmai directly with loans to its rural clients and with donations to cover the cost of financial education for its rural members.

Mrs Ka, Vanmai SCU memberMrs Ka (pictured below) recently took a loan for preparing her land to plant sweet potato and peanuts, which she will sell at the Lao Ngam market. This is the third loan she has taken from Vanmai SCU, and having turned a profit each time, she has expanded her plantation to cover her growing family’s living costs.

She is also saving to build a new house on her land. The new house will be roomier and built from better materials. Mrs Ka and her husband have 8 children.

Before Vanmai was in Mrs Ka’s village the only option was money lenders who charged 10-15% interest per month. Beyond her financial services needs she has asked Vanmai if it could provide agricultural training, particularly how to reduce the pests that attack some of their crops.

Program Highlights• 657 members across 42 villages in Lao Ngam

District

• 211 loans disbursed to the value of 341.1 million kip ($41,000 AUD)

• Fully covering its own operational expenses

• Seventeen training courses completed by multiple members of the Vanmai SCU staff, Board of Directors, and committees on leadership, effective management, credit management, customer relations, gender awareness and social performance management

• 194 members participated in gender awareness training

• 172 members participated in animal husbandry training

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Anthony Back was World Education Australia / Good Return’s first Field Ambassador. He travelled Nepal for several weeks during December 2011.

While in Nepal, Anthony met and interviewed Good Return clients, hearing first-hand how microfinance and education had given women in small, remote communities the opportunity to improve their own lives.

We hope to grow the Field Ambassador program over the next few years, and this first trip marks a positive start.

On the road in Nepal: December 21, 2011The past 2 weeks have been filled with travel. I have crossed a large part of the Nepal visiting a number of districts where our Good Return clients are situated – from the Terai plains which are made up of flat farmlands to the mountainous Ilam district. It required two days alone to travel up to the west of Nepal on a bus, an experience that I will not forget any time soon!

The two main methods of transportation so far have been motorbike and local bus. At times conditions have been tough, but I’ve been spurred on by the client feedback that I’m receiving.

Shirbati Rajbansi lives in a small village in the eastern part of Nepal. At the end of our meeting I asked her if she had any comments or suggestions. She said, “The loan has improved my family’s life, if I did not have access to this loan I would have to go to money lenders who only give small loans at extremely high interest.”

Sag Rajbansi offered similar comments, saying, “Without this loan I would have to go to money lenders who have a 36% to 45% interest fee.” These and other similar sentiments are widespread in Nepal.

Rina Majhi said that she is very happy with Nirdhan [Good Return’s MFI partner in Nepal] as they are the only bank around. She also said that the loan was helping to make her life a little easier and more hopeful for the future.

Wherever I have been so far with no exception I have been welcomed with warmth. I have now met with 43 clients. The aim of these meetings is to monitor a section of our clients to assess how our programs are progressing.

I think it is important for us in Australia and the developed world to imagine what our lives would be like without access to a bank or similar institution. How would you buy your house or apartment? Where would you put your savings? How would you start that business you have been dreaming of? Life would be a lot harder.

These Good Return clients are now able to get much needed funding so that they have the opportunity to begin to save their money safely, construct their family home and start a business which will support their family. It is an important step towards lifting themselves out of poverty. The loan that Good Return gives also provides livelihood training so that their improvements are sustainable.

– Anthony Back, Good Return Field Ambassador

Our First Field Ambassador

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Programs in AustraliaConnectEd with YWCA NSWWorld Education Australia in partnership with YWCA NSW, World Education Inc., and Alcatel Lucent Foundation is working to implement ConnectEd, a program that addresses the factors limiting the work and life options of disadvantaged youth in NSW. The program aims to reach 600 young people who are at risk of disengaging, or have already disengaged from education.

Communities targeted by ConnectEd have higher levels of youth unemployment compared to the national average; lower than average levels of income; welfare dependencies; and a high proportion of early school leavers.

