article "Microfinance doesn't end poverty, despite all the hype."
March 23, 2012 in Center for Financial Inclusion, Microfinance CEO
Working Group | Tags: Microfinance CEO Working Group Posted by Meghan Greene
The Microfinance CEO Working Group consists of the CEOs of leading
microfinance organizations ACCION, FINCA International, Freedom from
Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer,
VisionFund International, and Women's World Banking. In the post below,
the CEOs respond to the recent Washington Post article by David Roodman.
This may surprise you. As the CEOs of eight global microfinance
organizations, we largely agree with the substance of David Roodman's
March 8 op-ed "Microcredit doesn't end poverty, despite all the hype."
The headline, however, is just silly.
The hype is long over. The industry agrees that microcredit is not a
"silver bullet" to end all poverty, even though it can and has helped
many people build better livelihoods. As Roodman says, "Financial
services are like clean water and electricity – they are essential to
leading a better life." To significantly improve the lives of the
majority of the 2.7 billion people living in poverty, we need a number
of essential ingredients: education, health care, basic nutrition, the
rule of law, infrastructure – and access to a variety of financial
services especially designed for the poor, including credit.
The leaders of the microfinance industry have known this for some time.
And the industry has been moving in this direction for many years.
Today, the frontiers of microfinance go well beyond microcredit, to
include savings, insurance, money transfers and other products that, as
Roodman points out, the poor need just as much as the rich to manage
their financial lives. These financial services are important tools that
help individuals manage their businesses, cope with unpredictable cash
flows, build assets, and afford lump-sum expenses, like health
emergencies and school fees. Microfinance institutions are harnessing
new technologies to expand their reach and to serve clients faster,
better and cheaper than before.
Today, microfinance reaches about 200 million clients worldwide, a tiny
fraction of the billions whose lives would be better with access to
these basic services. We have much more we need to do, but continuing to
debate about whether microcredit – by itself – can end poverty is
distracting us from the far more important question of what we can do to
assist the poor.
The Microfinance CEO Working Group
Michael Schlein, President and CEO
ACCION
Rupert Scofield, President and CEO
FINCA International
Steve Hollingworth, President
Freedom from Hunger
Alex Counts, President and CEO
Grameen Foundation USA
David Simms, Board Chair
Opportunity International Network
Rosario Pérez, President and CEO
Pro Mujer
Scott Brown, President and CEO
VisionFund International
Mary Ellen Iskenderian, President and CEO
Women's World Banking
Image credit: frontpagemag.com
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
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