On July 30, 2009 the "father" of microfinance, Dr. Muhammad Yunus was one of 16 recipients awarded the Presidential Medal of Freedom. This is big news in the microfinance world and particularly exciting for the Grameen Bank-the Microfinance Institution founded by Yunus in 1976 to provide microloans to the poorest of the poor in Bangladesh.
In many ways we have Yunus to thank for bringing microfinance out of the academic, NGO and specialized social entrepreneurship sectors and into the mainstream, where microfinance and Yunus are now practically household names.
My hope is that along with this notoriety, comes a call to strength smaller microfinance organizations that do not receive critical donor dollars because of the disproportionate amount of these funds going to support a few large global MFIs. If we really want to see growth within the sector, bring these services to scale, and reach the millions of estimated individuals that could be served by microfinance, we must turn our gaze to smaller or “tier two” MFIs that have a lot of potential for impact within their communities but that receive scarce funding due to concentrated competition.
Bravo to you Yunus!!!
Dear Ms. Kingue:
ReplyDeleteThank you for starting this blog. It is interesting and informative.
Although I am not an expert on microfinance, I am aware that microfinance has been instrumental for community development in third world or developing countries. Currently my passions have me working on community development in the United States. Could you please advise whether or not microfinance would be effective in the United States, if so, do you recommend any organizations?
Thanks for your comment. To date, microfinance has been known as an international development strategy because of the relatively modest amounts of capital required to fund small businesses in developing countries. However, in recent years, there has been a growing trend to bring the benefits of microfinance to the US, particularly to low income African American, Latino and Native American communities.
ReplyDeleteThe impact within Native American communities could be particularly valuable as the poverty rates on reservations are triple the national average. Because of the fact that in the U.S. small business entrepreneurship accounts for the majority of our GDP, (in fact the income generated by 25 million entrepreneurs in the US is equal to 50% of GDP), providing microfinance services (which include loans, business training, etc.) could be the most important catalyst for economic growth within Native American communities in the long term.
You should check out an organization called the Lakota Fund, that is working in South Dakota. They are making strides and setting precedents in communities that have few other options. Also check out ACCION USA, working largely with the US immigrant community.
I should also note that the small business association (SBA) is largely responsible for the microcredit activity in the states. Unfortunately the SBA hardly exists in Native American Reservations.
Good luck April! The US needs more people thinking about US based microfinance for our communities.