The program utilises a range of interventions to equip students with life skills to enter the world of work. The training courses include financial literacy, basic IT and internet safety, health and nutrition, rights and responsibilities at work, safe consumerism, vocational skills training, and personal development. In conjunction with the training courses youth can participate in mentorship opportunities with Alcatel Lucent staff through financial literacy and career workshops. These workshops focus on giving youth an understanding of day to day financial considerations from superannuation to mobile phone plans and immersing them in a real work environment.

The program also seeks to provide work experience and work placement opportunities for out of school youth already disengaged from education.

Program Highlights

• 288 youth participated in ConnectEd activities throughout the year

• 203 out-of-school youth participated in programs designed to prepare them for the world of work

• 188 youth received technology training

Financial Literacy with the Traditional Credit UnionDespite its high level of development, Australia’s Indigenous population (approximately 500,000) experience conditions of economic and social disadvantage. Living with high rates of unemployment, overcrowded and inadequate housing, and low levels of education, a majority of Indigenous Australians are faced with great poverty.

As an Australian initiative, Good Return is committed to addressing the issues of poverty and access to financial services here in Australia. We are partnering with the Traditional Credit Union (TCU) in the Northern Territory to deliver financial literacy training to its remote Indigenous members. TCU has 11,000 members, most of whom live in remote communities in Arnhem Land.

The training will equip them with the knowledge and skills to understand and use banking services, save towards a goal, use credit wisely, and manage their income and expenses. The training is being delivered by TCU Money Mentors.

A brainstorming session with TCU staff.

A skills building class at a ConnectEd workshop.

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World Education Australia’s Board sets policy and strategic goals that guide our operations. The Board is made up of not less than five persons who are elected by the members for a renewable two-year term. Elections for the Board take place at the AGM.

Neild McIntosh, ChairmanB.A. (Actuarial Studies), M.A. (International Social Development)Neild has extensive executive experience in business, and now fills non-Executive Director roles in both the corporate and charitable sectors. He is on the board of equigroup (a subsidiary of CBA), and a Vice President of Can Assist, a charity helping cancer patients in NSW.

David KahlerB.Sc., M.A., M.Ed, Ed.D.David is an organisational development and training specialist with over 42 years relevant experience. He is a Vice President of World Education Inc. (WEI), overseeing new program development and management in Europe. David is based in France.

Guy Winship, CEOB.Soc.Sc., B.Com (Hons), M.Sc. (Town & Regional Planning)Guy is a seasoned development practitioner. He has worked with and advised NGOs, governments and others in the areas of microfinance, livelihoods, institutional development, public policy and vocational training across Africa, Asia and the Pacific.

Margaret Wright, TreasurerB.Com., FCAMargaret is a strategic advisor with focus on IT and business. She has run a major consulting business for KPMG and was a CIO within Macquarie Bank. She currently works for Helmsman, an IT consulting company, and is on the board of the National Breast Cancer Foundation.

Pamela JonasB.A. (Hons), M.A. (Public Policy & Management)Pam has over twenty years of experience in education, training, and employment policy. Her expertise is from industry, education and community sectors and applied in a variety of leadership, management, research, and public policy positions. Pam has spent the last year in France.

Gordon CairnsM.A. (Hons)Gordon has extensive experience as a senior executive, most recently as CEO of Lion Nathan Ltd. He now serves as a non-executive director of Westpac, Origin Energy, and Quick Service Restaurants, is Chairman of Origin Foundation, and acts as a senior advisor to McKinsey & Company and Greenhill Caliburn.

William PigottB.S., M.B.Bill is a retired international civil servant, having worked for over 20 years with WHO as an educationalist and international health practitioner in Nepal and Cambodia. He is now involved in community work, especially Landcare, at many different levels.

James MacNeil, AlternateEd. D.James is Vice President of WEI’s Asia Division. He has 20 years experience in education and livelihoods development. With WEI since 1999, he has had oversight of school governance and sustainable agricultural programs in Indonesia and India. James lives in Boston.

