Are the interest rates charged by MFIs justifiable?

It’s “Managerial Oral Communication” time again, and one of the things we typically do in this course is have at least one group discussion. Here’s the prompt for our most recent one:

A Consultative Group to Assist the Poor (CGAP) paper began with the following text:

Over the past two decades, institutions that make microloans to low-income borrowers in developing and transition economies have focused increasingly on making their lending operations financially sustainable by charging interest rates that are high enough to cover all their costs. They argue that doing so will best ensure the permanence and expansion of the services they provide. Sustainable (i.e., profitable) microfinance providers can continue to serve their clients without needing ongoing infusions of subsidies, and can fund exponential growth of services for new clients by tapping commercial sources, including deposits from the public.

The problem is that administrative costs are inevitably higher for tiny microlending than for normal bank lending. For instance, lending $100,000 in 1,000 loans of $100 each will obviously require a lot more in staff salaries than making a single loan of $100,000. Consequently, interest rates in sustainable microfinance institutions (MFIs) have to be substantially higher than the rates charged on normal bank loans.

Are the interest rates charged by MFIs justifiable?

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Check out the 20 minute discussion that the PDM 9 students had on the topic after the jump….

Online Resource Guide

Dear Students,

First of all, let me take this opportunity to thank you all for your participation in the interactive session on Perspectives on International Development. It was a great pleasure for me to share some of the aspects of the global development approaches and processes to which I was exposed during the course of my first year master’s programme. I hope it was informative and helpful to you in gaining a broader view of development and the way it is being approached internationally.

As a follow-up to that session, I felt it important to share some of the online resources on the various development topics which may be useful to you during your study and after, as you begin your work as development professionals. These are the links which my fellow students at Brandeis (my university in Boston, United States) and I were referred to; we have found them useful in our study work as well as field work. It is not an exhaustive list and some of you might be familiar with a few of them. The idea is to create a comprehensive list to which you all can contribute and use as an online resource guide. Please feel free to add any useful/interesting links related to your work that you may come across so that your fellow students can access them; just add a comment here with the link and the category and the list will be updated.

As you all gear up for your first hand experience with grassroots NGOs, I wish you all the success and a great learning experience!

Wish you all a promising year 2009!

Best regards,

Mansi Anand

The Grumpy Writer

The first issue of The Grumpy Writer's Grumps

aka Ananda Mahto

I wanted to create an avenue for me to write some periodic updates about the English language. Sometimes, for example, I might write about strange or frustrating usage; other times, I might, instead, offer some writing tips for students.

The result? The Grumpy Writer’s Grumps.

Check it out and see what you think….

The Academy goes hi-tech

The courses are currently offered on our local intranet

One of the exciting new developments at the Tata-Dhan Academy—to me as a faculty member, at least—is the addition of a few online courses and online assignments.

To do this, I have been using Moodle, a web-based course management system, to host online discussions and facilitate assignment submissions and exams. I have been using it for three of my courses this term—Managerial Oral Communication, Written Analysis and Communication, and Academic and Professional Writing—and I really have to say thanks to the PDM 8 students who have been very flexible in adapting to the new system. They have been so accommodating, in fact, that when I informally polled them to find out if they preferred a paper-based midterm or a computer-based midterm, the majority of the batch opted for the computer-based exam.

“I Have to Say Something”

One of the courses that Academy students have to take is “Managerial Oral Communication.” I rarely (almost never, actually) use PowerPoint in my classes, but for a change, I decided to deliver this presentation to them. (I’ve included notes below so you can have an idea of what was discussed in the class itself.)