Saturday, May 30, 2009

Is Microfinance Playing it's role in Sustainable Development in Uganda?

Going back to the Theme of the Tour above; many of you are divided whether Microfinance is really having an Impact. I will not point out which side i fall but rather goon ad see if we can stimulate debate about the above Question.
What is Sustainable Development? Sustainable development is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for future generations. The term was used by the Brundtland Commission which coined what has become the most often-quoted definition of sustainable development as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs.
Sustainable development ties together concern for the carrying capacity of natural systems with the social challenges facing humanity. As early as the 1970s "sustainability" was employed to describe an economy "in equilibrium with basic ecological support systems."Ecologists have pointed to the “limits of growth”and presented the alternative of a “steady state economy” in order to address environmental concerns.
The field of sustainable development can be conceptually broken into three constituent parts: environmental sustainability, economic sustainability and sociopolitical sustainability.The United Nations Division for Sustainable Development lists the following areas as coming within the scope of sustainable development:[11]
Climate Change
Consumption and Production Patterns
Desertification and Drought
Disaster Reduction and Management
Education and Awareness
Systems ecology
Fresh Water
Human Settlements
Information for Decision Making and Participation
Integrated Decision Making
International Law
International Cooperation for Enabling Environment
Institutional Arrangements
Land management
Major Groups
National Sustainable Development Strategies
Oceans and Seas
Sustainable tourism
Toxic Chemicals
Trade and Environment
Waste (Hazardous)
Waste (Radioactive)
Waste (Solid)
Sustainable development is an eclectic concept, as a wide array of views fall under its umbrella. The concept has included notions of weak sustainability, strong sustainability and deep ecology. Different conceptions also reveal a strong tension between ecocentrism and anthropocentrism. The concept remains weakly defined and contains a large amount of debate as to its precise definition.

While many factors contribute to poverty, its most obvious manifestation is
insufficient household income. Both the extent of income-generating opportunities
and ability to respond to such opportunities are determined to a great degree by access
to affordable financial services. Increasing the access of poor households to microfinance1
is therefore being actively pursued worldwide. Once almost exclusively the domain of
donors and experimental projects, microfinance has evolved during the last decade with
prospects for viability, offering a broader range of services and significant opportunities
for expansion.
Development practitioners, policy makers, and multilateral and bilateral lenders,
recognize that providing efficient microfinance services is important for a variety of
reasons. Improved access to microfinance services can enable the poor to smoothout
their consumption, manage their risks better, build their assets, develop their microenterprises,
enhance their income-earning capacity, and enjoy an improved quality of
life. Microfinance services have a significant positive impact on the depth (severity)
of poverty and on specific socio-economic variables such as children’s schooling,
household nutrition status, and women’s empowerment.
Despite this, about 95 per cent of some 180 million poor households in the
Asian and Pacific region still have little access to affordable institutional microfinance
services. Significant resources are required to meet the potential demand. This
chapter argues that on the supply side there is a need to build microfinance systems that
can grow and provide microfinance services on a permanent basis to an increasing
number of the poor through domestic resource mobilization. On the demand side, there
is a need to invest in social intermediation to enable the poor to optimally utilize
microfinance services.

The microfinance institutions and other microfinance providers have expanded
their outreach from a few thousand clients in the 1970s to over 10 million in the late
1990s. The developments in microfinance in Asia and the Pacific have set in motion a
process of change from an activity that was entirely subsidy dependent to one that can
be a viable business.
(a) The myth that poor households cannot and do not save has been shattered.
Savings can be successfully mobilized from poor households.
(b) Poor, especially poor women, have emerged as creditworthy clients, enabling
microfinance service delivery at low transaction costs without relying on
physical collateral.
(c) Microfinance services have strengthened the social and human capital of the
poor, particularly women, at the household, enterprise and community level.
(d) Sustainable delivery of microfinance services on a large scale in some
countries has generated positive developments in microfinance policies,
practices and institutions.
(e) Microfinance services have triggered a process toward the broadening and
deepening of rural financial markets.
Of Course Microfinance cannot go without it's criticism...but if Foreign AID does not trickle down to it's intended recipients what is the Alternative.
BRAC is just one of the many MFIs operating in Uganda we need to debate about and it's impact in sustainable development.
So Lets decide when should we have the Debate?


  1. Fred, In response to your post on Sustainability / Deep Ecology :

    Industrial Society Destroys Mind and Environment.

    Industrial Society is destroying necessary things [Animals, Trees, Air, Water and Land] for making unnecessary things [consumer goods].

    "Growth Rate" - "Economy Rate" - "GDP"

    These are figures of "Ecocide".
    These are figures of "crimes against Nature".
    These are figures of "destruction of Ecosystems".
    These are figures of "Insanity, Abnormality and Criminality".

    The link between Mind and Social / Environmental-Issues.

    The fast-paced, consumerist lifestyle of Industrial Society is causing exponential rise in psychological problems besides destroying the environment. All issues are interlinked. Our Minds cannot be peaceful when attention-spans are down to nanoseconds, microseconds and milliseconds. Our Minds cannot be peaceful if we destroy Nature [Animals, Trees, Air, Water and Land].

    Chief Seattle of the Indian Tribe had warned the destroyers of ecosystems way back in 1854 :

    Only after the last tree has been cut down,
    Only after the last river has been poisoned,
    Only after the last fish has been caught,
    Only then will you realize that you cannot eat money.

    To read the complete article please follow any of these links.

    Industrial Society Destroys Mind and Environment

    Industrial Society Destroys Mind and Environment

    Industrial Society Destroys Mind and Environment

    Industrial Society Destroys Mind and Environment

    Delhi, India