Innovating for Inclusion
At VisionFund, we’re always looking for ways to stay ahead of financial inclusion trends to serve our clients with cutting-edge microfinance programs that enrich their lives and the lives of their families.
We are constantly developing and piloting new products to create solutions for the one million clients we serve who are excluded by traditional finance mechanisms.
Water, Sanitation and Hygiene (WASH)
In the Philippines, VisionFund has been piloting a WASH (water, sanitation and hygiene) microcredit program designed to improve the sanitation and hygiene of rural poor households.
Since 2016, the Kanbankalan and Trinidad branches of our microfinance institution (MFI) in the Philippines have offered loans to clients who wish to build or improve their toilet facilities, or their clean water facilities and supply. Three quarters of those who took a WASH loan have seen remarkable improvements to their health and well-being, with a significant reduction in water-borne diseases.
Most significantly, women and girls have also reported that now that they don’t have to travel far to retrieve water for the family, they have more time for themselves and their families. 82% of surveyed female clients also reported an increased feeling of safety, as they no longer have to go long distances to collect water or defecate in exposed areas.
With the WASH loan now available in 17 branches of the Philippines MFI, VisionFund is exploring new ways to scale-up this pilot into other countries, providing loans for further WASH services. Because of the high cost of toilets, VisionFund is working to ensure a low-cost solution is available to our clients, so that sanitation is accessible to everyone through the power of a small microfinance loan.
In Ghana, VisionFund’s MFI has partnered with our parent organisation World Vision to address the burden of education expenses.
Many clients have requested loans that will help pay for their children’s school fees and supplies, so we have been working to meet our clients’ needs. With a specific education loan, business profits won’t be diverted away from income-generating activity. As 88% of VisionFund Ghana’s clients are women, moving an education loan product into market has been a natural progression for our portfolio.
Our new education product is being piloted across five of VisionFund Ghana’s branches, to 1,000 clients over FY2019-2020. A loan can be taken for up to US $913, ensuring that both our clients and their children, or other dependents, can benefit from the loan. VisionFund will disperse the loan either for the school term or for the year, allowing a shorter loan cycle that is flexible to the school year. The loan allows families to purchase uniforms, school books, and other educational materials so that both children and parents are able to further their education.
In other countries where VisionFund is active – including Armenia, Dominican Republic, Myanmar, Sri Lanka, Tanzania, India and Mexico – education loans are also being tested in market to improve the well-being of clients and children through educational opportunities. In Armenia, loan repayments can be deferred for up to four years, so that our clients can finish higher education and find a salaried job before commencing their loan repayments. VisionFund is optimistic about the potential for education loans to improve child well-being outcomes, all around the world.
Credit for Irrigation
Sufficient irrigation is essential to increase a farmer’s productivity and profitability.
For many farmers living in rural poverty however, a consistent water supply can be hard to come by, especially without the ability to disperse water across many hectares of sown land. Together, World Vision and VisionFund have been working in Zambia to improve the situations of farmers in partnership with World Vision’s THRIVE project model. As part of this model, VisionFund has been testing irrigation loans in five regions of Zambia, providing credit to enable farmers to buy treadle pumps and other irrigation solutions to improve their output and livelihoods.
In 2020, VisionFund will aim to distribute 5,200 irrigation loans as part of the initial three-year test. In one region, farmers reported being able to double or triple the area being farmed, thanks to their new treadle pumps. This increase in land size leads to an increase in production, allowing farmers to access better markets and gain higher prices for their produce. This enables farmers to pay off their irrigation loans with ease.
Early lessons learned have demonstrated to VisionFund the importance of loan timing, to ensure that the treadle pumps are deployed during the planting season so that they aren’t sitting idle in the off-season. Together with World Vision, we are also educating farmers about the best irrigation solutions for their unique crops and lands, so that the structure of their loan for their needs is clearer to them.
Stories From the Field
Inclusive Business in Myanmar
Inclusive Business (IB) is a new and appealing concept to Myanmar. While there is a growing number of social enterprises and corporate social responsibility activities (CSR) in the country, the notion of engaging the poor through core business activities is yet to be established.
Piloting financial inclusion for refugees in Uganda
In an innovative new project, VisionFund Uganda is engaging in product development, capacity building and investment in order to bring financial services to the refugee and host populations in West Nile.
Small and Growing Businesses
Small and Growing Businesses (SBGs) in developing countries are often left behind in the financial services market, deemed too small to lend to, yet too large for traditional microfinance. VisionFund is pioneering new ways to support the growth of SGBs, piloting projects in Mexico, Ghana, Sri Lanka, and Myanmar.