Learning from Microfinance's Woes

Harvard Business Review

A few weeks ago, I attended a lecture about microfinance, and got sucker-punched. Expecting to hear a litany of pros and cons about the business, and an exploration of good and bad models, I was instead greeted with a knockout punch: Microfinance doesn't work, at least not in the way we think it does. The pugilist-presenter was David Roodman, a fellow at the Center for Global Development and the author of a new book, Due Diligence: An Impertinent Inquiry into Microfinance.

Guest Post: An Entrepreneur's Thoughts on Market Incentives & Foreign Aid

Mills Scofield

by Chia Han Sheng on Sunday, August 19, 2012. One of his main tasks was to structure a hedging derivative that negated foreign exchange risks so that Microfinance institutions could take safer loans from the developed world.

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What is the best way to make a difference in the world?

CO2

My solution was to found a microfinance organization that puts women in a position to create their own destinies and achieve their full potential. May 2012. ###. This question is at the heart of Jacqueline Novogratz’s inspirational book, The Blue Sweater.

How Large NGOs Are Using Data to Transform Themselves

Harvard Business Review

A critical part was adapting a proven model in a related field: microfinance. By increasing or jump-starting these institutions’ housing microfinance lending, Habitat aims to create robust markets for this financing that can continue on their own.

Microfinance Is Good for Women, but It's Only Part of the Solution

Harvard Business Review

Career paths are not one-size-fits-all, yet in emerging markets, it's often assumed that microfinance — the use of small loans to foster self-reliant small businesses in a community setting — is the only path for women seeking economic opportunity. Microfinance has accomplished tremendous things and helped millions of women launch their own businesses; however, it is not a complete means of economically empowering women. Microfinance was one issue that we considered.

Entrepreneurs: You're More Important Than Your Business Plan

Harvard Business Review

In 2012 Echoing Green invested in 28-year-old Marquis Taylor as one of our Open Society Black Male Achievement Fellows. "Would you take a look at my business plan?". Some member of our staff at Echoing Green, an angel investor and grantmaker in social enterprise, hears this request every week.

Global Entrepreneurs Need New Funding Models

Harvard Business Review

We wanted to do this because we recognize that small enterprises are a very significant engine for development; they create employment, which tends to be more sustainable and better paid than you would find in the more informal microfinance sector," says Oxfam's Nicholas Colloff. Some microfinance organizations are also moving out of the purely micro and toward larger lending.

It Takes a Village to Raise an Entrepreneur

Harvard Business Review

Commercial microfinance organizations are perhaps the best-known hybrid organizations, but social entrepreneurs now use hybrid models to address a diverse set of social issues that includes hunger, healthcare, economic development, environment, education, housing, culture, law, and politics.

Funders Can Give More than Money

Harvard Business Review

In 2012 the world's problems grew more complex, but America's top 400 charities saw very little growth in their resources to address them. Six years ago, David and Donna Allman approached Opportunity with an idea that fell outside our traditional microfinance model: to build a Community Economic Development (CED) program in Nicaragua. We know that microfinance alone will not break the poverty cycle.