Microfinance: a workable approach to ending poverty

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The United Nations Economic and Social Council proclaimed 2005 a year of microfinance.

And in 2006 one of the founders of Microfinance bank in Bangladesh Dr. Muhammad Yunus became a Nobel Peace Prize winner together with his institution called Grameen Bank.

This is wonderful and encouraging. Since its inception in 1983, the Grameen Bank has been changing, transforming and empowering people of Bangladesh hence worldwide recognition.

Joshua Mbewe

Mbewe: Writes about need for microfinance.

In 2005 microfinance in Malawi was 9-years-old. But I don’t know if we participated and celebrated together with the whole globe. The year passed unknowingly. This is a sad development and going forward we need to follow global events on each and every sector.

Grameen Bank received the award because external observers were able to follow through their social and transformation reports and how people were moving from one poverty ladder to another.

Social reports for our loans are very important tool to know if we are on track as far as poverty reduction and economic growth are concerned. But the sad thing is that most Malawian microfinance institutions do not have social performance officers.

It means that we only focus on profit maximization and we don’t know whether positive or negative impacts are made on people. The founders of these institutions had the welfare of people at heart not the way we are running and managing the institutions now.

Microfinance practitioners let us start having social impact reports of our loans and transform the lives of Malawians.

Remember, microfinancing is still a workable approach to poverty reduction.

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