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Online Extra: Yunus Blasts Compartamos
Muhammad Yunus , who won the Nobel Peace Prize in 2006 for his pioneering work in extending credit to the working poor in Bangladesh, is aghast at the business strategies employed by a onetime charitable microlender that has become Mexico’s most profitable bank, Banco Compartamos (BMOSF). They’re absolutely on the wrong track, says Yunu...
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Compartamos: From Nonprofit to Profit
Banco Compartamos portrays itself as the gentler lender to Mexico’s poor. Compartamos means let’s share, reflecting the philosophy of its founder, Jos? Ignacio Avalos Hern?ndez. The scion of a cosmetics business family, Avalos, 48, is a devout Catholic who in 1990 converted a nonprofit donating food and clothing to the deprived into one that made loans guaranteed by borrowers’ neighbors. Clients, mostly women, gather weekly in groups of 12 or more. They can bor...
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Wal-Mart Banks on the ’Unbanked’
Every day 2.5 million people walk through the doors of a Wal-Mart (WMT) store in Mexico, generating nearly $20 billion in sales last year. Now they are potential customers of Banco Wal-Mart, the chain’s new lending operation. So are the company’s 12,000 Mexican suppliers, as well as its 155,000 employees. We want to leverage this traffic we have in our stores, says Julio B. G?mez, Banco Wal-Mart’s chief executive. As in the U.S., Wal-Mart is Mexico’s larges...
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The Ugly Side of Microlending
In a gleaming office tower in Mexico City secured with retinal scanners, bulletproof glass, and armed guards, dozens of workers in white lab coats dart around a large operations center monitoring long rows of computers. Along one wall, 54 enormous screens flicker dizzyingly with numbers, graphs, and fever charts: a relentless stream of data. You’d think the urgent mission involved tracking the trajectory of a spacecraft or the workings of a national power grid, not tiny amounts of cash and c...
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India?s dismal record on many fronts
By Rasheeda Bhagat Even as we get ready to cheer the 20-K mark the BSE Sensex might once again breach sometime soon, and do a lot of back-slapping on how India continues to remain an investment destination of choice, details in the 2007 Human Development Report released on November 27, highlighting some stark realities, should sober us up. On the Human Devel...
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MicroPlace Adds India to Roster of Microfinance Investment Opportunities
MicroPlace ( www.MicroPlace.com ), a wholly-owned subsidiary of eBay Inc. , today announced that it now offers investment opportunities in India through Oikocredit , the world’s largest private financier of the microfinance sector. For the first time, everyday people can make investments in India’s working poor by leveragin...
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Putting a Different Face on Africa: Hope for an Economic Turnaround
Africa’s stunning lack of basic services, such as electrical and telephone grids and Internet connectivity, might cause many to despair, but Euvin Naidoo -- a leading advocate for Western investment in the underdeveloped continent -- looks at the map and sees something different: hope. Naidoo, president and CEO of the South African Chamber of Commerce in Ame...
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How the Mobile Phone Is Becoming a Wallet
The Credit Suisse Thought Leadership Conference 2007, organized by ISP for key clients, took place on November 20 in Zurich under the slogan Entering the Next Level. One of the speakers was Professor C. K. Prahalad from the University of Michigan, USA. In an interview he talked about microfinance and market potential at the bottom of the income pyramid. Cornelia Stauffer: Why are you campaigning for the market at the bottom of the income pyramid? Pro...
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