Nonprofit Newswire | Tough Questions for Microlenders

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September 23, 2010; Source: Walrus Blog | A generally well accepted part of international philanthropy is support for microlending efforts pioneered by and frequently modeled after the Grameen Foundation’s work in Bangladesh. The Walrus Blog—commentary on the discussions at the Clinton Global Initiative annual meeting—included challenging questions for microlenders: “How much (loan) interest is too much interest?” and “If you were an NGO micro-finance loan officer, how would you respond to a poor woman’s plea of ‘Am I not poor, too?’ after you have just denied her a loan?”

The author of this blog notes the presence of big time Wall Street types like Goldman Sachs’s Lloyd Blankfein sitting cheek to jowl with Grameen’s Mohammed Yunus, suggesting that there is now attention focused on capturing big money for anti-poverty microlending. The blogger paraphrases Thomas Friedman to say, “If it ain’t of scale and self-sustaining—it’s a hobby,” or, in other words, the microlending institutions at the Clinton gathering are thinking about sustainability and scale, well beyond the idea of selling the concept of microlending as an attractive but small scale activity.

Toward that end, the unveiling of the Global Impact 50 Index, which will rank the top 50 investment fund managers on an index that combines their social and environmental value in addition to financial returns, became a major focus at the Initiative, with the expectation that these rankings will unleash a flow of new capital into microlenders, helping them achieve the sustainable levels of scale that they say they want and need.—Rick Cohen