1. Microfinance and Disabilities: Where can this relationship go?
Mike Goldberg
Private Sector cluster
LAC Region
April 6, 2006

2. The Microfinance Basics
Objective
Breaking the barriers to access to financial services
Commercial orientation
Relatively high market interest rates, full cost coverage
Subsidies for new product development
Scale matters (low marginal costs)
Economically rational institutions
Increasingly competitive markets – wide range of actors
No Direct Targeting
Choosing clients with potentially profitable ventures
Risk diversification
Remember: Credit is not an entitlement … it is a financial option with risks

3. Implications of the Basics
Group methodologies
(village banks, coops, SCAs, solidarity groups, etc.)
Adapting technology to service delivery (ATMs, palms, voice technology, etc.)
Bias toward urban (density of clients)
Bias toward women (superior performance)
Creative collateral… or none

4. Disabilities: Who are the clients?
For Disabilities, broad definition could include…
Entrepreneurs with disabilities
Entrepreneurs with workers who have disabilities
Entrepreneurs making products for the disabled (hearing aids, wheelchairs, glasses, artificial limbs, etc.)
Entrepreneurs who buy from providers who are disabled (sheltered workshops)
Consumer credit to purchase products for the disabled
Disabled who use financial services (savings, transfers, remittances)
Remember: (i) potentially profitable, (ii) scale (large number of microfinance clients)

5. Special Needs vs. Mainstreaming
How are these clients different?
Physical access (access to branches, to ATMs)
Self-selection of groups -- could this lead to exclusion?
Transaction costs can be very high (bus to city; group meetings)
Sales may be linked more to subsidies received by clients
How are they the same?
They seek access to a range of secure, affordable financial products
Can provide character references as collateral (DPOs)
Level of financial literacy unknown (like MFin. clients)

6. What do we need to move forward… together?
We need information and examples:
examples of products by and serving the disabled
statistics on market potential for these products
potential borrowers (savers, transfer and remittance recipients)
For example: Angola, Mozambique, Afghanistan, etc. etc.
People needing artificial limbs due to land mines
Local producers, their costs and financing needs
For example: Fundación Carvajal, Cali, Colombia (1985!)
Microcredit to Hotchkiss wheelchair producers (bicycle industry)
Consumer financing of wheelchairs
Teletón, AT International provided seed capital
120 clients in Cali, 80 in Bogotá in 1985… then what?
Other examples: Wheelchairs in Sri Lanka, Zimbabwe, Brazil