MFI dilemma...

Currently there is a dilemma between social bottom line and economic bottom line of MFIs. As MFIs aim to expand their services, they need lots of money and in order to attract investors they must behave like the rest of the market. The problem is that this leads to high interest rates to the lenders in a way that led Yunus to say: “Microcredit should be about helping the poor to get out of poverty by protecting them from the moneylenders, not creating new ones. A true microcredit organization must keep its interest rate as close to the cost of funds as possible.”
Possibly the solution will be the development of more and better social responsible funds and advocate for social responsible investors to invest part of their portfolios in social business.

Other solution is the “SKS way”! They were able to raise profitability by 300% between 2007 and 2008 without any change in the interest rates. Interest remains close to the rates of the not-for-profit MFIs. How they did it? :-) Well… That I cannot tell you, otherwise I would have to kill you! Eheheheh!