Panelists debate microfinances success, consider its impact

At the end of the Chicago Microfinance Conference May 20, four experts offered different perspectives on microfinance’s global impact and weighed in on how to measure its success. Christina Barrineau, chief technical advisor for United Nations Capital Development Fund (UNCDF), moderated the closing session of the event, which drew 300 students from the GSB, the Harris School of Public Policy, and Northwestern University’s Kellogg School of Management to a full day of discussions on microfinance at Gleacher Center .

Richard Taub, Paul Klapper Professor in the Social Sciences at the University of Chicago, questioned whether microfinance was more a social movement than a market enterprise. He suggested the idealism of microfinance might deflect people’s attention from other programs that would be more effective in reducing poverty. “There’s not a lot of evidence that the borrowers themselves are better off, and there’s much less evidence that their communities are better off,” he said.

Mary Houghton, president of ShoreBank Corporation, said it will take 15 to 20 years to see microfinance’s full impact. “I believe it’s a platform for broadening the reach of financial services into economies which are ignored and poor,” she said. Houghton characterized microfinance as both a serious business activity and a social movement with the potential to accomplish something significant.

Robert Annibale, global director of microfinance for Citigroup, acknowledged the field has “a double bottom line”—financial services companies have the opportunity to expand their reach while contributing to the social good. “You know you’re doing the right thing,” he said.

Alex Counts, president and CEO at Grameen Foundation USA, said microfinance may not yet be at a size to make a serious impact worldwide. But, he suggested, it is making a difference in such places as Bangladesh. The goal is to expand microfinance’s outreach globally, with competition creating better products and birthing new ideas. “I think it can be done,” he said.

 Jenn Goddu