Learn the lessons of the Indian crisis from the Microcredit summit campaign 2012 report
source : microcredit summit campaign
Just before its 2011 summit meeting, which will take place in Valladolid, Spain in November, the Microcredit Summit Campaign has published its latest report on microfinance. The authors of the report calculated that in 2010, 137 million extremely poor people, out of 205 million potential customers, obtained a microloan – 9 million more than the previous year. The Microcredit Summit Campaign, created in 1997, is getting closer to its target of having 175 million of the poorest in the world among the list of microfinance customers in 2015.
“Last year has been a challenging one,” wrote the report authors, who refer mainly to the collapse of microcredit in the Indian State of Andhra Pradesh. That event is important, for the authors remind us that over the last five years India has accounted for 68% of microcredit growth. The Indian crisis was linked to the search for growth at the customer’s expense. It should force players in the microfinance world to get to know their customers better and give them more protection.
The report considers that savings and financial training for customers should also be encouraged, as well as the assessment of social performance. As was the case last year, the Microcredit Summit Campaign is promoting the “Seal of Excellence”, a proposed label for rewarding those Microfinance Institutions (MFIs) that have been the most effective in social terms.
View our feature article on MicroWorld about assessing the social impact of microfinance