confessions of a microfinance h - hugh sinclair

[...]... microfinance academic and author of the standard textbook on the economics of microfinance After some “disagreement,” the company had split in two The archrival, Al Sol, retained good relationships with Grameen Foundation USA, while Grameen Trust Chiapas continued as part of the broad Grameen Bank franchise They didn’t want to change the name, since Grameen was helpful for attracting attention and funding The... software, over the years he learned the core microfinance model inside out and was colloquially referred to by many as El Mexicano Mágico I did meet a particularly inspirational group of entrepreneurs in the highlands of Chiapas who clearly demonstrated the transformational impact microfinance can have They were called Las Mujeres de Zinacantan—the women of Zinacantan village It was begun by a small... She had initially held something of a director role at GTC, but was largely displaced when Ruben stepped in Upstairs sat the head of finance, who would manage the bank accounts and pay bills and salaries, and who worked quite hard I was awarded a chair and desk in the corridor outside her office And finally, the IT team would attempt to organize the endless disbursements and repayments and handle the... institutions of becoming precisely the loan sharks that microfinance had initially sought to replace Yunus’s flagship institution, Grameen Bank, with whom he shared the Nobel Peace Prize, charges interest rates of about 20 percent2—enough to make any mortgage-holder in the developed world weep, but actually very reasonable in the microfinance world The fact that Grameen Foundation USA had inadvertently... Mario, the COO, sat downstairs and would manage the loan officers, do some basic projections (on Post-it notes) to see how many loans he could do each week, and work out how much money would return to GTC as loan repayments Another woman, called Liliana, had a job that was not well defined but had something to do with marketing She had glorious nails, elaborate hair, lashings of makeup, and abundant... experience these are few and far between Accepted wisdom has come to believe that access to microfinance is a necessary step in the direction of development We have managed to create a buzz around the very word microfinance that attracts volunteers, the media, and celebrities Muhammad Yunus goes as far as to suggest that access to microfinance is a human right According to the generally accepted belief, the... Each time a scandal erupts the microfinance funds are placed in an awkward position If they admit they knew of the practices but did not challenge them, they seem to have betrayed their very raison d’être If they claim they had no idea, they admit that their due diligence is sloppy They are damned either way Best to avoid the question altogether The average person on the street has been spoon-fed a. .. occasionally made, perhaps with a grace period for the first couple of months during which interest accumulates but the client doesn’t have to make payments on the loan Repayments may be linked to the harvest cycles for agricultural loans Again, this is not Goldman Sachs Operating expenses can be high Salaries are a major component, and while loan officers usually earn peanuts, senior managers usually... debts Instead, in accounting terms, they were treated as a donation—albeit one that had to be repaid The loan from Grameen Bangladesh had also vanished from the books The next problem was Ruben’s business plan, which contained stereotypical optimism that surely the IDB would see through Projections were made with little basis and without the assistance of actual calculations Only half the actual problems... with the ethos of developed countries: hard work and ambition, competition, and developing new markets The heroes of the NASDAQ are the pioneers who take a simple idea and propel it to become a huge multinational business —why not in developing countries also, on a smaller scale? Microfinance touches on the core values of entrepreneurial vision, of teaching a man how to fish rather than handing him a . perspective of the investor rather than that of the community and thereby lose sight of the bigger picture. Tara Thiagarajan, chairperson of Madura Micro Finance, a for-profit microcredit program in. class="bi x0 y0 w0 h0 " alt="" CONFESSIONS OF A MICROFINANCE HERETIC CONFESSIONS OF A MICROFINANCE HERETIC How Microlending Lost Its Way And Betrayed the Poor HUGH SINCLAIR Confessions of a Microfinance. yet another gathering of bright-eyed microfinance experts at yet another microfinance conference, and I had incorrectly assumed that irony and sarcasm were within their grasp. They were not. I attempted