Board of Directors

Kate JordanB.Com, LL.B, LL.MKate is a corporate lawyer with extensive corporate advisory, commercial and M&A experience. She is Sydney Managing Partner of Clayton Utz, a leading law firm. Kate was appointed 8 June 2012.

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Legal statusWorld Education Australia (WEAL) is a voluntary not-for-profit public company limited by guarantee. WEAL has charitable status as a registered Public Benevolent Institution (PBI) and has the authority to fundraise in all States of Australia.

World Education Australia Overseas Relief FundWEAL is the Trustee of controlled entity World Education Australia Overseas Relief Fund (WEAORF), which holds Deductible Gift Recipient status from the Australian Tax Office. The objective of WEAORF is to support economic and social development programs to improve the lives of the poor in the Asia Pacific region.

World Education Inc.WEAL shares its name and philosophy with its Founding Member, World Education Inc (WEI), a not for profit, secular, voluntary organisation based in Boston, USA. WEI was founded in 1951 and provides training and technical assistance through non-formal education across the globe. WEI and WEAL operate independently of each other, and all dealings are conducted on arms length terms.

ACFID Code of Conduct WEAL strives to maintain the highest possible standards of governance. WEAL supports and is committed to adherence to the ACFID Code of Conduct as a minimum standard for integrity, governance and reporting. All directors, staff and volunteers are expected to adhere to and uphold the Code of Conduct.

Board of DirectorsThe Board has nine members. Meetings attended during this period: Neild McIntosh, Guy Winship, Margaret Wright, Gordon Cairns, and James MacNeil attended four; Bill Pigott and Pam Jonas attended two; and David Kahler attended one.

Board meetings The Board met four times in the financial year: in September and December 2011, and March and June 2012.

Board committees The Board has three sub-committees: the Audit Committee, the Nominations Committee, and the Remuneration Committee. These Committees meet as needed.

Governance

A proud shop owner in Cambodia.

Llanie, a village agent in the Philippines.

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Independent Audit Report

Auditor’s Independence Declaration

Concise Financial ReportFor year ended 30 June 2012

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Consolidated Statement of Financial PositionConsolidated Group

2012$

Consolidated Group2011

$ASSETSCURRENT ASSETSCash and cash equivalents 1,319,030 1,465,872Trade and other receivables 34,455 21,830Other current assets 72,827 24,347Other financial assets (loans) 138,114 116,135TOTAL CURRENT ASSETS 1,564,426 1,628,184NON-CURRENT ASSETSProperty, plant and equipment 11,816 11,641Intangibles 41,758 80,412TOTAL NON-CURRENT ASSETS 53,574 92,053TOTAL ASSETS 1,618,000 1,720,237

LIABILITIESCURRENT LIABILITIESTrade and other payables 101,112 157,170Special purpose funding 817,639 1,210,639Other financial liabilities (loans) 304,305 139,416Provisions 40,275 31,603TOTAL CURRENT LIABILITIES 1,263,331 1,538,828NON-CURRENT LIABILITIESProvisions 47,073 16,465TOTAL NON-CURRENT LIABILITIES 47,073 16,465TOTAL LIABILITIES 1,310,404 1,555,293NET ASSETS 307,596 164,944

EQUITYContributed equity - -Reserve for designated purpose 306,895 227,569Retained earnings 701 (62,625)TOTAL EQUITY 307,596 164,944

Revenue ExpenditureDonations &

Gifts 16%

AusAID Grants 16%

Australian Grants 32%

Overseas Grants 20%

Investment and other income

17%

InternationalPrograms

69%

Accountability andAdministration 8%

Fundraising 6%

CommunityEducation 2%

Domestic Programs 15%

World Education Australia Limited ABN 39 106 279 225. The full audited financial statements are obtainable at www.worlded.org.au

Ratios based on the Consolidated Statement of Comprehensive Income (excluding non-monetary items).

