MICROBANKING BULLETIN - Microfinance Information Exchange

COMMENTARYCOMMENTARYServing the Poorest, SustainablyAn Interview with David Gibbons, CASHPORAbout CASHPORMicroBanking Bulletin (MBB): How didCASHPOR get started, what is its mission, andwhat services does it provide?David Gibbons (DG): CASHPOR was establishedby the Grameen Bank (GB) and 6 of its replicatorsin September 1991 as a vehicle to shareexperiences and to learn from each other. Over theyears, two main activities have evolved: 1) provisionof management training, surprise audits andtechnical assistance to its members (which nowinclude 20 MFIs in 9 countries in Asia); and 2)establishing GB-type start-ups in places where theyare very much needed and nobody has come forthlocally. Some examples include CFTS Ltd. inMirzapur, India and Project Naroman, which is juststarting in East Timor.CASHPOR wants to achieve a significant reductionof poverty throughout Asia by providing financialservices to poor households. Our mission is toprovide financial services to large numbers of poorwomen throughout Asia in a timely, honest, efficientand financially sustainable manner. As a result of adecision of the board, CASHPOR is currentlyconcentrating on the Philippines and India, but wecontinue to assist members in 7 other countries.CASHPOR no longer takes in direct members,unless there is no national network of GB-typeMFIs. National networks have been promoted inPhilippines, India and Nepal. GB-type MFIs in thosecountries join through their national network, whichCASHPOR assists directly.MBB: What is the relationship between CASHPORand the Grameen Bank?DG: Grameen Bank is a founding member ofCASHPOR. Periodically we call upon them toprovide experienced resource persons to assistother members in need. All members have agreednot to charge professional fees when called upon toassist another CASHPOR member.All CASHPOR members have adapted the GBapproach to their own economic, social, politicaland cultural contexts. We share the same vision asthe Grameen Bank, and like GB we deal exclusivelywith poor households. But in our operations, wetend to give more emphasis to attaining andmaintaining financial sustainability and to reachingthe poorest households. I think Prof. Yunus wouldagree that Grameen was reluctant to charge ahigher interest rate than the commercial banks inBangladesh; and that Grameen doesn’t reachenough of the poorest rural households.It is interesting to see some of the adaptations thatare emerging from CASHPOR members. One ofour MFIs in India, for example, was experiencingportfolio quality problems so it developed aninterest rebate. Each client who repaid on time foran entire quarter received a Rs. 10 refund, and ifthey paid on time for four quarters in a row, theyreceived an additional Rs. 10, or Rs. 50 for theyear. I was amazed at how well that worked inimproving the repayment rate.MBB: For the best CASHPOR members, whatfactors have contributed to their success?DG: The keys to their success have been: 1)capable, honest, visionary leadership; 2) highpriority for increasing their institutional capacity andkeenness to adopt promising new microfinancemanagement tools; 3) enough funding to continueto grow; and 4) CASHPOR’s guidance andassistance. Conversely, our weaker members lackgood leadership and/or are not sufficientlycommercially oriented (see Figure 1).MBB: What are the major changes that have takenplace to CASHPOR’s approach to microfinanceduring the past five years?DG: The most important change was recognitionthat we could not realize our vision unless we gavemore importance to attaining and maintainingfinancial self-sufficiency. To do this we had toimprove our financial management, reporting andanalysis.Most of the CASHPOR CEOs came from an NGObackground with a strong concern for social andeconomic development. Only later did they realizethat, for microfinance to be done well, it has to bedone with a commercial orientation, which meantthat we had to upgrade the financial managementcapacity of our members. CGAP deserves a lot ofcredit for bringing this to our attention.MICROBANKING BULLETIN, SEPTEMBER 2000 13