Workshops outputs

In the first workshop we discussed two approaches to community empowerment, the PAP or CDA approach and the Grameen methodology. The first one has been used in Egypt and implies that empowerment strategies and actions should not be concentrated in one hand, but its responsibility should be shared among different actors.

Some of the issues and questions that were raised with this approach included the difficulty in planning and the passive participation of the beneficiaries.

The second approach presented is the Grameen methodology. Grameen foundation provides technical assistance, financing promotion and technology to local MFIs in Egypt, Morocco and Saudi Arabia. Grameen Foundation believes in improving the quality of life of the poor, especially of women. We also believe in strengthening the institutions to better serve communities and clients.

One of the methodologies used by Grameen Foundation is the village banking methodology, which usually includes group lending and empowers the institution by providing access to capital and funds.

Some questions and issues that come from this approach:

How does this approach affect the women’s home life?
Does it also affect her relationships in the family and her working life?
Do beneficiaries have to own an income generating activity before asking for a loan?
How do we reach the poorest?
Do CDAs really promote the contribution of those whohave the power inside the organization?
and finally, are microloans really a community empowerment tool?

Eng Guido Benevento, Italian Cooperation

As far as PAP is concerned I think that we have dealt with the poverty problem in different ways. In fact that was not only a project for micro projects, but also a project of social and economic dimensions. In accordance with the Millennium Goals, we tried to reach female beneficiaries, promote their development and observed it. Especially for women, the Program supported the local communities in issuing national IDs which enable them to deal with different formal bodies and in organizing their activities; to this we also add the promotion of general culture activities by opening of libraries.

Even if the project has reached high positive results in this field, we cannot deny that it has also faced some difficulties. These were overcome by working together and the honesty in our cooperation proved to be one of the positive aspects of the project. In addition, one of the indicators for the success of that project is that we have begun working in three Governorates, and we have been very concerned on how we could benefit from previous experiences.

At the moment we are still following the same method and the project shows many positive aspects we hope will pass onto the next project. The project also counts for some negative aspects, but they are not worth being mentioned right now.

I believe that if we want to start up a similar project, we must determine beforehand the standards of participation of the foundations, the standards for choosing the beneficiaries of the program and the priorities. Also the high repayment rate, which is around 99%, is a sign of the progress of the projects, but the main objective for us has always been the impact of the project on the beneficiary’s life and its social effects (we hopefully mean improvements) on the beneficiary’s communities.

SECOND WORKSHOP:

MICROCREDIT AND GENDER PERSPECTIVE

Ms Micol Pistilli, gender consultant

Thank you. My name is Micol Pistilli and I am the gender consultant for PAP. The second workshop was moderated by Mrs Huda Badran from Alliance of Arab Woman with the representatives of the National Council of Women.

The main outcomes of the open discussion can be summed up in three main points, assuming that reaching out women clients through microcredit is considered to be one of the main objectives of most international policies that are dealing with poverty fighting.

1. There is a great need of doing much more for women clients. PAP did very good by disbursing over 8,000 loans to women, but if compared with the main outcomes, women still score low rates because they represent only the 25% of all PAP beneficiaries. This means there is a strong need to implement new policies to reach women clients with PAP but also other types of realities working in microfinance. One of the best ways to achieve a higher involvement of women in microfinance is training both the communities and women themselves, but also the field officers, volunteers and the local authorities in order to allow them to be aware of the gender problem and to allow them to operate more gender oriented. PAP. for example. needs to involve more women in the staff, in order to make potential beneficiaries feel more at ease when they approach the CDAs. The CDAs, in fact, should be more dynamic and reach the potential beneficiaries by explaining them what the program can offer and how to apply for it.

2. Microcredit is an effective tool to empower women, especially when it is mixed with other social interventions such as education and training and, in the specific case, in the provision of identity cards. This is a fundamental point: without an ID human beings do not even exist in front of the Authorities. They do not have any right, not only to access finance but also to open an activity or a business.

