Stanford Social Innovation Review

Despite the hoopla over microfinance, it doesn’t cure poverty. But stable jobs do. If societies are serious about helping the poorest of the poor, they should stop investing in microfinance and start supporting large, labor-intensive industries.

How for-profit clinics are healing and enriching the rural poor in Kenya.

Few microfinance institutions articulate what, exactly, their ultimate goals are and how to achieve them. If the goal of microfinance is to alleviate poverty, the authors say, then MFIs should focus on helping their clients build successful enterprises, rather than on making more and bigger loans.

Critics of microfinance institutions (MFIs) ask them to choose between helping the poor or making money for investors, but this is a false choice. MFIs can have their impact and profit, too, says the author, the CEO of the Grameen Foundation. He sketches a new vision of microfinance as a platform, not a product; one that relies on high volumes, not high margins, and that uses limits on private benefit, holistic performance standards, and third-party certification to help MFIs meet both their bottom lines.

Commercial microfinance institutions (MFIs) must calculate two bottom lines: alleviating poverty for clients and also generating profits for investors. To achieve the latter goal, some MFIs charge their impoverished clients exorbitant interest rates. The recent Banco Compartamos IPO in Mexico raises a red flag, demonstrating how easily well-intentioned MFIs and their investors can shift from microlending to microloan-sharking.

THE SOUL OF A NEW MACHINE by Tracy Kidder

Two new players in the world’s social investing scene seek financial returns along with social impact.

Win beads, give loans.

Nonprofit lender Root Capital connects rural farmers and artisans with the corporations that crave their products.

Research shows that men may be more effective than woman at utilizing microfinance investments. 

Kiva, the first online peer-to-peer microcredit marketplace, is one of the fastest-growing nonprofits in history. But its nonprofit status was not inevitable. Here’s why Kiva chose to be a 501(c)(3), what this tax status buys the organization, and how being a nonprofit poses challenges. —By Bethany Coates & Garth Saloner

How small loans are tipping the social scales for Roma people

Muhammad Yunus was getting nowhere in
Bangladesh – so he opened his own bank.

How one of the world’s largest companies builds loyalty among Mexico’s poor.

Banks in Mexico say that microloans are helping the poor while boosting their profits.

The emergence
of microenterprise development
programs internationally and in
the United States

Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good

Why businesspeople don’t mention values when they discuss social responsibility.