Thoughts After Skoll World Forum – Part IV by Alvaro Rodríguez Compartamos Banco
The microfinance industry in Bangladesh and India are going through the deepest crisis in the history of this sector. These are two very different crises, however we should draw important lessons from both. Lessons that should transpire to both, the microfinance industry and to the whole social enterprise sector.
The lesson coming from Bangladesh is the importance of succession. Every social entrepreneur should be thinking about succession very early on. Every social entrepreneur should be working him or herself out of her job.
To perpetuate yourself in the job is not good for the organization and for the industry. You need to allow for new and fresh leadership to flourish and bring new ideas to the organization and permit it to transform itself.
This is clearly a difficult task because your social enterprise is your “baby” and it is human nature to believe that there is no better mother than yourself to care of your child. However, it is best for that child to let go. This is something that all social entrepreneurs should have as an objective.
The lesson form India is that as social entrepreneurs, many times our mission is related to the poor. The poor is a sensitive subject since we are dealing with human lives and because its sensitivity, we need to be more careful than any other activity.
By being extra careful I mean that we should be proactive with self regulation and sound consumer protection practices. Being this a sensitive subject, when regulators act, they tend to over-react and thus affecting the industry and the clients. It is key that we do not create the circumstances for the authorities to need and want to get too involved.
Initiatives such as the Smart Campaign should be embraced and put into practice by all players in all countries. In addition, we should all be opened to receive ratings by organizations such as Microrate to demonstrate that our consumer practices are sound.
We should also be very proactive in maintaining authorities close to the realities of the clients and the field by motivating them to continuously visit clients and have an open communication with them so that they can hear their experiences from them.
Financial services, if poorly handled, can be harmful. But we also know that if a doctor performs malpractice or a medicine is misused, medicine is not prohibited and the medicine should not be taken out of the market. We need to do all we can to assure good practices in the microfinance industry, but also keep the authorities close for them to know the benefits of having access to financial services and for them not to over-regulate and thus harming the industry and the client.
