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Tag: microcredit

The "Entrepreneur Myth" Myth

The "Entrepreneur Myth" Myth

Muhammad Yunus, the godfather of microfinance, contends that everyone is an entrepreneur.  And microfinance is about individual economic empowerment, built on the premise that credit is both a human right and a path to economic freedom.  This reading has been distorted by those who talk about the “entrepreneur myth,” which says that microfinance romanticizes the poor by pushing a false by-your-bootstraps narrative.  This narrative, in turn, undermines development by giving the poor something they don’t want – credit for a…

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Competition, Saturation, Interest Rates, and Microfinance

Competition, Saturation, Interest Rates, and Microfinance

CGAP, the World Bank’s microfinance arm, turns 15 this year, having been formed ten years prior to Muhammad Yunus winning the Nobel Peace Prize.  In commemoration, Alexis LaTortue, the CEO of CGAP, wrote a summary of the state of the industry and the key transformations that have occurred over the last decade and a half.  There is a lot of to unpack for a 500-word article, but I want address one point in particular that I found interesting: More institutions…

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Microenterprise to SME: A Thought Exercise pt. I

Microenterprise to SME: A Thought Exercise pt. I

This is the third post of a three–part series on small- and medium enterprises.  It is a two-part post. [youtube=http://www.youtube.com/watch?v=6Z66wVo7uNw] A month ago, I attended a conference in Manila sponsored by the Microfinance Council of the Philippine Islands.  I wrote briefly about the level of cooperation among the participants, but have yet to share what I learned.  The conference – titled “Operationalizing Social Performance Monitoring (SPM)” – brought together a dozen microfinance institutions (MFIs) and lenders from across the country…

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The Tradeoffs of Serving the Poorest

The Tradeoffs of Serving the Poorest

This past weekend I went with four coworkers and a lecturer at Ateneo University Business School to a province called Aklan.  I woke up at 5:00 AM Friday morning in order to catch the ferry to Iloilo at 8:00.  We drove five and a half hours north to Kalibo, where we stayed in Sampiguita Resort, “where it’s Christmas everyday.”  It is the vision of Sam Butcher, the American founder and creative genius behind the Precious Moments dolls – a collectible…

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What I Do: Borrower Interviews

What I Do: Borrower Interviews

As a Kiva Fellow, I go to the field to interview borrowers about the status of their loan and talk about the business, the family, and their dreams for the future.  Usually I do a short write-up to update the Kiva lenders, but sometimes I go overboard and write an essay.  This is not representative of most journal entries, but I found her to be such an interesting client that I wanted to share it.  I titled this journal update…

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SMEs in the Philippines

SMEs in the Philippines

This is the second post in a three-part series on SMEs. In an earlier post, I discussed another area of development – SMEs – that is both important for creating sustained growth, and has recently attracted interest from investors.  The Philippines is also placing a lot of emphasis on this area of development. The Philippines is actually in good shape regarding SMEs, as it has an abundant labor pool.  The country has 800,000 registered businesses, of which ~7% are classified as…

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Helping Haiti: Microfinance and Natural Disasters

Helping Haiti: Microfinance and Natural Disasters

What is the role of microfinance in the immediate aftermath of a natural disaster?   The short answer is that, under the circumstances, microcredit is less effective.  A prerequisite for microcredit is a functioning economy.  Goods and services need to be worth money for capital infusions to make a difference.  For example, an MFI lends money to a woman for the purpose of opening a general store.  The woman uses the loan to buy soap from one retailer and soft…

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