Nicholas Kristof is a two-time Pulitzer Prize-winning columnist for the New York Times. He’s covered everything from sweatshops in Asia to anthrax attacks in the US; from the Armenian Genocide to the crisis in Darfur. Kristof uses his blog, On the Ground, to expand on his bi-weekly columns, offering insight on the thoughts that shape his writings. This week, he asked his blog readers to enlighten him for a change, this time on the topic of Microfinance in Africa:
“The discussion earlier in this blog about microsavings vs. microlending made me think that I should borrow from the expertise of you readers out there.
I have a general sense that microfinance has been very successful in South Asia, but that in Africa it has had more of a mixed record. Do others share that view? And, if it’s true, why hasn’t it been as successful in Africa as in Asia? I can imagine that lower population density means higher operating costs, and that lower economic growth rates mean fewer opportunities to invest successfully. Or is it, as Muhammad Yunus once told me, that the models in Africa sometimes haven’t been quite right, but that when they are introduced properly they work as well in Africa as in South Asia?
I don’t know the scene well enough to have a view, but would welcome hearing your thoughts.”
Microfinance is obviously a growing movement in the development field. At MCS, we follow microfinance projects all over the world, and we have seen incremental gains in Africa. One such success story is Jamii Bora in Kenya. It’s success is rooted in the basics of microfinance; smaller, localized projects work by addressing the specific cultural, economic, and social circumstances.
But, how big of a ripple effect are microfinance projects having on the overall economic success of the African continent? Share your opinions with him and with us! Do you think microfinance has been, and will be, successful in Africa? What has made some microfinance initiatives work and others to struggle?