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E-mail, Mobile Phones-- and Microfinance?
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E-mail, the internet, mobile phones, and microfinance. At first glance, you might think I'm playing Sesame Street's "Three of these things belong together" game. But I assure you that, despite my love for the Cookie Monster, I'm not. It turns out that these four innovations, along with 26 others, have been named the Top 30 Innovations of the Last 30 Years by PBS's Nightly Business Report.
To some, lumping microfinance-- a relatively new concept to much of the world's inhabitants, especially after Muhammed Yunus and his Grameen Bank won the Nobel Peace Prize in 2006-- with such staples of our modern life might seem puzzling.
But it's heartening to see that more are sitting up and taking notice that innovations in poverty alleviation are, in fact, a very modern thing. If we could start seeing the the world's financially disadvantaged beyond the sad faces flickering on the nightly news, and instead as protagonists of their own development through such innovations as microfinance, we might be on to a more sustainable means toward bringing about prosperity for all, in all senses of the word. Leveling the playing field, I'd venture to assert, is one of the key elements of modernity in a world where it's becoming increasingly obvious that the disadvantage of the part is to the detriment of the whole.
"Leveling the playing field," therefore, includes extending access to financial services to all. While microfinance has popularly become synonymous with giving out small loans, in more recent years, it's come to encompass providing all types of financial services for the poor. This includes access to a bank account, to a safe place to save, financial education, and other services that many of us take for granted. And in light of the recent global financial crisis, these services are now more crucial than ever.
There are some exciting developments with regards to using technology to facilitate access to financial services (see my recent post for news on the new DFID-funded three-year project in Africa and Asia, FAST). In a world where more individuals in the developing world have access to a cell phone than to a bank account, mobile banking is one promising way to link technology with innovations in poverty alleviation.
So it looks like the Nightly Business Report has hit the nail on its head this time. And here's to hoping that in thirty years, microfinance and financial services for the poor will seem as novel as color television and sliced bread.
(Photo courtesy of the World Bank Photo Collection)
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question on one entry
Do you really feel bio fuels warrant inclusion. They are a great future opportunity but really are not a developed or widely used technology.
two sides of microfinance
Very interesting post.
"...innovations in poverty alleviation are, in fact, a very modern thing."
I agree 100 percent. The middle class, known as the bourgeoisie in political theory, is a relatively new phenomenon in world history. It really just began a little over 100 years ago.
Microfinance, that is, the proliferation of access to financial services has certainly facilitated the transition from poor to middleclass and beyond, but there is lots of evidence to suggest that microfinance has actually benefited the old, tradition financial firms and general culture far more than the helping poor people break into the bourgeoisie.
Expansion of microfinance
Now it seems the microfinance firms are running into America however I don't expect to see the same result as those found in the third world countries. As Americans, the majority I'd guess is willing to help others but not from a state of total altruism. We want something tangible from our investments and I think that's where microfinance will be lacking in the future. Why invest 10 000$ into a person so that they can start their baking shop in New Orleans when you will get only the 10 000$ returned, if that when you can deposit it into a bank or a stock or mutual fund and receive a return. No other loans are given out without interest and while it looks nice on paper that the person doesn't have to pay back with interest, it doesn't make sense in our culture.
Altruism is a rare thing these days and increasingly so in the West. I think for the model to truly succeed and increase it's numbers there needs to be something in it for the middle class. Harsh to say but I think that's the truth.
David,
Microfinance
I never thought about putting Microfinance with email and mobile phones but it is something that is really helping people now. I wonder if it would have been as popular if the recession had not hit. Some people would not have any other place to turn for the financial needs. casino en ligne
I think Muhammad Yunus gets
I think Muhammad Yunus gets full credit of the concept of microfinance through his Grameen Bank
Definitely agree with Noah's
Definitely agree with Noah's post, the middle class is indeed a somewhat recent phenomenon.
I believe, however, that microfinance is of equal benefit to the establishment and to the upcoming middle classes.
Microfinance to the Rescue
An awesome innovation it is, microfinance has surely helped millions of people not just in America but across the globe. Specially poverty ridden farmers in rural India and China have got a path that they can lead with some security without the fear of local money-lenders. As Michael says, Mohammed Yunus surely deserves the credit.
Very great thoughts here.
Very great thoughts here. Extending access to financial services for poor people is a great thing and we must fight for it. People are getting Nobel prizes for various kinds of inventions, but the fact is that poverty is growing in the modern world. First of all, we must help them and only then invent some crazy stuff. I agree with every single word you have written in your article. Let's hope that things will get better after 20 or 30 years. Thanks for the great article.
Hmm I do not agree with one
Hmm I do not agree with one of the previous comments that the bourgeoisie is a fairly new phenomenon. A) it is not a phenomenon it is a social class and B)it is much older than 100 years!
"If we could start seeing the the world's financially disadvantaged beyond the sad faces flickering on the nightly news, and instead as protagonists of their own development through such innovations as microfinance, we might be on to a more sustainable means toward bringing about prosperity for all, in all senses of the word. "- this is so true. The developed world needs to do much more than mere lip service.
great
That is great that people are able to get financial assistance. Just because you are poor does not need that you will need financing for something. Making money and money managing tools available for the poor is just as important for the well off people.
naru
Extending access to financial services for poor people is a great thing and we must fight for it. People are getting Nobel prizes for various kinds of inventions, but the fact is that poverty is growing in the modern world...
I do not agree...what
I do not agree...what poverty is in modern world is not even comparable to the actual poverty. I feel pity for a person like you.
Microfinance was created for
Microfinance was created for the poor, that's for sure. As a simple working woman I always dreamed of having my own business but I needed some money to start up things. Get a bureau space and pay the papers I needed to register my business. Thanks to micro-financing I got a small loan to get me started. Now I just need to pay it back and ask for a bigger one in order to proceed to the next step.
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Evelyn Tiffany - dedicated servers programmer.
Why invest 10 000$ into a
Why invest 10 000$ into a person so that they can start their banking shop in New Orleans when you will get only the 10 000$ returned, if that when you can deposit it into a bank or a stock or mutual fund and receive a return. I think extending access to financial services would be a better option
The Impact of Mobile Phones
I have always found the effect of mobile phones upon society in general very interesting. They have changed so many aspects of our lives. I remember when nobody had them, and I used to go to festivals with friends. Once I lost my friends in the crowd, and there was no way to find them. I then had to "get by" and rely on my own resources to meet new people and embark upon a "mini adventure" of my own. With the advent of mobile phones, this no longer happens, so are our children growing up without developing important survival skills?