Paper
The Microfinance Crisis: The Developpement international Desjardins Point of View
Explaining Developpement international Desjardins' views on microfinance issues
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6 pages
This paper presents Developpement international Desjardins' (DID) position on issues related to microfinance, in the context of recent microfinance crises in various parts of the world.
The paper states that commercialization of microfinance has been identified as an underlying cause of microfinance crises. It states that microfinance should follow best practices in finance and eliminate practices that exclude communities from participating in economic and social development. DID's position on microfinance focuses on:
- Financial access as a fundamental need;
- Awareness of the difficult operating environment for MFIs;
- Government regulation and control of community owned financial institutions;
- Promotion of cooperation and collective ownership;
- Education, training and capacity building;
- Transparency, clarity in guidelines and client protection;
- Providing wide range of products and services;
- Developing alternative strategies to credit bureaus for preventing excesses in microfinance;
- Need for thorough MFI collection practices;
- Interest rates that cover costs and risks while allowing for expansion;
- Access to capital;
- Preventing disinformation regarding MFIs.
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