About INAFI
INAFI (International Network of Alternative Financial Institutions) is a global network of development organisations involved in supporting microfinance programmes of member organisations in Asia, Latin America and Africa and now recently in Eastern Europe too. INAFI brings together microfinance practitioner NGOs at three levels – international, regional (Continental – Asia, Africa and Latin America) and country level as in India, Bangladesh, Philippines, etc. INAFI networks target client group consisting of the poor and disadvantaged particularly, poor women and other vulnerable groups. Since its inception in 1995, INAFI has expanded to reach over 150 member organisations from four continents that provide financial services to the poor.
About INAFI India
INAFI brings together the microfinance practitioners at three levels – global, regional and local. The local denotes the country level networks being promoted now in the Asia region having regard to the diversity and to the magnitude of poverty in the country contexts and INAFI – INDIA is being established in response to the felt need. The Indian chapter of INAFI has been incorporated as a not for profit company in 2003.
INAFI INDIA is diverse and dynamic in its context, outreach, service delivery mechanisms and structure. Our members work in rural, tribal, urban, coastal, desert contexts Some provide microfinance services solely, others have added technical assistance and training (MF+), while others have integrated social development programs (MF++). Some provide direct financial intermediation while others assume promotional roles, supporting self-help grassroots groups, mainly women, and linking them with banks. Interestingly, we also have plus credit approaches where provision of microfinance services follows the development intermediation such as literacy promotion, health, education services etc. A few are still emerging and struggling, a large number are attempting to scale up their portfolio and outreach and there also those that have long reached scale, attained efficiency and have become major players. Diversity is INAFI India’s strength and it facilitates the members to share and learn from their successes and failures.
History
In the historical city of Cusco, Peru, in March 1995, 24 representatives of Non-Governmental Development organisations of Africa, Asia and Latin America, counterparts of the Dutch Non-Governmental Development Organisation NOVIB, established the International Network of Alternative Financial Institutions, INAFI.
At the first meeting of members held in January 1994 in Bangladesh, we found that all the institutions present faced common situations especially in processes of international changes to face the self-support of financial services with greater productivity and efficiency. At this time, we discovered that we had a lot to learn from each other, despite the diverse reality of our countries and continents, we faced challenges and difficulties in common and the solution that we found to our problems became the principal source of teaching and learning, sharing our errors and achievements, we found a practical management school for popular financial programmes.
One way of increasing our impact and fostering the use of credit and savings programs would be through an interchange of information and personal and institutional experiences, as well as sensitizing the international level to create an environment that would lead to savings and credit activities focused from a development perspective.
INAFI is established by microfinance practitioners and participation remains open to new members in the same field of action that share the Network’s philosophy. The Network has a simple and functional organisational structure comprising three Regional Secretariat, one each for Africa, Asia and Latin America, and an International Secretariat carried out by one of regional secretariats and now country networks in Asia - India, Bangladesh, Philippines, Nepal.
INAFI Global Vision
A World where the poor are empowered and ensured sustainable livelihood with dignity.
Mission
The common mission of INAFI members is to contribute to the eradication of causes of poverty, through granting efficient credit, savings and capacity / skill building services to the most depressed human groups, especially women, as part of a support process for sustainable development. Network members intend to encourage the communities to take control of their own lives by improving their economic and social conditions.
The network aims to ensure that the financial requirements of sustainable credit programmes are consistent with the primary social agenda of eradication of poverty and economic empowerment of the poor. The network endeavors to assist its members to become sustainable and expand their range of financial resources, including grants, loans guarantees, and other instruments.
The network members share a common mission of contributing to the eradication of the root causes of poverty through the development of microfinance services that are efficient and well managed and to directly empower the most disadvantaged groups and the other vulnerable groups particularly women. The network is guided by the following objectives to realize the mission.
- To establish and maintain networking among appropriate regional (continental) and country network organisations, which pursue the promotion of microfinance programmes for the poor.
- To contribute to building alternative microfinance institutions which are committed to the sustainable development of their clients.
- To contribute to making savings and credit and other financial programmes of Non-Government Organisations in the Asia, Africa, Latin America and Eastern Europe, efficient instruments for addressing the root causes of poverty and to support sustainable development.
- To improve the capacity of member institutions to increase outreach with commitment to quality of services and performance.
- To provide mentoring, research and publications support to the member institutions.
Core Values
- Inclusive, Holistic, Diverse
- Native, Indigenous
- Alternative
- Facilitating, Enabling
- Innovative, Imaginative
Objectives
The two-fold objectives of INAFI - INDIA are:
- Contribution to Members
- Member graduation through capacity building-perspectives, systems, structures
- Product Development
- Specific Member Services
- Upscaling of microfinance operations - linkage with banks
- Evolving a framework of standards - Beyond Financials
- Self-Regulation with SRO frame work
- Contribution to Microfinance Sector
- Member graduation through capacity building-perspectives, systems, structures
- Capacity Building of Small NGOs
- Research & Development
- Policy Advocacy and Lobby
- Enabling legal and regulatory framework
What is INAFI’s alternative financial perspectives?
The alternative paradigm of INAFI stems from its vision which places the clients at the centre of development. INAFI envisions a world where even the poorest of the poor have been able to attain the life of dignity with basic standard of living including access to food security, clothing, shelter, education and health care. It would like to see a world where the poor, particularly the poorest, have the opportunity to participate in their own development, by enhancing their own skills and abilities to reduce vulnerability and enhance opportunities through access to essential services, including financial services, to transform their lives and build sustainable livelihoods.
In realizing this vision, INAFI recognizes the critical role of microfinance interventions as part of the development strategy in eradicating root causes of poverty. For INAFI, microfinance is a ‘means’ to the larger end of poverty reduction and the interventions of INAFI go beyond microfinance. As a network, INAFI and its members are challenged by the millennium development goals and we are committed for a long-term work to connect microfinance with the MDGs.
The State of the World
More than one out of five people in the world - 1.3 billion people - struggle to live on less than US$ 1 per day. Most of these people live in the under developed regions of Asia, Africa, Latin America and in the rural areas.
Governments have set 2015 as the timeline for meeting the Millennium Development Goals: eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS, malaria and other diseases, ensure environmental sustainability, and develop a global partnership for development.
The Role of Financial Services in Poverty Alleviation
Over the last two decades, experiences have shown that when designed to meet the specific needs of the poor, microfinance can be an effective tool for poverty alleviation. By developing appropriate products and delivery mechanisms, microfinance institutions can help poor people work their own way out of poverty. Additionally, by delivering financial services at a significant scale, microfinance institutions can achieve financial self-sustainability.
Microfinance practices that involve the poor in design and delivery make the poor active participants in their own development and enhances their self-esteem. By providing loan rather than grants, the provider can become sustainable by recycling resources over and over again, reducing dependency on external grant / subsidy.
Microfinance has the following two broad objectives for poverty alleviation.
- Outreach with sustainability - reaching large numbers of the poor and ensure sustained access to the Microfinance services on a long haul
- Impact - ensuring that interventions achieve the dual objectives of economic and social impact
While endeavoring to achieve the above basic objectives, INAFI would adopt the following strategies.
Promote research and development initiatives to enhance product development and institutional capacity to increase outreach, enhance sustainability and improve overall quality of services to clients.
Influence microfinance sector policies and practices to that enable effective donor investments and to ensure that the poorest are served without compromising the autonomy and self-sustainability of the service providers.
Enhance transparency and accountability within the sector by developing appropriate tools and processes for measuring institutional performance and social impact.
