Since the assignment for a round-up of the year from my perspective was broad, I’m going to take full advantage, stretching this to financial access from microfinance and adding a few things which have a somewhat tenuous connection to this year. I’ve tried to mainly stick with writing about events, rather than events themselves (no doubt revealing my personal biases), but a few events snuck through.
1. Due Diligence: Could anything other than David Roodman’s multi-year, incredibly thorough and supremely careful public examination of microfinance top this list? While he began writing before 2011 and the book won’t be published for another month or so (though you can order it at a 25% discount now), this is unquestionably the writing that happened this year that will be remembered and referred to longest. Due Diligence is already part of the canon in the field. Like Portfolios of the Poor, I don’t think anyone who hasn’t read Due Diligence can legitimately claim a serious interest in microfinance . . .
Read MoreAs CEO of a global microfinance network I spent much of 2010 answering questions about the crisis in India and advocating for the continued relevance of microfinance as a model. This year’s challenges, however, gave me an opportunity to talk about theessential role of transparency and good governance and the importance of building on a deep understanding of client needs to tailoring products to fit those needs.
While the crisis dominated the media for much of the year, it would be regrettable if we didn’t acknowledge some of the important positive developments in the last 12 months. As an organization focused on increasing women’s access to financial services, we at Women’s World Banking (WWB) have a few things to cheer . . .
Read MoreCritics of microfinance have knocked down an army of straw men in recent years, and 2011 was no different. But it’s high time for microfinance practitioners to stop being defensive. We know enough about the perils and potentials of poverty-focused microfinance to address the real needs of the poor.
Early champions, including Sir Fazle Hasan Abed of BRAC, Mohammad Yunus of Grameen and Ela Bhatt of India’s Self-Employed Women’s Association, recognized that financial services alone would not be sufficient to break the bonds of poverty. Critics of microfinance became more shrill in 2011, but as a recent article in The New Republic points out, “the growing backlash is in danger of overcorrecting.”
Going into 2012, the microfinance field faces three key challenges . . .
Read MoreI for one am glad this year is over. Maybe, as the Washington Post suggested today, first prize for the worst year goes to the U.S. Congress, or maybe it goes to the government of Greece. But it was no picnic for microfinance. This was the worst year for microfinance since forever – at least since it was called microfinance.
This year the microfinance sector got hit with three whammies. The first was the crisis in Andhra Pradesh, where rapid loan growth created overindebtedness that triggered a political backlash that is still sending ripples through microfinance in India and beyond. The second was the news from impact research challenging the efficacy of microcredit in moving people out of poverty. The third whammy is the rise of “financial inclusion” making electronic payments innovations and mobile banking the new darling of donors and policy makers, and relegating microfinance to the status of legacy.
I watched the industry coming to terms with these challenges throughout 2011 . . .
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