August 2011: Imp-Act in the news - Sam Mendelson "optimistic about the future"
Sam Mendelson, co-author of the Microfinance Banana Skins survey, sees a need for the industry to "re-write the rules" and put clients back in focus
The presumption that microfinance is always good and if you give poor people credit you necessarily help them is gone. It is being replaced by a lot more nuanced understanding that [it] can be an incredible tool for change if you combine fair and ethical access to credit with other products...along with an oversight and good monitoring of social impact, discretion and flexibility in case of shocks.
When I see the debate in the Smart Campaign or the Seal of Excellence or the Imp-Act Consortium on how to make microfinance more effective and get the client back at the centre of the sector and not the investor then it makes me optimistic about the future.
I think it [that SPM] is in its early stages. A few years ago it wasn’t done at all and then the raters started offering social ratings and then there has been a growth in bodies like the Smart Campaign and the Social Performance Task Force etc. I think what is growing is the realization that there is a positive feedback loop between financial and social return rather than being opposable where you compromise one to get the other.
There has been a lot of debate on what microfinance is and what it is not. I think the question should be whether microfinance can work or not and for that question you get a qualified answer ‘yes’ with a ‘but’. It is this ‘but’ that is the important thing and something which people should be focusing on.