World Education Australia had no transactions and therefore zero

balances in the following categories: Current Assets inventories, assets

held for sale; Non Current Assets trade and other receivables, other financial

assets, investment property, other non current assets; Current Liabilities

borrowings, current tax liabilities, other; Non Current Liabilities borrowings,

other financial liabilities, other.

Concise Financial ReportFor year ended 30 June 2012

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Consolidated Statement of Comprehensive IncomeConsolidated

Group 2012

$

ConsolidatedGroup 2011

$REVENUEDonations & gifts: Monetary 286,749 220,528 Non-monetary 244,424 99,096Grants: AusAID 289,858 272,201 Other Australian 584,277 287,988 Other overseas 366,507 304,906Investment income 57,670 14,676Other income 264,363 126,723TOTAL REVENUE 2,093,848 1,326,118

EXPENDITUREInternational Aid and Development Programs ExpenditureInternational Programs Funds to international programs 752,620 583,443 Program support costs 429,630 312,736Community education 38,405 41,949Fundraising costs Public 87,928 103,910 Government, multilateral and private 11,047 23,339Accountability and administration 129,600 117,631Non-monetary expenditure 244,424 99,096Total International Aid and Development Programs Expenditure 1,693,654 1,282,104Domestic Programs Expenditure 257,542 19,642TOTAL EXPENDITURE 1,951,196 1,301,746Excess of revenue over expenses 142,652 24,372Income tax expense - -Surplus for the year 142,652 24,372

OTHER COMPREHENSIVE INCOME - -Total Comprehensive Income 142,652 24,372

Consolidated Statement of Cash FlowsConsolidated

Group2012

$

ConsolidatedGroup2011

$CASH FLOWS FROM OPERATING ACTIVITIESDonations and grants 1,134,391 2,107,020Customers 206,951 259,439Suppliers and employees (1,665,867) (1,069,763)Interest 57,670 14,676Net cash (used in) / provided by operating activities (266,855) 1,311,372CASH FLOWS FROM INVESTING ACTIVITIESFurniture and equipment (4,959) (2,587)Good Return software and website (22,395) (38,615)Security deposit (597) (549)Net cash (used in) / provided by investing activities (27,951) (41,751)CASH FLOWS FROM FINANCING ACTIVITIESGood Return - net loans received from the public 164,889 107,632Good Return - net loans paid to microfinance institutions (21,979) (93,882)Repayment of WEI loan 5,595 (69,936)Repayment of equipment lease (541) (1,081)Net cash provided by / (used in) financing activities 147,964 (57,267)Net (decrease) / increase in cash held (146,842) 1,212,354Cash at beginning of financial year 1,465,872 253,518Cash at end of financial year 1,319,030 1,465,872

World Education Australia had no transactions and therefore zero balances in the following

categories: Bequests and legacies, revenue from international political

or religious adherence promotion programs, expenditure for

international political or religious adherence promotion programs.

World Education Australia Limited ABN 39 106 279 225. The full audited financial statements are obtainable at www.worlded.org.au

Concise Financial ReportFor year ended 30 June 2012

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Cash Movements for Designated PurposesCash available at beginning of year

$

Cash raised during the year

$Interest

$

Cash disbursed during the year

$

Cash available at the end of year

$DESIGNATED PURPOSESGood Return development: AusAID Innovations Fund 150,000 - (150,000) -AusAID annual allocation 9,456 150,000 (139,858) 19,598Skills For Life 99,597 335,000 (342,039) 92,558Infuse 195,523 170,985 (366,508) -ConnectED 6,063 293,537 (246,205) 53,395Education & Microfinance Expansion 750,000 19,500 (213,784) 555,716Small farmers livelihoods - 83,826 - 83,826Other - 41,000 (28,454) 12,546

1,210,639 1,093,848 (1,486,848) 817,639Good Return - Net loans transactions 95,867 285,500 (4,716) 376,651Total for designated purposes 1,306,506 1,379,348 (1,491,564) 1,194,290Total for other non-designated purposes 159,366 126,883 57,670 (219,179) 124,740

1,465,872 1,506,231 57,670 (1,710,743) 1,319,030

Amounts indicated as cash raised and cash disbursed during the year for Good Return - Net loans transactions represents net cash balance movements with the program’s public lenders.

