microfinance_toronto - Lions Clubs International

Lions Clubs International Foundation
 Introduction of Microfinance & Social Business concepts
by Neville Mehta, Intl. Secretary, ISAAME, LCI
 Remarks by AP Singh, Past Intl. Director
 Remarks & video from Mr. Binod Chaudhary, Chairman
of Chaudhary Group (CG) & CG Foundation
 Questions + Answers
Lion Arvinder Pal Singh
International Director (2004-2006)
District: 322-B1
Home Club: Calcutta Vikas (45734)
Lion Since: March 1984
Lion A P Singh has been credited with 13 International President’s medals and
the highest award ‘Ambassador of Goodwill’. He is a Progressive Melvin Jones
Fellow and a Major Gift Donor for CSF II. He is also the First Lions Clubs
International Foundation Heritage Club member of 322-B1.
He has regularly served as a faculty on more than 25 LCI and Regional
Leadership Institutes. His latest contribution in extending new initiatives is
the establishment of Eastern India Lions Leadership Academy which includes
video conferencing facility in all districts of MD 322. He has also been
organizing webinars to reach out to clubs in furthest corners.
The Lions of Kolkata (India) have accepted Microfinance under the
leadership of Lion A P Singh and are moving ahead as this can have a radical
impact on facing the menace of poverty and changing lives of people.
Mr. Binod Chaudhary born on April 14, 1955 is a
Nepalese businessman, industrialist and philanthropist. He is the
current Chairman of Chaudhary Group (CG), a conglomerate that
consists of nearly 80 companies. Mr. Chaudhary is also the first Nepal
billionaire as listed by Forbes. Besides, business, Mr. Chaudhary has
been involved in various other government and social sectors. He
worked as a member on constituent assembly and parliament of Nepal
from April 2008 to May 2012. His CG Foundation works for social
welfare and he often contributes in the areas of art, music and
literature as well. He is also a former Leo member.
What is Microfinance
It is estimated that approximately 2.5 billion people around the world live in poverty,
struggling to survive on less than US$2 a day. Yet for people living in poverty, it’s all
they have to provide for the needs of their whole family. Families living in this kind of
poverty struggle to afford even the most basic of items. They are unable to afford
adequate meals, clean water or an education. They go without proper shelter,
transport and even medicine when they are sick.
The Solution: Microfinance…
Microfinance refers to an array of financial services like loans made available to poor
entrepreneurs and small business owners who have no collateral and wouldn’t
otherwise qualify for a standard bank loan. Most often, microloans are given to those
living in still-developing countries who are working in a variety of different trades,
including carpentry, fishing and transportation.
The goal of micro financing is to provide individuals with money to invest in
themselves or their business to help get them out of poverty. When providing loans,
micro financing institutions do not require collateral, but do insist that the loan is
repaid within six months to a year.
 Helps poor households meet basic needs
 Protects them against risks.
 Provides working capital for income generating activities.
 Provides additional capital for expanding business.
 Helps in asset creation
 Provides employment opportunities.
 Save poor from the trap of money lenders.
July 6th 2014
Micro Finance & Social Business
A reflection on the topic by
Mr. Binod Chaudhary
peace cannot be achieved unless
large population groups find ways in
which to break out of poverty„
Prof. Mohammed Yunus
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Micro Finance
Grameen Bank
 Financial source
 Clear definition of poor
 no collateral needed
 Maximum 20 % (int. avg. 30)
 Focus on the poor
 Lending groups
 2 main models
 Strong decentralized structure
 Relationship based model
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 Real money (M1)
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History Nepali Micro Finance
 1960: first appearance for flood victims
 1970: first scale approaches: failed
 1980: Social approach: group guarantees
 1990: institutionalization: rural development banks
 1995: commercialization started: NGO  MFI
 1998: Regulations of MFI
 2003: Banks and Finance Institution act
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Variety of players
Commercial Banks
Key MFIs
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16,854 SACCOS
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Poverty Line
25 % below
33 %
reached by
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Success-Stories in Nepal
 2.5 Million families reached
 Maximum 1500 $ without guarantee
 Total loan disbursed USD 1.67 billion
 Loan recovered ratio 99 percent
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Challenges Include
 Lack of Risk Management
 Inadequate Use of ICT
 Delivery methodology not considering geography
 Poor financial literacy
 Lack of demand and supply in wholesale fund
 Limited penetration in hilly regions
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Microfinance in context
Social Business SeedCapital
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Social Business
 Next step after Microfinance
 Empowers leaders
 ‘scaleable’ organization
 Considers a bigger group of stakeholders
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What is Social Business?
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What is Social Business & NSB
 Animated Video
 https://www.youtube.com/watch?v=gi5biNDk1Mc
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Why is it different?
 Skills to grow
 Refined skills and scalability
 Macroeconomic more sustainable
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