Finding Macro Solutions for Microfinance
Friday, November 22, 2013
Small loans to give backcountry villagers a modest start toward entrepreneurship — the bright idea that brought Muhammad Yunus the Nobel Peace Prize in 2006, 30 years after he founded Grameen Bank in Bangladesh — is by now a fading ideal. Microlending goes on, to be sure; dozens of Grameen offshoots and other institutions adopting the microfinance model have extended billions of dollars of credit that have helped lift millions of borrowers out of poverty.
But Grameen and its peers, after some unaccustomed losses in the Great Recession, have shifted into different and higher gears that could ultimately accomplish far more. At least, that is the hope and vision of a widening circle of government-related and nongovernmental organizations, investors, technology entrepreneurs and even established banks, all eyeing returns on investment from delivering innovative financial services to the world’s poor.
Much of the activity falls under the rubric of financial inclusion, which is the mantra of a campaign funded by the likes of the Ford Foundation, the Bill & Melinda Gates Foundation and such designated grantees and partners as the Alliance for Financial Inclusion and the Better Than Cash Alliance. The Group of 20 endorsed a Financial Inclusion Action Plan at its Seoul summit in 2010. The G-20 “platform” is the Global Partnership for Financial Inclusion — whose honorary patron, Queen Máxima of the Netherlands, is the United Nations Secretary-General’s special advocate for inclusive finance for development — a Gates Foundation partner.