Attack of the (Kiva) Clones!

An advert on Guardian.co.uk this morning reads: "Give a small loan, make a huge difference You can help budding entrepreneurs in developing countries work their own way out of poverty with a small loan. Find out how you can transform lives via lendwithcare.org. In association with Care International UK"

Clicking through to the Care site, we are told that "lendwithcare.org is a revolutionary way for you to help people throughout the developing world transform their future."

Seriously guys.

A - there is nothing revolutionary about directly copying Kiva's business model (they started doing this in 2005).

B - WHO ARE THESE PEOPLE who work in the microfinance industry and apparently have not read or understood "More than Good Intentions" or "Poor Economics" or "Due Diligence"?

Let me summarize for you, from David Roodman, who has just spent the last two years writing the book on the impact of microfinance;

There is not a case for heavy subsidy of these activities; I think less money should go into microcredit.

Is microcredit insane?

First off, a lot of microcredit programs operate under the assumption that there are large populations of entrepreneurs in countries with long histories of poverty who just need a tiny push in the form of a microloan to unleash their wealth creating power. A lot of EAWs can say with a straight face that their microloans empower people who may be illiterate, innumerate and own no productive assets to start “microenterprises”. 

The problem with this belief is that it’s insane.

http://stuffexpataidworkerslike.com/2012/01/23/132-microcredit/