Soundbites from Nancy Barry, former President and CEO of Women's World Banking

Last night I had the good fortune of sitting in on a talk given by Nancy Barry, a pioneer in the field of creating private, market-based solutions to poverty alleviation for women across the globe. Her talk was very powerful and on many points, spot on accurate in my opinion.

A veteran of the World Bank, she was the second president of of Women’s World Banking from 1990 to 2006. In the fall of 2006, Nancy started launched Nancy Barry Associates–Enterprise Solutions to Poverty, which works with major corporations, emerging entrepreneurs, and leading business schools to build business models that engage low income producers as suppliers, distributors and consumers of products that build income and assets. Simply put, her views come from a career of practice knowledge and her points should be taken with great seriousness.

Below are some highlights from her speech, which was titled “Microfinance and Beyond: Enterprise Solutions to Poverty,” and some of my own disagreements.

Microfinance

• MFIs must look beyond being simply mass-lenders, and instead should aggressively focus on providing a full range of financial products that enable poor women (and men) to build assets. Products like microinsurance, microsavings and so forth are integral to developing a holistic approach to poverty.
• Microfinance and to a larger extent povety alleviaion is no place for ‘do-gooder NGOs’ or what she also termed ‘hobbyists.’ Wanting to do good is not enough, those involved must recognize and build the most efficient and scalable business models possible to actually have a significant impact.
• There must be a grand vision to not only help people but to do so on a truly massive scale. However, we canot do so through hypercommercialization — for example the recent influx of Wall Street capital into MFIs. Instead we must work hard to develop domestic capital markets in the countries within which we operate.

Beyond Microfinance

• One line she said really hit home: “If I am a woman in rural Kenya, I probably should be borrowing” due to the lack of economic activity around that borrower to provide opportunities for payback.
• We must also recognize that microfinance is only an intergenerational solution, and that many of these women have used there incomes to send their daughters to college. But these college graduates do not want to go back to their rural village to sell oranges, they need careers that reflect their educational backgrounds.

Nancy’s Solution: Connecting the BoP with actual companies and major coporations and developing what she describes as inclusive business models that lead to actual job creation. She quoted Shiv Kumar, an executive at ITC, who said that he biggest challenge for business is to figure out “how to connect productively with communities” across the globe.

Moreover, she emphasized the importance of doing this in a profitable way, and repeatedly expressed her skepticism of the ability of government or non-profits to provide such solutions. As she put it, “there is something inherently clean in having a bottom line.”

My Own Two Cents

The talk was one of the better ones I have ever seen regarding an ambitious and aggressive approach to finding ways to scale up poverty alleviation. Many of the specific examples she use highlighted the power that connecting with major corporations can provide.

My one concern, one that I voiced in a question, is that this model does not provide for the means for that country to develop a culture of entrepreneurship among local residents that is independent of her organization. If Enterprise Solutions leaves so does the incentives to be employed. Entrepreneurship is a fragile dynamic that requires constant cultivation from multiple parties, including government actors. For example, bankruptcy laws that are amenable to failure or intellectual property laws that actually protect the inventions of a backyard entrepreneur are the types of incentives that need to exist to increase the likelihood that innovation will occur independent of outside actors.

ESP’s current focus on almost exclusively private side stimulation, seems to overlook this critical variable to the entrepreneurship equation. However, it is possible that the reason for this is that it is still too early in many of these markets to sustain such a culture as of yet.