What's Wrong with Microfinance? - Softcover

Dichter, Thomas; Harper, Malcolm

Softcover

ISBN 10: 1853396672 ISBN 13: 9781853396670

Publisher: Practical Action Publishing, 2007

Synopsis

Microfinance has been a long-lived development fashion. It has been around since the 1980s, and in 2005 it enjoyed the accolade of a UN international year. The reasons for this success are obvious. It reaches millions of poor people, particularly women, and it can be profitable both for some of its customers and also for the institutions which finance it.

There are, however, some important problems, discussed in this book. Some arise from exaggerated expectations, some from bad design and mismanagement and some from erroneous basic policies. Is microfinance really a step on the road to economic growth, or is it a short-term palliative, keeping poor people poor? Can an MFI really work if it embraces the "double bottom line" of both profit and social good? Is microfinance, especially credit, harmful, often landing the vulnerable poor in debt? Should microfinance be reaching the poorest? The chapters, written by well-known experts in the field, are grouped around the categories: clients, institutions, and expectations.

The authors sound a timely warning to governments, bankers, donors and the general public. The intention is not to bring microfinance to a stop, but to make people pause, reassess their expectations and re-think some policies. Microfinance is never a panacea and may sometimes be actively damaging to its intended customers.

Contributors: Irina Aliaga; Hugh Allen (Boulder Microfinance Training Program and Southern New Hampshire University's Microenterprise Development Institute); Milford Bateman; Thomas Dichter; David Ellerman (University of California/Riverside); Dr. Prabhu; Malcolm Harper; Mary Houghton and Ronald Grzywinski (both ShoreBank Corporation); David Hulme; Susan Johnson; Vijay Mahajan; Imran Matin and Munshi Sulaiman; M. A. Saleque; Richard L. Meyer (Ohio State University); Paul Mosley; Dr J.D. Von Pischke (Frontier Finance International, Washington, DC); S. M. Rahman; Paul Rippey; Namrata Sharma; Frances Sinha; Kim Wilson (Fletcher School, Tufts University).

About this title

Review:

"During a stampede it's useful for someone to ride apart from the herd and speculate about where the multitude is going. This book does that for the widely promoted and highly praised microfinance industry...."--Dr. Dale W. Adams, Professor Emeritus

"This book by microfinance insiders will be invaluable to the enthusiasts as well as the critics not only to reflect on its true potential but also to temper the unrealistic expectations that have been triggered by the UN year and the Nobel prize."--Sukwinder Arora, microfinance professional

"A timely collection of expert treaties questioning the scope of and rationales for microfinance. Specifically aimed at giving a reality check at a time when hype around microfinance's potential has never been greater...."--Dr. Ben Rogaly, Senior Lecturer in Human Geography

"What's Wrong With Microfinance? unapologetically asks questions that others have been too polite, complacent, or uncritical to ask. You don't have to agree with everything here, or even most of it, to learn a great deal."--Jonathan Morduch, Professor of Public Policy and Economics, New York University and co-author of The Economics of Microfinance

Synopsis:

Micro-finance has been a long-lived development fashion and in 2005 it enjoyed the accolade of a UN International Year. Many of the world's biggest multinational banks are now eagerly committing quite substantial sums to it, for business as well as public relations purposes. However, there are some important problems which risk being ignored or are fleetingly observed but then swept under the carpet in the current euphoria. The authors sound a timely and overdue warning to governments, bankers, donors and the general public and urges people to pause, reassess their expectations, re-think some policies and to recognise that microfinance is never a panacea and may sometimes be actively damaging to its intended customers. This important book will be of interest to students of microfinance, microfinance practitioners internationally, bankers, government ministries and NGO donor agencies, training institutions, and academics in finance, economics and sociology.

About this edition

• Publisher: Practical Action Publishing
• Publication date: 2007
• ISBN 10: 1853396672
• ISBN 13: 9781853396670
• Binding: Paperback
• Number of pages: 288