Microfinance Focus, January 17, 2012: Susan Davis is a thought leader in international development and civil society innovation. She is the founding President & CEO of BRAC USA, a grant making affiliate of BRAC, an international development organization started in Bangladesh in 1972 and now working in countries across Africa and Asia.

She is currently on the governing boards of BRAC and BRAC International and serves as chair for BRAC Sierra Leone and Liberia microfinance companies.

In an exclusive interview with Microfinance Focus, Susan discussed the development of the microfinance sector and its future course.

Microfinance Focus: How has the landscape of international development evolved from the days you started to present times?

Susan Davis: The present work in the field of social development and reducing poverty gave birth to an industry. We have democratized access to financial services. Organizations are now out in emerging economies. While it used to be that the largest development organizations were in Washington, DC, now they are in Dhaka. From DC to Dhaka is the biggest change.

We now have many institutions working in this field. We have institutions that support people working in this field. We now have rating agencies and magazines like Microfinance Focus who write about it.

Microfinance Focus: You have been a promoter of Social Entrepreneurship. Tell us about its potential of making large scale positive changes?

Susan Davis: Our fundamental idea is that everybody is a change maker. Social enterprises are organizational vehicles that can be used by social entrepreneurs to overcome problems and accomplish their goals. Many microfinance institutions are perceived as social enterprises. They are trying to defeat poverty and I think BRAC has played a catalytic role in doing that.

Microfinance Focus: Despite its impressive growth, the global microfinance sector has faced many blows in the recent past. Where do you think lie the weaknesses?

Susan Davis: The biggest weakness is in human beings. It is the problem of our species that sometimes out of greed we try to overreach and oversell. Sometimes microfinance is interpreted as a panacea, but it is just a tool which needs to be used properly.

Right now, I think the industry is trying to course-correct itself. Now there is greater emphasis on financial education so that borrowers really know what the terms and conditions are. We also have initiatives like Smart Campaign and MFTransparency. Whether we max them all out is another question.

Microfinance Focus: How do you view the Indian microfinance crisis?

Susan Davis: I suppose it was predictable. I think there was tension on whose idea should be tried out. In India there is a lot of focus on an either-or solution. It is self-help groups versus microfinance institutions. I don’t believe in either-or solutions. There can be many solutions to the same problem and they all can co-exist.

We had such crises in other regions of the world as well. They have recovered and India will recover too.

Microfinance Focus: With its Pioneer and Founding Father, Prof. Yunus getting victimized, the sector appears to be in a very vulnerable state. What is your opinion on that?

Susan Davis: I think the sector is strong. After all, Grameen Bank is still operating. What we have learned in the past few years is that we don’t want to mix politics with banking. But it happens all the time.

As citizens we can put pressure on the governments. Media can also play a strong role and bring out the facts. Recently, questions are being raised about the impact of microfinance. That is a disservice to the millions of poor people who have benefitted from access to financial services.

Microfinance Focus: In the coming years, where would you like to see your social development efforts directed to?

Susan Davis: We want to increase the opportunities available to poor women. In just few years we managed to touch the lives of two million people. We want to double that in the next couple of years. It is a great thing to combine microfinance with other development work. BRAC has always been about bringing transformational change in the lives of the poor women.

Microfinance Focus: How do you see the microfinance industry growing?

Susan Davis: At least enough of the industry should keep focus on what it initially set out to achieve. We have huge role to play in broadening products and services that we offer. We can always have relative poverty but absolute poverty should not exist.

Microfinance Focus: Any words of advice to development leaders?

Susan Davis: I can only advise them to stick to their mission. Don’t get washed away or distracted by money. Money is not our mission. Microfinance is not a tool created by the wealthy. I see fingerprints of poor women all over it.

(This interview was first published in the Microfinance Focus special print magazine which was distributed at the Global Microcredit Summit 2011 in Spain.)