The Rockstars of Microfinance!
Over the years, many big names have emerged as advocates for the expansion of microfinance. Here are just a fewof them:
Bill Clinton
Former President Bill Clinton
The Clinton Foundation has long touted the benefits of microfinance, working with organizations such as Unitus.com and Kiva.org. As governor of Arkansas, Clinton sought to implement microcredit programs for welfare recipients to improve their economic status.
Bill Gates
Gates, along with wife Melinda, run the largest foundation in the world with an endowment of $35.1 BILLION
The Bill and Melinda Gates Foundation was an early supporter of microfinance. Among its many donations, the organization has granted $5 million to the Financial Access Initiative to assist in microfinance research and another $1.5 million to the Grameen Foundation.
Dr. Muhammad Yunus
2006 Nobel Laureate
Dubbed “the father of microfinance,” Yunus won the 2006 Nobel Peace Prize for his efforts to fight poverty through micro-credit. The Bangladeshi economist began his microfinance efforts by loaning $27 USD to 42 rural villagers in Bangladesh. Dr. Yunus serves as the Managing Director of Grameen Bank.
Microfinance has seen robust growth in the past decade or so. In 1997, microfinance served about 15 million customers, and as of 2007 the industry served 154 million customers, which translates to a compounded annual growth rate of ~26.22%. Not bad, but we can do better. We certainly need these prominent figures to continue their work in promoting the field. Certainly many parts of the world have a plethora of problems-disease, poverty, food crises, poor education systems, and poor sanitation. However, microfinance is the only tool that has the ability to allow the poor to slowly climb the ladder of economic development through the sheer hard work of the poor themselves. In the meantime, NGO’s and governments will have to address the other pressing issues. When borrowers can graduate out of poverty over time, through microfinance, they will then be self sufficient and can seek out health care services, better sanitation, and other amenities that will ultimately increase their life span, and inmprove their quality of life.
4 Responses to “The Rockstars of Microfinance!”
Leave a Reply
sureshshan1 on May 31st, 2009
What about Vikram Akula at SKS Microfinance?
Abi Viswanathan on June 3rd, 2009
yes, Akula is a prominent figure in the field of MF, and SKS has done superb work in India. However, SKS is not even the biggest MFI in India itself, let alone the world. There are many other CEO’s of MFI’S who deserve a lot of credit, but my intention for this post was to include the most noticeable public figures who have been advocates for the field.
If you feel that this omission is an error, feel free to type up a paragraph or two on why Akula should be included-I’ll be glad to post it on the blog.
ratandeep pahwa on June 11th, 2009
Could you foresee investment vehicles take the shape of microlending-bank-mutual funds in global finance. These big names have backed it. Statistically microloans show a better rate of being paid back than the loans that may have been issued over the past 5 yrs in the realm of subprime mortgages, etc. Maybe an odd question: Can banks that offer microcredit, securitize the loans and sell them to investors?
I understand the loans are so small so the value may go unnoticed- but I’m curious of your opinions on all of my babble
Abi Viswanathan on June 12th, 2009
Securitization of microloans is prevalent, can give microfinance institutions a big boost by providing liquidity…however, as with the case with subprime loan underwriting, securitization can be taken too far if MFIs disregard credit quality in light of underwriting+securitizing to just make profit. I’ve received inquiries about investing in microfinance, investors are slowly starting to see it as a new asset class altogether. Deutsche Bank, JPMorgan, Citibank all have groups solely dedicated to microfinance investments. There is undoubtedly a lot of value at the bottom of the pyramid, and these “social investments” have the chance to make a good return while helping to drive a social cause, thus delivering effectively on a double bottom line.