Examining the Potential of Microfinance through a Haitian MFI

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July 08, 2011

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World.

Grameen Foundation has been working for 14 years to advance a certain approach to microfinance – one that is rooted in the experiences, achievements and philosophy of Grameen Bank.  Though we do not promote any particular methodology (i.e., a certain means of providing financial or human development services to the poor), we do focus on and try to advance a set of principles and standards.  Methodologies are very context-specific, while principles endure and standards are universal.  (We approach our technology-for-development work similarly, but that is beyond the scope of this short post.)

Some of the principles are not particularly controversial or microfinance-specific – things like a commitment to transparency, innovation, being client-centered, investing in the human capital of employees, promoting gender equality and so on.  Others are specific to microfinance, such as bundling financial and human development services wherever possible, measuring and managing social performance on par with financial performance, mobilizing loan capital locally (through savings or local currency borrowings), and local (or indigenous) ownership and governance.  Among the latter, there are some thoughtful people in our movement (or industry, as some prefer to call it) who would disagree with the wisdom of these principles. I say that to emphasize that these are not meaningless slogans that everyone agrees on.

Talking about principles and standards, and about our work to champion innovation that spreads them throughout the microfinance sector, can seem abstract at times, even though we are clearer than ever that this is how Grameen Foundation can have the greatest impact.  Sometimes we find it helpful to focus on individual organizations that embody these principles and meet these standards, however imperfectly, to deepen our own understanding of how microfinance can evolve, and also further the understanding of people who support our organization in various ways.  With microfinance coming under increasing scrutiny by regulators, the media and politicians, holding up pace-setting institutions is an important part of educating stakeholders about what microfinance can be, and arguably should be.

During his recent trip to Haiti, Alex met extensively with the borrowers and staff of Fonkoze, including founder Father Joseph Philippe (left).

During his recent trip to Haiti, Alex met extensively with the borrowers and staff of Fonkoze, including founder Father Joseph Philippe (left).

With my second sabbatical approaching (at Grameen Foundation we get one every seven years), I decided to pick one such organization and write a book about it for a general audience.  It was not that hard to decide which one – I chose Fonkoze, Haiti’s largest MFI.  It is a dynamic, innovative, risk-taking organization led by fascinating people – mostly Haitians and Haitian-Americans, but also a few Americans and Europeans – in a country that has been in the news in recently (for all the wrong reasons, unfortunately).  It has also been a beneficiary of Grameen Foundation’s products and services for more than a decade.

I began my sabbatical on June 16 and a few days later was down in Haiti – my fifth and longest trip yet to that sad and surprising country.  Shortly before going, I began a blog that would chronicle the process of researching and writing the book, and invited people around the world to participate in the creative process.  I have been posting short written reflections, photos and videos (most under two minutes) ever since.

My goals for this project are aggressive. I want it to be a New York Times best-seller!  (Why the heck not?)  I also want it to generate significant new partners and funders for Grameen Foundation, Fonkoze and organizations that operate along similar lines.  (All the royalties from the book will go to Grameen Foundation.)  And I want it to change the narrative in the mainstream media from simplistic answers to the “what’s wrong with microfinance” question to more interesting analyses of how it is evolving in some places to be an even more potent poverty-fighting strategy than earlier models.  I plan to have the book in stores by the third anniversary of the Haiti earthquake (January 12, 2013).

Ambitious?  Yes!  But with new “friends” of this project coming forward every day – consider yourself invited! – it just might be achievable.

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