In recent years, the debate around microfinance has gone from positive to negative. According to the CS Monitor & research produced by Sa Dahn, in India, lending to the poor has proved to be so profitable that MFIs saw an increase in portfolios from an average of $252 million to $2.5 billion in two years. Meanwhile, microfinance research institutions discuss fears of a microcredit bubble burst. Other debatable topics in microfinance include the impact of public microfinance offerings versus traditional lending to the poor in light of Banco Compartamos in Mexico and most recently, SKS Microfinance in India. Critics like the world renown Grameen Bank argue that the pressure of public MFIs create questionable lending practices, such as 100% interest rates and lack of interest in measuring the impact that microfinance has actually had on the lives of the poor. With over 1,400 registered financial institutions serving the bottom of the pyramid and a combined gross loan portfolio of over 64.7 billion dollars, financial services is one of the fastest growing sectors of the social enterprise world. While the positive impact of microfinance can hardly be debated, what trade-offs exist between high financial returns and lending on “the backs of the poor?” Is microfinance still the best tool for financial inclusion for the bottom of the pyramid?

In this panel description, Professor Dennis Shaughnessy of the College of Business Administration’s Social Enterprise Institute will discuss the implications of microfinance on the bottom of the pyramid, followed by a two part panel debate on the issue of private vs. public solutions to financing the poor.

Presenter:

Executive Professor, Entrepreneurship & Innovation
Director & Founder, Social Enterprise Institute

Professor Dennis Shaughnessy is an Executive Professor with the College of Business Administration's Entrepreneurship & Innovation group since 2005. Professor Shaughnessy also launched the international field study programs and is the Founder & Director of the Social Enterprise Institute. Professor Shaughnessy has led over 150 students abroad and exposed more than 500 students to coursework in social enterprise since 2007.