About Inside MicroFinance

Inside MicroFinance takes an insider's approach to collecting and presenting news and informaiton on the burgeoning field of microfinance.

Patti Murphy, founding editor of Inside MicroFinance, has spent more than 30 years reporting on and analyzing trends in financial services.

As an independent resource, Inside MicroFinance keeps tabs on a variety of public and private resources in the financial services sector generally and microfinance in particular. Our objective is to present timely reporting and analysis of what's going on and what needs to happen for microfinance to become an integral part of economic development, worldwide.

Microfinance has the potential to radically alter the global economy by empowering billions of poor people to generate capital through micro-enterprises like neighborhood stores and seamstress shops

The modern microfinance infrastructure traces its roots back to the 1970s with the first microcredit facility, Grameen Bank Bengladesh. Microfinance has since morphed into an international phenomenon that involves savings, credit and even insurance products, available on virtually every continent as a means of improving people's lives.

Microfinance today incorporates an array of financial services to low-income (even impoverished) consumers that traditional financial institutions either cannot or will not open their doors to. The objective is to help poor people better deal with the demands of everyday life, and unexpected events like serious illness or sudden loss of assets.

While microfinance, alone, cannot eradicate poverty, it provides a means for poor people to create individual wealth and thereby help to create and sustain national economic growth. This has become critically important as the financial meltdown of 2008 enters its second year.

Of the 4 billion people in the world today who live on less than $1400 a year, only a fraction have access to basic financial services. Not even the United States is immune, as can be attested to by the fact that dozens of microfinance institutions (including Grameen Bank) operate there, and at least 12% of households lack banking relationships (the unbanked).

Microfinance: Test Pad for Alternative Services

The evolution of technology-rich payment applications provides an excellent test pad for cost-effective delivery of financial services to regions and individuals that are not well served by banks and other lending and savings institutions. The result is that some of the biggest names in banking, armed with these new technologies, are taking a fresh look at underserved and unbanked markets.

Trends followed by Inside Microfinance include:

• Mobile banking and payments, especially applications based on Near Field Communications (NFC) technologies
• The plight of and efforts to help unbanked and underserved Americans
• Prepaid cards that make it possible for consumers without traditional bank accounts to receive electronic payments from employers, the government and other sources
• Microcredit and the poor
• Micro-insurance
• The emergence of non-bank financial institutions as bankers to the poor
• Electronic remittance services
• Credit scoring models that help lenders (traditional financial institutions and others ) evaluate customers who lack traditional credit histories
• Social networking and how trends like FaceBook and Twitter can support micro-credit and other microfinance programs
• Government oversight, including efforts to regulate areas of microfinance, such as the rates associated with credit products.
• Micro-lending oriented investment funds
• Microfinance projects and advances in the U.S.
• The economics of microfinance
• Implications of the current world economic crisis for microfinance organizations and projects

Americans purchase $75 billion a year in money orders from non-banks

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