Microcredit and Entrepreneurship - Carnegie Mellon School ... · Mohammed Yunus and Grameen Bank...
Transcript of Microcredit and Entrepreneurship - Carnegie Mellon School ... · Mohammed Yunus and Grameen Bank...
2
Bu
zzzz
zzzz
zzzz
zz!
Mic
rocr
edit
has b
ecom
e a
deve
lopm
ent b
uzzw
ord,
ju
st li
ke �
hum
an c
apac
ity�
or �
sust
aina
bilit
y�!
2005
was
dub
bed
the
�Int
erna
tiona
l Yea
r of
Mic
rocr
edit�
by th
e U
N!
A se
arch
of �
mic
rocr
edit�
on G
oogl
e yi
elds
2.7
m
illio
n hi
ts!
Moh
amm
ed Y
unus
and
Gra
mee
nB
ank
won
the
2006
N
obel
Pea
ce P
rize
!Pr
ofit
seek
ers a
re st
artin
g to
ent
er th
e m
icro
finan
ce
sect
or (M
NC
ban
ks, r
egio
nal b
anks
, etc
.)
3
Th
e W
orl
d o
f M
icro
…!
Mic
rofin
ance
: loa
ns, s
avin
gs, i
nsur
ance
, tra
nsfe
r se
rvic
es a
nd o
ther
fina
ncia
l pro
duct
s tar
gete
d at
lo
w-in
com
e cl
ient
s.!
Mic
rocr
edit:
smal
l loa
n to
a c
lient
by
a ba
nk o
r ot
her i
nstit
utio
n.
!M
icro
savi
ngs:
dep
osit
serv
ices
allo
win
g st
orag
e of
sm
all a
mou
nts o
f mon
ey fo
r lat
er u
se (e
.g.,
unex
pect
ed e
xpen
ses o
r fut
ure
inve
stm
ent),
man
y ha
ve n
o m
inim
um b
alan
ce re
quire
men
ts!
Mic
roin
sura
nce:
syst
em b
y w
hich
peo
ple,
bu
sine
sses
and
oth
er o
rgan
izat
ions
mak
e a
smal
l pa
ymen
t to
shar
e ris
k.
4
Tw
o m
ain
ty
pes
of
mic
rocr
edit
!G
roup
lend
ing,
or s
olid
arity
lend
ing,
allo
ws a
nu
mbe
r of i
ndiv
idua
ls to
pro
vide
col
late
ral o
r gu
aran
tee
a lo
an th
roug
h a
grou
p re
paym
ent p
ledg
e.
�Th
e in
cent
ive
to re
pay
is b
ased
on
peer
pre
ssur
e; if
one
pe
rson
in th
e gr
oup
defa
ults
, the
oth
er g
roup
mem
bers
m
ake
up th
e pa
ymen
t am
ount
. !
Indi
vidu
al le
ndin
g, fo
cuse
s on
one
clie
nt a
nd d
oes
not r
equi
re o
ther
peo
ple
to p
rovi
de c
olla
tera
l or
guar
ante
e a
loan
!Lo
ts o
f diff
eren
t len
ding
mod
els�
Gra
mee
nis
onl
y on
e ty
pe»
Sour
ce: I
nter
natio
nal Y
ear o
f Mic
rocr
edit
5
Var
ieit
eso
f m
icro
cred
it
1.Tr
aditi
onal
info
rmal
mic
rocr
edit
(suc
h as
, mon
eyle
nder
's cr
edit,
paw
n sh
ops,
frie
nds a
nd re
lativ
es, e
tc.)
2.M
icro
cred
itba
sed
on tr
aditi
onal
info
rmal
gro
ups
3.A
ctiv
ity-b
ased
mic
rocr
edit
thro
ugh
conv
entio
nal o
r sp
ecia
lised
bank
s (su
ch a
s, ag
ricul
tura
l cre
dit,
lives
tock
cr
edit,
fish
erie
s cre
dit,
hand
loom
cre
dit,
etc.
) 4.
Rur
al c
redi
t thr
ough
spec
ialis
edba
nks.
5.C
oope
rativ
e m
icro
cred
it6.
Con
sum
er m
icro
cred
it7.
Ban
k-N
GO
par
tner
ship
bas
ed m
icro
cred
it8.
Gra
mee
nty
pe m
icro
cred
itor
Gra
mee
ncre
dit
�So
urce
: Gra
mee
nB
ank
Info
�M
icro
cred
it�pa
ge
6
Gra
mee
nC
red
it!
Prom
otes
cre
dit a
s a h
uman
righ
t. !
It is
targ
eted
to th
e po
or, p
artic
ular
ly p
oor w
omen
. !
