These studies seem to tell us that microcredit makes exactly the services expected of a good financial product: it enables its customers to make major purchases for their business or their household, they could not hire otherwise.
But eighteen months later, we found no sign of a profound transformation of the lives of these families, neither the one nor the other of those studies demonstrated impact on health, education or decision-making power of women. Contrary to pessimistic predictions of the skeptics of microfinance, there has been no frenzy of irresponsible consumption caused by easy money: on the contrary, in India, some families drop out of small temptations of everyday life (tea, snacks, betel nut, tobacco) to repay the loan that allowed them to purchase durable goods.
It is much safer than short-term effects. The impact in three years or more may be quite different. The additional income from the activity they finance the schooling of children? Either the weight of weekly payments will he feel better? Data are being collected.
The dream world of a recipe against poverty and microcredit was a candidate quite plausible. These studies suggest that it is time to return to a more nuanced description of its possible benefits. But blame microcredit to be useless or dangerous because it might prove to be the recipe did not make much sense.
Leaving aside the controversial speech has the advantage of prompt us to go beyond a binary debate to question the canonical model of microcredit and ask how he could better serve their borrowers. One limitation is that the micro finance activities primarily to very small scale, very low growth, very different from the icons of a Bill Gates start Microsoft in his garage in the city streets of India, Indonesia and Bangladesh, we see countless small shops, selling all the same, whose profits are hardly sufficient to pay minimum wages to their owners, although ten to twelve hours of daily work. These micro-enterprises are struggling to move up a gear: more than 90% of business customers Spandana we studied have no employees, none did more than three. To what extent the structure of microcredit contributes Does this state of affairs?
A first aspect is the liability, trademark microcredit. It discourages risk taking, because other women in the group does not want to risk having to refund in case of failure, whereas in case of success, they n'empocheront no additional gains: they will tend to prevent others from engaging in risky activities, but more profitable. But a recent study in the Philippines shows that the loan is not solidarity essential to the proper reimbursement: reimbursement rates are equally high in the traditional branches in those where clients are only responsible for their own borrowing.
The weekly repayment and Now, another cornerstone of Microcredit, also has its limits. In West Bengal, the organization Village Welfare Society has enabled some clients do not start paying a few weeks after having received money from the loan. This enabled them to make investments more profitable and more ambitious: for example, those who wanted to engage in the sale of clothing bought a sewing machine instead of a stock to sell saris. This level of increased risk, of course, leads to more failures and thus more non-recoverable.
Thus, paradoxically, microcredit by its current rules, is more suited to finance activities that family eke out a living as real companies creating jobs. But the movement is in the process of renewal: some microfinance institutions (including Grameen Bank) have quietly abandoned the joint loan. They continue to ask their clients to meet each week, these meetings create strong social links, facilitating mutual assistance in case of crisis. But they do not penalize longer a client when the group does not repay. In addition, organizations such as Accion help microfinance institutions to offer their best customers individual products, tailored to business finance slightly more important. Other groups offer training in accounting or management to their customers.
But funding is not the only barrier to the growth of micro-enterprises. In many cases, microfinance clients are entrepreneurs want the best. Following the Asian crisis for example, the number of family businesses has exploded in Thailand. But unlike earlier periods, these companies have not prospered. Their owners have abandoned them once the economic situation had improved and were able to find gainful employment. These entrepreneurs forced dream for themselves and their children, a stable job, which seems to him, initiate a process of national transformation: its security can invest in the education of children, health or home more welcoming.
This obviously does not question the usefulness of microcredit, as these jobs are not stable or not in sufficient numbers. An activity, however modest, is already an essential income. But the romantic vision of one billion entrepreneurs barefoot is probably an illusion. Distinguishing those of their customers who actually risk-taking and enterprise of those who are forced, and offer each service is tailored the new challenge of microfinance. Similarly, growth of real wage sector (industrial or service) must remain a priority for economic policy in poor countries.
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