You are currently browsing the monthly archive for December 2010.
> Posted by Center Staff
We’re grateful to all of you who read our blog, work with us, and spread the word about financial inclusion. It’s been an eventful 12 months, and between now and the New Year, we will be taking a rest. Please visit the blog again in January 2011. We promise to continue bringing you the latest news and cutting-edge thought about the microfinance industry.
If you’re looking for some interesting reading between now and then, we recommend checking out our most-read posts of 2010 for an extra helping of inside perspectives and unique analyses.
Until then, we hope your holiday season and New Year are wonderful!
> Posted by Center Staff
“WAKE UP! … that is my call to microfinance.”
CFI Managing Director Beth Rhyne is setting forth a 6-point program to “‘recalibrate’ microfinance, or, as Vijay Mahajan put it, to ‘get the house in order’.”
In a guest post on David Roodman’s Microfinance Open Book Blog, she calls Andhra Pradesh “the most serious challenge to the microfinance sector in its brief history.”
Rhyne goes on to detail a vigorous approach to this recalibration. Among the key points:
- “The AP crisis has tagged ‘founder domination,’ executive compensation and the role of pure-commercial private equity as issues needing attention.” Read the rest of this entry »
> Posted by Center Staff
It was the best of times, it was the worst of times, it was the end of the ‘00s. It wouldn’t make sense to barrel through to the New Year without recapping some most-read posts of 2010.
Unsurprisingly, Andhra Pradesh seized headlines, and similarly sobering was Alex Silva’s take on MF failures. Also this year, documentary-maker Tom Heinemann flailed ineffectually at Dr. Yunus, the Gates Foundation showed us how it’s done, and Essma Ben Hamida held forth on “How Microfinance Matters.” And that’s just the end of the beginning…
- On Microfinance: Who’s to Blame for the Crisis in Andhra Pradesh
- Where Is Microfinance Headed? Essma Ben Hamida Interview Kicks Off ‘Microfinance Matters’ Series
- The Lessons of Andhra Pradesh
- Alex Silva on Failures in Microfinance
- Throwing Shoes at Dr. Yunus
- Swadhaar Co-founder Veena Mankar Analyses Andhra Pradesh Developments
Read the rest of this entry »
> Posted by Michelle Romeu
While the reverberations from upheaval in Andhra Pradesh continue, other noteworthy projects are moving forward. Blogosphere picks:
- Kiva is partnering up with FAI for a three-week educational series on the different aspects of microfinance. Check out their posts on microcredit and microsavings.
- Tanaya Kilara explores the tendencies of Kenyan and Ghanaian youth at CGAP’s Microfinance blog as part of market research for the Youthsave project. Read the rest of this entry »
> Posted by Anita Gardeva
The industry is still piecing together Andhra Pradesh, sizing up the government’s response, and puzzling over how to prevent a repeat.
To tackle this, microfinance’s biggest challenge to date, the Center for Global Development (CGD) hosted a panel of experts for a wide-ranging discussion on December 9th.
- CGD Senior Fellow David Roodman laid the foundation for the discussion with facts from the ground in Andhra Pradesh
- Stephen Rasmussen, technology program manager at CGAP, added the context of India’s long history of financial inclusion initiatives and vast array of players.
- Swaminathan Aiyar, one of India’s leading economic journalists, brought perspective on India’s political economy, how it contributed to this crisis, and why Andhra Pradesh is far from a one-time affair.
- CGD Senior Fellow Liliana Rojas-Suarez argued for adoption of policy principles that could have prevented this crises.
- Beth Rhyne, managing director of the Center for Financial Inclusion, shared an agenda for how we can “re-calibrate” the microfinance industry.
Among the questions the panel members grappled with: Read the rest of this entry »
> Posted by Josh Goldstein, aka Mr. Provocative
My first job out of college in the seventies was selling Encyclopedia Britannica in Connecticut. After a week’s office based training where I learned from oracles on the sales force how to “build the four walls around the customer so they {the customer} can’t get out,” I gamely popped a mint in my mouth and began to ring door bells of my prospective quarry. (None of these were the dreaded “cold calls”: interest had been signaled via phone solicitation or by the filling out of a newspaper insert.)
