MicroCapital: Please tell us a bit about how you to came to work in microfinance.
Edvardas Bumsteinas: My interest in microfinance began with a summer job some 20 years ago when I was a student at the London School of Economics. At the request of Lithuania’s Open Society Institute, I spent one of my summers helping to set up external financing facilities for the Lithuanian Credit Union’s network. During my meetings with staff members and clients, I was impressed with positive results that those member-owned financial institutions were having in their communities.
MC: In reading about the European Investment Bank (EIB)-funded Microfinance in Crisis project, I was struck by the language “The main thing is to make the system user-centric, not provider-centric, and to consider microfinance (and more broadly finance) as a common good.”
EB: The main outcome of the study will be a “delinquency crisis prevention dashboard,” which can be used to identify the factors that are likely to lead to a microcredit repayment crisis. The concept of “common good” should be seen in a broader context of building inclusive and sustainable financial systems. In the past, the main emphasis was placed on the (financial) sustainability of microfinance institutions. On the other hand, the actual needs and constraints of the final beneficiaries remained poorly understood and largely overlooked by the microfinance community. The end result was a backlash against microfinance providers in countries such as India and Nicaragua. Since then, much more attention is being paid to financial inclusion as an ecosystem in which customers occupy a central place.
MC: Why should our readers be sure to attend the 2015 European Microfinance Week this November?
EB: This year’s European Microfinance Week coincides with Luxembourg holding the EU Presidency. Since financial inclusion is one of the topics traditionally promoted by the government of Luxembourg, I would expect that the 2015 European Microfinance Week will be one of the largest and busiest ever (last year it welcomed 400 participants!). In addition, EIB will host the Sixth European Microfinance Award ceremony, which will recognize the work of microfinance institutions operating in post-disaster, post-conflict areas and fragile states. We anticipate the presence of HRH Grand Duchess of Luxembourg along with other prominent public personalities. I also am looking forward to welcoming the readers of MicroCapital in Luxembourg this November! For more information, please see the following website:
Edvardas Bumsteinas serves as the head of the microfinance unit of the European Investment Bank. While the dashboard should become operational by December, the research programme already has produced a number of research and policy briefs that can be found at: http://www.microfinance-in-crisis.org/resources/.
This interview is part of a sponsored series on European Microfinance Week, which is held each November by e-MFP, a 120-member network located in Luxembourg. MicroCapital will report live from the event.