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UNITED NATIONS
MICROFINANCE
Rural development needs more than just microfinance
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Microfinance
The role of microfinance in development
Rural development needs more than just microfinance
Comment: Peter Burgess
I wrote this message to draw attention to the need for multiple interventions
in a community in order to have sustainable development success. More and more
or just one thing does not optimise the use of scarce relief and development
resources. While microfinance has a role, it is not the only intervention
needed to maximize performance
Subj: Re: [MFP] Rural Development is not up to the mark proceed...
Date: 10/29/2005 11:39:34 PM Eastern Standard Time
From: profitinafrica@aol.com
To: MicrofinancePractice@yahoogroups.com
CC: peterbnyc@gmail.com, perwinder1bhatia@yahoo.co.in, krisdev@gmail.com, human_blaspheme@yahoo.com, dubey.sumant@gmail.com
Dear Colleagues
The vast majority of the world's poor live in rural communities ... and in
underserved urban communities. From what I have read and what I have seen,
microcredit is a valuable service for the people of these communities. But is
microcredit reaching anything like its full potential?
Most people in the micro-credit subsector would probably say no, and follow
up by arguing for more people being served by more micro-credit. I think this
is the main theme of the Micro Credit Summit of (I think) five years ago, and
this past year's UN Year of Microcredit.
But I am not sure that is the best use of scarce relief and development
resources. When I had executive responsibility in a fairly large US manufacturing
operation a few (actually many) years ago ... I was always looking for what
could be done to get improvement ... and over a period of about two years we made
hundreds of modest imrpovements in the way we operated. At the end of this
time we were producing almost twice as much product (a record by a mile) and
doing it at less cost than ever before. I was new to the factory, though I had
executive responsibility for its performance. The supervisors and factory
workers had years of experience. Maybe I had education ... but these colleagues had
experience. We put the two together and the results were impressive.
My experience as a World Bank and UN consultant has been that local
professionals, local officials, local leaders and local people have useful knowledge,
which international experts usually ignore or discount heavily. The
institutional memory of the major official relief and development assistance (ORDA)
organizations does not include much derived from this pool of experience ... and
consequently there is very little capability to track relief and development
performance where it really matters ... at the community level. And as a further
consequence we do not usually do what is best for the community ... we do what
is priority for an organization, a sub-sector (as in micro-finance) or a
donor ... and of course do not get optimal performance by a long shot.
A wonderful use of ICT is going to be getting information about community
progress 'on the record' and also information about what it was that facilitated
that progress ... or what constraints stopped progress. What this information
will show, I am sure, is that a whole portfolio of development initiatives are
needed ... they will not always be the same ... but rarely will one
intervention serve to optimise development progress.
What community information will show, inter alia, is that some communities
have a lot more potential than others. Development performance is getting the
most out of what is possible ... and doing it in an equitable manner. Resource
rich places that have huge FDI and the local people are poor and hungry (and
sometimes sick from pollution) is obscene ... and so are a lot of other issues
that are very clear at the community level, but less clear by the time they
have been aggregated and put into national level statistics. In my view,
community information is the key to having powerful management information to assess
performance in development.
And as I said before ... now possible more than ever before courtesy of
modern ICT.
Sincerely
Peter Burgess
____________
Peter Burgess
Tr-Ac-Net in New York 212 772 6918 peterbnyc@gmail.com
The Transparency and Accountability Network
With Kris Dev in Chennai India
and others in South Asia, Africa and Latin America
http://tr-ac-net.blogspot.com
www.tr-ac-net.org
In a message dated 10/29/2005 9:26:32 AM Eastern Daylight Time,
perwinder1bhatia@yahoo.co.in writes:
Subj:Re: [MFP] Rural Development is not up to the mark proceed...
Date:10/29/2005 9:26:32 AM Eastern Daylight Time
From:perwinder1bhatia@yahoo.co.in
To:MicrofinancePractice@yahoogroups.com
Agreed,
but whatever i saw and i feel & observe i can not forget because every time
whenever whereever i read and i listen from news sources that we are going
catch the development goal but it is not the reality 'we' that word explain our
economy standard not rural people. you can take the example of swedesh movie
i hope you have seen, in which shrk khan develop electricity in very remote
village and go back to foren after some time he came to village and think
abut next innovation but i say that villager would not be ready for next because
of 'religion' they don't want to convert our land to a mult story building.
Recently in business line wrote that rural migration is goint to downward
due to travelling back to the rural areas after earning their deficit problem.
you said micro finance is not only a loan provider but... i agreed that
point but what about the 'follow up'. every ngo think about development or
capacity development but they are not thinking about the villagers philosophy that
what they think about us why we are providing money to them?
they have fear regarding their homes and living standrd if they adopt it
then they have to leave that village due to castaism.
please reply me you view 'because i am writing a book on this topic since
nov, 04 when i intered into rural areas during my first project on micro
finance'
Thanks for your reply
to me and all group members
hemy wrote:
Dear Pravinder,
That is where microfinance comes in to picture. The goal of a microfinance
firm is not only as the loan provider, but also as capacity builder and
empowering people. Micrifin firm can do this with the local NGO working in the
field of capacity building.
Personally i believe that networking of local NGO and MFI would lead to an
efficient practice.
The problem which you pointed out is prevalent, but this is where rural
managers comes into picture.
Regards,
Sumant Dubey,
Post Graduate Program in Rural Management,
Xavier Institute of Management,
Xavier Square, Bhubneswar[Orissa],
India - 751013
Ph no.0 99375 25120
dubey.sumant@gmail.com
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