Why work with a corporate giant like Barclays? Are we merely being co-opted by Barclays for their own agenda? These are still the questions being asked. In CARE, we firmly believe that everyone can and should have access to financial services. Poor people in Africa are not unbankable. Since we started the first informal savings and loans group in Niger 20 years ago, 200,000 people – mostly women – have saved over $14 million. And Niger isn’t exactly a hotbed of economic boom.
Unfortunately, fewer than 10% of financially active people in sub-Saharan Africa have an account with a financial institution. NGOs like CARE can only do so much with the resources we have available. The private sector is key – we already work with local banks, microfinance institutions and telecom operators but it is important that the big ones like Barclays come on board too. Why? Because (in addition to their responsibility to truly serve the markets where they are present,) they operate at a scale that NGOs could not even dream of.
The Banking on Change partnership is a really exciting example where Barclays, Plan and CARE have come together to provide poorer communities the opportunity to access to financial services. Yes, a large component of the partnership is scaling up of the village savings and loans methodology that CARE, Plan (and many other NGOs) use to reach around 400,000 people. So far so traditional. But another important element is making Barclays think differently about how they operate and what long-term market potential looks like. We do believe that the gap between the savings and loan group under the village tree and the suited and booted from the world’s financial power houses can be narrowed. At the moment this is exemplified through the 118 savings accounts that groups have opened in Barclays branches in Uganda. There is currently market analysis, demand assessment and product and delivery channel development going on in four countries. Small steps perhaps, but it has certainly not been straightforward to get there and we are deliberately taking our time to get it right..
A really interesting point was raised about development organisations loosing control if business takes new development models to scale. That is probably true although we have not yet experienced this in practice. As NGOs, shouldn’t our job be to help put in place systems that Governments, local civil society and - yes maybe also - the private sector can take forward?
Loosing control makes it doubly important to get the models right. There seems to be agreement that the evidence of what works is not there yet. Perhaps this is something that the new DFID private sector department can help us all with?
Business/NGO partnerships are not without challenges. While the culture clash is not dramatic, it is true that NGOs need to sharpen their game and change their language – deliverables, business plans etc. True partnerships that go beyond quick PR wins and address core business take time – time to show results and time to be fully embedded in an organisation from global to local.
At the moment it’s a handful of big names that are exploring these partnerships, estimates say there are a total of 3,000 ‘inclusive’ initiatives going on but there are 82,000 multinational companies. This doesn’t even take account of all the small and medium sized companies out there. It is crucial that as NGOs, we seize opportunities to engage with companies, applying our influence to shape market interactions, and stimulate inclusive growth that favours the world’s poor.