Yunnus vs. Compartamos
Nobel Laureate Mauhammad Yunnus criticizes the successful profitability of the Mexican mirofinance bank - and recent successful IPO - Compartamos. He doesn't believe a profit maximizing approach can be pro-poor, and sees more loan-shark then poverty tool in the Compartamos model. The question is, at what point are interest rates and profitiabilty figures just too high? If ever.
The Compartamos case has become one of the centers in the debate of not-for-profit vs. for-profit approaches to microfinance. For a review, see these notes from ACCION and CGAP. Also see this op-ed.
Via PSD Blog.
Labels:
Development,
Finance,
Microfinance
1 comments:
Yunus is not arguing that profit maximizing microfinance is pro-poor. He is saying that loan sharking is not pro-poor. Compartamos did not began as profit maximizing organization. Just look at the CGAP note--it received subsidized loan. Yunus is suggesting that the interest rate should not exceed the cost of funds+ 6-8%.
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