The other day, I came across a post worth reading by Vivian Norris de Montaigu from the Huffington Post — Economic Colonization: The Rich Profiting from the Poor is Not the Way to Handle Microfinance. She wraps it up by saying this –

What is the point of helping the poor build up small businesses, if it is only to eventually provide wealthy, Western-owned businesses and individuals with even a larger share of the world’s wealth? In addition to that the rich believe they are doing a wonderful thing by “helping” the poor, when they are in fact acting like robber barrons.

It needs to stop. Quit patting yourself on the back for investing in microfinance that pays you a big return. Donate to reputable microfinance organizations such as the Grameen Foundation or Grameen America. Do your research before you donate! You should be paid nothing at all in terms of interest, and the capital you invest should be given as the way to begin a cycle which can help to create a sustainable solution to poverty.

I certainly agree that the people should not be making money off the world’s poor by requiring excessive interest rates for access to their capital. But at the same time, I think there is room for both types of microfinance lenders — those who ask for a return on their investment and those who do not. After all, the bottom line is that micro loans allow people to help themselves break free from poverty — and I don’t see too much bad happening from that.