2008年-世界发展银行全球_Access_to_Finance_and_Markets_as_a_Strategy_to_Address_Poverty_4页_214kb

Summary: Access to Finance and Markets as a Strategy to Address Poverty

Core Content

This document outlines a strategy for addressing poverty in India through access to finance and markets, emphasizing the role of financial services in enabling the poor to engage in low-skilled, economically viable occupations. It presents a comprehensive approach that combines financial inclusion, market linkages, and supporting infrastructure to create sustainable livelihoods.

Main Points

1. Economically Viable Occupations for the Poor

• Many poor households in India can engage in low-cost, low-skill occupations such as buffalo rearing, rural provision stores, fruit and vegetable vending, and home-based crafts.
• These activities rely heavily on public goods (e.g., grazing lands) and in-home under-employment, offering high returns on investment (often over 100% per annum).
• Micro-loans (typically less than USD 250 per household) can catalyze these activities, even if not used for new ventures, by refinancing high-cost debt and providing liquidity for essential expenses like school fees.

2. Pathway to Universal Financial Services Access

• The strategy involves three key components:
  1. Community-based financial institutions (e.g., cooperatives, NBFCs, local branches) that can provide basic financial services.
  2. Partnerships with mainstream financial institutions (e.g., ICICI Bank) to provide on-lending, equity capital, and financial engineering (e.g., insurance, securitization).
  3. Enabling environment through:
     • Venture Capital Funds and Takeout Finance mechanisms.
     • Specialized research centers (e.g., Centre for Micro Finance, Centre for Insurance and Risk Management, Centre for Innovative Financial Design).
     • Technology ASPs like FINO to support transaction quality and cost efficiency.
     • Human resource platforms like MicroFinanceJobs.com.
     • Regulatory support for business correspondents.

3. Scaling Financial Inclusion

• ICICI Bank's Partnership Model has demonstrated the potential for rapid scaling by creating over 100 microfinance partners and increasing micro-loans from USD 1.2 million to USD 522 million in three years.
• The model emphasizes commercial sustainability, local operational models, and client-driven demand.

4. Addressing Other Missing Markets

• Once basic financial access is achieved, the next step is to address missing markets in skill-building, productivity, and quality control.
• Network Enterprises are proposed to improve producer realization within specific value chains.
• Strategic partnerships with large companies can provide value-added services (e.g., commodity marketing, cattle feed, fruit and vegetable procurement) to microfinance clients.
• Health and productivity interventions (e.g., smokeless stoves, treated bed nets, iron pills) can be delivered through MFIs due to their high client contact frequency.

Key Information

• Microfinance clients often prefer dairying and other low-skilled activities, which can be supported through supply chain improvements.
• Market linkages are crucial for scaling impact, as they enable poor households to realize income potential and mitigate risks.
• Large, competitive entities are needed to connect small producers with global markets.
• Social responsibility (SR) programs, such as the Takamol project, can create mutually beneficial partnerships between financial institutions and community organizations.
• Client feedback and behavioral data are essential for targeted interventions and program improvement.

Conclusion

The document argues that financial inclusion is a key driver of poverty alleviation, especially when combined with market access and supportive infrastructure. By building a sustainable financial ecosystem, scaling access to finance, and linking clients to broader markets, it is possible to create positive income shocks and enhance livelihoods on a large scale. This approach is commercially viable, client-centered, and scalable, offering a more effective alternative to traditional grant-based livelihood programs.

Authors and Contributors

• Nachiket Mor: President of the ICICI Foundation, Board of Governors of IFMR, and Chairman of its Managing Committee.
• Bindu Ananth: President of IFMR Trust.
• Supporters: Annie Duflo, Russell Stevenage, Diviya Wahi, Shilpa Deshpande, and Anant Natu.

References

• Ananth, Bindu et al. (2004). "A Blueprint for the Delivery of Comprehensive Financial Services to the Poor in India."
• Helms, Brigit and Xavier Reille (2004). "Interest Rates Ceilings and Micro Finance."
• Khanna, Tarun (2006). "At home, it's not just profits that matter."
• Mor, Nachiket (2006). "Financial Inclusion Experiences from India."

Endnotes

• Microfinance demand in India is estimated at USD 20 billion annually, with nearly 100 million households lacking access.
• ICICI Bank has partnered with venture capital funds (e.g., Bellwether, Avishkar-Goodwell, Lok Capital) to support microfinance institutions.
• IFMR Trust has established Network Enterprises to improve value chain efficiency.
• Small Enterprise Finance Centre (SEFC) was created to address SME financing challenges.

Additional Project Highlight

• The Takamol project in Egypt has shown that social responsibility initiatives can be mutually beneficial and scale effectively.
• Barclays Bank Egypt has benefited from CSR initiatives through increased client base, reputation, and efficient resource use.