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Water connection with LED Peter

Please check out our home page- a topic of interest to you I think. Warm regards

Gwen

EAST AFRICAN BLOGS

Peter, I am one of them, and Getaneh (Ethiopia) too. I have done some work on water and sanitation issues for 2 years, although on the social impact side of these. I am seriously into local governance- and now expanding this to electronic governance scope. Given that you are an east Africa(ner), could i suggest we delve into the micro-finance current discussion, i would certainly be quite interested to hear of potential links/mislinks between water resources issues and micro finances. I also think we can easily form a generic (East African) network by having thematic discussions-such as the micro-finance ongoing, then our next one becomes water resources management-which you can take the lead for us to follow. In this way we are also likely to attract some of our members who are waiting for their relevant discussions-but the advantage is that we 'omnibus' these along the way! Whats your take?

Jason

Hi all (how many ?)

I'd like to understand where on the site - if anywhere - we can / will be able to / see who takes part in the East Africa community?

I'd be interested to link up with those of you that are interested / involved in integrated water resources management (IWRM) + water sanitation hygiene (WASH) and local governance and since we are on a LEDNA platform the articulation with productive use of water resources.

Ciao Peter

www.irc.nl

Getaneh, Excellent work.

(b) Organizational behaviours and the 'incentive' problem

(c) Inbuilt rationism/methodical exclusion of middle income earners.

(d) Competition disfunctioning-crowding put of noble initiatives through mixing approach

(e) One size fits all model

(f) Communication /infrastructure barriers

(g) Skill related barriers and

(h) Cultural barriers

These are legitimate bottlenecks in my view. More specifically, the communications and skill related barriers  (access traps) are particularly quite of interest. I think these are building blocks which require serious confronting. The skills one could perhaps be tackled through mainstreaming skilling into micro finance service provision, the communications one is a long term one which requires government's investment in capital projects such as constructions. The alternative would be to take these institutions to the localities, rather than expecting locals to 'come' to the urban based micro finance services. Infact, economic logic educates that peri-urbanization and general de-urbanization is probably the most promising way to go as far as the development project is concerned. But this approach has its own impossibilities.

 On a more critical approach, the organizing logic of the problematique you raised above is located within the broader financial sector. For example, the 'crowding out' argument in my view might be cared for by [at least] some mainline banks-certainly in Kenya. Usually the highly competitive entry criteria 'crowds in' middle income earners' increasingly so due to competition. In this case the demand for micro-finance services covers a wider range of those who need it most. This argument enjoins other pro-poor practises such as social policy which register the most success if they are means tested. The means test could be a reasonable option for micro finance. 

Second, and linked, overall, the competition factor is a positive one by all means, which further unlocks the log jams potentially introduced by the one size fits all models. A case in point, in kenya the more local these institutions become the more competitive they become. But i agree on some scale, although slightly different from your angle of approach, the mushrooming of 'everything micro' into a finance institution has recently seen kenyans loose large scales of money, where a good number of institutions become easily hibernating counterfeits for conning purposes. And they are often successful.

On a positive note, competition potentially forces Localization to becomes a supply factor, the alternative being possibilities to get out of businesses/ shrink their businesses if they (micro finance instituions) do not localize. This argument captures the 'mixing model' you pointed out, which might be a positive incentive, as these wide ranging service providers indulge into the micro financing sector. But to be fair, on this point i would be keen to know if you have a series of empirics, or a regression data of some sort which props up the 'mix and spoil' trend which you denote. 

Too much said, i hope others come in for this very interesting discussion.

Getaneh, Excellent work.

You have picked up some very important bottlenecks; among them being (a) poorly designed regulations

(b) Organizational behaviours and the 'incentive' problem

(c) Inbuilt rationism/methodical exclusion of middle income earners.

(d) Competition disfunctioning-crowding put of noble initiatives through mixing approach

(e) One size fits all model

(f) Communication /infrastructure barriers

(g) Skill related barriers and

(h) Cultural barriers

These are legitimate bottlenecks in my view. More specifically, the communications and skill related barriers  (access traps) are particularly quite of interest. I think these are building blocks which require serious confronting. The skills one could perhaps be tackled through mainstreaming skilling into micro finance service provision, the communications one is a long term one which requires government's investment in capital projects such as constructions. The alternative would be to take these institutions to the localities, rather than expecting locals to 'come' to the more urbanized barriers. But this approach ahs its own impossibilities.

