Against poverty

Feature Article | June 29, 2009 by Hans-Josef Jeanrond

Microfinance for needy people (photo: jupiterimages)

In 2006, the terms “microfinancing” and “microloan” made headlines. That was the year in which the Nobel Peace Prize went to Muhammad Yunus, an economics professor from Bangladesh who has been working on this subject at his Grameen Bank for more than two decades.

Microfinancing is considered an efficient means of providing long-term stimulus to the economies of impoverished countries. This more fair distribution of wealth is able to prevent conflicts around the world. The very first sentence of PlaNet Finance’s founding charter from 1997 accordingly specifies combating poverty as the greatest challenge of the 21st century.

World peace, the end of poverty – though there certainly are many people in the SAP network who are personally involved in seeing them achieved, these goals do seem removed from SAP’s day-to-day business at first glance. So what drew around 30 journalists to a joint press conference featuring SAP CEO Léo Apotheker and PlaNet Finance CEO and founder Jacques Attali at the Hotel Prince de Galles in Paris on a warm summer’s morning in June?

Watch a replay of the press conference

The unusual combination of topics and personalities was surely part of the attraction. Jacques Attali, a graduate of multiple elite grandes ecoles in the country, served as an adviser to President François Mitterand for ten years. Attali founded and became the first president of the European Bank for Reconstruction and Development (EBRD), which supports small entrepreneurs in 30 countries from central Europe to central Asia. The bank was established on Mitterand’s initiative.
Attali is also an economics professor, consultant, author, and historian.
The “Net” in PlaNet Finance indicates why both officials joined forces for the conference: The Internet and information and telecommunications technology in general are to play a greater role in microfinancing.

SAP’s support for microfinancing covers three areas, namely:

  • The use of SAP software at PlaNet Finance, whose more than 700 employees need a flexible, reliable management solution for their own organization and projects
  • The redevelopment of MicroFit, the software PlaNet Finance originally designed for microfinancing institutes. Web architecture and hosting as a software-as-a-service (SaaS) solution are to make the new version of MicroFit much simpler and more accessible to a large number of users.
  • Support of actual projects and the micro-financed foundation of companies using the expertise, tools, and personal commitment of SAP employees.

Both company leaders attached considerable importance to emphasizing the real impact of their commitment, making tangibility a key theme of their deliberations.

Apotheker described the companies’ first joint project, which is aimed at supporting women working as Shea nut pickers in Ghana. What may seem a niche industry is actually an important branch of Ghana’s economy. It employs a large number of women, including up to 90 percent of those living in areas where Shea trees are grown. Shea nuts are processed into Shea butter, which is used in the production of chocolate and cosmetics.

The goal of said microfinancing project is to provide these women with better working and living conditions, education, and access to information. The most important technology in the region is the cellular telephone, which ensures communication with microloan providers and information on the market for Shea butter. This in turn strengthens the women’s negotiating position with middle men, who often cash in on the pickers without adding value to the trade chain.

In many areas of Africa, cell phones are the only connection to the outside world. People are much more likely to have such a device than a bank account. Landline networks, developed road networks, and public transportation are virtually nonexistent.

In addition to the direct aid this project provides, Apotheker also spoke of involving SAP’s partner network. Nearly all of the major food and cosmetics companies are SAP customers. Even if only a portion of them agree to procure Shea nut products from Ghana at fair prices and advise the producers themselves, this line of business could generate sustainably profitable companies and bring an unprecedented level of prosperity to the region.

In light of PlaNet Finance’s worldwide commitments and the size of its new partner SAP, the project in Ghana seems – despite its local significance – rather small. However, this reflects the concrete focus of the two partners’ approach. “It’s about first carrying out a modest project, learning what works and what doesn’t, and then implementing the successes on a global scale,” says Attali.

SAP is to become a premium partner of PlaNet Finance, initially committing €300,000 in annual funds for the next three years and €200,000 in software and services. This should send a positive signal to the women working at Ghana’s Shea nut plantations and many other potential microentrepreneurs around the world.

About PlaNet Finance

PlaNet Finance is an international nonprofit organization whose mission is to fight poverty by issuing microloans, thereby providing financial services to impoverished people who are otherwise excluded from the traditional financial system. PlaNet Finance is headquartered in Paris and active in around 80 countries.

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