Under Fire, Microfinance Faces Falling Out of Favor

Harvard Business Review

Microfinance has come under fire in the past 18 months, triggered in part by SKS Microfinance's IPO. Critics complain that the institutions supporting microfinance have become too greedy, and many are using this as an argument to deeply regulate or, even more, cut support to microfinance operations. Dr. Muhammad Yunus introduced the concept of microfinance in 1983; in 2006, he won the Nobel Prize for his pioneering efforts. Such is the power of microfinance.

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How Large NGOs Are Using Data to Transform Themselves

Harvard Business Review

Based on this insight, Habitat sought to address the deficit in more systemic ways. A critical part was adapting a proven model in a related field: microfinance. Not many would associate innovation with large, service-oriented nonprofits with decades of history.

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The Innovation Mindset in Action: Shantha Ragunathan

Harvard Business Review

Sasikala, a Block Development Officer (BDO), talked to the Kodapattinam villagers about microfinance , only Shantha, of all the villagers, saw the opportunity and took action. To participate in a microfinance campaign, the village had to form a Self Help Group (SHG) of about 20 people, with each member contributing a certain amount of money every month. Undeterred, Shantha persisted until she persuaded the required number of people to sign up for the microfinance project.

What Makes Social Entrepreneurs Different

Harvard Business Review

Social entrepreneurs have also been some of the most attentive followers of the academic debate between the likes of Mark Pitt and Jonathan Murdoch about whether microfinance really helps reduce poverty.

The 3 Preconditions for an Entrepreneurial Society

Harvard Business Review

And if you need access to money, crowdfunding platforms and microfinance options make that easier than ever. Maybe it’s time to put a bit more emphasis on creativity and commercial savoir faire in our education system.

It's Not All About Growth for Social Enterprises

Harvard Business Review

Successful examples of this approach are still rare; most people point to microfinance.

Entrepreneurs: You're More Important Than Your Business Plan

Harvard Business Review

Could this organization directly, or by example, change a big system? We are proud to have made early investments in the work of Andrew Youn, who founded One Acre Fund; Wendy Kopp, who founded Teach for America; and Vikram Akula, who founded SKS Microfinance.

Funders Can Give More than Money

Harvard Business Review

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. It called for leveraging the profits of the global microfinance institution, and coupling them with private investments from the Allmans and their donor network. We know that microfinance alone will not break the poverty cycle.

How to Create Youth Jobs After Conflicts

Harvard Business Review

Upon graduation, the governments, nonprofits, or (more recently) microfinance companies give them loans to buy tools and opens shops. We developed a very cheap rechargeable lighting system and a model where a youth can operate a charging station using solar, grid, or human energy. By separating the lighting systems and the chargers, the former is made very affordable for the poor.

Using Games to Get a Handle on Bank Risk

Harvard Business Review

A better understanding of the drivers of behavior is needed for both banks and consumers to understand risk, and for the financial system to provide timely and targeted interventions. These concepts may be particularly useful for learning about new entrants into the financial system — from young people to the unbanked. Bank marketing materials focus on the dreams, anxieties and goals of consumers. Risk management processes don't — but they should.

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. Hybrid organizations have great potential to be building blocks for a more sustainable, just economic system.