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Geographic Tracking |
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General Description:
Geographic targeting refers to the strategy of setting up services in areas
with high concentrations of poor and vulnerable people and excluded
groups. Often this implies working in remote areas with low levels
of infrastructure which are not served by conventional financial
systems. Sometimes areas are targeted that are even avoided by
regular microfinance institutions. While there are potential costs
in setting up a remote branch, geographic targeting avoids the
time and expenses associated with a more thorough screening of
individual clients. It is based on a general understanding of
spatial differences in settlement patterns and the disparities
in existing distribution of infrastructure services. It has proven
to be a good method for generally ensuring that poorer and more
vulnerable people receive access to services.
Examples of Geographic Targeting:
Given that state investments and even development interventions have often conventionally been concentrated in urban and economically more affluent regions, some of the early MFIs saw a need to work in rural areas in their mission to
serve poor people. In fact Grameen Bank went so far as to include in their statute a provision that they would only provide services in rural areas. This was done to ensure that there would be no yielding to the natural pressure from within to work in urban centres with better-off clients
where staff life would be more comfortable and transactions costs would be low. Many other MFIs working exclusively in rural areas have similarly opted for geographic targeting. Prodem, for example, has focused on working in rural areas once Banco Sol was formed.
There are other MFIs who have chosen to work in the poorest regions of their country. Financiera Compartamos in Mexico works in ten states and Mexico City. Four of these states are ranked amongst the poorest six of the thirty-two states
in Mexico. Pro-Mujer's clientele are women in some of the poorest neighborhoods of La Paz, Bolivia.
Some MFIs
work in hard-to-reach, difficult or remote areas. The Association
Mennonite de Développement Economique (MEDA) provides services
to poor people in the mountainous regions of Haiti. There is virtually
no infrastructure here. The unreliable rainfall, poor soil, and
continuing environmental degradation, force people to survive
on subsistence farming.
Social exclusion,
or the exclusion of groups because of their differences from the
dominant social group, can exacerbate poverty. Social exclusion
may be based on ethnicity, caste, language or even profession.
Many MFIs have extended the notion of geographic targeting to
a targeting of such excluded groups. AlSol, in Mexico, works in
the state of Chiapas with the indigenous people. Chiapas has been
the scene of endemic violence following the Zapatista uprising
and the subsequent military repression. The Women Economic Empowerment
Consort (WEEC) in Kenya has a special program to work with the
Maasai, who have traditionally been a pastoral community. IDF
had been the only MFI for many years to work with the tribal people
of the Chittagong Hill Tracts in Bangladesh, who were caught between
an armed insurrection and state-sponsored violence. Swayam Krishi
Sangam (SKS) works with the Dalits (the "untouchables"),
the lowest caste in India, in one of India's poorest states. Even
now, in rural areas, higher caste people will not eat together
or socialise with Dalits because the Dalits are considered impure.
Geographic
targeting, including the targeting of socially excluded groups,
has allowed for services to be provided in unserved areas and
to unserved people. While it does not provide strong identification
of the poorest within a region or population, it does address
a primary concern of microfinance: meeting the financial needs
of people who are not covered by conventional financial institutions.
For many institutions this is a vital first step in achieving
their mandate of serving the vulnerable and the very poor.
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