3. There is a need for a stronger coordination between councils and ministries that are targeting women and are involved in the provision of MF, in order to join resources, share information so to be more effective on the field.

THIRD WORKSHOP:

THE SOCIAL LOAN TRACKING SYSTEM

Mr Sebastien Duquet, PlaNet Finance Morocco

PlaNet Finance is an international non-governmental organization (NGO) that aims at alleviating poverty worldwide by developing microfinance. Its objectives are:

Develop effective tools to develop microfinance worldwide
Guarantee ethics and excellence in the development of all activities
Become a self-sufficient organization by developing diversified and sustainable products

By providing financial access to the poorest populations, financial intermediaries, among which banks, cooperatives, Non-Governmental Organizations (NGOs) and Microfinance Institutions (MFIs) have been proving for thirty years that it is one of the most effective tools to fight poverty.

PlaNet Finance supports financial intermediaries and increases their growth by federating them and providing operational services which enable them to strengthen their technical capacities and financial resources. PlaNet Finance also works with the private sector (banks and financial institutions), governments and international organizations in order to increase microfinance sustainability.

PlaNet Finance, based in Paris (France), has developed operations in more than 60 countries and has established an international network of affiliated offices in Europe (United Kingdom, Italy, Spain, Belgium, Portugal), the United States of America, Latin America (Mexico, Brazil), Asia (India, China, Japan), Africa (Morocco, Senegal, Benin) and the United Arab Emirates (Dubai). PlaNet Finance supports the development of microfinance through a number of activities to strengthen the whole sector, governments and policy makers, or directly MFIs.

This third workshop was dedicated to the analysis of the social loan tracking system, and to compare what could be an open source ^(*) solution with the classical software that exists on the market. I have to say that it was an interesting workshop in which we analyzed the contradicting approach to the application of technologies to deal with development issues, in particular with those regarding microcredit: should we choose an open source solution or should we choose a close source solution?

The first one is a technology that was developed by the PAP together with It Synergy, a consultancy firm.

On the other hand, I have made a presentation of a process we have used in Morocco to select a proper MIS system for six small MFIs, and I have presented the best practice approach for selecting appropriate existing software. In this case, the software used was a closed source software and in order to use it, it is necessary to buy a license.

From the community development point of view, open source can constitute a very good tool. The communities and CDAs recognize that technology is a great support for their activities; for example, the It Synergy Consultant expressed the need for a web based tool to be designed and tailored on their needs.

Somebody also mentioned that open source is some kind of philosophy that asks for a improvement and that improvement can come only from users, such as the CDA. The users of the social loan tracking system, developed in Egypt for PAP, agree that it is a community tool that can be utilized in other countries and in other microcredit programs. This way, the tool itself can also be improved.

The Grameen foundation technology centre is now focusing on the open source to provide a technological solution for microcredit and I have to say that in Morocco we are working together with Grameen foundation on the implementation of the credit program and for it we use exactly the same open source solution used here by It synergy for the social loan tracking system.

The conclusion then was the validation of PAP’s choice to utilize open source technology for its activities.

FOURTH WORKSHOP:

FROM MICROCREDIT TO MICROFINANCE

Mrs Chiara Segrado, UN Fellow, Italian Cooperation

The fourth workshop was moderated by Bas Auer, from the Egyptian consultancy firm EQI, and it was about the shift from microcredit to microfinance. After a very interesting discussion we came out with six points that I am going to summarize as follows:

1. The majority of microcredit projects focus on the support to income generating activities, but experience has shown that microfinance is not a panacea that can solve all the poor people’s needs, even if it helps reducing poverty and improving their income. All this leads to the need of widening the range of financial products: in Egypt, for example, there is the need to implement market research to find a specific product for any specific market, but also to make the target groups for microfinance aware of their actual financial needs, because most of those people are not skilled enough to be conscious of the financial needs they actually have. The answers thus could be given by tailoring financial products to their needs.

