DVF Conversations: Microfinance (with Moulaye and Helen)

This morning I had one of the first "office chats" with my colleagues of the kind that I expect will help shape the project and give me greater insight into the challenges of operating in a foreign country and culture.

Helen Wang talked about the challenges of microcredit in China. She said that working through NGO's tends to hamper efforts, because the government controls development efforts. Therefore, attempting to work outside of the government is ineffective, and NGO's do not get the access and authority they need to be successful.

She also said that in many cases the small amounts loaned in the typical microcredit program are not enough for the types of projects that would enable growing a small business. The need for capital is more in the range of 40,000 - 100,000 Yuan ($5,000 - 12,500) whereas most microcredit programs start below $500 and top out at $3,000 or so. She said that entrepreneurs can turn to friends and family to borrow the small amounts and that at the high end of the range, banks will make business loans, but there is a middle ground where options are few.

Moulaye Ely Diarra said that Mali did have an effective microcredit program, started by a woman from Mali and her American husband. The MFI employed about 200 people and most of the businesses were started by women who sold (or re-sold) vegetables and fish, buying from fisherman or farmers and re-selling in the village.