in poverty 2.3 billions that’s one third
of human population 2.3 billion can be
defined to either being extreme poor or
moderately poor 900 million individuals
live in extreme poverty and the reminder
is so-called moderately poor if you are
defined being a person living in poverty
the definition basically is a claim to
the amount of money you are able to
spend per day according to the World
Bank today we are talking an average of
1.9 to 2.5 US dollars a day in order to
pay for your nutrition pay for your food
pay for your education pay for medical
care and also pay for your housing if
you have access to 2.5 dollars a day you
will never ever be able to save any
money you will never ever be able to
invest any money and to build your own
future it’s not only about numbers it’s
actually about faces because that’s what
we read the newspapers we always see the
large numbers but what we need to
understand 2.3 billion individuals or
individual faces with stories with
families with kids with fathers with
desires with hopes with anxieties so
what I tried to do initially I tried to
spend a lot of time trying to talk
trying to listen trying to understand
what are the real needs of poor people
today and I spent bulk of my time in
so-called frontier markets or emerging
markets where I usually don’t wear nice
suit azar there as I do today spend my
time somewhere on the road in a pretty
miserable hotel usually and
trying to fight my way together with my
colleagues but to meeting people Africa
is an example you might know today in
Africa hundred and thirty million
children and kids or in the age group of
getting access to schools and
universities out of this number however
only fifty million are actually provided
schooling and education and the reminder
has no access there are excluded from
any hope from any chance to actually
visit a school and go and study this is
a picture in Cameroon I’m not teaching
here I was just taught a French lesson
here because Cameroon as you know is
french-speaking now
poverty we need to understand if you’re
poor you can be homeless or you actually
live in huts without roofs you’ve got no
heating you are exposed to nature 70% of
the population today has no access still
no access to piped water medical care is
a disaster if you are modern if you are
receiving a child the likelihood of
maternal to death is extremely high and
one-third of the population today still
has no access to any recognised identity
has no access to any electricity and
keep in mind without electricity
it gets pretty dark at night it gets
dark starting at 5:00 6:00 p.m. and
evening the only alternative is using
kerosene kerosene is absolute disaster
it brings a lot of illness and lastly
poverty also has got to do having no
access to any banking facility because
only if you have got an access to bank
facility you might be granted alone you
might can ask for credit but if you are
excluded from the banking system you
will not be given the opportunity to
participate in the society we all live
in today now in order to understand how
you can actually fight poverty and all
of you know you know we have been
deploying billions of US dollars or in
development aid over the last decades as
of today
this is still the situation development
aid has reached certain goals has
fulfilled certain objectives but the
four poor level we are seeing today is
still disastrous the recent Nobel Prize
winner Angus Deaton he actually calls
development aid the modern colonialism
and there are other very important there
are people out there doing a lot of
research they believe a aid actually
kills and I want to show you now why I
personally believe together with my
colleagues working together with me our
beside actually providing pure
development aid you can really fight
poverty Nelson Mandela poverty is not an
accident like slavery in apartheid it’s
man-made and can be removed by the
actions of human beings poverty is
man-made Muhammad Yunus forum a Nobel
Prize winner and founder of the Grameen
Bank we have created a society that does
not allow opportunities for those people
to take care of themselves because we
have denied them those opportunities to
take care of themselves that is not what
Aid is about but what impact investing
for example and microfinance and
providing credits to individual that is
basically providing aid and help to
individuals to really work with their
own perspectives and helping themselves
it’s all about including the excluded
how can we include 2.3 billion
individuals in our society in our
financial systems and please don’t be
miss on the stake and people today who
are excluded in the system they have got
one desire they’ve got one hope they
want to become included that is so
important if you’re starving if you’ve
got five children sitting and besides
you and you have get you generate no
income and you’ve got really
difficulties to survive the only wish
and the only dream you had
and ambition is to make that next step
to become included in society Ninh
system you want to help you want to send
your children to education you want to
pay the medical care for your
grandfather etc so it’s all about how to
make people included how to push them
into inclusion that is what microfinance
is actually all about an impact
investing because if you are poor most
likely you have got no access to any
capital just imagine yourself you know
if you were to live in a poor country
let’s take Cambodia as an example fifty
percent of all the people living in a
Cambodia or so-called poor if you are