On a more critical approach, the organizing logic of the problematique you raised above is located within the broader financial sector. For example, the 'crowding out' argument in my view might be cared for by [at least] some mainline banks-certainly in Kenya. Usually the highly competitive entry criteria 'crowds in' middle income earners' increasingly so due to competition. In this case the demand for micro-finance services covers a wider range of those who need it most. This argument enjoins other pro-poor practises such as social policy which register the most success if they are means tested. The means test could be a reasonable option for micro finance. 

Second, and linked, overall, the competition factor is a positive one by all means, which further unlocks the log jams potentially introduced by the one size fits all models. A case in point, in kenya the more local these institutions become the more competitive they become. But i agree on some scale, although slightly different from your angle of approach, the mushrooming of everything micro into a finance instituion has recently seen kenyans loose large scales of money, where a good number of instituions become easily hibernating counterfeits for conning purposes. And they are often successful.

On a positive note, competition potentially forces Localization to becomes a supply factor, the alternative being possibilities to get out of businesses/ shrink their businesses if they (micro finance instituions) do not localize. This argument captures the 'mixing model' you pointed out, which might be a positive incentive, as these wide ranging service providers indulge into the micro financing sector. But to be fair, on this point i would be keen to know if you have a series of empirics, or a regression data of some sort which props up the 'mix and spoil' trend which you denote. 

Too much said, i hope others come in for this very interesting discussion.

Hi Jason, this is a great initiative and I believe it will respond to a critical need at such times we are  living in. Interestingly, the microfinancing sector is growing very first in developing countries in response to economic pressures. It will be interesting to share different country approaches to microfinancing in periods of economic downturn, policy challenges especially will be a worthwhile contribution. I will definitely be interested in the discussions.

Thanks,

Paul

Dear Jason Musyoka,

Thank you. This is an important topic.

From my experience as a practitioner in microfinance and microenterprise sector, I have summarised the challenges in the following summary, in a paper (Titled: LIVELIHOODS THROUGH MICROENTERPRISE SERVICES? ASSESSING SUPPLY AND DEMAND CONSTRAINTS FOR MICROFINANCE IN ETHIOPIA) I presented at the conference organized by the Ethiopian Economic Association (EEA):

"Rural financial intermediation currently constitutes a key development intervention in many poor countries. Yet, the success achieved particularly in countries who implemented such programmes a couple of decades ago notwithstanding, there remain many constraints limiting both the supply and demand in very poor countries like Ethiopia. Experience from over ten years of financial intermediation reveals that good intentions for expansion of supply are having difficulties due to poorly designed regulations and policies, organizational behaviours, the incentive problem, as well as weak capacity of institutions implementing it. Where poverty alleviation constitutes the main development agenda, rural financial regulations and policies tend to have an in-built rationing mechanism, targeting primarily the poorest and the disadvantaged, thus often missing others who might also have the demand for it. While more efforts are still needed to rectify the restrictive effects of some regulations and policies on pricing and competition, in a situation where there is no strict supervision and monitoring of the effective implementation of the well-intended ones, there are organizations, working without any hard budget constraints and mixing microfinance business with charity, thus crowding out the operations of more sustainable rural financial intermediaries. For those who are intent on implementing the rules of strict financial intermediation, their methodologies are largely replications of those implemented elsewhere, primarily under Grameen, with little capacity to customize it to local realities. No less challenges also remain on the demand side. For the majority poor, the communication system in rural areas, particularly the road network, bars them from accessing the service. Where the access is granted, clients low skill achievement in business development dictates their business’ absorptive capacity to remain weak. Many are risk averse, or don’t like (for cultural reasons) to venture into non-traditional activities, while others have a very low income perspective and simply don’t have the demand for such income-improving services. Such problems manifest themselves more profoundly on women, whose very access and benefit from the service is further limited because of problems emanating from a male-dominated patriarchal societal system prevailing in the country. Closing the supply and demand gap is a daunting task, but not impossible, and should involve microfinance practitioners, government, non-government organizations, donors, etc., -- for failure to do so would stifle efforts aimed at poverty alleviation and development at large."

I look forward to hearing from you.

Getaneh Gobezie

Ethiopia

Micro finance-opportunities and bottlenecks

So here we start; This is an appeal for all East Africaners, but also for the rest of the LEDNA Team

Topic 1. Micro finance-opportunities and bottlenecks

Shall we get Getaneh to give a brief narration of what [Getaneh] you think might be the opportunities and challenges you face as a micro finance specialist in this region? What are the [regional and country level] context specific dynamics you find in the practice?

Starting analytically [and theoretically], my initial thinking is that micro financing in this region [probably replicable elsewhere] could be seen as a critical factor which sustains informalization of economic activities. Tendencies in kenya are, small scale entrepreneurs prefer to multiply their small businesses, rather than expanding the small ones to mega ones-theoretically this would mean moving away from the informal economy to the formal. Yet there are numerous ills located in the informal economy-few of them being lack of social safeties/nets, child labour, general exploitation, and extended feminization of the poverty through  structural immersion of women in the informal economy.

