Unveiling the Dark Side of Microfinance: Pitfalls and Precautions

Introduction In recent years, microfinance has been widely touted as a powerful tool for poverty alleviation and financial inclusion. However, it is essential to recognize that microfinance is not a one-size-fits-all solution. This article delves into the lesser-known negative aspects of microfinance, analyzing potential pitfalls, and suggesting precautions to minimize harm to borrowers and communities. […]

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The Month of Microfinance Goals: Advancing Financial Inclusion for All

Microfinance has emerged as a powerful tool in the fight against poverty by providing access to financial services for those who are traditionally excluded from the formal banking sector. Microfinance institutions (MFIs) have been instrumental in providing loans, savings accounts, and other financial services to millions of people worldwide. In recognition of this vital work,

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The For-Profit Controversy

Although there are countless heartwarming success stories ranging from micro-entrepreneurs starting their own water supply business in Tanzania, to a $1,500 loan that allowed a family to open a barbecue restaurant in China, to immigrants in the U.S. being able to build their own businesses, microfinance has sometimes fallen under criticism. While microfinance interest rates are

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MAKING MICROINSURANCE WORK IN BANGLADESH: THREE TAKEAWAYS

The market for microinsurance in Bangladesh has been growing rapidly over the last 10 years, with over 25 million subscribers. Yet it is still met with skepticism among many poor microfinance clients. As of this January, BRAC, in partnership with Guardian Life Insurance Company, joined the market making its Credit Shield Insurance product available nationwide to

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Q & A WITH THE FOUNDER OF ZIDISHA – PART 2

Julia Kurnia is the founder of Zidisha, the first online community to enable direct person-to-person lending to entrepreneurs in developing countries without local intermediary banks. We had our first Q&A with her last year. You can find her on facebook and twitter. What makes a person-to-person lending platform so unique in the microfinance world? Person-to-person lending platforms like Zopa, Prosper and Lending Club have reduced

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REFLECTIONS ON STARTING MICROFINANCE IN A NEW COUNTRY: BRAC’S JOURNEY IN MYANMAR

In 2014 BRAC launched its microfinance operations in Myanmar – one of the last countries in the world to open up its economy and simultaneously the country with one of the poorest and most unbanked populations. Within three years BRAC has grown to serve over 40,000 women. Read about its journey in a country full

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THE HIDDEN IMPACT OF MICROCREDIT: THREE UNDER-RECOGNIZED WAYS THE INDUSTRY CAN HELP EMERGING MARKETS

In my last post, I argued that there is a case for social investment in microcredit under the status quo, since delivering microcredit is, on average, so cheap. That discussion presumed evaluating microcredit on the terms that the industry was built on: raising the income, investment and consumption of clients. It’s on those measures that

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