Microfinance

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Microfinance

• Capitalism, Philanthropy, and the Nobel Peace
  Prize

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Introductions

• Welcome
• Everyones background
• How I became interested in microfinance

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What is microfinance?

• Microcredit (microbanking, microinsurance)
• The need for loans
• Why not normal banks?

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Background

• Mohammad Yunus / Grameen Bank
• Lent to groups of women instead of individuals
  (1976)
• More scalable, better borrowers
• Nobel Peace Prize (2006)
• Today, 100M microfinance clients all over the
  world
• Potential market 4B

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Whats different about microfinance?

• Less paternalistic
• Its a loan
• Its effective!

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Ripple effects

• Schooling for children
• Money for healthcare
• More goods available in the market
• Existence of savings accounts reduces crime

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Whats the catch?

• The missing middle
• Not everyone is an entrepreneur
• Medium sized companies
• High interest rates
• 25-90

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Whats the catch?

• Controversy about commercialization
• Compartamos (80 million)
• Criticisms counterarguments
• Most MFIs lose money
• Not self sustaining (funds may dry up)
• Dependence on charity
• More focused on donors, less on clients
• Unstable countries

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What can we do?

• Individually
• Small group
• Useful websites

Kiva.org
Microplace.com
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