Making International Microfinance Institutions Disability Inclusive: A Call to Action

By Josh Goldstein, Principal Director for Economic Citizenship and Disability Inclusion, Center for Financial Inclusion at ACCION International

It is indisputable that commercial microfinance institutions (MFI) have largely failed to reach a significant segment of the poor: persons with disabilities (PWD). With the clearly stated mission of providing the self employed poor in the informal sector with small loans and other financial products, this market failure is unacceptable and one that the Center for Financial Inclusion at ACCION  International (CFI), in partnership with disability organizations worldwide,  are committed to remedy. Not doing so would make a mockery of the Millennium Development goals since disability is so heavily concentrated among the poor. Indeed, of the estimated 650 million persons with disability, 525 million are in developing countries. The legal and moral obligation to address this market failure is clear but that business case is less certain.

Last June, the CFI (with the support of the Disability and Development team at the World Bank) , held a “summit”  at the World Bank  bringing together leaders of the microfinance industry and disability organizations to see if we could coalesce around some common objectives to jumpstart this initiative. A springboard to action was the 2006 Convention on the Rights of Persons with Disabilities, the first great human rights treaty of the 21^st century. Framing the discussion was a concept paper that CFI prepared, “A New Financial Access Frontier: Persons with Disabilities,”  (http://www.centerforfinancialinclusion.org/Document.Doc?id=830) based on a year of research and informational interviews.  Its conclusions, as discussed below, were widely endorsed by meeting participants.

The lessons from the early days of microfinance, as delineated in the “A New Financial Access Frontier,” are both instructive and a cause for optimism: “When microfinance pioneers like ACCION International and the Grameen Bank first provided loans to poor people in the informal sector in the 1970s, lending to the poor was considered by the majority of international development professionals a losing proposition and certain business folly. How wrong that proved to be. Not only did the poor prove bankable but they were bankable in a sustainable and profitable way. Microfinance was instrumental in this dramatic shift away from seeing the poor as forever dependent on charity or family support, to fully enfranchised citizens able to control their own destinies and contribute to society. Women, in particular, were empowered in dramatic new way to work their way out of poverty. Today, the case for providing financial services to poor people with disabilities faces similar skepticism, some of it based on real service delivery challenges and some rooted in misperception.

While several pilots have demonstrated quite conclusively that persons with disabilities can be successful clients,[i] pilots have limited life spans and the non access status quo for people with disabilities unfortunately returned too. 

Clearly, to achieve a permanent change of MFI culture demands institutional buy in from the top to bottom of the organizations. Such a cultural transformation towards disability inclusion is not as daunting as it sounds since it depends on MFIs taking relatively simple steps towards inclusion as drawn from “A New Financial Access Frontier” and enumerated below:

1. Partnership with Local Disability Organizations for Effective Outreach. In order to effectively and efficiently reach out to people with disabilities, it makes sense for financial service providers to work directly with local disability organizations because these organizations (where they exist) offer entrée into communities of people with disabilities and also provide support services. They may also provide training that strengthens the business capacity of potential clients. (While some Disability Organizations remain committed to running microfinance programs themselves, a consensus is developing that this work is best left in the hands of the specialized financial service providers.)

2. Staff Training to Enable Mainstreaming. One of the first steps toward mainstreaming is to train microfinance staff to increase their awareness of the potential of persons with disabilities to be good clients as well as sensitivity training to increase their ability to do effective outreach.

3. Hiring of People with Disabilities. MFIs should actively recruit persons with disabilities as staff members. Such a human resources policy will make outreach to potential clients with disabilities all the easier and will speed the way to making disability inclusion part of the MFIs permanent culture.

4. Reasonable Accommodation and Universal Design.  Under the Convention on the Rights of Persons with Disabilities (CRPD) it is a legal requirement for Financial service providers (like every other business and public institution) to improve physical access to their banking facilities, in accord with a basic tenet of the UN Convention, particularly when planning new construction. Among the steps to remove access barriers include physical access like ramps and availability of information in Braille or through sign language interpreters. Low cost actions and solutions that affect large numbers of potential clients will be the first to be implemented.

