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Overview
From the abstract: [Paper from a lecture held at the Academy in Mainz, Germany that] discusses the so-called commercial approach to microfinance under economic and ethical aspects. It first shows how microfinance has developed from a pure welfare activity to a commercially relevant line of banking business and argues why this is the only sound approach to adopt if one wants microfinance to have any social and developmental impact, and that therefore the wide-spread "moralistic" criticism of the commercial approach, which has emerged as the dominant approach to microfinance in the 1990s, is ill-placed both from an economic and an ethical perspective. However, some recent events in microfinance raise doubts that the commercial approach has, in a number of cases, gone too far, the evident example being the Mexican microfinance institution Compartamos, which has recently undertaken a financially extremely successful IPO. As it seems, some microfinance institutions have become so radically commercial that all of those social and development considerations, which have traditionally motivated work in the field of microfinance, seem to have lost their importance. The conflict between commercial and developmental motivation is, however, not inevitable. The paper concludes by showing that, and how, a microfinance institution can combine using the strengths of the capital market and maintaining its developmental focus and importance. German text.
Synopsis
From the abstract: [Paper from a lecture held at the Academy in Mainz, Germany that] discusses the so-called commercial approach to microfinance under economic and ethical aspects. It first shows how microfinance has developed from a pure welfare activity to a commercially relevant line of banking business and argues why this is the only sound approach to adopt if one wants microfinance to have any social and developmental impact, and that therefore the wide-spread "moralistic" criticism of the commercial approach, which has emerged as the dominant approach to microfinance in the 1990s, is ill-placed both from an economic and an ethical perspective. However, some recent events in microfinance raise doubts that the commercial approach has, in a number of cases, gone too far, the evident example being the Mexican microfinance institution Compartamos, which has recently undertaken a financially extremely successful IPO. As it seems, some microfinance institutions have become so radically commercial that all of those social and development considerations, which have traditionally motivated work in the field of microfinance, seem to have lost their importance. The conflict between commercial and developmental motivation is, however, not inevitable. The paper concludes by showing that, and how, a microfinance institution can combine using the strengths of the capital market and maintaining its developmental focus and importance. German text.