10 March 2011

Many years ago, in the early 90s, I travelled to Jinja, Uganda, where I established our first village banks in Africa. Skeptics in the banking sector had told me: “You are wasting your time, Mr. Scofield. First, no one will want your small loans. And if they do take them, watch out, because they¬†won’t repay you.”

I was sufficiently rattled that I called up Muhammad Yunus, who was serving on FINCA’s board at the time, and asked him if I should change the village banking methodology from how we did it in Latin America, since people were telling me Africa was totally different. “Don’t change anything,” Yunus advised me. “Do it exactly as you do it in Latin America. If it doesn’t work, then change it.”

It was sage advice. We didn’t change it, and in those early years, we spread the village banking methodology first to Uganda, then Malawi, and finally to Tanzania, Zambia and the Congo. It has suffered some modifications since then, but it’s still holding up well.

Given the shallacking microfinance is taking in the media these days, it helps to remember why we do what we do, and how, at least in the early days, capital was so scarce in all the markets where we worked that our clients normally enjoyed very high returns to their microbusinesses, if they were among the fortunate few who could obtain access to capital. To be sure, it’s a different world now, and, thanks to the success of FINCA and others, accesss to capital is not an issue for millions of poor people.

I will be convening with the CEOs of a number of other MFI networks and MFIs this weekend at an undisclosed location, somewhere in New York (Beth Rhyne already let the cat out of the bag in the Huffington Post today, narrowing it down from the lower 48). Security will be tight, provided by Blackwater, I understand. Our communications teams are already out there trying to dampen expectations, but we are secretly hoping for a positive outcome. I can’t comment further at the risk of being gift wrapped head to toe and bundled into a windowless Econoline van.

There is a momento from my early Uganda days hanging on the wall at FINCA headquarters, which expresses, better than any PR firm could if they worked for a million years on how to best brand FINCA, how the clients used to feel about us — and hopefully most still do:

FINCA is our Mother

So remember, to those of you in the media. Before you think about attacking microfinance, do you really want to attack your mother?

Rupert Scofield


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