Dispatch from Harvard Business School – Relating Social and Financial Value

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Apr 8, 2010

Apr 8, 2010

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> Posted by Elisabeth Rhyne

2009 HBS-ACCION Program on Strategic Leadership in Microfinance


I’m writing today from the HBS-ACCION Program for Strategic Leadership in Microfinance, where 70 microfinance leaders from 28 countries have come together to think with some of the top business professors in the world about how to move their MFIs into the future. 
I love the first half of the program, where cases from the business world turn out to have surprising applications for microfinance.  So far, we’ve looked at Grupo Elektra (Mexico), which built a financial services business for the lower-middle segment from a consumer goods retail platform, and I wondered what lessons Elektra has for those who want to use microfinance services as a platform for access to consumer goods (like renewable energy). We’ve looked at Farmacia Similares (also Mexico), exploring the art of combining client need with realism about what is possible to provide and coming out with a successful product design. We’ve looked at distribution channels at the informal sector level using Hindustan Lever’s Shakti program as a jumping off point. We’ve seen how financial incentive systems shape employee behavior in a biotech company. And we’ve learned a lot about building a successful business model from the inventor of the spinning toothbrush. 
The background theme, which professors Michael Chu and Kash Rangan are very passionate about, is that social and financial value are mutually reinforcing: attention to social value helps increase financial value, while financial value underpins the ability to provide social value.  It is great to hear the variety of perspectives on this from the participants. 
In the second half of the course, it will really get interesting, as we discuss some of the highest profile cases in microfinance, new and old, including SKS, Equitas, the Compartamos IPO, and the consumer credit crisis in Bolivia. Stay tuned.

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