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| Volume 2, Issue 1: June '04 | ||||
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In This Issue Responses to New York Times Editorial Regarding New US Law on Poverty Measurement Tools REGISTER NOW for Middle East/Africa Region Microcredit Summit Meeting of Councils Microcredit Summit Campaign Announces Appointment of New Africa Regional Organizer Archived Issues
Vol 1 Iss 6 Jan. '04 |
Letters to the Editor of The New York TimesThe following are published and unpublished Letters to the Editor in response to the May 5, 2004 New York Times editorial and/or the article published on April 29, 2004. To the Editor: Your editorial on "Microcredit's Limits" was right on the mark. The stipulation that half the funds appropriated for microcredit by Congress must go to the very poor rests on a misunderstanding of the nature of microfinance and what it can, and should, accomplish. Poverty alleviation requires a toolbox. Microcredit is a powerful tool when it is made available to borrowers who can use it effectively and repay their loans at interest rates that allow commercial microfinance institutions to cover their costs and risks, earn returns, and attain wide outreach to low-income people. Such institutions provide not only loans but also the voluntary savings facilities that are much in demand. But other poverty reduction tools are required for people who are food-deficit, destitute, or unemployed and lacking opportunities for profitable self-employment. The very poor are often already indebted. Before assuming new debt, these people have prior needs, including food, shelter, medicine, skills training, and employment. The key to reducing poverty is knowing how to use the tools in the toolbox. Providing credit to the extremely poor (and credit subsidies to the economically active poor, who don't need them) is like trying to build a house by using a saw to hammer the nails and a screwdriver to cut the boards. Marguerite S. Robinson, Marguerite S. Robinson is the author of the 3-volume book, The Microfinance Revolution, published by The World Bank and Open Society Institute. |