Microfinance Practice: Re: [MFP] The microfinance delusion: who really wins?

Chuck

The article extends past diatribes against microfinance well. But the scholarly assertion " A growing body of evidence suggests that direct cash transfers, with no strings attached, not only deliver success where microfinance fails, they appear to be the single most impactful anti-poverty intervention available" beats me. Is this a serious suggestion? It does not require a study or evidence to conclude that if you hand out cash to people (poor or rich), it will mostly have a positive effect on their lives ( you have to allow for some who will misuse the cash). Microfinance tried to make people save, provide loans, help people to improve livelihoods through that process and not rely on handouts. Asking poor to depend on handouts (with the label of DBT) does not seem sound. Microfinance may not achieve good results everywhere. But the alternative of handouts is neither sound nor sustainable. Despite the mass of evidence which suggests that microfinance is not a sound option for the poor, if microfinance is expanding it must carry some appeal with the poor customers - and reflect that no other mainstream intervention is as useful to the poor. Otherwise, such a negative, unsound intervention should have collapsed - especially in the aftermath of recurrent crises faced in country after country. Instead of studying impact from a very high level, can we study customer behaviour and motivations - on why they save with and borrow from microfinance institutions?

Regards

Srinivasan

On 13-Jun-2015, at 7:59 AM, Chuck Waterfield waterfield@microfin.com [MicrofinancePractice] wrote:

The writers might be more enlightened if the industry were more enlighted. The industry is still 90% credit, because that's where the profit is.

Most MFIs see microsavings are too expensive to manage.

Microinsurance is generally nothing but an add-on fee for micro-credit.

We talk about other services, but we put our money and effort into expanding our credit product expansion.

It would be useful to see some figures for what we believe to be:

* number of people with micro-credit
* number of people with TRUE VOLUNTARY micro-savings (and it would be nice to see the numbers for ACTIVE savings accounts)
* number of people with voluntary insurance that does more than just guarantee their micro-loan

Does anyone have a source for those numbers? By country? Regionally? Globally?

Chuck Waterfield

On Jun 12, 2015, at 8:14 PM, DeanMMahon@aol.com [MicrofinancePractice] <MicrofinancePractice@yahoogroups.com> wrote:

Yes, the article at first seems to be is somewhat persuasive.

However, the title cites microfinance, but the author only speaks of micocredit. I would have thought that, by now, writers and practitiioners would be more enlightened.

Dean Mahon

In a message dated 6/12/2015 7:26:25 P.M. Eastern Daylight Time, MicrofinancePractice@yahoogroups.com writes:

A well-written article, and quite persuasive.

http://www.theguardian.com/global-development-professionals-network/2015/jun/10/the-microfinance-delusion-who-really-wins

The microfinance delusion: who really wins?