“People with a motive of making profits should not use the term microcredit to describe their activities,” thundered Prof Muhammad Yunus, often hailed as the father of microfinance.
The 2006 Nobel Peace Prize winner was reacting to questions by journalists on the commercialisation of microfinance. The Bangladeshi economist said he was dismayed by the commercialisation of the concept he pioneered, whose sole aim is to benefit the poor.
“When we started the concept of microcredit, we didn’t go there to make money. If you want to commercialise this activity, then choose another term to describe yourself. Don’t call yourself a microcredit player,” said Yunus. who started the concept of giving micro-loans to the poor and eventually established the Grameen Bank to give microcredit to the needy.
Asked what he thought about Vikram Akula, founder of SKS Microfinance, Yunus said he was a great person who had started with Grameen, but later he went the money-making way.
“Both our countries need a regulatory authority which can help financial services reach the poorest. The interests of the receivers of microfinance should be protected,” said Yunus, adding that he is optimistic about the Malegam report which has capped interest rates at 24%.