Natalie Portman wants to use her MySpace diary to end poverty. She’s supporting a campaign to raise $200 million for Finca International, a pioneer in microfinance, the Financial Times reports today.
"I have seen that ending poverty is possible - it is just a mouse click away," Ms Portman said at the campaigns launch.
The Financial Times reports that Portman will contribute a video video diary about Finca for its MySpace page.
“People check their MySpace pages 10 times a day, why not harness that tool to build support for microfinance,” Portman says.
Why not? Perhaps because there is little evidence that microfinance is an effective way to reduce poverty, much less end it all together. Like many claims that begin with the phrase “I have seen,” Portman’s claim to have witnessed the end of poverty is most likely anecdotal evidence at best, if not outright hyperbole.
Portman’s first video is now available on Finca International’s Village Banking MySpace page.
Hollywood joins royalty to seek $200m for microfinance [Financial Times]
Village Banking [MySpace]
Earlier on DealBreaker
As It Turns Out, Lending Tiny Sums Of Money To Poor People May Not Bring Peace or Propsperity: [10.30.06]
More Gratuitous Grameen Bashing [11.9.06]
Posted by Me , May 03, 2007 3:46PM
You heartless Republican capitalist pig!
Posted by , May 03, 2007 3:48PM
Basic Facts About Microfinance
Comprehensive impact studies have demonstrated that: (i) microfinance helps very poor households meet basic needs and protect against risks; (ii) the use of financial services by low-income households is associated with improvements in household economic welfare and enterprise stability or growth; (iii) by supporting women’s economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being; (iv) for almost all significant impacts, the magnitude of impact is positively related to the length of time that clients have been in the programme.
The demand for microfinance services is largely unmet. Estimates of the global demand ranges from 400 to 500 million households of which only around 30 million are reported to have access to sustainable microfinance services in 2002. Although many poor and low-income people do not yet have access to financial services, the number of customers that use microfinance, has grown between 25 and 30 percent annually over the past five years.
Other important insights concerning microfinance include:
In the 1990s, average per capita income growth was less than 3% in 125 developing and transition countries, and was negative in 54 countries. In a further 71 countries, growth was below the 3% a year needed to double incomes in a generation.
(UNDP, Human Development Report, 2003)
At least 30 million people now have access to microfinance (Unitus Website)
The existing 10,000 Microfinance Institutes (MFIs) reach only 4% of the potential market (2001 World Bank Statistics)
At least 90% of eligible self-employed lack access to microcredit programs. Unmet demand is around 270,000,000 (Unitus)
In Africa, women account for more than 60 per cent of the rural labour force and contribute up to 80 per cent of food production, yet receive less than 10 per cent of credit provided to farmers. (Data Snapshots on Microfinance – The Virtual Library on Microcredit)
The World Bank estimates that there are now over 7000 microfinance institutions, serving some 16 million poor people in developing countries. The total cash turnover of MFIs world-wide is estimated at US$2.5 billion and the potential for new growth is outstanding.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
There is concern that official assistance will be diverted from vital primary care aid programmes such as health, water projects and education into MFIs, owing to their popularity among donors. (Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Though women appear to benefit most, studies indicate that many loans awarded to and paid back by women are in fact used by men.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
The widely-imitated Grameen Bank in Bangladesh aims to provide credit to those in extreme poverty. Some 94 per cent of those who meet the bank's criteria and take up loans are women. Grameen borrowers keep up repayments at a rate of around 98 per cent. The Bank lends US$30 million a month to 1.8 million needy borrowers.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Savings are important both as a vital safety net for the poor and as a source of funding that does not rely on external sources. Many strong MFIs, notably in Africa, recycle the savings of needy clients as a principal source of loan funds for their customers.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
The Microcredit Summit estimates that US$21.6 billion is needed to provide microfinance to 100 million of the world's poorest families. The Summit planners say it should be possible to raise US$2 billion from borrowers' savings alone. The final figure may be even higher.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Studies have shown that during an eight year period, among the poorest in Bangladesh with no credit service of any type, only 4 percent pulled themselves above the poverty line. But with individuals and families with credit from Grameen Bank, more than 48% rose above the poverty line. (Data Snapshots on Microfinance – The Virtual Library on Microcredit)
It is estimated that, worldwide, there are 13 million microcredit borrowers, with US$ 7 billion in outstanding loans, and generating repayment rates of 97 percent. It has been growing at a rate of 30 percent annual growth.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Fewer than 2 per cent of poor people have access to financial services (credit or savings) from sources other than money lenders.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Under 10 million of the 500 million people who run micro and small enterprises have access to financial support for their businesses.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
There is a potential demand for microcredit services from seven million borrowers.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
There is a potential demand for microsavings services from 19 million savers.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
The world's seven richest men could wipe out global poverty. Their combined wealth is more than enough to provide the basic needs of the poorest quarter of the world's people.
(Data Snapshots on Microfinance – The Virtual Library on Microcredit)
Studies of the impact of microcredit in more than 24 countries found dramatic improvements in household income levels. These improvements took place primarily through growth in the borrower’s business, which translated into increased household income. The studies found that access to microcredit allowed the borrower to increase the number of goods or services sold and reduce the costs of supplies and raw materials. As a result, sales increased and profits grew 25% to 40%. (Unitus)
The top 5 MFIs reach almost half of the market. (2001 World Bank Statistics)
Only 1% of MFIs are financially stable. (2001 World Bank Statistics)
MFIs reach self-sufficiency through cost and income structures that vary by region: Asian FSS MFIs achieve a high level of profitability due to low costs. In the other regions, Eastern Europe, Latin America and Africa, MFIs face high costs and reach self-sufficiency through a combination of higher income and productivity.
