With my new Corporately Socially Responsible hat on, I attended a meeting last night of the Micro-Finance Club UK (The agenda being the title of this blog).Having worked with Microfinance ("MF") in Angola and been exposed to it in Bangladesh, I was looking forward to a lively debate with interesting viewpoints expressed. But sadly no!
Winners and losers
Since Dr. Yunus's Nobel prize, I have harbored a growing disquiet at the amount of interest and attention MF has got. Whilst I acknowledge there are winners, I have also seen losers and I feel it is an area for discussion. All the current attention seems a distraction, that funds and creativity have been diverted from real needs.
In London, everyone wants a piece of the MF action and to have MF on your CV is suddenly very "bankable" experience. It is as if MF is the silver bullet and we don't have to think of a solution to the problem of poverty anymore. If she were here today; Marie-Antoinette may well have said "Let them have credit".
What is wrong with MF?
The meeting was held in the shiny glass corporate HQ of Barclays Bank and introduced by the Group Vice Chairman, who proudly announced that MF was "now part of the banks business strategy, not just philanthropy".
The speakers ploughed through their intelligent, thought provoking research to general heckling from the Armani suited and Gucci carrying Investment Banking audience. One of the most provocative statements the speakers raised was:
- "Repeat borrowing is often quoted as a success measure..So what we are really saying is that these people paid of their loans and then came back to borrow more. Is that success? The same behaviour can be seen with drug users yet we consider increasing need and dependency as bad."
Every question to the speakers was either an attack or a self-justification. One eldery gentleman, purple with frustration, jumped up and yelled "Tosh!!" (A terribly British word last uttered in public in 1853)
I am a big believer in open forum discussion, I easily slip into devil's advocacy and feel the need for all perspectives to be considered. Far from a debate, all I saw were closed minds, self-serving celebration and a desire for profit.
I left as early as politely possible, thanking the speakers on my way to the door. I am left with the sad impression that the biggest thing wrong with microfinance is to voice any criticism of it.
2 comments:
Regardless of how we participate, through donation or loan (Kiva) I suspect that someone other than the recipient of the loan is making a profit off of my money. I know almost nothing about micro credit and would like to know more. There are lots of feel good articles on the web, but I can't find anything that allows me to understand all sides of micro finance. Also, as long as someone is making money off of my money, I would like to participate. Any suggestions where to put my $100.
I don't get your point: is there anything wrong with MF or not?
I guess it is: charging SO high interest rates can't be considered development support or poverty fight tools. Money lenders have existed since the dawn of times, all charging high rates. The challenge is to charge a rate that allows the MF institution to survive and the borrower to thrive...
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