When the world’s first microfinance institution, Bangladesh’s Grameen Bank, and its founder, Muhammad Yunus, were awarded the Nobel Peace Prize, it opened up new directions for the field of microcredit, BusinessWeek reports. The honor both raises awareness of innovative small-loan financing for the poor and gives banks and corporations incentive for creative new types of investment in the sector.
Already, multinational insurer AIG has partnered with global microfinance firm ACCION International in a $5.25 million deal to develop new financial products such as insurance, financial literacy, remittances, and other possibilities. AIG’s Ned Cloonan told BusinessWeek,
"We're calling the investment 'beyond credit' because we feel that the industry is ready for the introduction of additional products and services that go beyond straight lending, and we want to play a role in developing that capacity."
Other big players such as Citigroup have already entered the field, and Germany’s Deutsche Bank has an $80 million fund that invests institutional and pension funds in microfinance.
Meanwhile, the relief within the development committee about the Nobel Peace Prize's de facti establishment of microcredit as a viable financing mode with real potential to combat poverty is palpable. See the World Bank Group-affiliated Consultative Group to Assist the Poorest's take. Also, see the related post by our friends at the NextBillion.net blog.