As a part of a series of stories on microcredit, Radio Netherlands conducted this e-mail interview with Portman.
1. Do you think that microfinance is the answer to solving poverty?
Poverty is a complex issue for which a broad array of interventions need to be employed. Key interventions, in my opinion, include access to education, the ability for women to have control over their bodies and reproduction, access to the very basic human requirements of food, shelter and healthcare, and the means to provide financially for one's family.
When I was first researching the types of interventions that can provide the most positive outcomes for the poor, I learned that women make up 70 percent of the world’s poorest citizens. I saw that microfinance provides the world's poorest citizens, especially women, with access to capital. In doing so, they are able to take control of their lives, determine how they can best use their talent and creativity to create their own jobs, acquire the assets that will allow them to move from dependence to self-sufficiency, and ensure that their children can look forward to a better, more prosperous future.
So, while I don’t think microfinance is the only solution to poverty, I do believe it is one of the key tools that can make a huge difference in the lives of individuals, their families and their communities.
2. Who profits from microfinance?
Many people profit from microfinance. First and foremost, clients and their families profit because the added income generated by small businesses allows mothers to purchase more, and more nutritious, food. It provides the means for them to take their children to the doctor when they are ill and purchase medicine, if needed. Microentrepreneurs can improve their homes, adding a roof or another room, or a latrine. But most importantly, the added income more often than not allows children to start, or remain in school, which is the best way for them to lift themselves out of poverty as they grow.
FINCA’s client assessment research findings show that mothers use their added income to pay for their children’s school fees before they make additional improvements to the family situation. In addition, communities profit because more of their population become productive members of society, and generate revenue that can support local programs.
National governments profit because of the jobs and income generated at local levels that bolster national economies. Microfinance organizations can profit because, once their programs reach self-sustainability, the income generated can be put back into their programs, allowing them to reach more clients, more quickly with larger portfolios of loan capital.