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Making Money Off the Poor? Microfinance Institutions Going Public Creates Controversy

Shweta Banerjee's picture

Microfinance originated in South Asia in the 1970s when pioneers such as Mohammed Yunus of Grameen, introduced the idea that providing small loans to the poor, especially women, can help generate income. In the last thirty years, after many experiments from around the world, the term microfinance now not only includes credit but also savings, insurance and cash transfer services for low income families.

An explosive growth of microfinance institutions (MFIs) has been seen within the last decade, both in India and globally. In fact, following the recent financial crisis, both Grameen Bank and Kiva have started lending in the United States.

The largest MFI in India, SKS made its first public offering on July 28, 2010. Backed by powerful funders like George Soros and Narayan Murthy, this is only the second “pure” MFI in the world to go public. The first one was the Mexican MFI, Compartamos, in 2007.

The Microfinance Gateway is the most comprehensive online resource for the global microfinance community and recently features an article based on eleven interviews with diverse experts on what they think the IPO could mean for the poor. Here’s a sneak-peek:

Have Librarians Missed the Bus?

Dilinika Peiris's picture
Photo Courtesy of Sri Lanka Library Association (SLLA)

As the Sri Lanka Library Association celebrates its Golden Jubilee this year, it’s time for us to reflect on the contributions of the Library and Information professionals to the development of Sri Lanka. At the same time, given the explosion in the sheer amount and sources of information now available especially through the internet, I found myself asking; do librarians have a role in the digital world? How are they adapting to this change? And are organizations and policymakers still making effective use of their knowledge and expertise while making decisions?

A recent Sunday Island piece captures the challenges and exciting opportunities that Librarians face in Sri Lanka today; I agree with them that with the expansion of information and sources, professional assistance is vital to identify trusted and accurate information. As a result, we should more actively recognize and involve Library and Information professionals as partners in policy consultations and working groups.

The Little State that Could

Muthukumara Mani's picture

It is not often that you find forest officers sitting face to face with mining officials to discuss environmental sustainability—especially in a state which is rich in both minerals and forest resources. Nor do you often see fishermen walking toe to toe with farmers in sweltering 48° C heat to be heard alongside tribal chiefs and industrialists. And it is not often that a state, dubbed as the disaster capital of India, and which lags behind on every conceivable development indicator, comes out on top by being the first to consult with its people on how to tackle the onslaught of climate change.

Well, this happened last week in India’s coastal state of Orissa, one of the poorest states in the country. While the richer states - Maharashtra and Gujarat - were busy building fancy climate models to predict temperature and rainfall changes fifty years from now, Orissa focused on what it can do today.

The New Normal? South Asia Looks East

Dipak Dasgupta's picture

The world South Asia will face after this crisis is not going to be the same as in the past. The trend that is accelerating after the financial crisis is that of the “new normal”: the shift in traditional engines of growth from industrial countries to emerging markets.

The crisis is accelerating this fundamental change in economic order in which developed countries have to save more and spend less, while emerging markets, such as China, India, Indonesia, Brazil, Russia, and South Africa begin to play much bigger roles in driving the global recovery. According to our estimates, by 2020, in just ten years---Asia may see its share of world GDP (in nominal dollars) climb to over one-third, replacing North America and the European Union as the biggest region. Underlying this is an expected sharp rise in shares of China and India, and indeed, that of all emerging markets may climb to nearly one-half of global output.

Is South Asia Moving Up?

Dipak Dasgupta's picture

The food, fuel, and financial crises during the last three years sent shockwaves throughout the world and its effects rippled across South Asia. It impacted growth, causing a reduction of growth by nearly 3% from the peak of 8.9% in 2007 to 6.3% in 2009, led to job losses, declines in stock market value, decreases in tourism, and increasing pressures on already weak fiscal, balance of payments, reserves and exchange rates.

