You're not wrong rather absolutely right, Chuck!! And I can't agree more to your points related to pricing and self-regulation.
One thing that I've observed that various rating templates are so biased towards profit-making (smartly used for sustainability) and efficiency that issues like Governance take the back-seat; e.g. Microfinance Programme Performance given a weightage of 50%-60% vis-a-vis 10% to Governance.
Likewise, self-regulating organizations are promoted to protect profiteering interests of its members (mFIs) only, at the cost of borrowers i.e. society at large.
Best regards,
Another 'outvoted'
Best
Love Kashyap
+91-786-9910-939
Sent from BlackBerry® on Airtel
From: "'Chuck Waterfield' waterfield@microfin.com [MicrofinancePractice]" <MicrofinancePractice@yahoogroups.com>
Sender: MicrofinancePractice@yahoogroups.com
Date: Fri, 12 Sep 2014 10:14:40 -0700 (PDT)
To: <microfinancepractice@yahoogroups.com>
ReplyTo: MicrofinancePractice@yahoogroups.com
Subject: [MFP] Microfinance's position - Greed is good!
I’m reaching the decision that I’m wrong on something I believe passionately about.
I believe the microfinance industry needs to stake out a clear position that we do not make excessive profits off of the poor, that we do not charge usurious rates to the poor. Others do that, and they have that choice. But to me, responsible practice means we restrain ourselves and make no more than moderate profits.
I’ve been saying that over and over for 7 years. But the industry disagrees. We still do not have a good definition of “responsible price” and we do not have any industry position on responsible profit vs. profiteering.
Last month, Compartamos became the 22nd MFI in the world to be certified as meeting the SMART principles, despite prices of 105% and profits of US$1M a day.
I made my case last week, at the Micro Credit Summit in Mexico. My views are summarized in this article by NextBillion:
http://www.nextbillion.net/blogpost.aspx?blogid=4057
I have recorded my position in this 15-minute video here:
http://www.mftransparency.org/making-markets-safe-vulnerable-good-intentions-concret-actions/
I know there are many people who share my views. But we are outvoted. (Oh there are no votes taken on these positions.)
Self-regulation has a serious risk of really being self-interested regulation. Until open debate and objective decision-making takes place, I see no change possible. But what open forum is there for debate and decision-making on these topics? I certainly haven’t seen one.
So maybe I’m wrong on all of this. But without discussion and debate, I can’t be convinced that I’m wrong.
Chuck Waterfield
WARNING! If you hit REPLY, your message will go to the entire listserve, not just the original author!
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