Under Construction: Microfinance Architecture and Public Health Benefits

The number of microfinance institutions in the developing world has exploded since their earliest modern incarnations began to appear in the early 1980s.1 The highly publicized successes of Muhammad Yunus and the Grameen bank have placed microcredit, and associated financial services for the poor, in the spotlight in much of the development community literature. The designation of 2005 as The Year of Microcredit, followed by the awarding of the 2006 Nobel Peace Prize to Yunus and Grameen Bank have increased awareness on the part of a larger audience as well. This paper will examine some key issues discussed in the literature on microfinance against the backdrop of the larger debates over the traditional top-down approach to foreign aid practiced by most Western governments and multilateral organizations like the World Bank and the International Monetary Fund (IMF). The increasing popularity of the bottom-up, or grass-roots, approach to poverty alleviation and other social goals as practiced by nongovernmental organizations (NGOs), as exemplified by the microfinance movement, is in part a recognition of the failure of historical macrolevel policies to effect significant improvements in the lives of the poor in the developing world.1 However, the effort by the World Bank and others to promote their own vision of poverty reduction is played out in the debate over microfinance practices and in the discussion about the role of NGOs in development. Finally, some specific cases of successful microfinance organizations will be presented in order to illustrate how the controversies in the field are addressed in practice.Master of Public Healt