Making Markets Safe for the Vulnerable – From “Good Intentions” to “Concrete Actions”
MAKING MARKETS SAFE FOR THE VULNERABLE. FROM “GOOD INTENTIONS” TO “CONCRETE ACTIONS”
On September 5, 2014, Chuck Waterfield, CEO of MFTransparency, gave the opening presentation in a plenary session at the Micro Credit Summit in Mexico on the topic of “Making Markets Safe for the Vulnerable”. He challenged the microfinance industry representatives, the summit’s participants and the microfinance industry at large with the important questions:
1. Can we truly believe we are working toward our vision statements if we do not address the issues of
– What price we charge the poor?
– How much profit we make off of the poor?
– How much debt we encourage the poor to take?
2. How should we define and enforce responsible practice?
– What price we charge the poor?
– How much profit we make off of the poor?
– How much debt we encourage the poor to take?
2. How should we define and enforce responsible practice?
In this follow up video after his presentation in Mexico, Chuck drills down the subject with additional powerful presentation slides giving insight to the questions – how much profit is too much in microfinance? Are there ethical limits to profits? Why self-regulation does not work?
Click below to watch the full video!
Chuck,
I applaud you for making this presentation to a group of practitioners and for clearly highlighting the problem that Microfinance has “lost its way” fulfilling the original intention of helping the poor instead of making excessive profits from them. I have always felt that excessive interest rates are not only a way to create excessive profits, but are also frequently a disguise for inefficient operations with excessive costs (e.g., overstaffed institutions). I have always respected the work you have done and your contribution, but especially your creation of Microfinance Transparency which has attempted to show the clients the true cost of their borrowing when the true cost is often cleverly disguised. Keep up the good work and I hope that this presentation and many others you have made will finally result in some changes in the industry so that it returns to its original social mission. Abrazos, Lon
A business partner and I started a Microfinance business with a view of targeting rural Zimbabwe. In the face of it the interest rates are high but the cost of reaching out to rural areas is high. The owners of VIRL have a set target on the profit they want to make. Can Microfinance Transparency offer any advice so that the business can reduce interest rates in a sustainable manner. We are not deposit taking and neither do we force savings and the business was started by individuals and is funded mostly through borrowing and currently it is just breaking even. We do not want to take advantage of the poor but want to reach out in a sustainable manner.