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| Back in black: has microfinance matured? | Back in black: has microfinance matured? |
| (6 days later) | |
| Access to affordable credit was pioneered in the 1970s by the Bangladeshi economist Muhammad Yunus, as a way to support the entrepreneurial capacity of poor people. | Access to affordable credit was pioneered in the 1970s by the Bangladeshi economist Muhammad Yunus, as a way to support the entrepreneurial capacity of poor people. |
| Largely funded by grants and aid, the microfinance sector grew quickly and fuelled hopes for a new "miracle cure" for global poverty. | Largely funded by grants and aid, the microfinance sector grew quickly and fuelled hopes for a new "miracle cure" for global poverty. |
| But in the decades since, critics of microfinance have been just as vocal as its proponents. A series of crises, notably in Nicaragua, Pakistan and India, have called the ethics of microfinance into question, and suggested the sector might need better regulation. One incident, in Mexico, saw borrowers protest against rising interest rates and the heavy-handed tactics used to get repayments – while the government wavered over how to intervene. | But in the decades since, critics of microfinance have been just as vocal as its proponents. A series of crises, notably in Nicaragua, Pakistan and India, have called the ethics of microfinance into question, and suggested the sector might need better regulation. One incident, in Mexico, saw borrowers protest against rising interest rates and the heavy-handed tactics used to get repayments – while the government wavered over how to intervene. |
| Now, supporters of microfinance agree that it's lost its way. In a recent interview, Vijayalakshmi Das, former chief of microfinance institution Ananya, said: "Maybe in the priority list, client interest became the least important one … The crisis has told us that it is time for us to invest more time in understanding our clients and their needs and then respond accordingly." | Now, supporters of microfinance agree that it's lost its way. In a recent interview, Vijayalakshmi Das, former chief of microfinance institution Ananya, said: "Maybe in the priority list, client interest became the least important one … The crisis has told us that it is time for us to invest more time in understanding our clients and their needs and then respond accordingly." |
| So are microfinance institutions back on the right track? Could the sector be maturing? Earlier this month, at the Convergences World Forum, microfinance leaders launched a global appeal for responsible microfinance, calling for commitment to measurable improvements in lending practices. The Centre for Financial Inclusion has also produced a six point action agenda, and placed 'getting serious about client protection' at the top of the list. | So are microfinance institutions back on the right track? Could the sector be maturing? Earlier this month, at the Convergences World Forum, microfinance leaders launched a global appeal for responsible microfinance, calling for commitment to measurable improvements in lending practices. The Centre for Financial Inclusion has also produced a six point action agenda, and placed 'getting serious about client protection' at the top of the list. |
| While the above speaks of steps being made towards a more responsible microfinance, there is also the area of wider effects of access to credit to explore. In a letter to the network, Saif Mohammad Moinul Islam expressed concern that microcredit may be putting vulnerable women at greater risk of violence. While controversial, a response blog by Anjali Banthia suggested that Saif's claims weren't entirely incorrect. Anjali, a researcher at Women's World Banking, writes: "While we do think that microcredit specifically can have this impact it is important to highlight that this analysis [applies to] loans only." | |
| So, where next for microfinance? Will encouraging commercial investment always be at odds with protecting borrower welfare? And how far should lenders go to support or protect their clients? Have your say on Thursday, 3 October. | |
| The live chat is not video or audio-enabled but will take place in the comments section (below). If you are unable to get online on Thursday, email your views to globaldevpros@theguardian.com or follow our tweets using the hashtag #globaldevlive | The live chat is not video or audio-enabled but will take place in the comments section (below). If you are unable to get online on Thursday, email your views to globaldevpros@theguardian.com or follow our tweets using the hashtag #globaldevlive |
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| Panel | |
| Ganhuayg Chuluun, executive chairman, EIT LLC, Ulaanbaatar, Mongolia. @ganhuyag Having begun his career at the Mongolian stock exchange, in 2010 Ganhuyag became vice-minister of finance for Mongolia. He was a member of the Global Agenda Council on social entrepreneurship, and now focuses on engaging financial investments managing turnaround. | |
| Maren Duvendack, lecturer in development economics, University of East Anglia, Norwich, UK Maren specialises in applied micro-econometrics, quantitative analysis and microfinance. She focuses on impact evaluations in India and Bangladesh, and the link between microfinance, empowerment and reproductive health. | |
| Max Robinson, chief operating officer, VisionFund International, London, UK Max runs a broad network of microfinance institutions that serves nearly 900,000 clients in 35 countries. Max is a chartered accountant, and prior to joining VisionFund worked for various banks and strategy consultancies. | |
| Ismail Ahmed, founder and CEO, WorldRemit, London, UK. @WorldRemit Ismail has extensive experience in international remittances as an academic researcher, compliance adviser and consultant for money transfer companies. He was formerly a compliance advisor at the UN remittance programme. | |
| Ben Warren, founder and CEO, Kubaru Microfinance, London, UK. @kubaruorg Ben specialises in post-disaster microfinance, supporting partners in the Philippines and Burkina Faso. He is also a social investment policy adviser at the Cabinet Office. He previously worked in investment management. | |
| Nejira Nalic, director, Mi-Bospo, Tuzla, Bosnia and Herzegovina. @NNalic Nejira's group serves over 15,000 clients who are mostly women, and is a member of the Women's World Banking network. She also helped establish the debt advisory service The Plus. | |
| Philippe Guichandut, head of development and technical assistance, Grameen Crédit Agricole Microfinance Foundation, Paris, France Philippe specialises in setting up and monitoring microfinance projects. He was the first executive director of the European Microfinance Network and has taught microfinance project management for over 10 years. | |
| Shameran Abed, associate director of microfinance, Brac, Dhaka, Bangladesh Shameran manages microfinance operations that serve over five million clients in Asia and Africa, with a loan portfolio of more than $900m. He is on the Microfinance Network and the World Economic Forum financial inclusion steering committees. | |
| John Bergeron, executive director, Truelift, Fort Collins, US. @jdbergeron John specialises in developing social performance strategies and audits. He works with responsible inclusive finance working group and social performance task forces, and frequently speaks on socially motivated microfinance. | |
| Dennis Ripley, chief business development officer, Opportunity International, Oak Brook, US. @OpportunityIntl Dennis provides oversight for the grant and equity funding raised and placed in Opportunity International's financial institutions in over 20 countries. | |
| Anthony McKernan, acting CEO, Five Talents UK, London, UK Anthony specialises in providing microfinance options for those in rural and post-conflict areas, and those who are marginalised in developing countries. | |
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