A characteristically fine essay from Beth Rhyne on her recent visit to Bangladesh:
Ask a casual observer to describe microfinance, and most likely he or she will mention Bangladesh and tiny group-guaranteed loans for women. But on a recent trip to Bangladesh, I learned that the Bangladeshi microfinance sector has moved on. Way on.
She describes in brief many of the changes that have occurred in Bangladeshi microfinance over the decades. In so doing, she illustrates the importance of seeing microfinance as a dynamic industry, not just a vehicle for mass-producing a static intervention called microcredit. That's an important theme in my book, and I got it from Beth. Most of the changes were wrought by competition and benefited clients, such as the shift to savings and even insurance. She notes that "overlapping" (taking multiple microloans) is a longstanding concern in Bangladesh...and yet there never has been a crisis, perhaps because the growth was never as fast as in, say, India. But like any thoughtful observer, she cannot rule out the possibility that it is yet to come. "Pride goeth before a fall, says the proverb, and if there is one lesson from the history of financial crises, it is that no financial sector is immune."
