Josh Weissburg, a Project Associate at The Aspen Institute has shared his perspective on Prof. Aneel Karnani’s SSIR article “Microcredit Misses Its Mark". He argues that the poor need options, not prescriptions.

Provocative, yes, but it has become fashionable to ask this question in other subsections of the financial community - the state of the venture capital industry and more recently, the private equity industry have been heavily and often bitterly debated.

It seems timely to revisit the need for scrutiny in the microfinance industry as it enters the mainstream and to hopefully broaden the debate beyond academic circles and development institutions. CGAP this month published a focus note analyzing the Compartamos IPO, essentially seeking to answer the question of whether the exceptionally high profits Compartamos has earned for its private shareholders can be justified for an organization that is supposed to have the social interests of its clients in mind. CGAP's answer, while not completely damning, is not a vindication for Compartamos either - they conclude that the NGO could have reasonably charged lower interest rates that would have decreased profits but allowed poor clients to keep more of their earnings.

This is an informative case to watch, because it shows that despite all the positive media attention fawning over market-based solutions to social and environmental issues, the ugly reality of trade-offs will eventually become unavoidable. All the feel-good talk in the world praising triple bottom-line initiatives is put in perspective when you realize that as organizations like Compartamos become successful, they have to do the difficult work of stating precisely how they will measure and prioritize social, environmental, and economic returns.

(This post continues past the break; click "Read More" to continue)

Pablo was kind enough to forward me the latest issue of A Closer Look, Aspen Institute's monthly briefing on the latest in MBA education.  This month's topic is BOP in the classroom -- check out the PDF, which is posted online via Aspen's Business and Society Program.

It's a well-done issue, featuring short interviews with Stuart Hart and Aneel Karnani as well as descriptions of actual BOP classes offered throughout the world.  To me, it's interesting to read about BOP courses offered at Stellenbosch (in South Africa), San Francisco State, Vanderbilt, and Thunderbird -- usually I read more about the BOP programs at Cornell and Michigan.

Kudos to Aspen for a job well done on this issue of A Closer Look.  If I have one complaint (and I'm bound to), it's that they didn't refer to The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid report and specifically, the new data that were introduced back in March (Aspen claims that the BOP market is worth $14 trillion annually, when it's actually more like $5 trillion).  On the other hand, it asks some tough questions, such as whether civil society is strong enough in some BOP communities to rebuff the introduction of inappropriate products.

Check it out, and thanks again to Pablo for pointing me towards this.