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There is only one goal. That is to be whole again.

There is only one goal. That is to be whole again. How human beings live and work determines whether they remain whole or are split. ...

12/6/10

There is an increasing level of comfort with private for-profit microfinance institutions in developing countries. Even though only 1 in 10 microfinance institutions is private, they account for over half of the industry's assets.* These companies make a profit by lending to the poor at high rates of interest. I don't think these companies should be allowed to operate at all.

Microfinance is about extending small amounts of money to poor people. The loans are signed not only by the borrower but also by a number of neighbors who all vouch for the borrower. This system devised by Mohammed Yunus (who went on to win the Nobel Peace Prize) in Bangladesh was created in the spirit of seeing credit as a fundamental human right, one that was denied to the masses for much of human history. The only access to credit that the poor have had in developing countries has been the usurious money-lender. Microfinance was developed as a way to break this mold of exploitation and make credit available to all.

To allow market-driven for-profit institutions to operate in the guise of microfinance institutions is to return the poor to the world that Yunus worked so hard to bring an end to.  A for-profit company has a very simple goal: to make as much money as possible at the least cost. Private companies, in their search for new ways to make money pose as benefactors while exploiting the poor. They should not be allowed to operate. Microfinance is a spiritual idea of our time as much as Gandhiji's satyagraha, or soul-force was in his own. The spirit must not be compromised with the flurry of Initial Public Offerings (IPOs) and corporate scandals that have arisen with the privatizing of the idea of microfinance.

* Little India, November 2010, page 37.

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