Wednesday, April 06, 2005

Knowledge@Wharton - April 6 to April 13

This week's Knowledge@Wharton reports on microcredit, an innovative financial tool that provides very small business loans to poor people. Developed more than (30) years ago by the Grameen Bank and the appropriate technology movement - - microcredit - - the authors contend, has moved well beyond its infancy stage and is now an adolescent. The advice in the article "Microcredit Is Becoming Profitable, Which Means New Players and New Problems" is that microcredit lenders and program managers should move away from non-profit donors and become an established part of the global capital structure.

An example of its success is the interest that large commercial financial institutions, including Citigroup and Deutsche Bank, are now showing in microfinance, which could increase access to credit for the poor. At the same time, challenges remain in attracting private capital, lowering costs and interest rates, and developing regulation.

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