Micro-Finance & Micro-Credits, The Good, The Bad, & The Ugly
By Amber Jones, 2/26/2019, Blog Post #5
Micro-finance and micro-credits. These terms sound to be like something that would add insult to injury. Why would people loan large amounts of money to those most struggling? How on earth would they be able to afford to pay it back when the targeted audience for this idea are those among the highest poverty levels?
In Mali, micro-finance is struggling hard. In 2005, the Premiere Agence de Microfinance Mali was established in line with the Malian government to initiate micro-finance into the country. This area is served by 14 banks that serve the urban areas, but the micro-finance sectors serve the more rural areas, which totals upwards of 1 million clients, and 126 licensed MFI’s serving them. The sector has been in crisis for some time though, and are technically bankrupt or need strengthening. This has caused the majority of the Malian population to lose faith in the system, especially with the growing political and security issues within their government.
In reflecting on the 31 off track countries, it is sad, but not surprising that Mali is listed among them. While Mali has received a large amount of aid, the mid to long term sustainability outlook is poor. One of the largest reasons for this is the Malian government and security for their own people. Even though Mali is technically a democratic state, their government still has a large amount of corruption, especially in the northern and rural areas. To further hinder the ending of poverty, many larger nations are now afraid to take chances investing in these countries, as they do not believe the risks outweigh the risks. This attitude is not helping the mass population, and the ones who suffer are those who cannot rise above the poverty level. It’s interesting to note that this article did mention singular projects that aim at aiding the countries, and while they have small to medium success in a small range, they struggle to make at – large impacts. This whole statements brings to mind projects like the Millennium villages and other initiatives. It’s upsetting to see that all the hard work and initiative put into these projects are unable to sustain larger parts of the countries they serve.
When looking at digital technology in Mali itself, we see that MyAgro has come in and is trying to fully digitize the country’s payment methods. How MyAgro works for those is poverty is that instead of paying for seed and fertilizer in one lump sum, the farmers use scratch cards they’ve purchased over time, and thus prevent them from spending the meager monies that these people have all at once. These digital technologies are trying to make the country go full digital in their payment methods, and so far in both Mali and Senegal, MyAgro is doing quite well.
With regards to the article that we are “stealing” Africa’s wealth, I personally had a hard time with this. While I do agree that problems of what seems like tax – workarounds that tend to profit the rich in their home countries by using Africa as a means to facilitate their finances, this plays into the corruption of many of the African country’s governments. Also, the citing that many of Africa’s natural resources are being illegally farmed, such as logging and fishing, which in turn affects those who may already be in poverty, furthering their need. One large thing I didn’t agree with is assigning a monetary amount to climate change. Now, I do know that climate change is real, and not refuting that it is having and is going to continue to have a large effect on climate, production, and wildlife, I find that assigning an arbitrary number to the consequence may be downplaying the effect. I realize the 36 billion dollars is not a small amount, but Africa alone is a large continent, and this monetary figure seems like it could be lower than the actual damage done by climate change. With the climate change burden, I believe that the effect would hit those in poverty the greatest, as they may lose their ability to farm, due to the harsh climates and lack of resources. I believe the term “stealing” to be a bit of a daring headline, but there definitely is a problem of people using and abusing Africa, and it’s hurting those most in need.
https://www.akdn.org/where-we-work/west-africa/mali/microfinance-mali
https://www.aljazeera.com/indepth/opinion/2017/05/africa-poor-stealing-wealth-170524063731884.html
Peace Studies 4810 