Our Spring 2012 issue features a policy briefing by author Heather Campbell who addresses the increasingly salient shortcomings of the microfinance institution. Campbell critiques the prevailing microcredit trope that capital alone is capable of generating meaningful social change for impoverished women. Campbell discusses the potential of the SHG model in India as a boon for social programming and structure, which she argues are both essential elements for the successful application of microcredit. In the past year international concern over the failing efficacy of the microfinance institution has heightened due to a significant rise in suicide rates among men and women who are unable to pay off their debts, often incurred by towering interests rates. BBC 4 Radio’s spot “The Bankers and the Bottom Billion” shares an intimate story about women living within the slums of India who are targets of financial services and victims of the “rapid injection of investment capital.” This program notably coincides with Muhammad Yunus’ resignation from Grameen Bank in May 2011 and the resulting criticism of the Grameen banking model. Following Yunus’ dismissal from Grameen, other microfinance CEOs have felt pressure to step down. Further, this May, nearly a year after Yunus’ resignation, Secretary of State Hillary Clinton has announced support for Grameen Bank as an independent organization where “poor women themselves are the owners.” What do you think? Is the Grameen model effective or does it do more harm than good?
- Rebekah Kennel, Editor
Related to this issue:
http://www.bbc.co.uk/programmes/b0112fz9 – BBC 4 Radio program on the downfall of Muhammad Yunus and resulting criticism of Grameen Bank.
http://www.bbc.co.uk/news/business-15866827 – More microfinance CEOs step down under building pressure.
http://india.blogs.nytimes.com/2012/02/27/yunus-was-right-sks-microfinance-founder-says/ – New York Times post on Indian suicides linked to microfinance debt.
http://www.bbc.co.uk/news/world-asia-17973267 – Nearly a year after Yunus’ resignation, Secretary of State Hillary Clinton backs Grameen Bank.
Jonathan Morduch, Professor of Public Policy and Economics at NYU Wagner http://wagner.nyu.edu/morduch
His website features a short clip “Is microlending the solution for global poverty?” which discusses the evolving nature of the microcredit enterprise, specifically the combining of financial services with healthcare services. This holistic approach uses financial services as a platform for a wide range of other services.