Compartamos IPO Sparks Ideological Debate Over Microfinance

Abigail Keene-Babcock — Mon, 17 Dec 2007 12:06:47 -0500

December 14, 2007 - 00:00, BusinessWeek

Online Extra: Microlending: It's No Cure-all

Story Link: http://www.businessweek.com/magazine/content/07_52/b4064045922248.htm

Teaser:
The initial public offering in April that earned $467 million for the owners of a Mexican lender to the poor, Banco Compartamos (BMOSF), provoked a passionate protest from nonprofit traditionalists around the world. Veteran development experts have argued for years that commercialized microlending inevitably means favoring investors ahead of vulnerable borrowers. "They're money lenders. They're not microcredit," says Muhammad Yunus, who won the Nobel Peace Prize in 2006 for his pioneering work in extending credit to the working poor in Bangladesh.

The initial public offering in April that earned $467 million for the owners of a Mexican lender to the poor, Banco Compartamos (BMOSF), provoked a passionate protest from nonprofit traditionalists around the world. Veteran development experts have argued for years that commercialized microlending inevitably means favoring investors ahead of vulnerable borrowers. "They're money lenders. They're not microcredit," says Muhammad Yunus, who won the Nobel Peace Prize in 2006 for his pioneering work in extending credit to the working poor in Bangladesh.

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Compartamos IPO Sparks Ideological Debate Over Microfinance