2. Secondly we focused on the challenges that the microfinance market is facing at the moment, which are: inappropriate regulations and procedures; distorted role of the public institutions in delivering these services, especially by providing grants, which consequently led to a distorted idea of the financial market; the lack of awareness of the private sector for the potentialities of this market. As a matter of fact this sector is not seen as profitable, especially by traditional financial institutions.

3. Thirdly we focused on the best practices and experiences. For example, a representative of the Social Fund for Development told us about one of their pilot projects for developing and providing health insurance in rural areas.

4. The fourth point of discussion concerned some recommendations to make microfinance work in the Egyptian contest and to be more precise: the role of commercial banks in microfinance and the reasons why they should or could be involved in the enterprise through a process of downscaling. The group also recognized that the beneficiaries do need broader financial services, not only credit: that is why most of the practitioners prefer to use the word "microfinance" and not "microcredit". There was an agreement in the group on the great potentialities the cooperation stirs in delivering these services.

5. The last point of discussion was on savings, especially on whether non-financial institutions, for example, NGOs should be allowed to capture savings, a kind of bottleneck in the strategy shift from microcredit to microfinance services. In both cases, there is a need to be met: people need also other kinds of financial services, especially savings, and to that need MFIs could give an answer by acquiring capital for credit services.

IT Synergy is a high tech consultancy based in the Middle East and Latin America. The company has been involved in PAP since early on, taking the lead in the technology development initiative and providing support in the areas of human resource assessment as well as providing techno-infrastructural support systems such as issue tracking tools. Post project delivery, IT Synergy has been engaged in the provision of support to the SLTS under its new ownership and has also engaged in capacity building for the technology recipients.

IT Synergy is, at its core, a technology consultancy with roots in a United Nations initiative. In the mid-1990's, the UNDP was involved in providing technological solutions for state modernization in several Latin American companies. After the project completion, this initiative resulted in the formation of IT Synergy, a company dedicated to technology research and technology-to-market matching. IT Synergy S.A. was incorporated in Peru in 1999, then in the United States in 2001 and, more recently, as an Egyptian company in 2004.

IT Synergy has partnered with many government and enterprise-class clients to implement ICT4D projects, predominantly based on open source for its beneficial technology transfer component. Apart from the PAP initiative with the Egyptian Ministry for Insurance and Social Affairs, IT Synergy is partnered with the Italian Cooperation and the UNDP to provide the Egyptian Ministry of Water Resources and Irrigation with a decision support system based on geographical information systems, in addition to developing geographical information systems as management and decision making aides for solid waste management with the same partners in the Egyptian Gavernorate of Minia.

IT Synergy is involved in many other projects with a wide range of partners as listed on the company website at www.itsyn.com .

The technological component of PAP is called the Social Loan Tracking System, or SLTS for short. The SLTS was developed by IT Synergy in the full spirit and with the proper methodologies of open source, which has significant implications for the viability and sustainability of the project firstly from a technological perspective but, consequently and more importantly, for the entire initiative.

Open source is the name of a technology philosophy which is rapidly achieving prominence in the global information technology industry. Open source software is, at the most basic level, software which is provided along with the source code. Source code represents the instructions from which the computer creates the software which is actually run when the user invokes it; metaphorically, the source code can be likened to the recipe for the software. With open source software, the technology recipient not only receives the software systems but also receives the ability to assume technological sovereignty over said systems. Under the traditional non-open software paradigm, software was sold and the technology user was entirely dependent on the vendor for support, feature requests, upgrades, and training.

The SLTS is placed under the most common and effective open source software license, the General Public License (GPL). Both the client and the server component are open source and, in their capacity as support providers to the MISA, IT Synergy are making the systems available freely for reuse and modification.

With open source providing a technological infrastructure supporting PAP, the initiative achieves a level of sustainability which cannot be achieved using more technology philosophies.