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> Posted by Damian von Stauffenberg, Founder, MicroRate

This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.

Why is it that microfinance has grown at such an explosive pace while other development initiatives, which originally looked just as promising, have languished? What’s different about microfinance?

In development, we too often see efforts that look good, but that lack life. Let me offer an analogy in which a tree symbolizes a development project. In this example, a development agency could decide to simply build the tree. To do so, it finds some leaves and pastes them on branches. It then pastes these branches onto a stump, and finally it drills holes for some roots into the stump. If it is skillfully done an impressive tree will result that can be inaugurated, photographed and featured in the agency’s newsletter.

The problem is of course that this tree, though beautiful to behold, is not alive. We have created something that will not grow. To the contrary, eventually it will disappear. All of us have seen such “trees” in the world of development. Read the rest of this entry »