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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 TimesTo the Editor: There are three false premises underlying the May 5 editorial, "Microcredit's Limits." The first is that the poverty targeting embedded in the recent Microenterprise legislation was inserted to promote efficiency. It is in the name of greater accountability and aid effectiveness that Congress has required USAID to certify that half (only half) of its funds for microenterprise be targeted at the poorest in a given country. The second false premise is the suggestion that poverty targeting will result in poor people being forced to assume debt without their consent. The reality in most poor countries is that the poorest are already saddled with incredible debt at usurious rates from local moneylenders. This is the fundamental predicament that microfinance institutions have effectively addressed for nearly three decades now. Finally, the third false premise is that funding for microfinance is somehow "crowding out" more fundamental investments in health, education or basic infrastructure. Funding for microfinance is less than 1 percent of overall ODA in 2002 ($500 million out of $58 billion). It is not a substitute for other development priorities, but a very effective complement to most of them. Sincerely, Karen L. McGuinness |