Connie Bruck published a very good article on the current state of microfinance in the 30 October New Yorker. It details the gulf between two approaches, roughly exemplified by Nobel Peace Prize-winner Muhammad Yunus and eBay-founder Piere Omidyar. Omidyar argues that microfinance needs a dose of commercialization to build it into a profit-making sector, while Yunus sticks to the belief that "anyone, provided the means, can become self-sufficient--even successful" through his model of small loans.
It's a curious debate and I suspect there is room for both aproaches. Yet, thinking about Omidyar's for-profit approach may provide a better means toward sustainability for social entreprenuers. (See my article "Drayton's Conundrum" on the Social Entrepreneurs Group at Gather.com
Read the full article by Connie Bruck: "Millions for Millions"
Categories: poverty, changemakers, microcredit, microfinance, innovation, socialentrepreneurs
I doubt Yunus & Omidyar are that far apart. Yunus champions profitable, but not profit-maximising, social enterprise, and says that Grameen is a for-profit organisation. The aim is to make the biggest difference to poverty possible, while maintaining the business disciplines that ensure costs are covered, there is a return on investment, and the organisation is sustainanble and growing without needing constant external funds.
See his videos linked from my blog, as one source of his views here.
Thanks, Torchwolf, for your comment. I will definitely check out your site. In my personal opinion, we need all the streams flowing -- regardless of their origin or perceived destination -- to fill the ocean that will float all boats.
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