Microfinance Leaders Strive to Walk the Walk

> Posted by Center Staff
Beth Rhyne’s latest contribution to the Huffington Post examines specific steps that microfinance leaders are taking to respond to a legion of new challenges facing the industry.
Vijay Mahajan, founder of the microfinance institution BASIX, and widely regarded as the dean of Indian microfinance, is walking the hot and dusty roads of rural India in his kurta pajama and sandals, and as he’s walking he’s thinking about the microfinance industry’s tough year. A crisis of overindebtedness among some clients in Andhra Pradesh, India, political attacks on Mohammad Yunus of Grameen Bank, and academic studies that question the magnitude of microloan impact have all conspired to shake the global microfinance community at its roots.
Vijay, who has devoted thirty years of his life to microfinance, is taking these challenges very seriously. He has dropped all routine activities and is spending two months walking in villages across India, both as a spiritual journey and as a way to listen fully to the voices of low income people…

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Other Huffington Post articles by Beth Rhyne:

Three Secrets of Safe Microfinance – January 20, 2011
Like sex, microfinance can be safe if practiced responsibly. Recently, however, we’ve seen that not all participants in the microfinance industry are practicing safe microfinance. As happens with that other risky activity, the players in microfinance face temptations that lure them away from healthy long term relationships. One need look…
A Tale of Microfinance in Two Cities – December 13, 2010
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….
On Microfinance: Who’s to Blame for the Crisis in Andhra Pradesh? – November 2, 2010
When a story on microfinance appears in major media outlets, the effect on the public image of the sector can be dramatic. That’s why last Friday’s article in the Wall Street Journal, “India’s Major Crisis in Microlending,” requires a response. The story covers a microfinance crisis in the…
An Open Letter to Elizabeth Warren – October 18, 2010
“The industry is trying to fix itself right now” – Elizabeth Warren, speaking on “In Business with Margaret Brennan”
Dear Ms.Warren,
What an important challenge you face in bringing the new Consumer Financial Protection Bureau into being! Although you’re reputed to be a woman not easily daunted, it might…
Funding the Risk Frontier in Microfinance – September 13, 2010
The recent IPO of SKS Microfinance, India’s largest microfinance institution (MFI), was a watershed event whose ripples are affecting the public perception of microfinance. When an organization originally founded as a nonprofit first attracts some $75 million in successive waves of private equity capital and then raises $358…
Measure? Alleviate? No, Eliminate Poverty – August 17, 2010
While academics from prestigious East Coast universities are developing randomized trials to test the impact of microfinance on poverty – and coming up only with modest-sounding results, Martín Burt, the founder of Fundación Paraguaya , is making a bold leap. Not content to measure poverty impact, or even…
Microfinance: Keeping the Mission When Non-Profits Become For-Profits – August 9, 2010
Most people with a lively interest in microfinance know that the majority of microloans dispensed throughout the world today come from for-profit microfinance institutions, rather than donation-dependent non-governmental organizations (NGOs). What may be less recognized is how these for-profit MFIs were born. Many of the world’s largest and most successful…
A New Financial Access Frontier: Persons With Disabilities – July 27, 2010
Can a person with a disability living in a developing country become the valued client of a financial institution? According to Harvard Law professor Michael Stein, 650 million people around the world, nearly 10 percent of humanity, have a disability, and over 80 percent of these people live in developing…
The Impact of Microfinance: Grameen Foundation Provides a Primer – June 21, 2010
What’s the impact of microfinance? A question with 150 million answers, one for every client around the world who receives microfinance services. Academics who wield sophisticated statistical tools to assess complex social phenomena like microfinance give answers with more precision, but they don’t always spend much time explaining their…
Microfinance Among the Populists – June 11, 2010
Populist governments across Latin America are re-shaping the environment in which microfinance institutions (MFIs) provide financial services to low income people. The proposals of these governments are similar -interest rate caps that are politically attractive but unfeasible, public intervention in financial services (as they have nationalized other industries) and a…
Why are Microfinance Interest Rates So High? – May 28, 2010
Americans often suffer sticker shock when they hear about interest rates charged in international microfinance. At annualized rates above 20 percent, most Americans start getting uncomfortable, and when they hear that in some places annual rates rise as high as 100 percent or even more, their moral outrage beepers start…
How Much Debt is Too Much? Microlenders Want to Know. – May 17, 2010
When does a borrower cross the line from leveraged into losing it? Every borrower wants to avoid sliding into debt stress. Lenders, too, have a stake in ensuring that their clients cope successfully with their debt burdens. If no one wants debt stress, why is there so much of…
Lessons for Microfinance – April 20, 2010
Lately the microfinance industry has come under a lot of scrutiny, but media coverage doesn’t reveal the full picture. A recent New York Times article painted microfinance an industry overrun by big banks that charge eye-popping interest rates. First, a couple of misperceptions have to be cleared…
Image credit: Lorenz Kerscher

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