28 July 2011

Microfinance

Felix Salmon posted a blog entry recently about his conversation with Muhammad Yunus. 

Salmon is generally skeptical about efforts to bring microfinance to the US via Grameen America, but he does seem to have been personally impressed by the flagbearer.

He was pleased that Yunis found the emphasize on the poorest of borrowers, and on microfinance as a pseudo-charity, to be "undignified."  This is the approach associated with Kiva, and you can read about it here.

After all, the beneficiary of microfinance is someone whois paying interest.  Yunus asked rhetorically:
"Why should you advertise her as someone who’s deserving of donations? It’s an undignified way of doing it. She’s running a business. Respect her as a client. As somebody who’s paying full cost.” 

Here's a coupling of Kiva and Gameen by a Seattle columnist a coiuple of years ago. Click

Of course, a business can cut costs if it can get people to volunteer their hours.

As Alicia Quinn has written: "This is a mutually beneficial relationship; organizations receive labor at little to no cost and volunteers fulfill their desire to give back. However, there are farther-reaching impacts of volunteers on microfinance organizations."

I'm afraid that's the sort of hippie-dippie language that gets my own dander up.   If they are a sustainable capitalist endeavor, as Yunus for one certainly believes, they should be able to pay the market rate for the labor they require.

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.