A 6-Point Action Agenda to Recalibrate Microfinance

> Posted by Center Staff
“WAKE UP! … that is my call to microfinance.”
CFI Managing Director Beth Rhyne is setting forth a 6-point program to “‘recalibrate’ microfinance, or, as Vijay Mahajan put it, to ‘get the house in order’.”
In a guest post on David Roodman’s Microfinance Open Book Blog, she calls Andhra Pradesh “the most serious challenge to the microfinance sector in its brief history.”
Rhyne goes on to detail a vigorous approach to this recalibration. Among the key points:

  • “The AP crisis has tagged ‘founder domination,’ executive compensation and the role of pure-commercial private equity as issues needing attention.”
  • “We’ve seen that it is very hard for institutions that start as credit-only to morph into balanced savings-credit institutions. But this transition is necessary.”
  • “It is high time for the launch of ‘Fair Trade Microfinance’.”
  • “We know very little about how clients get into debt stress, how over-indebtedness and multiple indebtedness are connected, and what happens to clients once they become over-indebted.”

To learn more about the 6-Point Action Agenda, visit Roodman’s blog here.