Microfinance and Poverty Reduction

Some fear profit motive to trump poverty efforts in microfinance, By Matthew Saltmarsh and Cat Contiguglia, August 28, 2009, New York Times: “From a warehouse in this scruffy suburb outside Paris, Jacques Attali has been building what he calls the ‘McKinsey’ of the microfinance world, a one-stop consulting shop for the sector. A consummate French insider, Mr. Attali, a former banker and presidential advisor, has recruited big names as board members and advisors, including Bernard Kouchner, co-founder of the Nobel prize-winning Médecins Sans Frontières, now the French foreign minister; and Muhammad Yunus, the Nobel-winning founder of Grameen Bank, a pioneer in the field of microfinance. He has attracted a host of corporate partners, like SAP, the German software company, and BNP Paribas, the largest bank in France. The result – PlaNet Finance – now has a staff of 700, about 10 percent based in Saint-Ouen, active in more than 60 countries. Since 1998, it says it has provided help to 140,000 entrepreneurs and set up $80 million in financing. It also has an investment arm and offers technical assistance to donors and recipients. Some services, like ratings, have become benchmarks; others, like insurance, are less successful. The expansion illustrates just how microfinance – the providing of small business loans to individuals, usually in developing countries – has become big business. Companies like PlaNet Finance and BlueOrchard, based in Geneva, attract not only public investors, but private ones seeking a “double bottom line” of socially responsible returns…”