While researching Haitian charity, I discovered that GiveWell.net, a blog focused on non-profit effectiveness, has written a bunch on why they don’t like microfinance nonprofits, and don’t like Kiva and Grameen in particular. I’m sharing for your next idle moment that pairs with an urge to know more about microfinance as an industry!
The core criticism:
Too many organizations that lead with their financial metrics (loans made, repayment rates) over their social metrics (are clients actually better off? Is there good client satisfaction?) MixMarket, a MicroFinance Institution (MFI) research site lists 1,678 MFIs with financial data but according to GiveWell only 66 have filed social reports. They assert that profitability does not necessarily equal impact and I agree. That’s a core tenant of Social Impact investing!
Warning, this contains easily an hour’s worth of muddling around. But interesting stuff!