It quickly became apparent that I had no talent for convincing my would be customers in middle class neighborhoods to buy the premium set with luxury binding which would earn me a healthy commission as opposed to the economy edition in faux leather, which would earn me peanuts. In fact, I was lucky to get my foot in the door, let alone erect even one of the four walls on the road to commission heaven. Indeed, it became increasingly apparent that the middle class were reluctant to buy from a door to door salesman—when they wanted a product, they went out and shopped around for it on their own terms. It was reassuring to find out that it wasn’t only a novice salesman like me who suffered at the hands of the middle class. Even the legends of the sales force encountered resistance from these quarters.
So where did the commissions come from that kept the Britannica sales force in clover? Read the rest of this entry »
> Posted by Michelle Romeu
Beth Rhyne’s latest Huffington Post blog puts Bolivia’s microfinance crisis of 1999-2000 side by side with the current crisis in Andhra Pradesh. In the late 1990s, Bolivia suffered the adverse effects of a microfinance bubble; now, ten years later, the affected institutions have recovered and Bolivia’s microfinance sector is looking much healthier due to several adjustments that pushed it in the right direction. Despite the innate differences between the two countries’ situation, perhaps India can look to Bolivia for a “recipe for reform,” or at the very least, hope for the future.
Microfinance in India is undergoing a crisis caused by a toxic mix of mushrooming growth and political volatility. As they ponder their next steps, participants in the Indian microfinance sector would do well to examine another crisis that touched microfinance, in Bolivia in the years 1999 and 2000. Hyderabad, meet La Paz. Read the rest of this entry »
> Posted by Center Staff
The bad news is, a new study has found that microfinance has difficulty reaching the very poor.
The good news is, that’s not the sweet spot of microfinance. Never has been.
Reams of research show that MFIs are best at reaching people who are moderately poor, as well as those scrabbling to stay above the poverty line. That population is huge enough to keep the world’s MFIs running at full steam for a terribly long time to come.
So there is not much “new” news in the metaevaluation on microfinance released by the Evaluation Cooperation Group of international financial institutions.
But helpfully, the new study reminds us of several points and potential pitfalls, including: Read the rest of this entry »
> By Center Staff
Yesterday we reported that “Caught in Micro Debt,” Tom Heinemann’s new documentary, alleged misuse of Norwegian donor funds by Dr. Muhammad Yunus’ Grameen Bank.
This hatchet job brought Heinemann his seconds in the spotlight — and caused great anguish to the people and institutions whose integrity he attacked.
The Norwegian foreign ministry on Wednesday stated that “no Norwegian money is missing or unaccounted for,” according to the BBC. Read the rest of this entry »
> Posted by Center Staff
Taking a swipe at a Nobel Prize winner is a sure way to grab some headlines, as documentary film-maker Tom Heinemann is proving.
Heinemann’s film “Caught in Micro Debt” is a broad critique of microfinance, but the headline that has grabbed most of the attention is the accusation of dubious activities by Muhammad Yunus’ Grameen Bank — activities involving use of aid funds in ways different from those intended by Norwegian and other donors.
The accusation is significant, though it is important to note that there is no intimation of use of the funds for purposes unrelated to microfinance or for personal gain. Whatever the merit of the charges leveled at Dr. Yunus, it’s clear that Heinemann had to dig long and hard for his material. A long time has elapsed since 1998, where Heinemann sets his tale. And that is why it is hard for observers (like us) to know exactly what happened at that time.
Lack of clarity about the facts doesn’t stop the blogosphere and media from opining, of course, or from uncritically transcribing interested parties’ opining. Here are links to four pieces offering early snapshots and spin:
• The BBC’s Ethirajan Anbarasan takes a mostly just-the-facts approach in “Grameen founder Muhammad Yunus in Bangladesh aid probe”, noting that “Norwegian authorities say they have no suspicions of tax fraud or corruption committed by Grameen Bank.” However, Heinemann’s parting overgeneralization that “poor people are getting into more and more debt because of micro-credit loans” goes unchallenged. Read the rest of this entry »
Facebook
Twitter
Recent Comments