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Microfinance has been been one of financial innovations best able to empower people at the bottom of the pyramid to plug into economic growth and move out of poverty. But the recent political violence in Kenya and Pakistan—two countries with deep microfinance operations—is undermining the effort. In Kenya especially, thousands of people who took out loans to build businesses have seen everything destroyed by mobs. They cannot pay back these loans. In the West, “Too Big To Fail” is the motto for government policy toward big banks, which translates into bailing them out of bad loans because their bankruptcy would threaten the entire economic system.
I suggest that “Too Small To Fail” is appropriate as well, since the lending of money to small business people in towns and villages of Asia and Africa is essential to their upward mobility out of poverty, the spread of the market economy and political stability. We need large financial institutions to step up, write off the debt of people with micro-loans in Kenya and elsewhere and start lending them additional funds to rebuild their businesses and their lives.
what is happening in Kenya that I have seen anywhere. She recently returned from the country, where Acumen has significant programs in place.
Just as we need more innovative insurance products to protect people in the US and Europe against the disruptive unemployment that is now part of globalization, we need new kinds of insurance for poorer people to protect them against the political and economic disruptions in their lives. In many ways, it is all part of the vast globalization process going on today.
Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.