No
colla
tera
l, or
lega
lly e
nfor
ceab
le c
ontra
cts.
It is
bas
ed o
n "t
rust
", no
t on
lega
l pro
cedu
res a
nd s
yste
m.
!Pr
omot
es in
com
e ge
nera
tion,
not
con
sum
ptio
n !
Cre
ated
in o
ppos
tion
to tr
aditi
onal
ban
king
pra
ctic
e!
Peop
le sh
ould
not
go
to th
e ba
nk, b
ank
shou
ld g
o to
the
peop
le.
!G
roup
-lend
ing
base
d ap
proa
ch
!It
com
es w
ith b
oth
oblig
ator
y an
d vo
lunt
ary
savi
ngs p
rogr
ams
for t
he b
orro
wer
s. !
Sust
aina
bilit
y of
bus
ines
s mod
el is
key
!G
ram
eenc
redi
tgiv
es h
igh
prio
rity
on b
uild
ing
soci
al c
apita
l. �
Sour
ce: G
ram
een
Ban
k In
fo �
Mic
rocr
edit
Page
�
7
Mic
rofi
nan
ce V
ideo
!So
urce
s for
vid
eo:
!ht
tp://
ww
w.y
outu
be.c
om/w
atch
?v=s
3I9T
hVw
w3k
!ht
tp://
ww
w.g
ram
eenf
ound
atio
n.or
g/vi
deo/
ful
lscr
een.
htm
l
8
When
is
mic
rocr
edit
NO
T
appro
priat
e?!
Whe
n co
nditi
ons p
ose
seve
re c
halle
nges
to lo
an
repa
ymen
t (e.
g., h
igh
dise
ase
burd
en, g
eogr
aphi
c is
olat
ion,
bus
ines
s com
mun
ities
, fam
ine,
nat
ural
di
sast
er, w
ar, e
tc.)
!A
ccor
ding
to m
ost m
icro
cred
itso
urce
s, un
der t
hese
co
nditi
ons,
mor
e tra
ditio
nal d
evel
opm
ent
tech
niqu
es w
ork
bette
r!
In g
ener
al, c
lient
s mus
t hav
e th
e ca
paci
ty to
repa
y th
e lo
an u
nder
the
term
s by
whi
ch it
is p
rovi
ded
in
orde
r for
loan
s to
be e
ffec
tive
»So
urce
: Int
erna
tiona
l Yea
r of M
icro
cred
it
9
Man
y e
xam
ple
s!
Gra
mee
n, F
INC
A, A
ccio
nIn
tern
atio
nal,
Opp
ortu
nity
Inte
rnat
iona
l, N
amas
teD
irect
, Fo
nkoz
e(H
aiti)
, etc
. etc
. etc
.!
As o
f Dec
embe
r 31,
200
4 �
3,16
4 m
icro
cred
itin
stitu
tions
�
92,2
70,2
89 c
lient
s, 66
,614
,871
of w
hich
wer
e w
ere
amon
g th
e po
ores
t of t
he p
oor
�83
.5 p
erce
nt, o
r 55,
622,
406
mill
ion,
of t
hese
poo
rest
pe
ople
wer
e w
omen
(sou
rce:
STA
TE O
F TH
E M
ICR
OC
RE
DIT
SU
MM
IT C
AM
PA
IGN
RE
PO
RT
2005
)
10
Ro
le o
f T
ech
no
logy
!Pr
odem
Smar
t ATM
in
Bol
ivia
�C
lient
s can
get
cas
h an
d do
oth
er tr
ansa
ctio
ns a
t A
TMs w
ithou
t co
nnec
tivity
�A
ll ac
coun
t inf
o st
ored
on
smar
t car
d�
Secu
rity
base
d on
fin
gerp
rint
�G
UI d
esig
ned
for i
llite
rate
us
ers (
audi
o an
d vi
deo)
�M
ultil
ingu
al�
Hig
h ra
te o
f acc
epta
nce
Gra
phic
take
n fro
m a
nd In
sead
pres
enta
tion:
�The
Myt
hs &
The
Mag
ic o
f Mic
rofin
ance
: Ass
essi
ng th
e ro
le th
at m
icro
finan
ce c
an p
lay
in p
rivat
e se
ctor
dev
elop
men
t in
Afric
a,�a
vaila
ble
onlin
e at
: http
://w
ww
.inse
ad.e
du/in
devo
r/doc
umen
ts/0
606_
MF_
mag
icM
ythl
12
Cau
tio
ns
!V
ery
diff
icul
t to
dete
rmin
e w
heth
er m
icro
finan
ce h
as a
si
gnifi
cant
impa
ct o
n de
velo
ping
eco
nom
ies
�Lo
ts o
f ane
cdot
al e
vide
nce
and
trend
s, lit
tle st
atis
tical
ly si
gnifi
cant
pr
oof
�Ev
iden
ce a
vaila
ble
sugg
ests
impa
ct is
gre
ates
t in
poor
est
com
mun
ities
and
fam
ilies
�D
efin
itely
hel
ps p
eopl
e, b
ut it
isn�
t cle
ar w
heth
er it
lifts
them
out
of
pove
rty!
