John Cookson, a writer for an online “forum for connecting people and ideas,” Big Think, recently wrote a blog entry entitled “Microfinance: For Community or for Gain?” which questions the present-day motives of microfinance institutions (MFIs) quoting Jonathan Morduch, Professor of Public Policy and Economics at the New York University Wagner Graduate School of Public Service. Mr Cookson claims that there is a division between MFIs with two separate motives: “one [motive is] firmly rooted in its socially responsible core, and another [motive is] capitalizing on the global tightening of credit to expand using more traditional business models.” He claims that mission-oriented organizations include Grameen Bank and Kiva. In contrast, he argues that SKS Microfinance of India is an example of a profit-maximizing institution, saying that given its recent IPO “its social investment interests will now cede to shareholder interests.” Finally, Mr Cookson closes stating that microfinance is “going mainstream,” citing Muhammad Yunus’ scheduled stint on the popular television cartoon “The Simpsons.”

By Julia Korn, Research Associate

Sources and Additional Resources:

[1] Big Think. “Microfinance: For Community or for Gain?” by John Cookson on July 30, 2010. http://bigthink.com/ideas/21613

MicroCapital. “MICROCAPITAL BRIEF: SKS Microfinance Launches India’s First Initial Public Offering (IPO) by a Microfinance Institution” by Jennifer Shevock on July 29, 2010. http://www.microcapital.org/microcapital-brief-sks-microfinance-launches-india%E2%80%99s-first-initial-public-offering-ipo-by-a-microfinance-institution/

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