Women's World Banking (WWB), the world’s largest network of microfinance institutions and banks, has just concluded its 14th Global Meeting and its 7th annual Microfinance and the Capital Markets Conference. Both meetings focused on how to manage financial risk in an uncertain economic climate while continuing to meet the needs of women entrepreneurs.

WWB Global Meetings, which are generally held biennially, are an opportunity to bring together MFI leaders, the WWB global team and other experts to discuss innovations and challenges in microfinance. The 2009 meeting, aptly titled “Focusing on Women: A Winning Strategy in Bad Times and Good,” gathered WWB network members from 40 microfinance institutions and banks in 29 countries to discuss why focusing on women is a sound strategy regardless of the economic climate. Held at J.P. Morgan headquarters in New York City, the first day of the two-day event provided an opportunity for network members and experts in the fields of management, gender, and finance to share best practices. The agenda focused on issues at both the macro and local levels: challenges facing the sector as well as panels on product diversification and risk management.

The discussion on the first day dealt with the effects of the global economic crisis on institutions and clients. It was evident that there are many regional differences and particular interest in whether women clients are more affected than men. Other key areas of discussion were some of the current challenges, such as over indebtedness and transparency. The participants discussed solutions – the emergence of credit bureaus in some countries, MFIs working together to reduce multiplicity of loans, and better client financial education.

Parallel sessions on innovations in savings, rural lending and microinsurance explored gender dimensions, mitigating risk for the institution, the importance of strategic alliances and shared innovations from WWB network members. For example: When introducing savings, confidentiality is a very important factor for women. When introducing rural lending it is important to understand where women are located in the agricultural economy in order to make sure that they are not bypassed when accessing microfinance. Savings programs, while costly to introduce, are a true mitigating strategy for MFIs, allowing them to also avoid financial exchange risk. By mimicking the existing ‘susu susu’ collectors and collecting deposits from clients remotely WWB Ghana has successfully expanded its savings program. XacBank (Mongolia) created a ‘future millionaire’ account—and marketed it successfully to parents saving for their children.

The second day focused on the network, adapting to new changes in the network structure and revisiting what it means to be a part of the Women’s World Banking network. MFI leaders signed the WWB pledge.

Highlights included:

• Recently appointed U.S. Ambassador-at-Large for Global Women’s Issues Melanne Verveer spoke about the commitment of the current president’s administration to continue building on the work done under Hillary Clinton that calls attention to the need for microfinance, particularly for women.
• Pedro Aspe, former Minister of Finance for Mexico, shared his thoughts on the financial crisis. He advised MFIs to stay the course and continue to lend responsibly, grow carefully, and focus on savings to fund the portfolio. He also reminded network leaders that recessions can be a good opportunity to define new or redefine existing business models.

After two days of hard work, the meetings broke for dinner on Wednesday, April 29th, at Tavern on the Green. This dinner was an opportunity to celebrate WWB network members who attended and to thank WWB supporters. Cherie Blair, women’s rights advocate and wife of former British Prime Minister Tony Blair, was honored at the event as was corporate honoree J.P. Morgan, and Dra. Mercedes Canalda, founder of ADOPEM (Dominican Republic), for her tenure as chair of the WWB Board.

The 7th annual WWB Microfinance and the Capital Markets Conference, “Maximizing Access in a Capital Constrained Environment,” gave leaders from the financial and microfinance communities the opportunity to network, discuss concrete funding deals, learn about key capital markets transactions in the industry, and take advantage of emerging opportunities by developing innovative ways of accessing capital.

The conference was sponsored by J.P. Morgan and had a special focus on the economic crisis— providing global and regional insights on the current capital landscape and strategies for MFIs to continue accessing capital in this environment. The agenda also included sessions on optimal capital structure, risk management; and outlooks for 2009 and beyond.

“J.P. Morgan views microfinance as an untapped market opportunity with the potential to provide reasonable financial returns and improve the lives of hundreds of millions of low-income families,” said Christina Leijonhufvud, Managing Director and Head of Social Sector Finance, J.P. Morgan. “We are proud to support Women’s World Banking in the effort to expand the investor base for microfinance services to low-income communities.”

Daniel Gross, Senior Editor at Newsweek and author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation opened the conference by reflecting on whether a largely unregulated lending, borrowing, and trading financial culture, one that preferred short-term fees to long-term gains, and that confused liquidity with cash on hand, led to the current economic crisis. In his words an “era of cheap money devolved into an era of dumb money, and then into an era of dumber money.” Also reflecting on the state of the global economy was Jamie Dimon, Chairman and CEO of J.P. Morgan Chase. He opened day two of the conference with a 90-minute dialogue with the attendees. In that time he covered a wide-range of topics: building a strong financial institution, leadership, work-life balance, and organizational culture.

A highlight of the conference is the annual MFI competition, which gives WWB network members the opportunity to work with teams from the sponsoring financial institution to address capital challenges they face. This year MFIs presented either their solutions to reaching, presenting and positioning to new funders and investors; or recommendations for contingency planning/growth. Nine teams competed in the two-round competition. The winner, WWB Ghana, evaluated their macroeconomic climate and operational performance to create a stress case projection. Based on this analysis, the team created a growth strategy that will allow WWB Ghana to grow sustainably while mitigating risk.

Other highlights:

• Roger Ferguson, CEO, TIAA-CREF and former vice chair of the Federal Reserve spoke about regulatory reform and country-level reactions to the economic crisis.
• Norma Corio, J.P. Morgan Treasurer, and Suzanne Nora Johnson, Former Vice Chairman at Goldman Sachs, discussed optimal capital structure, giving advice on appropriate ratios and use of various forms of capital. They stressed the importance of not relying on a single source of funding, pre-funding maturing debt for over one year and up to three years, and maintaining fortress balance sheets—always having more capital and more liquidity than you need for your asset mix.
• In a panel on equity valuations, investors in XacBank (Mongolia), both current and exited, discussed their valuation strategies and expectations; Nick O’Donohoe, Managing Director, Head of Global Research at J.P. Morgan and Xavier Reille, Lead Microfinance Specialist at CGAP, presented the first ever set of valuation benchmarks for microfinance institutions.

“What we have learned in these two days together is that the microfinance industry has many friends who want to see us all succeed,” said Mary Ellen Iskenderian, President and CEO of Women’s World Banking, in closing the conference. “We have creative thought partners and financial partners who can help us weather the storm of this financial crisis. As we head back to our respective countries, I hope this conference has only been the beginning—the introduction—to mutually supportive relationships that will be built on in the coming weeks and months. I hope there have been hand shakes of introduction this week that will lead to hand shakes of deals closing in the months ahead. That’s a powerful image—hands grasping hands as we strengthen each other and pull each other forward to better times for our institutions and for the common goal we all share: providing financial access to men and women around the world who desperately need it and who have the power to shape a better future for all of us.”