converting and you would like to develop
and create an own business and help your
family you want to buy you want to sell
you want to produce for all of these
factors you are going to need some money
you need some investment you’re going to
need to buy a couple of pineapples here
in Cambodia you actually can buy
pineapples and you can sell them with a
margin of 25% but you need to have some
money to buy 50 pineapples somebody
needs to give you 50 dollars in order
for you to take them along you know go
from one village to the next village and
sell your pineapples with a margin to
make some profits if you do not have any
cash you will never be able to buy a
pineapple so you need some money and
it’s small money if you ask your friends
and family you will not receive any
funding because most likely your friends
and family will be poor as well you
obviously can go to a bank there are
lots of banks in frontier markets some
of you probably have seen them who
travel a lot the problem is banks will
only provide you money for collateral
for guarantee but since you’re poor
you’ve got no access to any collateral
you cannot pledge anything there’s
nothing you have in your hands so a bank
is not going to help you you can go and
see your so called shark lender the
shark clan the most likely is going to
provide you with some money but research
actually shows for the last 15
is that the default rate by receiving a
funding by a shark lender is close to
90% as no way you will ever pay back
that loan so the only other opportunity
you have is you’re going to see a so
called microfinance institution and a
microfinance institution is going to
give you a loan without collateral it’s
going to be small initially this can be
a loan of $50 in India for example the
average we provide is 50 to 60 US
dollars it can be $1,000 in Southeast
Asia and it can be up to 2 or $3,000 in
Central Asia for example but you’re very
small loans and it’s a loan it’s a
business a loan needs to be paid back
that’s very important and there’s always
an interest rate talked together with
the loan so it’s a business so you
provide money and accessibility to an
individual who actually gets the
opportunity to develop himself you
become a business partner of a poor
people who has no other opportunity in
life impact investing is very different
from traditional investing or from
philanthropy so philanthropy is
providing aid right it’s great support
for a couple of years you can send your
kid into school you might receive some
books but it’s not sustainable it’s not
going to help a family to develop
independently that’s the difference the
impact investing where you provide money
the money needs to be paid back that’s
the important system about that and it’s
not only about because you want to make
money as an investor but it’s
psychologically totally important that
the individual knows it’s a business
relationship and it’s an opportunity to
basically develop financially and
economically and obviously by providing
a loan you’re so sure that you can
guarantee that there’s a social impact
you do not want that the money spent to
buy TV or car but you want to make sure
the money is spent for the right course
so you start to measure the social
impact
you start to understand if jobs are
created if kids are in a better health
if children can go to school and educate
that’s what you measure that what impact
investing is about the company I’m very
proud and representing together with you
know great staff working all over the
world with ambassadors with board
members but also with investors some of
the most from Switzerland what we have
been doing over the last 15 years we
basically have deployed 3.5 billion into
over 60 countries and we are touching
about 30 million individuals as we speak
today the orchard is providing every
eight seconds alone and by the end of my
little speech we will have deployed and
granted 150 loans to individual people
who would not have had any access to
funding these are crazy numbers I’m
fully aware of that but it’s big data
and that’s also the message I want to
convey with you
it is small money but if you multiply
small money and if you assure that
there’s a social impact it’s small money
big impact and I really mean big impact
the examples I’m showing you all know
the people personally George is living
in Tbilisi Georgia has received the
first loan three and a half years ago in
order to build up his little grocery
store now he’s planning to expand he
actually wants to open up a coffee shop
he’s an extreme happy individual today
and he’s running his own business he
would have had no chance whatever to
start a business without receiving an
initial loan three and a half years ago
Carmen is running restaurant in
Guatemala when I made comment the first
time she was a beggar the first loan she
took was $50 the $50 she invested in
buying some pans and plates she started
to cook some food at her home and
started to sell it on the local market
today
shree loan cycles later Carmen is one of
the proudest women I probably have met
because she’s an intrapreneur she runs
her own restaurant
her daughter’s our University she
employs four people in the restaurant
and when I asked her last time what a
plan while she owes she’s going to apply
for next loan because she’s planning to
open up two more restaurants and that is
what I basically mean when talking to
individuals right this is not aid but
you basically accelerate and you help an
individual to create your own fortune
and your own future and that’s the
beauty about really providing some