Consolidated Statement of Changes in EquityRetained earnings

$

Reserve for designated

purpose$

Total$

Consolidated Group Balance at 1 July 2010 107,577 32,995 140,572Items of other comprehensive income - - -Excess of revenue over expenses 24,372 - 24,372Amounts transferred (to) / from reserve (194,574) 194,574 -Balance at 30 June 2011 (62,625) 227,569 164,944Items of other comprehensive income - - -Excess of revenue over expenses 142,652 - 142,652Amounts transferred (to) / from reserve (79,326) 79,326 -Balance at 30 June 2012 701 306,895 307,596

The excess of revenue over expenses from operations of the controlled entity, World Education Australia Overseas Relief Fund, is transferred to a Reserve for Designated Purposes. This recognises that the net assets represented by this reserve cannot be used for any purpose other than providing relief to persons in a developing country certified as such by the Department of Foreign Affairs and Trade; or, on winding up, must be transferred to some other fund qualifying under the Overseas Gift Fund Provisions of the Income Tax Assessment Act 1997.

World Education Australia Limited ABN 39 106 279 225. The full audited financial statements are obtainable at www.worlded.org.au

Concise Financial ReportFor year ended 30 June 2012

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Kaushila Adhikari’s StoryI visited the home of Kaushila in Durgapur, Jhapa, not too far from the Nepalese-Indian border in the south east of the country. Let me preface this story by saying that Kaushila is one of the funniest old ladies I have ever met! She had us in stitches as she told us the story of her life.

Kaushila is 63 years old. She is illiterate and comes from a large family of 8 sisters and 2 brothers. Growing up it was only her 2 brothers that were provided education. She openly shares that she was married at the age of 7 and jokes that she was so young she can’t even remember her wedding day! But the issue of gender is very real in Nepal. She has 1 son and 2 daughters of her own. Kaushila made an effort to give her own daughters a better start in life, and is proud that both of them were able to attend school thanks to her business (one reached 7th grade and the other 9th grade).

Before she had access to microfinance, Kaushila used to borrow money from money lenders in her village – the interest rate she paid ranged from 60% to 120% per annum. She says that one of the biggest benefits of being a client of Nirdhan Bank, our partner in Nepal, is that she can borrow at a reasonable interest rate (20%). She also gets access to training opportunities, like the Good Return-sponsored livelihoods training program.

She smiles as she tells me that for the first time in her life she learnt how to write her own name during our training program. She also learnt how to grow her business and strengthen her own business management skills.

I told Kaushila that her story would be shared with people in Australia so they can better understand the challenges and dreams of Nepalese women. She grins and says, “I have heard something of Australia and when I make enough money from my business I will be going there to visit!”

Kaushila makes a meagre living from the milk of her 3 cows (which were bought with a microfinance loan) and selling the milk within the community. Only one of her cows is producing milk at the moment so she can sell 2 litres of milk a day for a total of 64 Nepalese Rupees (about AUD$0.70). Most of us pay 4 times that amount for a cup of coffee each day.

Her family manage their living requirements from day to day by relying on her son’s salary (he is a truck driver) and from the food they grow on a small plot of land they lease.

At the age of 63 Kaushila feels she should be afforded the small luxury of being able to visit some of Nepal’s religious temples. Her income and the needs of her family keep her from doing so.

I finish my interview by asking her and her husband for a photo. She smiles while I get the shot in focus and says to me, “even if I cannot visit Australia, my photo will go there!”

Kaushila reminded me today of something very important – a sense of privilege for life and a good sense of humour makes you a wealthy person. And clearly age is no barrier!

– James Le Compte, Microfinance Program Manager

Kaushila with three of her grandchildren, who are also in school thanks to her business!

