We posted the following as a comment to the Stanford Social Innovation Review piece to which it refers:
We couldn’t agree more with “In Microfinance, Clients Must Come First,” by Datar, Epstein and Yuthas. Microfinance aims to alleviate poverty by providing access to credit to the world’s poorest entrepreneurs. But, as the authors allude, if merely giving money to entrepreneurs will propel them out of poverty, microlenders must be smarter than every investor in the world. That logic clearly is flawed. The assumption is that lending alone will achieve successful results. We know that’s incomplete. But lending, combined with business education, may be the key to propelling the world’s poorest entrepreneurs out of poverty.
Just as venture capitalists provide to their entrepreneurs to improve their chances of success, MFIs should provide additional, non-monetary resources for their borrowers. We recognize that the scope and scale of microfinance don’t make that a resource-efficient practice.
That challenge, presented to us by the chairman of a Thai MFI in January 2007, energized us to search for, and ultimately to create, a tool that could help entrepreneurs and MFIs begin conversations that would result in better business decisions – and better outcomes.
We created a tool, the Barefoot MBA, to meet that challenge. The Barefoot MBA seeks to give the world’s smallest business owners knowledge and concepts to empower them to make better business decisions and provide better lives for themselves, their families and their communities. The Barefoot MBA is intended to be used by existing organizations that have resources, relationships and infrastructure. It is a free, open-source tool, supported by us, available to all at http://www.barefootmba.org.
The Barefoot MBA’s lessons are taught through storytelling, the simplest, most time-tested method of teaching. Because they require no literacy, props or technology, they are accessible to anyone, anywhere. The stories are modular, their examples context-specific but adaptable; we include in our materials a guide to adapting the Barefoot MBA to other cultures and norms.
Microfinance debt is more useful with services that help entrepreneurs make effective, successful decisions with their new money. We hope to work with others in the field to help those trying to make ends meet bring those ends a little closer together.