Enterprise Development and Microfinance

formerly Small Enterprise Development

Volume 20, Number 4, December 2009

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Crossfire: 'Making microfinance safe for commercial funding'

Warning to microfinance institutions in Africa: innovate or die

For a long time, micro finance institutions in Africa have been content with being mainly microcredit specialists without much regard to the real needs of their customers. But in recent years the customer pro file has drastically changed; customers are now more exposed and savvy and they question everything from price to design. The commercial banks and the mobile network operators have joined the fray. So unless micro finance institutions change, they will slowly but surely die a natural death.

We asked for private sector involvement - now we've got it. Some challenges to microfinance from disruptive new entrants

Banco Azteca is one of the fastest growing commercial banks serving poor people in Mexico. It has very different origins from the more usual MFIs, but what can these institutions learn from Banco Azteca about achieving scale and delivering quality financial products? What can they teach Banco Azteca about reaching poorer clients with fairly priced services?

Achieving inclusive growth

The expansion of micro finance services has included a widening array of services as well as greater diversity of partners such as banks, mobile operators, retailers and social investors. MFIs will continue to serve the ultra-poor with specialized services, but outreach will also be achieved by banks working with 'correspondents' to expand into rural areas, as Citi Micro finance is already demonstrating in Mexico and Colombia.

What's the trouble with men? Contributions and challenges of gender analysis to microfinance

This article discusses the difficulties women face because of men's exclusion from development programmes. I suggest that gender-interdisciplinary research is needed from which MFIs can draw information and knowledge to make micro finance more inclusive of all the poor, men and women, their families and communities.

Gender mainstreaming in enterprise development: starting to adequately address the needs of the majority of the world's poor

In the 21st century gender mainstreaming can no longer be dismissed as a marginal 'feminist' concern. Significant change in gender inequality is possible - often benefiting men as well as women and children. But all enterprise interventions should stop treating male needs and interests as 'the norm', and to give equal attention and resources to women who are the majority of the poor, and key actors in wealth creation.

It's time to address the microsavings challenge, scalably

The option to store value and to transact from a safe savings account is the foundation of financial inclusion. There is a need for developing banking models that allow poor people to save daily, as they earn money, right from their neighbourhoods and villages. This requires leveraging existing non-bank retail outlets to serve as cash transaction points acting on behalf of licensed financial institutions, and mobile operators acting as channel managers and transaction aggregators. Such schemes need to be commercially viable for all players involved, without having to rely on credit as a driver of profitability.

Two decades of small enterprise development and microfinance

The focus of articles in this journal has shifted over two decades from specific, supply-driven interventions for small enterprises to a broader market development approach, including demand and intermediaries for private enterprises generally. Micro finance and business development services are increasingly being treated holistically through a value chain approach.

Microfinance is dead! Long live microfinance! Critical reflections on two decades of microfinance policy and practice

The rise of the financial systems approach has been central to the past two decades of micro finance practice which aimed to achieve sustainability through scale and building profitable institutions. This resulted in extensive debates over its ability to reach poor and very poor people. The approach rode the wave of the Washington Consensus which promoted economic reform and liberalization. Now the policy discourse has moved even further away from a poverty focus to advocate financial inclusion for the unbanked into the mainstream financial sector. On these terms micro finance seems to be dead. However, the diversity of approaches on the ground aimed at poor people and hard-to-reach rural areas, points to a survival of 'micro finance', albeit largely outside the mainstream of the Washington consensus. This article also discusses where these developments leave the women's empowerment agenda that has been so central to micro finance.

A 20/20 retrospective on enterprise development: in search of impact, scale and sustainability

This article traces the evolution of enterprise development theory and practice over the past 20 years and suggests what critical challenges this field will face over the next decade. The paper delineates four key stages (sometimes overlapping) in enterprise development - beyond credit, commercial service delivery, systems approaches and developing inclusive systems - and describes the main themes, challenges and learning of each stage. It then moves to a brief analysis of upcoming issues in the enterprise development industry.

Microfinance - a tentative neo-Marxist diagnosis, and what next?

Karl Marx postulated that the owners of capital could use it to exploit those who only have their labour to sell; this article demonstrates private capital can use micro finance lending to extract the surplus from poor people in developing countries by charging high interest rates on loans that they use for running microbusinesses. The author makes recommendations that may help to make micro finance less exploitative.


Portfolios of the Poor: How the World’s Poor Live on $2 a Day, by Daryl Collins, Jonathan Morduch, Stuart Rutherford, Orlanda Ruthven

Seminar Report



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