Micro-tales of the Microfinance World

“A Silent Tsunami” : The Food Crisis and Small Entrepreneurs

Gabriela Salazar — Sun, 18 May 2008 12:50:16 -0400

There has been a food crisis brewing. The U.S.’s Farm belt has been on the comfortable end of an ample 40% rise in commodity prices since October, but those hefty profits have naturally translated into significant losses for consumers. A UN representative recently suggested that this persistent upsurge in food prices be considered a “silent tsunami,” crushing developing countries’ consumers especially. Until policy intervenes, it seems, these prices and this tsunami will keep swelling.

Making More Music: “Microfinance” and Struggling Artists?

Gabriela Salazar — Sat, 03 May 2008 23:50:05 -0400

As long as people have a sense of hearing, there will always be a market for music. Sounds get ranked, and musicians are sensitive to those distinctions. So, what does microfinance have to do with have to do with music? In the footsteps of Kiva, calabash.com advertises the option to “microfinance” struggling musicians around the world with its“tune your world” campaign.

One on One, One by One: Person-to-person Micro-lending with Kiva

Gabriela Salazar — Sun, 27 Apr 2008 23:36:25 -0400

Within our own personal circles of trust, most Americans are used to lending 10 or even 1000 bucks to a friend or relative. Intimacy tends to blur the agreement and it becomes difficult to quantify the “loan.” It’s not so easy to say that a child owes their parents for having been raised, or that a friend owes another friend for a gift. This blurring is set somewhat straight when individuals draw clearer boundaries between themselves. Financial intermediaries have evolved well to serve this purpose, but the evolution continues. As of 2005, a new breed of intermediary has entered the microfinance scene – online person-to-person lending platforms.

Prospects of Small Business Development in Iraq

Gabriela Salazar — Sat, 19 Apr 2008 20:06:22 -0400

Turmoil tends to devastate and frighten investment. This is the unsurprising case in Iraq where unemployment, not counting underemployment, has run as high as 46 percent in just the southern provinces. Small business development will be and is critical in stabilizing the country, so what room is there for microfinance?

Is It a Ripple Effect? The Subprime Crisis Leaks Into the Microfinance Sector

Gabriela Salazar — Sun, 13 Apr 2008 15:58:02 -0400

The U.S. credit market has been flooded with delinquencies and foreclosures. Why? This economic flu we feel can be traced to a blend of deceptively designed sub-prime loan products and devious borrowing strategies. It is the lenders, though, that merit the bulk of the blame.

How High is Too High?

Gabriela Salazar — Sun, 06 Apr 2008 18:12:32 -0400

Microfinance has been praised for its tangible contributions to poverty alleviation, but the media tends to sidestep a certain detail: what do these MFIs actually charge as interest?

It’s a basic question, but the answer would likely baffle the uninformed public. Whereas credit card rates in the US typically linger below 30 percent, interest rates among MFIs can range from around 20 to 100 percent. What then, can be defined as usury?

How Many Birds With One Stone? Socially Responsible Investments

Gabriela Salazar — Mon, 17 Mar 2008 22:07:02 -0400

Stones are in limited supply, and, as always, we’re desperate for a bird or two. “What kind of return can I get on that toss?” thought the Cro-magnon man. Today, returns and happiness have been further defined, and to many they extend beyond the immediate satiating fill of a fallen crow. The same rules apply, but after having thoroughly sorted stones, stone throwers and birds, many are armed with money instead. Among other things, deepening social interactions appear to have broadened our options.

Watch Your Step: Banana Skins, 2008

Gabriela Salazar — Sat, 15 Mar 2008 23:47:09 -0400

Just out is the most comprehensive risk survey for the microfinance industry to date, Banana Skins, 2008. With a title that refers literally to the classic slippery threat of a strewn banana peel, the report outlines barriers to the industry’s development.

The Castros Fade, and Cuba Sits Waiting

Gabriela Salazar — Tue, 26 Feb 2008 00:19:36 -0500

Tuesday morning this week, Fidel Castro stirred interest in his island state by resigning as leader of Cuba. He has formally handed power to his aging brother Raul, an unsurprising move given Fidel’s hospitalization in 2006. Conspiracy theories abound and onlookers wonder if this most recent development might indicate or launch serious shifts in the country’s political and economic systems.

Unraveling Microfinance: The Industry’s Origins

Gabriela Salazar — Wed, 06 Feb 2008 23:10:54 -0500

To start out in this historical review, let’s note that the term microfinance asks us to imagine a very specific financial scale. At the apex of the macro world sit those individuals and conglomerates that see billions of dollars fly easily between their guiding hands. Transactions of the micro world are hardly visible in comparison, but are additionally confined to the present and recent past.

A Creative Capitalist's Gold

Gabriela Salazar — Wed, 30 Jan 2008 18:41:16 -0500

Last Thursday at the World Economic Forum in Davos, Switzerland, Bill Gates pushed for a shift towards creative capitalism. The term asks for the use of market forces in bridging the broadening rift between the world’s best off and worst off, and may someday dream of a glorious rise in the buzzword ranks.