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SupportersWorld Education Australia would like to acknowledge and thank our partners and supporters for their commitment and contribution. These organisations and people have been essential to the impact and sustainability of our work and we thank everyone for their time, funding, and talent.

Australian SupportersAlcatel Lucent Foundation, AusAID, Australian Council for International Development (ACFID), Cosway Australia, Customer Community, Custom House, Downstream Marketing, Fern Software Australia, Harvest the Net, Macquarie University, Nous Group, Nuffnang, PayPal, Porter Novelli, Travel and Associates – Press & James, WiTH Collective, XE.com, YWCA NSW.

Corporate PartnersAccenture Australia Foundation, Accenture, Clayton Utz, Deloitte Foundation, Deloitte, Origin Foundation, Origin Energy, and Westpac Group.

Regional INFUSE / UNCDF, Irish Aid, Microfinance Pasifika Network, Solidaridad, Stichting DOEN Foundation, World Education Inc.

Volunteers, Friends, and Donors Anthony Back, Anton Wiesman, Anne Bissaker, Australian Communities Fund / Morawetz Social Justice Fund, Bradley Abbott, Caroline Armitage, Claire Lagunzad, Damian Fuller, Fionnuala Maye, Jose Hiquiana, Lesley Hume, Mark Dawson, Monique Alfris, Peter van Roekel, Rachel Mulholland, Rina Budiawan, Sandra Carvajal, Saurabh Suman, Stephanie Sheehan, Tahnee Card Company, Ted Harnett, Vincent Cleary, the Greatorex Foundation, the McIntosh Family, the Cairns Family, Valentina Cerutti, our online editors, and all our generous donors.

AmbassadorsAnn Devine, Heath Francis, Shrav Malkani, Andre Karemacher, and Paul Mitchell.

ManagementIn 2012 World Education Australia had a team of full time and volunteer personnel in Australia and overseas. The management team at June 2012 comprised:

Guy Winship CEODiane Bowles Director, Marketing & FundraisingShane Nichols Program DirectorMehul Patel Financial ControllerNicole Stanmore Operations DirectorNorm Sturrock Operations & Risk Advisor

CreditsAnnual ReportJoni Freeman, Norm Sturrock, Di Bowles, Guy Winship, Shane Nichols, Celine Bachelet, Colette McInerney, James Le Compte, Sandra Carvajal.

Photos in Annual ReportCeline Bachelet, Rose Ramilo, Colette McInerney, James Le Compte, Shane Nichols, Monique Alfris, Anthony Back, YWCA NSW.

Complaints ProcessShould you have a complaint or concern about World Education Australia, please contact us using the contact details on the back cover. Please note that all complaints, questions or comments will in the first instance be actioned by a World Education Australia team member within 48 hours.

If this procedure is not appropriate, or you are unsatisfied with their answer, please call us on (02) 9114 8111 within business hours Monday to Friday. Upon request, you can ask to speak to one of our senior executives, either the Operations Director, Marketing Director or Risk Advisor. That manager will make sure your concern is addressed in an appropriate, discreet and confidential manner. You can be assured that every effort will be made to find a satisfactory resolution to your complaint.

ACFID Code of ConductWe are a signatory to the Australian Council for International Development (ACFID) Code of Conduct. Details of the provisions of the Code can be viewed in the ACFID website at www.acfid.asn.au. In the event that your issue entails a potential breach of the Code, you have the option of escalating it to the ACFID Code of Conduct Committee. Their contact details are in their website under the Complaints tab.

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Financial literacy students return home after a class in the Philippines.

Clients of SPBD in Tonga march in their annual parade celebrating the Woman of the Year Award.

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www.worlded.org.auwww.goodreturn.org

PO Box 479St Leonards NSW 1590

Address:Suite 1, Level 7

1 Chandos StreetSt Leonards NSW 2065

E info@worlded.org.auT +61 2 9114 8111F +61 2 9419 6933

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World Education Australiabuilding skills, changing lives