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Conflicts of interest?

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Title Conflicts of interest?
 
Creator Technical Centre for Agricultural and Rural Cooperation
 
Description After the recent deluge of micro-finance, the hard lessons are pouring in. The original idea - to lend small sums to poor people who are regarded as unbankable by commercial banks has not led to the expected massive creation of new jobs, enterprises or productivity. What went wrong, why expectations were falsely high and how micro-finance can become sustainable were the key topics of a CTA study visit to South Africa in October and November 2000.

The participants came from finance institutions, formal and informal, from 13 countries of eastern, southern and West Africa. During visits with their South African peers, they studied the often confused transition of community organisations into caring local banks, lending where commercial banks did not dare tread.

The home truths were hard: you do not succeed by subsidising loans or targeting the truly poor, you must properly analyse risks and cover your costs, and you must separate poverty alleviation from wealth creation. If you want to be sustainable in finance, be a banker, not a drip-feed charity.

Between the lines of the visit s sometimes stark report (most microfinance bodies are not sustainable) are early signs of the inevitable. The commercial banks and finance wholesalers, who have spent the last two decades warily watching upstart and start-up microbankers, are now preparing to move into the informal sector, in a macro way. By the time of the United Nations Year of Microfinance (yes!) in 2005, they will be there in swarms.
microfinance lessons
 
Date 2014-10-16T09:05:43Z
2014-10-16T09:05:43Z
2001
 
Type News Item
 
Identifier CTA. 2001. Conflicts of interest?. Spore 91. CTA, Wageningen, The Netherlands.
1011-0054
https://hdl.handle.net/10568/46051
 
Language en
 
Relation Spore;91
 
Publisher CTA
 
Source Spore