5. Technology Solutions. Technology companies like IBM see the CRPD mandate for reasonable accommodation as an exciting business opportunity which opens up the possibility of many new innovations in the area of information and communication technologies that could revolutionize the workplace for persons with disabilities. What appears to be an “unreasonable” accommodation today may be perfectly reasonable tomorrow.

Finally, it can’t be emphasized enough that mainstreaming clients with disabilities is preferable to designing parallel financial products specifically tailored to persons with disabilities because the latter approach is most likely not sustainable. More and more disability organizations agree with this approach.

While making the moral and legal case (with the widespread ratification of the CRPD) for inclusion of persons with disabilities is not difficult, proving the business case may be much more challenging. One place to begin is with the demographic reality of an aging global population in the twenty first century that is likely to increase the prevalence of persons with disabilities in the workplace dramatically. Current clients of MFIs may “acquire” disability through age related diseases like arthritis or diabetes-- not to mention workplace accident, natural disasters e.g.  earthquakes and man-made calamities like war that can all lead to loss of limb, sight; etc. So this is but one perspective where becoming disability inclusive should makes business sense for MFIs,--but much more research needs to be done to test even this premise.

As microfinance providers and disability organizations, it is incumbent on us to further develop the joint working agenda with specific goals and objective that began to take shape at the World Bank summit in June. If we work closely together we can surely make significant progress toward advancing the human and economic rights of persons with disabilities.  

About the Author

Josh Goldstein, Principal Director for Economic Citizenship and Disability Inclusion, Center for Financial Inclusion at ACCION International

Josh Goldstein is Principal Director, Center for Financial Inclusion at ACCION International. He leads the disability inclusion initiative at the Center. Before joining ACCION, he ran a small non-profit, Timoun Haiti, to help the restaveks (poor servant children) of Haiti and provide ad hoc relief. Mr. Goldstein is an accomplished playwright. His plays have been produced in London and the U.S., and several have been collected in a book Four Plays. His poetry and prose have been published in the New Republic. He is a graduate of Yale University.

About the Center for Financial Inclusion

Financial services tailored to the needs of poor people contribute to poverty alleviation, social justice, quality of life and human dignity. At a societal level, these services also contribute to the economic growth and stability of emerging markets. For these reasons, microfinance has emerged as a leading strategy in sustainable economic development.

For years, the pioneers of microfinance have been leading the movement to expand access to finance. These organizations, mostly nonprofits or specialized financial institutions, embrace poverty alleviation and enterprise development at the core of their mission. Thanks to their success, private-sector players are now moving into the industry at an unprecedented pace, bringing with them enormous resources and potential for growth. With financial inclusion gaining this kind of momentum, we are on the brink of a new era in which economic opportunity for the poor will become more fully integrated into financial markets worldwide.

At this juncture, ACCION International has launched the Center for Financial Inclusion, a collaborative effort to advance the commercial model of microfinance while upholding the interests and needs of poor clients worldwide.

The Center works with a wide variety of actors – microfinance experts, banks, investors, regulators, technology firms, universities and others – to address challenges related to financial inclusion. Center staff collaborates with experts across industries – many of whom have not yet applied their strengths to microfinance or worked at the same table – to develop solutions that enhance the lives of the world’s poor. Research, events, and field-piloting focus on areas such as the double bottom line, microfinance investing, and product and process breakthroughs.

The Center’s goal is to connect the microfinance community with the major drivers of the global economy – e.g. capital markets and technology – and harness their capabilities to address the financial needs of poor people. By bringing these elements together, the Center for Financial Inclusion serves as a bridge between today’s microfinance and a future of economic opportunity for all.

Major Focus Areas: The Center for Financial Inclusion has identified three interrelated focus areas that will be supported by an integrated Publications and Outreach team: Double Bottom Line, Investing in Inclusive Finance and Client-Product Connection.

How the Center Works: The Center serves as a portal for active, outcome-focused collaboration among the microfinance community and the private sector.