Exploring the Role of Subsidy Through Three Lenses

Fiw Topics

MSEs
Women's Financial Inclusion

Fiw Year

2024

Transcripts:

English

Spanish

French

Summary + Key Insights

Andree Simon and Greta Bull discuss the role of subsidies in driving impactful microfinance and financial inclusion, focusing on cost, technology, and targeting marginalized populations.

💡 Cost of Funds: High borrowing costs hinder microfinance institutions. Subsidies can mitigate these costs, allowing institutions to offer lower interest rates to clients. This creates a more sustainable financial ecosystem.

💻 Technology’s Role: While digital tools can enhance services, they must align with organizational goals. Strategic technology investments can streamline operations, reduce costs, and improve client experiences.

🎯 Targeting the Marginalized: Effective outreach to underserved populations requires tailored products and services. Understanding clients’ needs is crucial for financial inclusion, particularly for women and small farmers.

🌐 Local Financing Solutions: Encouraging local currency financing through subsidies and guarantees can reduce dependency on external funding, making microfinance more accessible and affordable.

🔄 Stakeholder Collaboration: A multi-faceted approach involving governments, banks, and NGOs is essential for creating a supportive environment that fosters sustainable microfinance solutions.

📈 Leveraging Investments: Strategic use of subsidy can amplify impact. For instance, investments in infrastructure can catalyze significant savings and attract more funds from the banking sector.

📊 Importance of Data Sharing: Robust data infrastructure enables better risk assessment and client targeting, ultimately leading to more effective lending practices and improved client outcomes.

This session summary was AI-generated using NoteGPT.

Meaningfully serving women and low-income entrepreneurs requires an integrated approach that includes education, mentorship, and community support. Operational costs and challenges inherent to the current MFI model increasingly require supplemental funds to sustainably serve these populations. In an interview-style conversation, the two speakers will discuss the role of subsidy across three dimensions: the cost of funds, the use of technology, and targeting of specific client groups. What actors need to work together and what are the biggest challenges in lowering the cost of funds? What are some of the challenges MFIs face in implementing impactful technology change, and how can we make systems-level approaches work? And how can subsidy help financial inclusion efforts reach specific populations, and what’s the benefit of doing so?

Session Speakers

Greta Bull

Director, Women’s Economic Empowerment, Bill & Melinda Gates Foundation

Greta oversees a portfolio of investments in gender data and evidence, women’s economic collectives, and livelihoods development for poor women. Before joining the foundation, Greta worked for 15 years at the World Bank Group, where she served for six years as the CEO of CGAP, a think tank focusing on financial services for the poor. Earlier, she was a manager for Financial Institutions Advisory Services at the International Finance Corporation in Latin America and sub-Saharan Africa, working primarily on issues related to access to finance for the poor. Greta has more than 20 years of experience in development finance, focusing on small and medium enterprise finance, microfinance, digital financial services, payments, and livelihoods. She has worked with financial services providers, development partners, and policymakers in Latin America, Central and Eastern Europe, sub-Saharan Africa, and South Asia. Her clients and partners have included banks, microfinance institutions, mobile network operators, financial technology companies, and major technology firms. Greta has a master’s degree in public policy from Harvard University’s John F. Kennedy School of Government and an undergraduate degree in international studies from the University of Washington.

Andree Simon

President and CEO, FINCA International

Andrée Simon is the President and CEO of FINCA International. Andrée oversees FINCA’s work toward one mission: ending poverty through sustainable and scalable solutions driven by the insights and needs of people in the communities where they live and work. FINCA takes a holistic approach to eradicating poverty and creates opportunity for over 6 million people in more than 45 countries, focusing its investments in solutions that generate measurable results in income generation, resilience, and access to education. Andrée has spent more than 20 years at FINCA, helping shape the organization into the one it is today. She first joined FINCA in 2001 as Deputy to the President and CEO and, over the next eight years, played a pivotal role in redesigning FINCA’s microfinance business, transitioning it into a sustainable operating structure with a double bottom line of financial and social performance. Andrée left FINCA in 2009 to serve as President and COO of Women for Women International and returned to FINCA in 2013 to help launch FINCA Microfinance Holding Company, FINCA Impact Finance’s parent company. Andrée served as President and CEO of FINCA Impact Finance from 2016 to 2023.

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