The case for renaming for-profit MFIs

Felix Salmon in Conde-Nast’s Portfolio.com provides counterpoints to The Economist’s glowing editorial about the Compartamos IPO, and thereby provides another plank in the platform of those who believe in separating for profit and nonprofit microfinance.

I’m not sure how realistic that goal is, but I would propose something that might assuage the fears of the “social good” set behind the nonprofit model of microfinance. Why not rebrand the for-profit version of microfinance? Undoubtedly the concern is that unscrupulous lenders will trade on the sterling reputation of “microfinance” to engage in predatory lending. So why not stipulate, through regulation, that microfinance is the practice of nonprofits with social missions? The for-profit version could be called minifinance, or nanofinance, or whatever they settle on–just not microfinance, microcredit, et al.