Archive for the ‘Microfinance’ Category



June 10th, 2009

The Microfinance Market Today

Posted at 6:00 AM ET

Alex Bernhardt, Assistant Vice President
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The groundbreaking efforts by pioneers in the microfinance industry have already begun to yield substantial returns. Today, more than 150 million people worldwide have access to microcredit, the industry’s flagship product - roughly equivalent to half the population of the United States. From the perspective of microfinance institutions (MFIs), this growing market has been successful, as well. Loans are being repaid, and many lenders are generating profits, as you saw in last week’s article with Grameen Bank. It’s clear that the foundation for microfinance has been established … but there is still plenty of room for growth. After all, 2.6 billion people — over 40 percent of the world’s population — still live on less than USD2 per day and more than 2 billion remain “unbanked” (i.e., without access to traditional financial systems).

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June 3rd, 2009

History of Microfinance

Posted at 1:00 AM ET

Alex Bernhardt, Assistant Vice President
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By most accounts, the modern microfinance movement began in Bangladesh more than 25 years ago, with the official opening of Grameen Bank in 1983. This institution and its revolutionary “double bottom-line”, “social business” practices remains 95 percent owned by its poor clients and has had lasting effects on the microfinance industry and on economic development efforts in general. Grameen Bank was profitable for 22 of its first 25 years of existence and has helped 65 percent of its clients’ families to exit poverty. On a broader scale, this effort has demonstrated that a microfinance institution (MFI) can be successful in fulfilling both aspects of its twofold mission: turning a profit and achieving social good via combating global poverty.

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May 27th, 2009

What Is Microfinance?

Posted at 9:00 AM ET

Alex Bernhardt, Assistant Vice President
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We are all quite familiar with basic consumer finance. At a minimum, as insurance industry professionals we understand the role of banks, payment servicers, and (of course) insurers in the modern economy. In fact, at a certain level, we don’t even notice. Credit cards, mortgages, and electronic fund transfers are commonplace, requiring little thought beyond the basic elements of a transaction — i.e., swipe your card, sign your name, and you’re done. Yet, there are some parts of the world in which the financial services and infrastructure which we often take for granted are rare — or don’t exist at all. In many developing nations - and even in parts of the developed world — large swathes of the population have little or no access to the very foundations of consumer finance that have become embedded in the cultures of developed economies. This is a problem that the microfinance movement seeks to solve.

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