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September 21, 2020

Social Entrepreneur Gregory Casagrande Highlights How to Scale the Microfinance Industry

Over the last 20 years, the microfinance industry has made significant strides in the ongoing war against poverty. Key achievements include providing the poor with access to a broad range of financial services including credit (for micro-enterprise development, for basic housing, for childhood education), savings accounts, insurance facilities, remittance provisions, and business skills training.  These services have empowered the poor to establish a credit history, become creditworthy, and to launch and grow small businesses to propel themselves economically upward.  Importantly these services are delivered by local staff in a financially sustainable and scalable manner.

However, rather than resting on these laudable successes, microfinance experts such as Gregory Casagrande are calling for the industry to take the next big step — and eradiate global poverty once and for all — by scaling individual microfinance institutions and building new ones. 

“Reading about or talking about the impact of microfinance on the lives of individuals, families and communities is one thing, but actually seeing the radical life-changing differences for oneself is altogether more profound and inspiring,” commented Gregory Casagrande, a serial social entrepreneur and founder of SPBD Microfinance Network, which is the leading microfinance institution in the South Pacific. “Microfinance is not some abstract feel-good program with an idealistic vision. It is fundamentally pragmatic, because it incentivizes the poor to take ownership of their situation and connects them to the economic ladder so they can permanently lift themselves up and out of the cycle of poverty. It is a vivid demonstration of the adage that if you give a person a fish then you provide them with a meal, but if you teach them to fish then you provide them with a livelihood.”

Gregory Casagrande further advises that in order for the microfinance industry to scale, then four battles need to be fought and won: the battle to establish a consistent and clear vision for the microfinance industry, the battle to build financially self-sufficient and scalable delivery channels, the battle to generate investor confidence at both the international and local levels, and the battle for human talent.

“We must never lose sight that the relentless objective of scaling the microfinance industry is to eradicate poverty,” commented Gregory Casagrande, who is also the founder of the microfinance acceleration fund MicroDreams, and of the microfinance advisory company Transformative Ventures LLC. “In addition, we must build financially self-sufficient delivery channels that enable and support regulated microfinance institutions, bankable NGOs and down-scaled commercial banks to reach the massive numbers of poor. To generate investor confidence, we need to integrate rating agencies into the industry and to generate $100 billion in savings, credit and equity worldwide. And when it comes to human talent, the industry has to work hard to attract the best and brightest by giving them a career path that is both professionally and personally rewarding.”

As for success metrics, Gregory Casagrande has also put together a list of criteria that will confirm whether these battles are being won or lost.

“We will know that the battle to establish a consistent and clear vision is won when the men and women on the ground understand and embrace it,” commented Gregory Casagrande, who has served as a director on several impact-industry boards including the International Association of Microfinance Investors (of NY), Microfinance Pasifika (of Fiji), Planet Finance (of Paris), and Plebys (of Irvine, CA (News - Alert)) a Base of the Pyramid investment fund. “We will know that we are winning the battle to build financially self-sufficient delivery channels of microfinance services when there are more than 2,000 such providers around the globe. We will know that we are winning the battle to generate investor confidence at both the international and local levels when microfinance investment vehicles are recognized as separate asset classes. And finally, we will know that we are winning the battle for human talent when aspiring and established professionals enthusiastically choose to enter the microfinance industry, even though they are sought after by deep-pocketed enterprises like Google (News - Alert) and Goldman Sachs.” 

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