Mos
t app
ropr
iate
whe
n ho
useh
old
has o
n-go
ing
econ
omic
ac
tivity
and
exi
stin
g ca
sh fl
ow o
r pot
entia
l for
cas
h flo
w"
dang
er o
f cre
atin
g la
rge
debt
bur
den
�G
ram
een,
FIN
CA
and
a fe
w o
ther
s are
exc
eptio
ns!
Not
a su
re b
et fo
r inv
esto
rs�
mak
ing
a pr
ofit
on
mic
role
ndin
gis
har
d!
13
Cau
tio
ns
!N
ot a
ll m
icro
cred
itle
nder
s cha
rge
low
inte
rest
rate
s �
Gen
eral
ly 3
0-70
% p
er y
ear
�B
ut th
at�s
muc
h lo
wer
than
oth
er p
oten
tial s
ourc
es
!M
any
peop
le a
rgue
that
the
stat
e sh
ould
be
prov
idin
g m
icro
finan
ce se
rvic
es a
nd a
gen
eral
soci
al sa
fety
net
�I d
on�t
find
this
con
vinc
ing,
do
you?
!N
ot a
solu
tion
for t
he d
estit
ute;
mus
t wor
k in
con
cert
with
oth
er e
ffor
ts�
But
wha
t is i
n th
e re
al w
orld
?
14
Cau
tio
ns,
co
nt.
!C
reat
ing
incr
ease
d de
bt b
urde
n fo
r po
ores
t of t
he p
oor
!M
icro
ente
rpris
esre
quire
mac
rosu
ppor
tto
surv
ive
15
Lin
ks
to
En
trep
ren
eurs
hip
!Th
e m
icro
cred
it tre
nd h
as e
mer
ged
sim
ulta
neou
sly
with
two
othe
r dev
elop
men
t tre
nds:
�So
cial
ent
repr
eneu
rshi
p�
The
notio
n th
at p
eopl
e in
dev
elop
men
t com
mun
ities
sh
ould
pay
[wha
t the
y ca
n] fo
r the
goo
ds a
nd se
rvic
es
that
will
impr
ove
thei
r liv
es�
incr
ease
s lik
elih
ood
that
they
will
mak
e go
od u
se o
f the
se
good
s and
serv
ices
�cr
eate
s inc
ome-
gene
ratin
g ac
tiviti
es fo
r com
mun
ity m
embe
rs
(opp
ortu
nitie
s for
old
-fash
ione
d en
trepr
eneu
rs)
�M
ore
sust
aina
ble
than
don
or-le
d or
gov
ernm
ent-l
ed p
rogr
ams
�Sh
ift fr
om c
harit
y an
d ha
nd-o
uts t
o se
lf-im
prov
emen
t and
pr
ivat
e in
itiat
ive
(aga
in, a
par
t of t
he n
eolib
eral
app
roac
h to
de
velo
pmen
t)
!M
any
of th
e m
ost i
nnov
ativ
e ap
proa
ches
to
deve
lopm
ent i
nvol
ve a
ll th
ree
16
Wh
at i
s an
en
trep
ren
eur?
!�T
he e
ntre
pren
eur s
hifts
eco
nom
ic re
sour
ces o
ut o
f an
area
of
low
er a
nd in
to a
n ar
ea o
f hig
her p
rodu
ctiv
ity a
nd g
reat
er
yiel
d.� �
Jean
Bap
iste
Say,
ear
ly 1
9th
cent
ury
Fren
ch e
cono
mis
t!
�Ent
repr
eneu
rs �
refo
rm o
r rev
olut
ioni
ze p
atte
rns o
f pr
oduc
tion.
��
Jose
ph S
chum
pete
r, ea
rly 2
0th
cent
ury
econ
omis
t!
