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Aug 01

Summit Reflections: Transparency

Posted by: Dan Lundmark

Dan Lundmark

This past week at the summit a major topic was interest rate transparency, as some MFIs have come under fire for charging relatively high rates and allowing "mission drift" to move them to a priority of high profits instead of the original mission of poverty alleviation. Long time microfinance insider Chuck Waterfield has taken the initiative to address these concerns, launching MicroFinance Transparency.

A highlight for me was the lively discussion between Professor Muhammed Yunus, Damian von Stauffenberg (the founder of MicroRate), and Chuck. They debated the importance of the profit motive in growing microfinance, with Yunus holding firm to the ideal of not making a profit, seeking only to break-even and pass any potential profits back to the clients. In my view microfinance has always been a profitable business proposition, with profit driving the ability to expand the reach of poverty alleviation efforts. Perhaps the debate should be reframed around reinvesting profits to expand reach vs. passing profits on to outside investors. Or is it possible to do both?

(Photo: Denise Hughes)

 The topic is getting great press in the Wall Street Journal, BusinessWeek, Forbes, and many more (100+ stories listed when I searched Google News).  It's great to see this positive move coming from inside the Microfinance community to address these issues now rather than later.
With current energy price pressures, environmental degradation, and climate change looming, we at GreenMicrofinance hope to lead a similar movement among MFIs, disclosing standardized metrics of environmental impact and sustainablility.

Jul 27

Summit Day T minus 1 and counting...

Posted by: Dan Lundmark

Tagged in: Poverty , Microfinance , Impact , Environment

Dan Lundmark

Flying USA to Bali is one of the longest flights possible on the planet, at about 20 hours in flight. Any further and it's quicker to come around from the other side. It was then great to see a familiar face during the layover in Hong Kong - it turns out Sam Daley-Harris and Eileen White Read of the Microcredit Summit Campaign were also on my flight! While waiting to process an entry visa, I had a chance to chat with a tourist from Australia about current events. She was excited about Obama, with comparisons to Ronald Reagan and John F. Kennedy and the possible impact of his campaign. That led to a conversation about microfinance and the difference between 'trickle-up' vs. 'trickle-down' approaches to addressing economic, social, and environmental challenges. Our conversation concluded with the idea that government policy plays a large role, however local actions driven by economic incentives can bring the broadest impact. After a Rp. 50,000.00 taxi ride (that's $5US) In Bali on the way to lunch with Denise Hughes today we ran into Mr. Bambang Isamawan of Gema PKM, Professor Muhammad Yunus of Grameen Bank, and Sam Daley-Harris.

  (from left: Katheleen, Mr Isamawan, Professor Yunus, Sam, Elizabeth, and myself)
Tomorrow the summit begins. We're excited to see where microfinance is going. Please share your thoughts in the comments below. Stay tuned!

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