How to provide for sustainable development AND a Social Mission

By Jerome Peloquin

In recent issues of this magazine, We have been an outspoken critic of what has been called:  Commercial Microfinance.  That is, an MFI operating without transparent loan or operating policies and having no BDS component, essential in an installment lending operation without a visible social development component.  Our attention has been focused upon those MFI’s that, in our opinion, have essentially abandoned the original mandate of service, in blatant pursuit of profit.   Recently articles in respected publications and other media have been critical of the Microfinance sector in general.  Although essentially anecdotal in nature, charges brought by a respected publication bear scrutiny.

As an offset to these allegations we would like to report on an exciting new development in the MFI arena.  microUP!  (see story under horizon on page 18)

We believe that our sector is about to enjoy a renaissance, a rededication and refocus (pun intended) of the now traditional model of micro lending Microfinance Focus has identified an emerging model of micro credit, tied to intensive business developments and a total focus upon tangible benefits to the poor.  Sam Daley-Harris, founder of The Micro Credit Summit and sponsor of The 2010 Micro Credit Summit to be held in Nairobi, Kenya is a major proponent of the microUP approach.  Based upon recent discussions with those closest to the issue.  Microfinance Focus perceives there are five basic principles that cover the diverse strategies employed by the three principal practitioners.  Although each one uses a different strategic approach the policies are essentially common.

The new paradigm will debut next year in Kenya and will be championed by Sam as a transformation of traditional MF into a global force for the eradication of poverty in general.  microUP is a holistic solution.  It combines lending with DBS, transparent operations and a fair honest management system that values the individual with more than lip service and places the poor in the middle of both the economic and social goals of the organization. Microfinance Focus Magazine has learned that Mr. Daley-Harris plans to launch a global effort to spread the technology and the process to all developing countries in 2010.  In discussions with leaders in the movement, we have produced an initial set of basic principles.  We will be blogging on this as  soon as the magazine is published so let me hear from you.  I can assure you that you will be hearing from me.