Microloan Sharks

Rob Katz — Mon, 09 Jun 2008 16:16:29 -0400

June 9, 2008 - 16:00, Stanford Social Innovation Review

Microloan Sharks

Story Link: http://www.ssireview.org/articles/entry/microloan_sharks/

Teaser:
Banco Compartamos, the largest microfinance institution in Mexico, is the acknowledged poster child for commercial microfinance institutions (MFIs). From its inception in 1990 until 2000, Compartamos operated as a not-for-profit nongovernmental organization (NGO), receiving $4.3 million from international development agencies and private Mexican donors. In 2000, the organization was reaching 60,000 borrowers— mainly poor women in rural areas. To tap commercial funds for even faster growth, the NGO and other investors converted it to a for-profit business. By the end of 2006, the corporation was serving some 616,000 borrowers—a tenfold increase.

Banco Compartamos, the largest microfinance institution in Mexico, is the acknowledged poster child for commercial microfinance institutions (MFIs). From its inception in 1990 until 2000, Compartamos operated as a not-for-profit nongovernmental organization (NGO), receiving $4.3 million from international development agencies and private Mexican donors. In 2000, the organization was reaching 60,000 borrowers— mainly poor women in rural areas. To tap commercial funds for even faster growth, the NGO and other investors converted it to a for-profit business. By the end of 2006, the corporation was serving some 616,000 borrowers—a tenfold increase.

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Microloan Sharks