What’s next for microfinance? More than money
Pro Mujer, an organization that funds microcredit cooperatives in Latin America, also provides women’s health screenings, using a special van retrofitted with medical consultation rooms and staffed by a nurse and doctor. The vans travel into remote parts of southern Peru, combining financial help with preventative health care and education.
Women in Peru get health care during meetings of their microcredit group in a program of Pro Mujer, a non-profit supported by Seattle-based Global Partnerships. The van combines mobile banking with health services to rural areas.IMAGE COURTESY OF PRO MUJER
Women in Peru get health care during meetings of their microcredit group in a program of Pro Mujer, a non-profit supported by Seattle-based Global Partnerships. The van combines mobile banking with health services to rural areas.. It’s based on a simple fact that people who are poor tend to get sick, and people who are sick easily become poor, or deeper in debt.
Rick Beckett, CEO of Global Partnerships, gave the example of Pro Mujer’s work at a talk last night about the future of microfinance. About 150 million people around the world have borrowed money through the system of microcredit pioneered by the Grameen Bank.
Once the model showed promise, investors started flocking to it. The last decade has seen an explosion of commercialization, exemplified by Compartamos, a lucrative Mexican bank that started as a non-profit but ended up going public in 2007 and now charges more than 80 percent interest on microloans. Commercialization is necessary for raising the amount of money needed to get microcredit to the millions who could benefit, Beckett said.
But the profit-motive also leads lenders to bypass the poorest people. Commercial capital goes to the most profitable microfinance institutions. It turns out that poor people at the bottom are not as profitable as others farther up, and it’s easier to make money in dense urban areas than in rural ones, he said. Rest of the Article