> Posted by Val Ng
Elisabeth Rhyne takes questions from students during the senior seminar at Beloit.
Sitting in on a senior seminar class reminds me that college is almost over. The atmosphere is more serious, and the topics of discussion are deeper (and sometimes fly over my head).
My main interest was Dr. Rhyne’s discussion of the public sector and how Indonesia has the most successful government-owned microfinance bank. Having lived 6 years of my childhood in Jakarta where my dad worked in Citibank, this topic fascinated me. I had no idea that Bank Rakyat Indonesia (BRI, meaning ‘The Bank of the People of Indonesia’) had such a history of success. That makes me really curious – what is it about Indonesia and BRI that has allowed this success? What is it about the country’s culture, politics, and policies that has allowed this and why can’t other countries copy it?
I was also fascinated by the topic of debt bondage and the formal versus the informal sector with regards to loans. Loan sharks are a huge problem in many countries. Is there a way to create a system that renders loan sharks useless?
Two final notes: Dr. Rhyne has mentioned gender issues in a lot of her lectures. ACCION’s clients are 65% female. It’s interesting to think about gender-related topics and microfinance. Also, what are the pros and cons of microfinance being ‘sold’ to supporters as a poverty alleviation tool vs. a financial-sector development tool?
Thoughts and ideas anyone?
Val Ng is a student at Beloit College and is our guest blogger reporting on Elisabeth Rhyne’s participation in the week of events surrounding the 10th anniversary of the Weissberg Chair Program. Elisabeth Rhyne is this year’s Marvin Weissberg Chair.
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March 27, 2009 at 7:51 pm
Alex Schwartz
I found Dr. Rhyne’s visit to this class, as well as my Economic Development course, to be truly edifying. I was previously largely ignorant about microfinance and, had it not been for Dr. Rhyne’s visit, I would still hold many of my misconceptions of it.
One important thing that I have learned is that although microfinance is a means to increase the standard of living of many citizens in developing countries, “poverty alleviation” is not necessarily the goal of microfinance. Instead, its goals are more closely-aligned with the expansion of the financial sector and the empowerment of entrepreneurs in these countries. Judging from the class discussion, I think many of my fellow students also held this misconception.
I would also like to echo Val and say that I was amazed to learn that 65% of the clientele were women. I find this remarkable, and would cite it as a clear example of microfinance’s immense potential for social progress. I am looking forward to Dr. Rhyne’s address this evening.
March 27, 2009 at 9:43 pm
Tshepo Mosienyane
I like the idea that Professor Rhyne raised about modelling microfinance on Federaral Housing Act. The mortgage business was modified by making the loan repayments stretch for a longer period rather than the initial five year period. I hope when this is applied to microfinance, the longterm effects are taken into consideration. Effects such as the viability of the business. This could help in avoiding things such as loan defaults.
March 27, 2009 at 11:46 pm
Ryohei Onda
Before coming to the class I read some news about microfinance, and I found a critique about large private financial institution such as venture capitals going into the field. The article’s point was how large business companies’ greediness can spoil the nature of microfinance; however, I am personally favor of this phenomenon. The primary reason for this is because those profit-seeking business companies have their “soft power”, which is their skill to conduct marketing researches, experience to calculate the best financial flow, and any other intangible assets to help the business run smoothly. (After all, that is the most valuable feature of venture capitals, right?)
I am wondering how those “soft powers” large corporations hold can help the clients of microfinance. Besides financial assistance, are there any kind of system or example in which clients can benefit from the soft power lender possesses? Also, on Friday’s night’s speech I asked a similar question, and Dr. Rhyne talked about her opinion about job trainings done by microfinance institutions. In the answer she commented that the clients know about their business more than trainers expect. However, then my new question is; what do they not know about their business? What kind of things taught in the job trainings are benefiting the clients most?
March 28, 2009 at 9:58 am
Kelly Allen
Last night’s address by Professor Rhyne dispelled many misconceptions regarding microfinance and prompted thought-provoking dialogue regarding the shortcomings of the mainstream economic systems. It is ironic that the microfinance movement once looked to mimic the mainstream economic market, but now that market has a few things to learn from microfinance. Rhyne’s call to bring the “soul” into business is so simple and yet so complicated in its application. Perhaps the economic crisis is precisely what is needed to initiate such ideological changes in mainstream businesses.
March 28, 2009 at 1:07 pm
Hannah Westheimer
Like Alex and Val, I was interested in microfinance’s relationship with women. After being in Latin America and witnessing the strong gender roles, it was interesting to hear Dr. Rhyne talk about how she has not seen a problem regarding women coming out of the private sector and into the public sector with the help of micro loans. Maybe microfinance is actually helping make gender roles more equal in Latin America. However, I still wonder if these loans create any problems within the Latin American household that Accion International might not be able to see. I think that we will not really be able to see the affects of these loans on gender roles until generations in the future.
March 28, 2009 at 3:34 pm
Tshepo Mosienyane
During her class visit,Dr. Rhyne mentioned that Accion didn’t do business in Botswana because Botswana has a low population density. Botswana might have a low population density, but it has a sound economy. If Accion did business in Botswana they might get a better return on their investment because of Botswana’s good governance and sound economy. Our currency has value. And there is a lot of peace.Or maybe i’ i’m just being patriotic, because i’m from Botswana.
March 30, 2009 at 6:30 pm
Rattana Phon
I had no previous knowledge about micro-finance prior listening to Dr. Rhyne’s talks. I learned quite a great deal from listening to her talks. It is interesting to learn that 65% of the ACCION’s clients are women. Even though I feel that it is a reasonable statistic since I believe women need more help, I still think ACCION is a good institution to assist those who need help without focusing on one gender issue. Also, one other thing that I’ve learned is that loaning out money to the right people is more productive than just giving it out. I’m very fascinated by Beth’s desire and concern on how to make micro-finance a useful source for people, especially the poor that need it.