Microcredit: Sound Business or Development Instrument

Gert van Maanen

Microcredit - or microfinance - has captured the attention of the development world because of its extraordinary relevance to enable the poor to improve their economic situation. Gert van Maanen elaborates on a number of aspects that influence the success (or failure) of Microfinance Institutions (MFIs). In particular he deals with the question whether microfinance should be seen as a business that - like all businesses - should aim at profitability or as a development instrument that should aim primarily at increasing its outreach and effectiveness.

In his view the latter approach should prevail. Without, however, ignoring the need for any MFI sooner or later to stand on its own feet, without being dependent on friendly donor capital. He has some innovative proposals to mobilise the banking sector in the South and the North to adopt microcredit, because the future of the poor "may be none of their business but should be part of their concern".

Gert van Maanen was, until his retirement in June 2001, Managing Director of Oikocredit (Ecumenical Development Cooperative Society U.A.). Before joining Oikocredit on a full-time basis in 1994 he was Member of the Executive Board of ING Bank, Vice-chairman of ICCO and Board member of Oikocredit. At present he is Board member of MFC, the Microfinance Centre in Warsaw, and Board member of CORDAID.

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