Replication Experience of CASHPOR in Asia

David Gibbons

Fifteen years ago, Professor David Gibbons along with his close associate Professor Sukor Kassim, from the University Sains Malaysia in Penang, launched Amanah Ikhtiar Malaysia, the first known replication of Grameen Bank's micro-credit approach towards alleviation of poverty. It proved to be highly successful in Malaysia, a high middle income country. Today Amanah is one of the largest replication of Grameen outside Bangladesh. Since, then David and his regional network known as CASHPOR have moved on to a number of other important replication projects in the Philippines, Indonesia, Vietnam, Nepal, India and last but not the least, in the People's Republic of China. David sums up his valuable experience with replication in Asia and the Pacific, of what he calls, the Essential Grameen.

That's right, we have been at it for the last fifteen years! What important things can be said based on this experience that spans over a decade and a half, in different countries an Asia and the Pacific?

The GB approach to reduction of poverty through the provision of financial services to poor women can be effective any where in Asia:

together CASHPOR network of Grameen Bank replications or GBRs in Asia and the Pacific, has reached over 436,000 poor households in 8 countries, with financial services by the end of June 2000; more than US$45 million was outstanding in their hands, as small loans for income generation; overall, only 1.7% were classified as at risk, meaning that they had arrears of more than 4 weeks duration; total balance of savings amounted to more than US$7 million impact studies show significant reduction of poverty among the repeat borrowers.

This poverty-reduction is being done in a financially sustainable manner:

clients are paying the full costs of delivering the financial services to them; one of CASHPOR's member GBRs, the CARD or the Rural Bank in the Philippines, has become fully financially self-sufficient; several are operationally self sufficient; and · several are close to attaining operational self sufficiency.

Nearly all CASHPOR GBRs could increase dramatically their outreach to the poor and the poorest, if they could get access to the necessary financial resources.:

So the vital question right now is how the GBRs can access the huge amounts of funds necessary to realize their capacity, in order to reach millions of poor households throughout Asia with required financial services, for reduction of poverty?

National-level micro finance funds, like PKSF in Bangladesh, PCFC in the Philippines and MCDF in Nepal, are an important part of the answer, especially for the smaller GBRs to scale up to the numbers of clients at which they can enjoy large economies of scale. But most of the US$21 billion that is estimated by the Microcredit Summit Campaign to be required to provide financial services to 100 million poor women throughout the world, will have to come from commercial money markets, the only source large enough to meet the huge finding requirements. To access large amounts of funds from the commercial money markets, GBRs will have to establish formal, professionally competent financial institutions that are profitable. Governments will have to make this both possible and safe by providing an innovative, regulated legal status suitable for micro finance institutions working with the poor and banks will have to be attracted commercially, to supply the requisite funds.

The great potential of GB type micro finance for widespread reduction of poverty in Asia, in a financially sustainable manner, has been demonstrated clearly. But much work remains to be done by Grameen replicators, governments and banks for the full potential to be realized.

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The author is the Executive Trustee of CASHPOR Inc.