access to capital and it is access if
you provide food it will go nowhere if
you provide books it will go nowhere you
need to provide capital in order to
really develop individuals and they are
looking for it I want to give you an
example from investment perspective
because they’re always two sides on the
one side is the individual being
receiving funding on the other size it’s
the investor take an example you provide
1 million US dollars over a period of
five years the average loan now company
for the last 16 years is one thousand US
dollars in average the duration of a
loan cycle in average is only 12 months
so loans are being paid back already
after 12 months you basically provide 1
million for 5 years you are going to
reach out to over 55,000 individuals
because you can recycle the money and
every single loan reaches out to at
least 10 to 15 members and friends
within the family these are World Bank
figures so think about that $1,000,000
in five years touches and increases the
life of over 55,000 individuals on the
other side an investor will basically
receive returns because there is
interest rate related to the to the loan
of the last 16 years we have provided on
an annual rate 4% return which in the
current your low yield environment
obviously is also a fantastic investment
but that’s not the cause but it just
shows you it’s a business
over 16 years the default rate with 30
million loans has been lower than 1%
which is absolutely astonishing this is
lower then you know any bank would give
you figures here in Western Europe the
reason why the default rate is so low it
is all related to pride and dignity if
you are individual and you get a
once-in-a-lifetime opportunity to get
access to capital
you will make everything happen to repay
that loan so you’re going to invest it
in whatever cause you have been granted
the money for
and lastly obviously you also have got a
substantial environmental impact we call
these three factors we call them triple
bottom line impact who is actually the
recipient of the money women play
important role in providing micro loans
the overall average is roughly sixty
percent and I want to run you one
example here we made a lot of research
if you have got a male and a female and
both are coming from the similar
background and both of them would be
granted $1,000 what is happening in most
of the cases the recipient is going to
be approached by a friend by a colleague
and he would ask me if you’d be willing
to provide some of this of this loan in
order to double the loan so physically
what happens the colleague would come
giving the money I’ll double it by
tomorrow now research shows that the
women the female would be responsive in
3 percent of the cases and the male
believe it or not will be responsive in
about 27 percent of the cases which is
totally mind-blowing and it’s all over
the world to save picture it’s the same
picture as well in here something you
might want to think about on the weekend
that’s the reason why women have a very
different risk understanding than men
have the cause remains the same also the
man was to protect and wants to help his
children but he’s got a different way of
looking at risks there are several
active
is beside microfinance where you can
basically help and improve it’s about
renewable energy it’s about education
it’s about providing insurance coverage
you can empower women
so microfinance has developed into all
kinds of different topics and areas and
is today you wouldn’t believe it it’s
the fastest-growing asset class in the
world the growth rate is about 30 to 40
percent and that’s beautiful because the
money being pumped into the system is
really helping and is reducing poverty
dramatically that’s the last picture I
want to show you I came back five days
ago from Cambodia and this is all NASA
we have been knowing her for several
years when I met her first she was
really a beggar she’s living at two
hours out of seeum rep in agricultural
area and she had nothing she asked for
loan for $50 to buy a couple of hens
because she wanted to sell out the eggs
in the neighborhood so she was given the
first $50 together with a one-day
training session on some basic
accounting standards just that she would
know and understand what is a margin and
what is the price of an egg she’s going
to ask for now shree loans are cycles
later on she basically has opened a
total new world
she has employed her entire family her
friends are working for her it’s a small
and mid-sized company with over 15
people working for her in the back you
see a couple of hands and docks it’s
difficult to see she’s got two and a
half thousand ducks and I think about
8,000 hens and anybody of you who
potentially you know will be somewhere
in a hotel close to siem rep and have a
breakfast egg that is most likely going
to be come from her form and the amazing
and the amazing thing is she’s making
profits on a monthly basis of over one
thousand US dollars today and the
average income in Cambodia today per
month is $80
she has become one of the most my I
wouldn’t call it wealthiest but
successful businesswomen in the area and
now she’s starting to help she’s
starting to employ other people so it’s
very small money initially but the
impact is phenomenal
and I would all like to ask you to
participate in helping to include
excluded the 2.3 billion colleagues and
friends and families out there they want
to be part of our system we can all help
we can help with very small money the
impact is phenomenal thank you very much
[Applause] [Music]