Vitiana Tubuka is a busy mother of six in Fiji, ranging in age from four to 25, and grandmother of one. She manages a busy household — her three youngest children and husband live with her, and her youngest daughter has a congenital disability that leaves her unable to talk, walk or sit up on her own.
Before her first loan from Good Return partner South Pacific Business Development (SPBD) Fiji, Tubuka was trying to run the household on her husband’s income as a labourer at the nearby healthcare centre.
"It was very hard,” she says. “Only my husband was working [and] his income was not enough to cover the family.”
A gentle and soft-spoken woman, Tubuka is now on her fourth loan with SPBD Fiji — she finds the time to run a small convenience store, or canteen, from her home and has recently started selling copra, a type of dried coconut used in cosmetics and oils.
The difference her business has made to her life is clear.
“I have been sharing with the centre that if you run your business well it is a great help for your family,” Tubuka, who has also been the Centre Chief (elected leader) of her SPBD Fiji centre with for the past three years, says.
Because of her business, Tubuka has been able to send her son to medical school in Suva where he is specialising in Public Health, and this year she sent her daughter to teachers’ college in Lautoka.
She can now afford to buy her younger children shoes and good school uniforms, and send them to sports tournaments in the main town.
“Now, with my fourth loan, I started another two businesses — drying copra, and selling fuel for boats, brush cutters and generators,” Tubuka says.
There are benefits for the community too — the village had no canteen before, and there are only two shops nearby, not enough to serve the villagers’ needs. Now instead of a two-hour ride to town on a bus that comes twice a day, they can get their necessities from Tubuka’s store.
Tubuka has big plans for the future to build on her success and further improve her family’s financial stability. As well as extending her house and expanding her canteen into a big shop, she wants to buy a solar panel for her house and maybe a backup generator as well.
Tubuka’s story is a perfect illustration of the power of financial education coupled with microloans to enable women to start sustainable businesses.
In this guest post, Good Return’s Head of Fundraising Cathy Sowden shares how Good Return helps to build pathways out of poverty by empowering people to grow their incomes and access responsible finance.
At Good Return, we work with women like Vitiana Tubuka by leveraging technology, through financial education and, soon, by offering more than just a starter loan.
Microloans tend to range from $200 to $1200. By partnering with local organisations, we've funded more than 10,000 borrowers and trained more than 50,000 people. But we’ve discovered that helping our clients succeed sometimes requires helping them expand a successful business, and making an impact can mean helping them employ more people.
In order to support this, we’re launching an Impact Investing program, offering larger loans to support growing businesses. We’re also currently testing an app that will help with household financial management as well as financial education.
None of this would be possible if we were not operating in an environment of trust.
Microloans are not new, but a decade ago the microfinance industry in the Asia-Pacific region learned the hard way what happens when trust evaporates. The industry had its own financial crisis when lenders in southern India, influenced by poor government policy and investors expecting quick returns, pursued aggressive growth targets — oversaturating the market and contributing to the debt stress of overcommitted borrowers. The error was devastating for borrowers and slowed progress of what began as a well-intentioned system.
Problems arise if microlenders try to apply the same rules that exist in developed economies, or focus on growth KPIs rather than on enabling the financially sustainable success of borrowers.
So, we turn the focus onto the customer, ensuring they are well educated in financial matters and building client protection principles into everything we do. By putting the client first, we can begin to build trust. But that’s just the beginning.
The rest is about focusing intently on three Cs — character, capability and credibility.
Character is about our mission, always putting the client at the centre of everything we do. Capability comes from having the right technology and partners. In this part of our mission, Salesforce provides vital expertise. Credibility comes from regular delivery of what we promise.
We train and support our partners to adopt good practice — considering responsible design of a financial services product, how to avoid the client becoming over-indebted, best-practice complaints handling procedures, gender and diversity, and working appropriately and sensitively with vulnerable groups.
These practices are reflected, protected and strengthened through our technology, which also allows us to make user data sacrosanct. Our technology brings a consistency of intent and behaviour, but still allows for the flexibility that our work requires.
For example, we’re currently making a difference in Cambodia, Fiji, Laos, Nepal, the Philippines and the Solomon Islands. While our intent across each region is the same, we can’t just take a model from one of those regions and parachute it into another. In some of the countries we operate in, women can’t actually own property. We customise our content for each culture — trust only comes through a mutual appreciation and understanding of the cultures of all involved.
When we do our job well in an environment of trust it can have an enormously positive effect.
To illustrate this, let’s go back to Vitiana Tubuka in Fiji. She opened her store with a microloan. Her business grew and she gained confidence, and she’s been able to change her family’s fortune and her village immensely.
Through her work with our partner SPBD Fiji with us, she’s been able to teach other women about financial management and business.
And it all began with one woman, one idea and a loan.
To find out more about how open banking will help finservs create compelling and personalised consumer interactions, download the Accenture and Salesforce ebook Beyond compliance: Winning with open banking.