I would be keen  to hear what EA based practises tend towards, whether the aforementioned is a visible pattern /not. And if this is the case (or not) we could begin to explore national [and regional] policy leanings, whether there is a necessary solution to this kind of [ill]practise

Throwing out ideas... Getaneh, whats your take as a practitioner?

Dear Jason, dear Getaneh

Great! Congratulations for this initiative! So Jason, just start whenever you feel ready - and Getaneh, just jump onto the discussion or start a separate one specifically on Microfinance whenever you wish! It is a free blogging world :-)!

Here in SA, we will start only after March 9th, since we are coordinating some topics. But please do not wait for us, we will just check with your topics first - and then add to this.

OK?

Have fun! Looking forward to your inputs :-)!

Best
Marianne

Hi Getaneh,
This is great. I'm in Kenya, we (East African-ers) are starting off next week a regular blogging, intending to share experiences and ideas on our LED practises but also theoretical knowledge. The Southern African Region is also starting off as we hope to do-although they are more active than we are. Will you be the EA contact person for the Tanzania network? Can you mobilize them to get our region started on regular excahnges of ideas? I will be coordinating the Kenya network, and trying to reach out other networks within the region. Just by passing, your micro-finance experience is a very important one for the region, certainly in kenya-we might well start off discussing about it-but perhaps lets test the ground by engaging network members first. 

Kind regards
Jason

 

Marianne,
Only now i realise i had not picked up your comment in reply to my reply! Sorry. Your suggestions sound terrific, i think off grounding your (SA) kind of initiative; specifically throwing up topics for discussion and reacting to ongoing bloggs will do well to get on board and network individuals from that region, and so is this (region). Indeed i am more than happy to start off-this coming week, we are a wide range of us here, and i sincerely would hope the interest for this way forward is there- which i decide to believe it is. I think the catch is to generate topics of interest to members, in which case i will pose few thoughts/questions to a good number of them, we see what we could come up with. To be sure, or probably too sure, East Africa is dominated by national waves of politics, and conflicts, these might easily derail LED issues...in which case we could try and discuss these sorts of waves in LED context. Buit let me be democractic. I will also be more than happy to delve into the SA discussions (it is where i learnt LED after all!) sure to find those interesting.

So, next week it is!

Kind regards
Jason

Dear Colleagues,

I am based in Ethiopia, working on microfinance/microenterprise sector. A growing number of poor people are getting the opportunitiy to get engaged in income generating activities, earning incomes and getting empowered. There are many of us, and looking forward to expanding networks.

Regards,

Getaneh

Hi Jason!

You got the idea perfectly right, thanks! So yes, let's think about a way forward :-)! In South Africa, there is a network of LED practitioners and LED policy makers that organised an LED conference over the last 2 days. As a follow up on the outcomes of the conference, we are thinking of putting up 2 or 3 topics that where discussed at the conference to further discuss them on LEDNA. And there will be a couple of people who - in the background - follow the discussion and provide inputs to stimulate the discussion if needed.

I propose that you choose a similar approach: it seems that you are well embedded in a network of people dealing with LED. Why don't you choose a topic and ensure that you and some colleagues follow the discussion regularly to keep it going - at least at the initial stage?

What we also agreed here in South Africa is that we try to provide input to the Q&A section of LEDNA.

So basically, we are proactive (blogging, put up questions for discussion) as well as reactive (navigate through the page and see where we can provide input).

We hope to start from next week.

What do you think about this :-)?

Warm regards Marianne

Marrianne;

Good initiative. I am one of the east African LED fellows; would be quite keen to engage dialogue/s on a blog. Although i am in the industry cum academia, there are also government practitioners such as the Secretary general of the ssociation for Local Governments in kenya (ALGAK), and others. So yes; lets think of a way forward! Perhaps adhoc discussions as ideas come into mind/from practice, or we select themes where we work through them in a mor structured manner. I'm putting up ideas out there for discussion.

Jason

Marianne This is a good question, to begin with please look at the LEDNA members we already have in East Africa- you will see we already have quite a few Members in your target countries who are either already engaged in LED or who are interested in LED. Currently we have members from universities, national and local governments, local government associations and business associations, private businesses and sole practitioners.

Our platform enables you to send emails to specific members- we have the system set so you can send an email to the member you are interested in contacting- however their email address will not be known to you until they respond. I would start there and see what practitioners they know. Blogging can sound a bit 'hi-tech' but really it is just a written conversation, just like this- Gwen