Last friday The New York Times published an article called “Some Fear Profit Motive to Trump Poverty Efforts in Microfinance” raising the question whether or not big business and microfinance are compatible. The article uses, as an example, the great expansion of PlaNet Finance: a leading international non-profit organization created and based in France with the mission to alleviate poverty through the development of microfinance.
PlaNet Finance now has a staff of 700, active in more than 60 countries. Since 1998, it says it has provided help to 140,000 entrepreneurs and set up $80 million in financing. It also has an investment arm and offers technical assistance to donors and recipients. Some services, like ratings, have become benchmarks; others, like insurance, are less successful.Companies like PlaNet Finance attract not only public investors, but private ones seeking a “double bottom line” of socially responsible returns. But some in the field worry that the industry may become overly driven by profit and lose sight of its original aim — reducing poverty. There are also persistent questions about debt burdens and regulation. Mr. Attali, the founder of PlaNet Finance, says his company had been pushing two or three years for an international treaty to regulate microfinance and that the aim of microfinance should be creating products that improve lives, so it is not ideally suited to a purely commercial model.
Read the Full article of the New York Times
To learn more about PlaNet Finance, visit their Website