All photos courtesy of VisionFund International
For an organization of problem solvers who aim to make a lasting impact on the world, few challenges are more ambitious than transforming extreme poverty into relative prosperity. In the last few years, more and more Oliver Wyman support professionals, consultants, and partners have embraced this challenge.
Here is how these colleagues are helping to prime the economic pump, expand financial inclusion, and bring world-changing ideas to scale.
All photos courtesy of VisionFund International
Young consultants who work with VisionFund run their own show, helping to create sustainable economic development at the grass roots level. It’s a world-changing partnership that began with a chance encounter.
In 2010, Angelina Grass-Oguma was searching for an event that would get her out of the house after the birth of her first child. An invitation from VisionFund to an information session on microfinance looked promising. Angelina, a Partner in our Financial Services practice group based in Singapore, had always been interested in microfinance, and the information session was an opportunity to learn more and meet the organization’s chairman.
When they exchanged business cards, a light went on. VisionFund’s chairman had been an Oliver Wyman client during his commercial banking days in New York. “I bought a project from Alex Oliver and it was the best consulting work I ever purchased!“ he told her. Not only was he delighted to reconnect with the firm, he had a project in mind. A few months later, Angelina had kicked off a pro-bono project developing a strategy template for VisionFund’s 43 Microfinance Institutions around the world. She now sits on the board of VisionFund Myanmar.
Since then, Oliver Wyman consultants have helped improve the performance of VisionFund Microfinance Institutions in seven countries. For many, these projects have brought some of the most gratifying moments in their careers.
VisionFund projects provide high-level consulting experience in concentrated doses. In one of our earliest engagements, Shasheen Jayaweera developed a turnaround plan for a VisionFund operation in Malawi.
Insights gained at one end of the financial spectrum have helped him succeed at the other: Shasheen recently advised one of the world’s largest banks on its expansion in Asia. He is now the Oliver Wyman/VisionFund coordinator, and he has helped facilitate some amazing experiences for other consultants. Here are three of their stories from our world of micro credit.
Work at VisionFund gives young Oliver Wyman consultants the opportunity to “own” a project that is compressed into a bite-sized time frame. In three weeks, Thomas Stapp, a consultant in our Sydney office, met with Senegal’s Ministry of Finance, loan officers at an underperforming Microfinance Institution, and some of its clients.
Thomas’ time in the field was well spent. “I must admit that I was skeptical about microfinance at first because interest rates seemed high,” he told us. “But when I actually went out into the field, I came to realize that even though they seemed high, they are manageable, and that people can still pay them off and make a profit.”
Based on his end-to-end analysis, Thomas developed a strategy that would put the Microfinance Institution on a sustainable financial footing while ensuring that its overwhelmingly poor, rural clients could not only survive, but thrive.
The future of a Peruvian Microfinance Institution was in the hands of Kurt O’Brien, a consultant in our Singapore office. The company was failing and the board wanted his advice: Could the company be turned around or should they exit the market? This was a new role for a young consultant. “As a first-year consultant I was used to being told what to do, but here I was responsible for making decisions and recommendations, and managing everything.”
Kurt was surprised to discover that the market was oversaturated. There were too many Microfinance Institutions, most posting losses. He used his insights to map out the recommendations that have since turned his client’s operating losses into steady profits, but “profit” is not what he’s proudest of. Now the company and its customers have more security, he says, “because the organization will continue to be there to give them credit and jobs going forward.”
Victor Lee’s challenge was to help VisionFund’s Ugandan Microfinance Institution achieve long-term sustainability. A consultant in our Seoul office, Victor dug through all the financials, interviewed the management team, did some benchmarking, and then went into the field — literally — to talk with credit officers and customers. It was there that he had his realization. Field staff had some great ideas to improve the business, like ways to reduce the number of loan documents. Victor set up mechanisms to get these ideas to management — and saw first-hand the impact that his work could have.
“I met a farmer who used to be very poor but is now one of the wealthiest farmers in his community. He was able to make money by taking out a loan to rent some land, grow tomatoes, sell them, and generate a profit even after paying back the loan. He did this for many seasons and every time he did it, he would increase the scale and make more money. If it weren’t for the very first loan he got from VisionFund when he had nothing, his success story would not have been possible.”
Bringing 18 million low-income women into the financial mainstream.
In poor countries, women entrepreneurs are the engines of community prosperity. Data show that they invest more of their earnings in healthcare, education, and home improvement than men do. Yet the vast majority of them are financially underserved — or entirely outside the financial system. Goldman Sachs has estimated that if the gender gap in access to credit was closed, the opportunity for lenders would be about USD 285 billion — and per capita incomes in poor communities could rise 12% in ten years.1
Women’s World Banking has pioneered financial inclusion for women since 1976, building a network of 38 microfinance institutions in 28 countries. Loans as small as USD 100 give women entrepreneurs the capital they need to buy fertilizer to expand a harvest, enlarge the stock of a bodega, or upgrade the stove in a bakery.
