YAO-New York core member and event co-organizer Sheila Ramachandra sends us this report from the panel discussion YAO hosted on Tuesday evening, which examined the current microfinance landscape.
On Tuesday evening, YAO-New York hosted a panel discussion entitled “Trends and Challenges in Today’s Microfinance Landscape.” The panelists included Sarah Buitoni, senior associate at Women’s World Banking, Center for Microfinance Leadership; Mark Narron, assistant vice president at Deutsche Bank Community Development Finance Group and co-president of the Microfinance Club of New York; and Dan Yu, of Opportunity China. Opportunity International‘s Jennifer Mitrenga, director in Resource Development, moderated the panel session.
Some highlights from the discussion:
- The term microfinance used to mean only microlending. Now microfinance incorporates a whole host of products and financial services in addition to microlending, such as insurance and savings. MFIs are transforming from pure non-governmental organizations to formal financial institutions. This trend has helped them diversify their funding base as well as reduce risks, but requires greater infrastructure to support their operations.
- A major challenge for MFIs to overcome in the future is the change in social and commercial perceptions of microfinance. As the microfinance industry has matured, it must now face tough questions concerning its long-term social impact. Much of the future success of MFIs will hinge on their ability to respond to criticism and to demonstrate to the public their effectiveness in fighting poverty.
- Technology has played an important role in the development and expansion of microfinance. The transaction costs of providing banking to the poor have always been high, but increased use and investment in technology has helped to reduce these costs and increase efficiency. While most advances have been made in infrastructure, MFIs have used technology in new ways to help broaden their reach. For example, a network member of Women’s World Banking has used the Internet and social media tools such as YouTube to spread awareness of its microfinance programs.
- On Tuesday night, an audience member asked how corporations and banks in particular can help the microfinance industry. The most obvious benefit they can provide is in donations and financial assistance, but corporations and banks are also an important source of human capital and technical assistance. Additionally, retail banks such as Citibank can leverage their broad branch capacity, and investment banks such as Deutsche Bank provide one important source of credit for MFIs.
The event had a great turnout including several attendees who were new to YAO. It was successful in raising awareness both about important issues in microfinance today, and it highlighted the ways in which the young professionals of YAO are educating, inspiring and involving our generation about microfinance.
Thanks to Sheila Ramachandra and Michelle Mak for organizing the event and to YAO-NY for your support.
Michelle Mak also wrote a guest post for the blog last week, about the Microfinance Club of New York’s panel on microfinance in Africa. Read her post here.