Comments on: 6 myths about microfinance charity that donors can do without

by: kevin jones

Sat, 31 Dec 2011 15:58:26 +0000

disappointing scarcity approach; giving is better than investing, and give to our charities. destructive of “competition” when it could be additiv, reductionist old style western silver bullet, my silver bullet approach. flawed and deficient in its foundational thinking.

by: John Hunter

Sat, 24 Dec 2011 23:57:48 +0000

Thanks I will. I have been a donor to Trickle Up for years (before micro-lending was a big thing). They largely engaged in micro-grants to the exact type of people micro-lending targets. Instead of being focused on lending they gave people a hand to let them build a business. They also focus on training (as do the better micro-lending efforts)

http://trickleup.org/solution/our-approach.cfm

I actually didn’t realize their focus on micro-saving until now. “Less than 15% of participants had cash, or in-kind savings before joining their savings and loans groups. After Trickle Up, over 90% of participants have cash savings.”

Trickle Up has in fact been my favorite charity for over a decade.

by: Paul Rippey

Fri, 23 Dec 2011 05:49:10 +0000

Thanks for this good piece.

The micro savings movement - or the Savings Group movement - has a lot of former micro-credit folks involved and committed, including me. I had the rare opportunity to start and run two MFIs - in Guinea and Morocco - and then got burnt out, realizing I didn’t want to spend the rest of my life getting poor people in debt, forever, at high interest rates. Then I discovered savings groups, in the village, independent and run by the members, with no money being sucked out to support headquarters costs, and I thought - as many of us did - that we should have been doing this all along.

A group of us have a site - (Savings Revolution) - dedicated to the creative discussion of savings groups. We’d love for you to check it out.

by: John Hunter

Thu, 22 Dec 2011 09:56:23 +0000

I like the idea of micro-finance and I agree we need more study of what actually happens. On “myth” 2 I think you miss out the real benefit for kiva personal matching. That is that it is a good psychology gimmick for the lenders. Psychology is a natural outgrown of our humanity. While this point doesn’t make micro-finance more (or less) effective it does aid in drawing the interest of potential lenders. If micro-finance is beneficial then this is a good thing.

Granted your point that it is not useful somehow useful from some merit of the loan perspective is correct (and it is a fiction in reality since the loans are made and then funded). But it is a useful fiction I think.

by: Stacy

Wed, 21 Dec 2011 20:53:04 +0000

I think John’s point in mentioning Grameen was not a request to donate to it, but to offer an example of a highly successful MFI (they no longer accept contributions because they are fully funded by participant savings, just like most other banks) that also incorporates health care issues into their plans. Because of Yanus’/Grameen’s role as a ground breaker in this field, the org has been consultant to many other MFIs. If you’re looking for recommendations on which are best suited for helping individuals, I would contact Grameen/Yanus directly and ask which MFIs around the world they think are well suited for success. Then, you can either donate to that org directly or even through an intermediary like KIVA.

by: Holden

Mon, 19 Dec 2011 15:24:30 +0000

Niece - we would say no, based on the reasons outlined in the above post. We would recommend instead giving to our top charities.

by: Niece

Mon, 12 Dec 2011 13:20:27 +0000

I’m not in a financial position where I have a lot of money to donate. Am I safe to assume that I am doing more good using an organisation like Kiva, where I can lend my money again and again, than not donating at all?

by: Yaqoob Khan

Sun, 17 Apr 2011 17:57:51 +0000

Thanks for this post these are great talking points.

by: Holden

Thu, 24 Feb 2011 13:48:19 +0000

If you’re just looking to do as much good as possible, we recommend our top-rated charities. You can also check out our recommended microfinance organizations if you’d like.

by: dweb

Tue, 22 Feb 2011 12:27:41 +0000

URGENT: I just came across this blog as I am preparing a framework to deploy 25,000 usd of cash through microfinance in urban compounds in sub-saharan africa. The organization is not an mfi but rather a nationally run ngo that has had relationships with the beneficiaries for 20 years. My question is: If not microfinance, what would be the best way to deploy these funds?