(Issabelle Barres, Microbanking Bulletin, 2002)
In Indonesia, borrowers increased their incomes by 12.9 percent compared to increases of 3 percent in control-group incomes. Another study on Bank Rakyat Indonesia borrowers on the island of Lombok in Indonesia reports that the average incomes of clients had increased by 112 percent and that 90 percent of households had moved out of poverty.
(CGAP, Focus Notes. 24, Elizabeth Littlefield)
Microfinance programs from different regions report increasing decision-making roles of women clients. The Women’s Empowerment Program in Nepal found that 68 percent of its members were making decisions on buying and selling property, sending their daughters to school, negotiating their children’s marriages, and planning their family. These decisions traditionally were made by husbands. World Education, which combines education with financial services, found that women were in a stronger position to ensure female children had equal access to food, schooling, and medical care. TSPI in the Philippines reported that program participation increased the percentage of women who were principal household-fund managers from 33 percent to 51 percent. In the control group, only 31 percent of women were principal fund managers.
(CGAP, Focus Notes. 24, Elizabeth Littlefield)
The number of poor people with access to microcredit schemes rose from 7.6 million in 1997 to 26.8 million in 2001—21 million of them women, enabling them to control assets, make economic decisions and assume control of their lives. According to some estimates, 5% of microfinance programme participants could lift their families out of poverty each year.
(UNDP, Human Development Report, 2003)
As of December 31, 2001, 2,186 microcredit institutions reported reaching 54,904,102 clients, 26,806,014 of whom were among the poorest when they took their first loan. Nine hundred ninety- four institutions submitted a 2002 Institutional Action Plan outlining their progress. Assuming five persons per family, the 26.8 million poorest clients reached by the end of 2001 affected some 134 million family members.
(Microcredit Summit Report 2002)
Over the previous two years, the growth in the number of very poor women reached has gone from 10.3 million in 1999, to 14.2 million in 2000. Now, as of 2001, 21,169,754 women have been reached. This is a 49.6 percent increase in the number of poorest women reached from December 31, 2000 to December 31, 2001. This increase represents an additional 7,016,841 poorest women reported with microloans in the last year.
(Microcredit Summit Report 2002)
Over the last five years the number of poorest clients reached has grown by 350 percent, from 7.6 million at the end of 1997 to 26.8 million at the end of 2001.
(Microcredit Summit Report 2002)
Data from the Micro Banking Bulletin reports that 63 of the world's top MFIs had an average rate of return, after adjusting for inflation and after taking out subsidies programs might have received, of about 2.5% of total assets. This compares favorably with returns in the commercial banking sector and gives credence to the hope of many that microfinance can be sufficiently attractive to mainstream into the retail banking sector. (CGAP)
Posted by BSD , May 03, 2007 3:48PM
I don't care what she advocates. I would wreck that chick.
Posted by , May 03, 2007 3:51PM
She went to Harvard!
Posted by Anonymous , May 03, 2007 4:05PM
Give it a rest Carney. Credit is obviously import to the economy. Without credit the economy would collapse and we would all be poor. It follows that "microeconomies" need "microcredit." This is a lot smarter than just giving money away.
Posted by Ruthless Gravity , May 03, 2007 4:06PM
I never understood Dealbreakers beef with microfinance. Its basically venture capital in LDCs, and we all love venture capital, right?
Posted by MG , May 03, 2007 4:25PM
Ms. Portman knows what she's talking about - don't let that silly outfit make you take her any less seriously -- and she has seen it personally. Because of microfinance, there was no poverty on Padme's home planet, Naboo. Naboo was absolutely crawling with microfinanciers - you can recognize them by their flowing robes. Grameen would have fit right in!
Tatooine - now that planet could seriously use some microfinance!!
Posted by Luke Skywalker's 3rd cousin Boon Moonflighter , May 03, 2007 4:42PM
Tatooine was run by the Hutt, a cartel of gangsters. So pretty much like Russia, but without the oil reserves or the baltic coast.
Posted by , May 03, 2007 4:54PM
nerds
Posted by Pelham , May 03, 2007 4:57PM
Microfinance is merely a tactical rebranding of the global aid and welfare industry. It's meant to appeal to serious business types who might be more receptive to the word "finance" than to the more loaded terms "aid" or "welfare."
Microfinance is just another way to separate guilt-ridden white Westerners from their money and give it to the Third World.
Throwing money at indigent people in the Third World in the form of "microfinance" does not work, any more than giving free money to Third World governments has worked over the last few decades.
That Portman went to Harvard proves nothing. What I want to know is, what businesses has she started? And how profitable are they now?
Posted by , May 03, 2007 4:59PM
Can someone sum up in like 3 sentences what the first anon said?
Posted by joe , May 03, 2007 5:23PM
how does one end poverty? isn't that like getting everybody to be above average? The redistributionists will always complain that people are in the bottom decile, quintile, quartile, whatever and that we need to take from the top and give to them. Seriously, when I hear people say we need to eliminate poverty I always scratch my head as to what that means.
Posted by BSD , May 03, 2007 5:34PM
That's right Joe - it's a zero sum game. That's why when bums ask me for money I kick them in the nuts and take their change.
Posted by retail guy , May 03, 2007 5:38PM
more Munson please.
Posted by , May 04, 2007 5:53PM
Yunis was very successful with his microfinance program. But I agree with BSD, kick dem der bums in the nuts.
and Joe, poverty is "the state of one who lacks a usual or socially acceptable amount of money or material possessions "... and given the circles I roll in, if you're not 8 figure net worth, you're in poverty, bitch! But seriously, redistributionists aside, as the world gets richer, or as income becomes more evenly distributed fewer and fewer people will be relegated to live in what we consider 'poverty'. Of course, there will never be an end to poverty, just like there will never be a Muffie. Oh well, fuck it.