|
Continued from previous page
Addicted to Helping the Masses
ROSALIND COPISAROW
In 1881, American entrepreneur and industrialist Joseph
Wharton had the most radical idea in the history
of business.
Copisarow has told the story of her move
to microfinance dozens of times: The year was 1993, and
she was stuck in a seat between two banking competitors on
her regular British Airways flight from London to Warsaw.
Forced to keep her work documents safely inside her briefcase,
she began reading the Financial Times, and came across
a story about Grameen Bank, a microfinance organization in
Bangladesh. "I read about the more than a million women
this organization had made unsecured loans to, some of the
poorest people in the world, and that the repayment rate was
98 percent," she said. "It was astonishing."
By this time, Copisarow was vice president and country officer
of J.P. Morgan's Poland branch, where she had been working
to bring market economy principles to post-Iron Curtain
Poland. It was an exhilarating time for Copisarow, who by then
had her MBA and MA from Wharton/The Lauder Institute,
spoke four languages (English, French, Spanish, and Polish), and
had a dozen years of investment banking experience.
"It was very exciting because everything there was a first in
Poland," she says. "We did the first Euro Bond issue, the first
project finance, the first syndicated loans, the first of every
kind of financial structure to get things off the ground. It
was high-level adrenaline. Things were moving very quickly;
construction was rapid. But while I was walking to meetings
in Poland, I would always see very poor people on the streets.
And I was very aware of the people in the countryside who
were being left way behind while huge developments were
going up in the main cities. In spite of all the progress, the
gap between rich and poor was widening."
When she read about Grameen Bank, the little voice
that had nagged her throughout her career became louder.
Microfinance could be an answer for the poor in Poland.
As fate would have it, Copisarow found herself seated next
to Poland's then-finance minister, Leszek Balcerowiz, at a J.P.
Morgan-hosted dinner a few weeks later. She asked him if he
had heard of Grameen Bank. He responded that he thought it
was an amazing success story. Copisarow then heard herself asking
Balcerowicz what he would think of a "crazy foreign woman"
bringing the microfinance concept to Poland. He replied
that if she was willing to give up her fast-track banking career to
do that, he would support her in every way he could.
Microfinance had by this time shown itself to be a highly
successful tool in the poorest countries worldwide. Could it
be equally useful for a transition economy such as Poland,
Copisarow wondered?
"I certainly never imagined that I was capable of setting up a
company," Copisarow says. "Until that point, I had worked for
huge companies as a cog in the middle levels. I also didn't know
anything about the micro-business market. Even the Polish
people I talked to told me I was crazy—that the Poles didn't
even trust each other, let alone a foreigner. But I saw in Poland
this extraordinary spirit of striving and hoping and believing and
I couldn't believe that people had totally lost the ability to trust
each other. In the end, I thought I would just give it a go, and if
it failed, very little would have been lost."
But it didn't fail. In July 1994, on the back of the Bush
administration's SEED Act (1989), which provided special
support to Eastern European countries through the creation
of independent American Enterprise Funds, President Bill
Clinton announced the Polish-American Enterprise Fund and
USAID would provide $24 million to launch a microfinance
institution in Poland. Copisarow was its founder and CEO.
Within five years, Fundusz Mikro was able to break even
with 35 branches in every major town and city in Poland and
$45 million in loans to 40,000 people, creating over 10,000
new jobs. And Copisarow, by then "utterly addicted" to microfinance,
was ready to go home to London, where she hoped
to adapt her model to serve the poor in the most developed
economies. "I felt that I had really finished the work that I had
set out to do," she says, "which was to create a Polish institution
for Polish people run by Polish people. I didn't want to
overstay my welcome."
She founded Street UK, a British microfinance organization, in
2000, a process that was anything but easy. The government had
little initial interest in the venture, which was ultimately backed by
charitable foundations and several sympathetic banks. Street UK's
progress was further stymied by Britain's tax and benefits system,
with many potential clients stuck in an informal economy "no-man's land"
between receiving benefits and running a legitimate
small business. In an effort to begin a real dialogue with policy
makers and regulators, Copisarow created StreetLab, a research
and advocacy initiative, to work alongside Street UK conducting
pilots with controlled groups of clients and recommending specific
policy changes. She also created StreetServe, a full back-office
service for other microfinance and community loan funds in the
U.K. StreetServe is now not only Street UK's main source of revenue,
but has also improved the cost-efficiency and transparency
of performance of the industry as a whole. Meanwhile, StreetLab's
work has contributed to a number of significant improvements to
the U.K.'s tax and benefits system, consumer credit regulation, and
enterprise-related policies.
Today, a year into her new post at microfinance pioneer
ACCION, Copisarow hopes to bring her vast microfinance
experience to the poorest regions of intermediate countries,
nations like China and Turkey with thriving, sophisticated
cities but thousands still living in extreme poverty in rural
areas. "I will begin to look not just country by country, but
city by city and market by market," she says. Her plans include
going into the poorest areas of the Middle East, Africa
and Asia and Eastern Europe.
Created in the 1970s by a number of parallel initiatives,
including ACCION International's in Latin America and
Opportunity International's and Grameen Bank's in Asia, the
microfinance industry has become increasingly prominent in
recent decades. Today, microfinance institutions are active across
the globe and the industry itself has become a competitive
market, emerging from its low-key non-profit origins into the
mainstream financial industry.
"A great aspect of the success of this industry is that it's one
of very few that has the capacity to shift from a solely non-profit
activity to mostly for-profit," Copisarow says. "The significance
of this is absolutely huge. You now have a very complex and
tricky array of providers from huge global banks to non-profit
foundations."
The challenge for industry leaders like Copisarow, she says,
is to respond to the needs of these private sector players. "We
are rethinking the microfinance industry by trying to incorporate
it into commercial banks—which already have the infrastructure,
the back-office, the branches, the staff, the capital—and help them serve micro-entrepreneurs as an additional
client group," she says. "If we can do this, we reach many
more people more quickly and more cheaply than by building
NGOs from scratch and reinventing everything.
"The work has become absolutely fascinating," says
Copisarow, who was born in France but grew up in the U.K.,
studied human sciences as an undergraduate at Oxford and
grew up in a family where giving back was a routine part of life.
"The whole effort is toward maximizing outreach and minimizing
the transaction costs of these tiny loans. The more we can
keep these costs down, the wider the group of financial institutions
interested in providing them will be." With an estimated
market of 500 million households worldwide and only about 15
million households now being served, "there is a huge potential
still untapped, and so much good to be done," she says.
|
