History of Microfinance
1961: ACCION International was founded in Venezuela with $90,000, raised from private companies by Joseph Blatchford. Initially the funding was used to build schools and water systems, before turning to microcredit in 1973.
1971: Opportunity International, founded by Al Whittaker and David Bussau, lend to microentrepreneurs in Indonesia and Columbia. In 1979 they expand across southeast Asia and South America.
1976: Another Milestone – Prof. Muhammad Yunus, an economist in Bangladesh, finds that a loan of $27 can change the lives of 42 families in an impoverished village in Bangladesh. All loans are paid back with interest.
1983: Prof. Yunus creates Grameen Bank. To date, Grameen has lent more than $6 billion (to 7.4 million Bangladeshis). Its methods have become the basis for modern microfinance that includes group lending, women-focused, and good repayment rates.
1992: ACCION helps found BancoSol, a microfinance institution in Bolivia as a nonprofit organization.
1997: The National Microfinance Bank in Tanzania (NMB) is created. Meanwhile, Deutsche Bank enters microfinance as part of its drive to embrace social investing. And, Grameen Foundation is founded in the US.
2000: Banco Sol in Bolivia becomes a regulated bank, dedicated to microfinance.
2001: The Microenterprise Access to Banking Services initiative in the Philippines helps integrate rural banks’ microfinance loan clients into the credit system.
2005: The UN names 2005 the International Year of Microcredit. Citibank opens Citi Microfinance, based in London , New York , India and Colombia to broaden the reach of its financial services.
2006: The Microfinance Summit Campaign Report estimates that there are more than 3,000 microfinance institutions serving 106 million poor people in developing countries. The total cash turnover of these institutions worldwide is estimated at $2.5bn.
* Prof. Yunus is awarded the Nobel Peace Prize
* Barclays Launches Ghanaian Microfinance, tapping into one of Africa’s most ancient forms of banking, Susu collection.
* International Finance Corporation, part of the World Bank, announces a $45m investment in credit-linked notes to be issued via Standard Chartered bank to facilitate microfinance lending in Africa and Asia.
2008: Microfinance continues going mainstream. Retail investors/lenders participate in Kiva.or and MicroPlace.org that allows individuals to ‘invest’ in small loans to microfinance clients directly online.