Microfinance, the long-tail of banking

This morning, while going for my walk, I was listening to the "IBM and the Future of…" series on my Zune.  The episode that particularly caught my attention was about microfinancing:

Two thirds of the world’s population earns less than $5 a day. Among the many efforts to alleviate global poverty, one of the most promising is microfinance. As of last year, there were 3,100 microfinance institutions providing services to over 100 million people with a gross loan portfolio exceeding US$23 billion. Listen to a discussion on how these $100 loans are driving entrepreneurship and helping to build a new economy.

Source: http://www.ibm.com/ibm/syndication/podcasts/future/january11_2008_micro.shtml

Imagine that, a $23 billion dollar industry based on people who earn $5 dollars a day.  Companies providing a full suite of banking products and services that are tailored for this market alone.

The show talks about some of the mechanics that allow microfinancing to run and be viable, but it would be fascinating to read more on the origins of microfinancing.  Particularly some of the ethical dilemmas that were undoubtedly faced for the pioneers of such an instrument.  The wikipedia entry for microfinance touches on some of the dilemmas, but does not discuss any of the early ethical debate issues surrounding it.


~ by D on January 28, 2008.

2 Responses to “Microfinance, the long-tail of banking”

  1. Hi Darren,
    It\’s interesting you raise this as I was really impressed in this regard by our new Senior Australian of the Year. He spends his life providing seed funding micro-loans and helping these people. They estimate he helps create a new job every 30 minutes.
    What also intrigues me is why he isn\’t the Australian of the Year. Lee Kernigan\’s a nice guy but from what I see, he isn\’t having an impact in the same league as our new Senior Australian of the Year. Sadly, it always seems to be a popularity contest.

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