Mary Houghton: A Community Leader and Committed Inclusive Banking Pioneer


Prior to the 1970s, few financial institutions in the United States served low-income people, especially in underserved urban and rural communities. Mary Houghton, a pioneer in the U.S. financial services industry, helped to change that in 1973 when she co-founded ShoreBank, the first and largest community development bank in the U.S. Under Mary’s guidance, ShoreBank built a portfolio of more than $2.5 billion in assets as it enriched communities and built a reputation as a game changer in financial inclusion.

Mary and ShoreBank are recognized as the inspiration for the Community Development Financial Institution (CDFI) industry, which has invested approximately $2 trillion to revitalize urban communities in the U.S. since 1992. In 1987, Mary helped develop ShoreBank International, Ltd. (SBI). With consultants in over 40 countries in Asia, Africa, and the former Soviet Union, SBI assists financial institutions with financing small entrepreneurs. In 2003, Mary led the formation of ShoreCap Management Company and the launch of ShoreCap International, a $28.3 million equity fund which invests in financial institutions in developing countries globally.

Today, Mary serves as Vice Chair of the Women’s World Banking Board of Trustees. Here she reflects on her work and on what makes a good leader in the financial services industry.

What led you to start and maintain your long relationship with Women’s World Banking?

Mary: There were conversations between Women’s World Banking’s founders and ShoreBank right before the organization’s inception in the 1970s. I went to some of the initial meetings. However, in the 80s and early 90s, I had virtually no interaction with the organization. When I reconnected in the 90s, I was inspired to join because of the roles of women and microcredit organizations. I also thought the structure of the organization—with the affiliates on the Board—was a smart business model. It makes it possible for the institution to be very connected to the work on the ground.

What do financial institutions in developing countries need to focus on?

Mary: You can see signs that institutions are waking up to the realization that the non-affluent in developing countries need banking systems. There is this growing understanding because microfinance systems have been so successful. People who work in banking are risk-averse, and there’s a lot of class discrimination that goes on. I don’t think you can assume that the conventional banking system is going to actively want to serve poor people. If you look at the U.S. market, [the banking industry] reaches a large number of people with simple accounts but doesn’t want to deal with people with loans. It doesn’t want to deal with young businesses and those who do not have the same class background as the bankers. The system will change, but there will always be impediments to delivering capital to less affluent markets.

How do we change that/bridge that gap?

Mary: I don’t know the full answer. Women’s World Banking is now deeply involved with savings and insurance products and deeply involved with those markets. You can run a profitable business in any of those categories. It may not be as profitable, because transaction size will be smaller, but technology is changing this a lot. A lot depends on whether you are a short- term or long-term thinker. It is important not to fall into the trap of discrediting the fact that you are making an acceptable (if not large) profit and serving a long-term social need. Whether or not an institution pursues an approach to broaden financial inclusion or not also comes down to having shareholders who share your ideas and expectations.

It is important not to fall into the trap of discrediting the fact that you are making an acceptable (if not large) profit and serving a long-term social need. Whether or not an institution pursues an approach to broaden financial inclusion or not also comes down to having shareholders who share your ideas and expectations.

What are some of the characteristics of good leadership, particularly in this industry?

Mary: Leaders need to be able to recruit and retain talented people, delegate responsibility to talented people and have an inspirational vision for the organization. One great lesson that we had from ShoreBank was in team management. Early at ShoreBank, we were able to hire a large number of very high-energy, capable people who were great at what they did but were often kind of like cowboys. They wanted to run their own departments without collaborating with their peers. Later, we hired some team players who better understood the need to focus on the organization as a whole, the value in being generous. This is crucial. People management and people skills are critical. I should have also mentioned technical skills, but I would imagine that they built these out in their earlier roles. People skills need to extend downwards; not just concentrated among the top people.

Is there a particular mentor or leader who inspired or empowered you?

Mary: With ShoreBank, our idea was to buy a bank in Chicago and use the bank as a vehicle to attract outside resources (and provide its own resources) in investing in its market, which had recently changed from white to black. We eventually grew to quite a substantial holding company that operated throughout the United States. ShoreBank was started by four people including me. Two of us were white and two were black. We worked together for 25 years. So my mentor was the fact that it was a team, and a bi-racial team, that played off our different strengths to become a very successful company. I think I learned a lot about race issues in the U.S. market. I learned a lot about inequality in this country from this team and (about) how different people do different things. We would have failed without that combination of people.

What are you working on now?

Mary: I’m on the board of BASIX [in India] and a couple of its subsidiaries in India; a bank owned by VanCity Credit Union; also Women’s World Banking and three or four other boards, mostly international. The two projects that I’m working on are both U.S.-focused: one on the potential for U.S. banks to be long-term thinkers on both social and environmental issues; the other is that in the U.S., bank loans to African American businesses have really plummeted, and I’m interested in looking at what we can do to address this.

Can you tell us a little about the woman behind the accomplishments? What do you like to do for fun?

Mary: I’m really a Chicagoan. I live on the South Side near the University of Chicago campus. It was a choice to live in integrated environment, and I really enjoy that. I also have a summer cottage in Wisconsin, where I like to spend time. I stay in close touch with all of the people who were running ShoreBank. ShoreBank was closed in 2010, but its affiliated companies are doing great. There’s a CDFI association—essentially, loan funds, equivalency of a micro- finance trade association—when they met a month or so ago in Denver, about 28 managers from ShoreBank were all meeting together there. I stay very connected to this. Community is very important to me, as is my “work family,” and that is what I focus on these days.

Sources for this Story:
Calvert Foundation Board of Directors
Women’s World Banking Board of Directors
“ShoreBank Corporate President Mary Houghton Receives Opportunity Collaboration’s 2009 Economic Opportunity Achievement Award”
Remarks by Mary Houghton: “Credit that matters”

 is responsible for product research, marketing and financial education on the product development team at Women’s World Banking. She conducts product-related customer research and works with network members and associates to develop marketing and financial education programs that target un- and under-banked customer segments as a means of deepening financial inclusion.