Microfinance has lost its soul. Six fundamental shifts in the practice of microfinance have left it operating more like a for-profit bank and less like an innovative pro-poor movement.
I don't have much against banks; they mostly do good things for people who can access their services. But, if you happen to lack title to property, a credit history, or official identification, as many of the world's poor do, banks are little more than sets of closed doors. Until recently, the only options for accessing credit and savings services were informal networks and local moneylenders. That all changed with the invention of microfinance -- a pro-poor social innovation that has provided access to financial services to millions of people previously thought to be "unbankable."
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