MFC Conference: "Reorienting Microfinance: Generating New or Repairing the Old?"
The 14th Annual MFC Conference on "Reorienting Microfinance Towards Balanced Growth" had an impressive opening plenary session that sought to address the following questions:
- Does microfinance suffer from intrinsic system drawbacks?
- Have microfinance funds contributed to the crisis in the microfinance sector?
- What will the “new” microfinance look like?
The panel, “Reorienting Microfinance: Generating New or Repairing the Old?” was moderated by Elvira Lefting of Finance in Motion and featured:
- Maria Teresa Zappia of BlueOrchard
- Professor Dr. Adalbert Winkler of the Frankfurt School of Finance and Management
- Dr. Milford Bateman of the University of Juraj Dobrila Pula
- Christian Speckhardt of responsAbility
- Luka Djurovic of Alter Modus
- Rupert Scofield of FINCA International
Bateman started the panel by stating that microfinance does not work as a development tool; even further, he argued that providing microfinance can be as damaging as "selling drugs or junk food." Such a provocative statement caused an interesting and heated debate that was followed by many questions from the audience. Many agreed with Bateman on the following points:
- microfinance has been oversold as a unique tool to fight poverty, and
- microfinance providers have not been very diligent about capturing impact, therefore the industry is lacking studies that prove the effectiveness of microfinance.
The panelists also discussed whether microfinance serves more to smooth consumption or if it can bring long term development. The panel, excluding Bateman, stood behind microfinance, but the majority of the presenters did agree with Bateman that SME development is very important for achieving sustainable growth, however most of the time there is limited political will making it difficult to invest in SMEs.
The Microlinks Team will be interviewing Milford Bateman during the MFC Annual Conference (May 18-20), so check back soon in to hear his view on microfinance.