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Microfinance As Social Business

March 28, 2012

In the Huffington Post, Beth Rhyne riffs off a theme in my book, which actually comes from one of her books:

To my thinking, the most important soft institutional achievement is the creation of an organizational framework that genuinely marries both social and financial objectives. By blending the best elements of charities and businesses, microfinance institutions take on a distinctive and different character. The most prominent microfinance institutions were founded with the social aims foremost, and while many of them have migrated in a more commercial direction (and some have perhaps gone too far), their fundamental commitment remains.In the landscape of organizations in developing countries, a private, for-profit company with a strong social orientation, is something to celebrate and to look to as an agent of future positive change in society. So is a non-profit with business-like finances and delivery. I suspect there are not many social purpose organizations in these countries that are neither part of the public sector (and hence financed from taxes), nor part of the charity sector (financed by philanthropy), but are anchored in the business world. Wouldn't it be great if there were more?

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

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