I have been working in the microfinance sector for about 15 years, with MFIs in institutional development and on the investor side, raising and placing a series of funds to invest equity in MFIs. I have also served on the boards and investment committees of MFIs and investment funds in various countries.  From these vantage [...]

I run a microfinance institution (MFI). It was born of the strong conviction that market forces can help solve social issues. Having worked earlier in the formal financial sector, I am acutely aware that the market is a double-edged sword: the benefits of price discovery, innovation, and customer centricity can sometimes be undone by an [...]

I read Chuck Waterfield’s CGAP blog post and have been participating in many discussions lately about the plight of microfinance. As people talk about the way forward, I cannot help but notice what seems to me an obsessive focus on issues that really seem rather secondary – issues such as standard setting, defining responsible microfinance, [...]

Time for the hard questions Microfinance is at a critical juncture, and as we reflect on how we got here, I suggest that we challenge ourselves to ask:  What makes us different from what was previously done through the ages, since coins were first established as a medium of exchange? And how do we maintain [...]

The topic of commercialization has been hotly debated, largely because it raises fundamental questions about whether the dual social and financial missions of microfinance can coexist. It has become clear in recent years that not only can these two priorities coexist, but when done right, they are mutually reinforcing, creating a healthier long-term business model [...]

Responsible finance is not an output resulting from good intentions. It is an input in to business to ensure its relevance to customers and other stakeholders. This means that institutions should design their products, processes and staff training to think, plan and deliver responsible finance. The institutions should have an appropriate collective mindset and back [...]

If you ask social investors whether responsible finance should be the “new normal” in microfinance, the answer is always yes. For most “social-first” and mission-oriented investors, client benefit has been the driving force from their entry into microfinance. For the more “finance-first” social investors, questions coming from shareholders and the public at large have increased [...]

Since its launch, the Smart Campaign has made enormous strides toward ensuring that clients of microfinance would receive transparent, respectful, and prudent treatment.  The Campaign is proud to now have more than 1000 institutions as endorsers and these organizations that serve over 40 million low income people. In the last year, at least 10 major microfinance [...]

Responsible finance is not something that you can check off a list. It is not a practice that you can hope to implement before the 4th quarter ends. Responsible finance is a way of doing business – a never-ending process of adapting your products, processes and policies to keep your clients at the center. If [...]

A soon-to-be-published CGAP Focus Note asserts that “responsible finance” should become the new standard for delivery of financial services to poor people. Simply extending more access within the “white space” of underserved people and places is not enough. Microfinance clients should be able to count on products and practices that are transparent, fair and take [...]

Last week the New York Times published the latest in a growing number of articles that call attention to the downsides of microfinance, in particular the cases of over-indebtedness and high interest rates that have been documented in certain markets. It was of course met by reactions from the microfinance sector that pointed to the [...]

Traveling the Africa and Asia conference circuit over the past month, it’s striking how the issues of responsible finance and client protection are suddenly prominent wherever microfinance providers and financial inclusion policy makers, funders and observers gather. From Africa , where the first Africa-wide conference on consumer protection drew over 200 participants, to the annual [...]