The Scientific Leader Blog

I was pleased to discover that the desperately poor people involved in the microfinance industry appear to be resistant to the current financial market turmoil.  Mary Ellen Iskenderian, CEO of Women’s World Banking, an expert, spoke with Time Magazine indicating that because it falls outside the mainstream economy, microfinance is resilient to the current crisis.  They succeed in repayment rates at 97% to 98%. 

Iskenderian credits good “old-fashioned” banking that forecasts a family’s ability to repay, unlike the wild speculation and government-sponsored irresponsibility in the US (e.g. Freddie Mac, Fannie Mae).  In 2007, commercial capital invested over $3 billion USD in microfinance.  Microfinance is also transforming into for-profit institutions, with the hope that this will service the finance needs of a billion people, espeially women.

Could the the developed world have its’ own form of microfinance for the middle class with similar results?

Human Capital, Microfinance, Poverty, Wealth, Profit, Crisis, Finance