Yes, it is as asserted by one blogger.
As I was reviewing my scheduled posts, I dropped by at google to see want is happening around micro-finance and I came across this shocking article that says:
The ugly face of micro-finance was never in doubt. But now even the dark underbelly is coming out in the open. I wonder how much more evidence is required to put a stop to this barbaric activity that goes on unchecked in the name of empowering the poorest of the poor…
This is not to discourage you to do your part in changing and saving lives but to give you some thoughts of what to avoid in the future while you are engage in microfinancing.
There are, of course, some microfinance advocates who forgot their main objective, that is, helping the poor rise from the pit of poverty. Some of them camouflaged their ways as poverty alleviation programs but, in reality, are all for profits.
Profits are needed in delivering good services but not to the extend of exploiting the very ‘beneficiaries’ of a noble program.
Is microfinance an industry of exploitations?
You are the only one who could decide and answer this question. It depends to your mission and vision. Go for profit, then so be it. Microfinance programs should earn decent income to provide better services to the poorest of the poor. It is understood in the beginning that this program is not a charitable program. It is a financial industry.
Do not let your defaulting borrowers stand up under the sun or run some miles as what the article ‘The Barbaric Way of Micro-Finance” posted in the whole world wide web.
Go back to Credit Discipline…
Missed payments are not the faults of defaulting members. These are symptoms of unsound microfinance programs, unclear missions and visions and half-hearted commitments of some MFIs to the true objective of microfinancing.
Let it be known that there are people watching how an MFI is doing its businesses in every corners of its area of operations. May it be an independent organization or the government as this Indian state asking RBI for the de-recognition of some MFIs did.
A Lesson to Learn
I hope you have learnt something from this instant article.
Have you seen such exploitations in your area and these are perpetrated by some MFIs?
If yes, then, you have all the advantages and opportunities to come in and put up your brand of compassion coupled with quality financial services.
Let others know how you did it, so post some comments below.
I am thinking to continue our series on Marketing Approach in Microfinance to position yourself and your brand, branded products and services among our target clients.
If you have a good brand name, then you are not going to do what these MFIs are doing with their partners. Reputation matters, after all.
GET UPDATES by subscribing now.
You may want also to review the objective of micro-finance.