David Roodman quoted in a KPLU's Humanosphere piece on the microfinance panel in Seattle.
From the Article
I think it’s fair to say microfinance is no longer regarded without question as a panacea for poverty. In fact, as I have written ad nauseum, it is in something of a crisis.
This is primarily, but not only, because of alleged abuses and mistakes made by folks in India who got a little too excited about doing microfinance as a fast-return-on-investment business. A story in Tuesday’s New York Times about SKS Microfinance describes the highest-profile collapse — and, arguably, loss of mission focus — in the largest microfinance market in the world, India.
But the problems are not unique to India (see Bangladesh) and not simply because of excessive profit seeking.
David Roodman, a microfinance expert at the Center for Global Development in Washington, D.C. who I frequently cite here on Humanosphere, was flown in to serve as keynote speaker for the event (held Monday evening at St. Mark’s Cathedral). He was joined by three of Seattle’s leading microfinance experts.
Here are their four answers to the question of “Does microfinance work?
• Roodman: It depends upon what you mean by “work.”
• Rick Beckett, Global Partnerships: It depends upon what you mean by “microfinance.”
• Peter Bladin, Grameen Foundation: Yes, for the most part, and it is still one of the best anti-poverty tools we have.
• Chris Wolff, Accion: Yes, but only if we remain focused on what people really need.
Roodman opened the discussion by giving his perspective on the Indian microfinance meltdown, which I summarized earlier. He says the collapse of SKS Microfinance, and its accompanying collateral damage in the Indian state of Andhra Pradesh, was caused by a number of things but primarily by growing too big too fast.
“I don’t think it was profit-seeking, ripping off clients, that was to blame,” Roodman said.