> Posted by Val Ng
I hopped in on Professor Rachel Ellett’s “Introduction to International Relations” class today, where Dr. Rhyne was invited to speak. She began by defining Microfinance with two definitions: 1) financial services for low-income people in the developing world and 2) a movement where groups of institutions since the 1980s developed a certain set of methodologies on providing services to the poor. In the world today there are 600-700 major microfinance institutions that altogether serve around 100 million families.
Dr. Rhyne’s brief lecture on the history of microfinance and ACCION led to a rapid firing of questions. What are the issues with a not-for-profit organization transforming into a for-profit organization? An interesting fact Dr. Rhyne mentioned was how microfinance does not need money for lending but rather, money for expansion and the building of the industry. On the other hand, with microfinance on the rise, there is now danger of competition and the problems that come with competition in such a small industry. What’s the right way to communicate interest rates to clients?
ACCION is a company with a global reach. What interests me the most are the differences of operation among countries and how cultures spend money on different things. The money loaned could well be spent on alcohol, tobacco, and ceremonies. But if the repayment is still coming in on time, so what? Should training on how to successfully invest money be necessary for clients? And if so, wouldn’t the training have to differ according to different cultures in order for it to be successful?
Val Ng is a student at Beloit College and is our guest blogger reporting on Elisabeth Rhyne’s participation in the week of events surrounding the 10th anniversary of the Weissberg Chair Program. Elisabeth Rhyne is this year’s Marvin Weissberg Chair.