�The
ent
repr
eneu
r alw
ays s
earc
hes f
or c
hang
e, re
spon
ds to
it,
and
exp
loits
it a
s an
oppo
rtuni
ty.�
�Pe
ter D
ruck
er, 2
0th
cent
ury
busi
ness
man
agem
ent g
uru
!�E
ntre
pren
euria
l man
agem
ent [
is] t
he p
ursu
it of
opp
ortu
nity
w
ithou
t reg
ard
to re
sour
ces c
urre
ntly
con
trolle
d.�
�H
owar
d St
even
son,
Har
vard
B-S
choo
l
Sou
rce:
Tim
Zak
(CM
U-A
ustra
lia)
17
Wh
at i
s so
cial
en
trep
ren
eurs
hip
?!
App
lyin
g th
e pr
inci
ples
and
pra
ctic
es o
f en
trepr
eneu
rshi
p to
soci
al p
robl
ems
�G
ener
ally
with
the
goal
of d
ecre
asin
g re
lianc
e on
trad
ition
al so
urce
s of s
olut
ions
(I.e
.,
gove
rnm
ent,
phila
nthr
opy,
and
cor
pora
tions
)
18
Pri
nci
ple
s o
f SE
!A
dopt
ing
a m
issi
on to
cre
ate
and
sust
ain
soci
al (n
ot
just
priv
ate)
val
ue!
Rec
ogni
zing
and
rele
ntle
ssly
pur
suin
g ne
w
oppo
rtuni
ties t
o se
rve
that
mis
sion
!En
gagi
ng in
a p
roce
ss o
f con
tinuo
us in
nova
tion,
ad
apta
tion,
and
lear
ning
!A
ctin
g bo
ldly
with
out b
eing
lim
ited
to re
sour
ces
curr
ently
in h
and
!Ex
hibi
ting
a he
ight
ened
sens
e of
acc
ount
abili
ty to
th
e co
nstit
uenc
ies s
erve
d an
d fo
r the
out
com
es
crea
ted
19
Soci
al E
nte
rpri
se
!Ta
king
soci
al e
ntre
pren
eurs
hip
to th
e in
stitu
tiona
l/ins
titut
iona
l lev
el!
�An
orga
niza
tion
or v
entu
re th
at a
dvan
ces i
ts
soci
al m
issi
on th
roug
h en
trepr
eneu
rial,
earn
ed in
com
e st
rate
gies
.��
Soci
al E
nter
pris
e A
llian
ce (d
raft
defin
ition
)
20
Soci
al E
ntr
epre
neu
r V
ideo
!B
ill D
rayt
on, �
Entre
pren
eur f
or S
ocie
ty�
�ht
tp://
ww
w.y
outu
be.c
om/w
atch
?v=B
oh9z
KQ
l5oc
!B
ill D
rayt
on, �
Not
hing
Mor
e Po
wer
ful�
�ht
tp://
ww
w.y
outu
be.c
om/w
atch
?v=j
-tK
0ajU
z0A
21
Res
ou
rces
!G
ram
een
Ban
k (w
ww
.gra
mee
n-in
fo.o
rg)
!G
ram
een
Foun
datio
n (w
ww
.gra
mee
n-fo
unda
tion.
org)
!Y
ear o
f Mic
rocr
edit
(http
://w
ww
.yea
rofm
icro
cred
it.or
g/)
!A
shok
a (w
ww
.ash
oka.
org)
!Sc
hwab
Fou
ndat
ion
!Sk
oll F
ound
atio
n (w
ww
.skol
lfoun
datio
n.or
g)!
CM
U�s
Inst
itute
for S
ocia
l Inn
ovat
ion
(ww
w.h
einz
.cm
u.ed
u/so
cial
inno
vatio
n)
22
Kic
kst
art
!K
icks
tart
vide
o:
�ht
tp://
link.
brig
htco
ve.c
om/s
ervi
ces/
link/
bcpi
d42
2541
436/
bclid
2251
5191
3/bc
tid47
4435
226
23
Dis
cuss
ion
!W
hat a
re th
e pr
oble
ms t
hat K
icks
tart
is tr
ying
to
solv
e?!
Wha
t is t
he b
usin
ess m
odel
use
d by
Kic
ksta
rt?!
Wha
t is t
he d
evel
opm
ent m
odel
use
d by
Kic
ksta
rt?�
I.e. W
hat i
s the
mos
t �ap
prop
riate
�us
e of
tech
nolo
gy
acco
rdin
g to
Kic
ksta
rt?!
How
doe
s Kic
ksta
rt�s s
olut
ion
to th
e pr
oble
m o
f w
ater
diff
er fr
om th
e on
e de
scrib
ed in
the
Wat
ers o
f A
yole
?!
How
do
mic
rocr
edit,
ent
erpr
eneu
rshi
p, a
nd so
cial
en
trepr
eneu
rshi
p pl
ay in
to th
e st
ory
of K
icks
tart?