About five years ago, the microfinance landscape began to change, in part because of Women’s World Banking’s success. Commercial capital began to flow where only charity had before, and women needed financial products beyond loans. An Oliver Wyman team helped the organization analyze the shift and map strategic options.
Today, most of Women’s World Banking’s 24 million clients, 80% of them women, are getting more than loans. They are purchasing microinsurance to protect their livelihoods. And they are creating capital, with over USD 5 billion in savings accounts — a quiet revolution at the bottom of the pyramid.
1 Source: WWB “Global Best Practices in Banking Women-Led SMEs”
Turning cell phones into business banks in the rural Philippines.
In the central Philippines, about 600 kilometers south of Manila, a motorbike draws up in front of a shop. The rider is a banker, here to discuss a loan so the shopkeeper can expand her stock. In a few minutes, her cell phone rings. The transaction has been completed and the money is in her account, ready to go to work.
This is mBank. Launched with the help of Oliver Wyman, mBank provides low cost, wide reach, branchless banking to thousands of rural clients. Instead of infrastructure, the bank uses the leading cellular network that reaches 70 million subscribers to offer unsecured loans on a mobile wallet. Innovative data systems assess creditworthiness continuously, increasing opportunity for good customers and minimizing risk. The high level of automation enables mBank to earn a profit on loans as small as USD 50.
The Oliver Wyman network in action. This new system of banking was conceived in 2008 by Arnaud Ventura, founder of two leading microfinance companies. One of his first calls was to an old friend, Greg Rung, a Partner in Oliver Wyman’s Financial Services practice based in Dubai. Greg made a few calls of his own, inviting colleagues Matthew Sebag-Montefiore, Partner in our London office, and Patrik Ringstroem, Partner in our New York office, to help get the new venture off the ground. Three other consultants came in to work pro bono; Oliver Wyman alum Anthony Evans agreed to spend six months in the Philippines to lead the pilot project.
Meanwhile, other Oliver Wyman consultants started Nonprofit Fellowships to help mBank win funding from the Bill & Melinda Gates Foundation. With the organization, the technology and the funding in place, mBank opened for business in 2013.
Helping social entrepreneurs succeed in the United Arab Emirates.
In January, 2013, 35 teams of aspiring social entrepreneurs gathered at the Dubai Financial Center to pitch their ideas to the Acumen Fund. Acumen is a nonprofit global venture fund that invests in innovative approaches to the problems of poverty. The Fund has launched companies that provide off-grid solar lighting in Uganda, community-owned hydro power in Pakistan, and disease-resistant chickens in Ethiopia.
Like Oliver Wyman, Acumen believes that the best solutions spring from people who know local needs. The social entrepreneurs in Dubai had come with new solutions to environmental and social challenges in the United Arab Emirates. While the entrepreneurs’ companies were there to compete, two of our colleagues were there to teach. Oliver Wyman Principal Jad Haddad and Shatajit Basu, a consultant in our Dubai office, led a workshop on what these early stage companies would need to succeed. The workshop covered business planning, operational tips, how to value their companies, and how to fund a successful startup. The session attracted interest beyond the competitors, which says to us that social entrepreneurship is gaining momentum in the new financial crossroads that is Dubai.
Funding programs to lift millions of children from poverty.
In 1990, more than twice as many people suffered from extreme poverty around the world than do today. …As countries and other global development actors come together to shape the post-2015 development agenda — a new set of time-bound targets to succeed the Millennium Development Goals — the elimination of extreme poverty by 2030 is likely to be a central aim.
US Agency for International Development programs help people in developing nations live longer, healthier lives; achieve security in food, energy and water; recover from catastrophe; and build an equitable and sustainable economic base.
The global scope of the agency's work makes it one of the most complex organizations on earth. Recently USAID invited Oliver Wyman to look under the hood. The goal was to identify both the ways that health aid could reach its targets more efficiently and innovations with the potential to transform the work itself.
How can we save more lives? A key recommendation was to apply evidence-based assessments at every level to make sure that thousands of individual in-country programs serve the agency’s strategic goals and capture learning to continuously improve processes.
Over time, these mechanisms will help USAID become more nimble at meeting changing needs and more consistent in program delivery. In the near term, the Oliver Wyman team was able to help produce a series of core recommendations to increase the value that USAID achieves for taxpayer money — benefiting directly people with needs that can’t wait.