Poverty Alleviation as a For-Profit Affair?
Lots of folks are talking about the cover story of this week's New Yorker, "Battle of the Do-Gooders", which explores competing approaches to today's hottest poverty alleviation strategy: microfinance.
In one corner is Mohammed Yunus who just won the Pulitzer for his work with Grameen Bank. In the other is e-Bay founder Pierre Omidyar whose recent $100 million gift to Tufts University is intended to promote the "commercialization" of microfinance. Omidyar believes a for-profit approach is required to scale this poverty alleviation strategy to reach 300 million heads of household representing the world's 1.2 billion poorest people. The article quotes him as saying:
I would love investors and donors to really think about this. There is a difference between 'undemanding capital' contributed by donors, who expect nothing in return and 'demanding capital' which requires transparency of financial reporting and appropriate reward for risk. His goal, he says is 'to shrink the undemanding source of capital and grow the other.'
Overall, Yunus comes across more sympathetically in the article quoted as saying, among other things:
"He (Omidyar) says people should make money. I said, Let them make money 'but why do you want to make money off the poor people? You make money somewhere else. When they have enough flesh and blood in their bodies, go suck them, no problem. But until then, don't do that. Whatever money you are taking away, keep it with them instead, so they can come out more quickly from poverty.'
Let no good deed go unpunished. Definitely worth a read"
Posted by Susan Herr