I was based in New Delhi during the crisis, and the effects were palpable. For a moment, it looked as if confidence was ebbing---the construction cranes in Gurgaon (the fastest-growing township around Delhi) became silent, a young scholar at Delhi University ran a survey of what graduates might do as job markets became difficult, airlines ran half-empty and racked-up massive losses, jobs were lost heavily in diamond-cutting in Gujarat and IT firms stopped hiring in Bangalore, and people paused to consider the implications of such a dramatic change from the accelerating and heady growth of the previous years. But despite the circumstances, and thanks to strong and prompt government actions, confidence has swiftly returned, the region has proven to be quite resilient and a noticeable resurgence has taken hold.

Accessing the connectivity revolution for education

Michael Foley's picture
Click here to view Full Resolution Map

One could say that by being connected to the rest of the academic world through an NREN your isolation from research projects, high cost lab equipment, and world-class leading edge knowledge will disappear. If you are a physicist you can contemplate joining research teams using the Large Halidron Collider in CERN in Switzerland, an astronomer can manipulate in real time a telescope in Chile or access the data from radio telescopes, a medic can join in high definition seminars on advanced techniques in surgery or remote diagnostics, climate specialists can access and provide data to disaster management databases, an economist can access and contribute to economic modeling resources, and everyone can gain access to the thousands of on-line specialist journals.

A revolution in connectivity for education coming your way

Michael Foley's picture
Photo Courtesy of Dante

When Jim Wolfensohn, then President of the World Bank, sent me to Kabul in early 2002, just after the fall of the Taliban, in order to set up the first GDLN center in Afghanistan, the main challenge was to find decent Internet connectivity. In the end we had to set up our own satellite connection back to the World Bank in Washington DC. The same happened in Sri Lanka. How things have changed in South Asia.

For a long time, universities in the region had to rely on high cost, low speed, satellite based services to bring Internet access to its faculty and students, but that situation is changing rapidly. Led by the Higher Education Commission (HEC) in Pakistan and more recently by the National Knowledge Commission in India, and by a host of other programs in other countries, educational institutions across the region are building or rebuilding their networks, connecting to each other and to global networks with high speed fiber optic links that are set to revolutionize how we share knowledge and collaborate in research.

South Asian Youth Showcase Economic Ideas with the World

Joe Qian's picture

I had the opportunity to be a part of the launch of "Economic Challenges to Make South Asia Free from Poverty and Deprivation" in Washington and was truly inspired by the talent and knowledge of the students and the ideas and enthusiasm generated by the event across the region.

The event, coordinated across the region through video conference was moderated by Economic Adviser Shekhar Shah, who authored the foreward, and was exceptionally encouraging of the students and the issues discussed in the volume and organized by Hema Balasubramanian who heads the Public Information Center in New Delhi.

The unique student initiative that created the book, South Asia Economics Students’ Meet (SAESM), edited by Meeta Kumar and Mihir Pandey promotes budding economists to foster intellectual discourse with other students from the region. The annual conference, since 2004, has provided an opportunity for exceptional economic students to write, present, and share their academic papers on economic issues critical to the region.

Yes, how many deaths will it take till we know…

Maitreyi Bordia Das's picture

…that too many children have died?

I adapt this from Dylan’s famous 1962 lyrics, but it is nowhere more true than for Adivasis or tribal peoples (called Scheduled Tribes) in India.

Come monsoon, the Indian media is rife with stories of child deaths in tribal areas, frequently reported as “malnutrition deaths”. Kalahandi district in Orissa for instance, had been a metaphor for starvation due to press reports dating back to the 1980s. Melghat area in Maharashtra has similarly surfaced in the press especially during the monsoon when migrant Adivasis return to their villages and to empty food stocks in the home. This is followed by public outrage, sometimes by public interest litigation and often a haggling over numbers.

We recently published a working paper that looks at child mortality among India’s adivasis – the starkest manifestation of their deprivation. We find that an average Indian child has a 25 percent lower likelihood of dying under the age of five compared to an adivasi child. In rural areas, where the majority of adivasi children live, they made up about 11 percent of all births but 23 percent of all deaths in the five years preceding the National Family Heath Survey 2005. While there has been progress in child survival over the years, and much greater vigilance, which often leads to these stories surfacing in the media at all, the fact remains that children in tribal areas are at much greater risk of dying than those in other areas.

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