- Created on Saturday, 01 January 2011 23:54
Microfinance Quotes of 2010
By: Sandra Frempong
We created microcredit to fight the loan sharks; we didn't create microcredit to encourage new loan sharks. ... Prof. Muhammad Yunus on charging usury rates.
Microfinance is not about making money from the poor. Some have not gotten the memo. ~ Professor Muhammed Yunus to profiteering merchants of Microfinance.
A free market was never meant to be a free license to take whatever you can get, however you can get it. ~ US President Obama addressing profiteering merchants of microfinance.
Governments work something like this. They do what they think is easier to do rather than what is right. When confronted with a problem, they do one of these three things. They will either ban it (or threaten to), or they will throw money at the problem. If they don’t know what they want, they will appoint a committee. ~ R. Jagannathan on statutory response to the crisis at Andhra Pradesh.
It is foolish to talk of inclusive banking and then try to tie down the only bankers who are willing to lend to the poor. ~ R. Jagannathan on government ordinance issued to address the crisis at AP.
Let’s first define what micro finance is. It’s lending money to the poorest women for income generating activity, without collateral, so she can help herself out of poverty. If you cross that boundary, then use another term because when you use the term micro credit, you confuse people. Then loan sharks can say they are doing micro credit. I say find a name for yourself: call it [Bottom of the Pyramid] BOP credit. ~ Muhammad Yunus on his discontent with issuance of IPO by SKS microfinance and other publicly traded MFIs.
A woman taking this loan is not concerned with who is making a profit but if she’s getting her loan. Yours is maybe the more morally pure way but it’s a long way away from helping all the people who need it. ~ Akula Vikram responding to Prof. Yunus on why SKS Microfinance went public (to augment capital needed to service loan to more borrowers).
I have worked on financial inclusion for about 20 years, and I’m always trying to convince bankers in the formal banking system that poor people are actually good credit risks. We now have a lot of evidence of that. In fact, we have, some might argue, better evidence for poor people than rich people. ~ US Secretary of State Hillary Clinton at the Financial Inclusion Discussion part of the Millennium Development Goals Summit.
The big risk of pyramid schemes is that they cause serious and often long lasting damage to people’s willingness to trust financial institutions or in this case electronic cards as a means of exchange…a pyramid scheme collapse can also makes regulators more suspicious of new financial sector entrants, which can result in regulators raising higher barriers to entry. ~ Elisabeth Rhyne
But I argue that these benefits are very minimal indeed, and anyway wholly insignificant when set alongside the huge longer-term downsides and opportunity costs inherent in the operation of the microfinance model. To focus upon these few minor shorter-term benefits is to deliberately focus on the few trees left standing after having helped the entire forest to burn down. ~ Milford Bateman on Why Microfinance Doesn’t Work…
It is easy for the likes of us to say “donors should do that instead of this” but in fact there may be all sorts of practical reasons why doing things another way is very hard (if not necessarily impossible). Those reasons, and the history of donors’ past attempts to do things another way, need to be reviewed, respected, and learned from. ~ David Roodman Review of Why Microfinance Doesn’t Work…