Finance of solidarity and social links, document for debate

Is there any danger that microfinance institutions targetting poor and vulnerable lose it solidarity in the long-run ?

Renée Chao Beroff, February 2001

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Summary :

Microfinance is only possible when there is an economic and social structures that will integrate the poor and vulnerable. It is necessary to understand social networks that exist and to build the micro-finance system on it. Are all microfinance institutions respecting this principle? Do they have a tendency to forget it and to aim only the sustainability of the micro-finance .

Two types of institutions exist : 1) those that limit their role at delivering services and making loans ; 2) those that consider that micro-finance is an efficient tool to the service of the society and human development.

For this second type of institutions, the difficulties are numerous : links between already existing institutions, definition of the field of action, solidarity, and a vigorous management.