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Beyond Good Intentions: Micro-lending
Tori Hogan, former aid worker and amateur film maker, traveled around the world to film ten mini-documentaries examining international development efforts in their strengths and shortcomings.
In the ninth episode she examines micro-lending as a model for development. In the spirit of her journey, she leaves it an open question–pointing out positive examples and highlighting problem. Hogan then asks us, the viewers, to join the conversation in her online series, Beyond Good Intentions.
The Skoll Foundation also published her blog posts on SocialEdge, and the post on micro-lending spurred quite a debate.
I thought her five minute video was fair. My one critique is that, in her survey of various development strategies, she has no time to dig deeply into any one. If I could give her an additional five minutes to extend her video on micro-lending, I would encourage her to examine micro-lending in the context of the larger microfinance movement that includes microsavings, microinsurance, and other financial instruments for the poorest of the poor. I would encourage her to spend a day with Pro Mujer in Bolivia, which uses micro-lending solely as a means to achieve gains in literacy, health, and education.
In any case, I would encourage visiting the site and commenting on the thread.
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I think that your critique, regarding her inability to dig deeply and her lack of inclusion of other financial instruments, is understandable. However, I feel that Tori’s argument was not that microfinance is bad, but rather that successful microfinance organizations are those which set up a *system* of education and support for their borrowers to help them learn how to manage their businesses. Loans are like the other financial instruments you discuss in that new users need an effective support system in order to make sure that they use these tools responsibly. The picture she painted in Mozambique was one where there were few standards or regulations regarding the governance of microlending groups and poverty reduction came second to the interests of the lender. Standards and a systematic approach to poverty reduction are what’s needed in order to make microlending successful.
Note: As a summer intern for Global Washington, I feel that it is pertinent to note here that my views are not necessarily those of the organization I work for.