Faculty & Research
Prioritizing Price or Profit in Microfinance: Two Roads to Systemic Social ChangeNovember 16
Michael Chu
Senior Lecturer of Business Practice
Mark H. Moore
Visiting Professor of Management
Date and Time: Monday, November 16, 3:30 — 5:00 p.m.
Location: Aldrich 209
To register: Please RSVP to sefs@hbs.edu
Description: In recent years, microfinance—and especially 2006 Nobel Peace Prize winner Grameen Bank—stand as compelling examples of what social entrepreneurs and markets can do to help millions of poor people escape the dangerous and degrading conditions of poverty. Despite the general acceptance of microfinance, a fierce debate has raged in the industry since the 2007 IPO of Mexico's Banco Compartamos—an IPO that valued the microfinance institution at $1.5 billion a mere eight years after it originally had been capitalized with just $6 million from investors. The debate has focused on how the industry as a whole can best serve the public—through microfinance firms set up as for–profit firms, nonprofit entities, or some combination of the two. Linked to this debate is whether and how government can support the development of the industry. Chu and Moore will rejoin a debate that began between Chu and Muhammad Yunus, the founder of the Grameen Bank. Critical issues to be explored include:
- What is the evaluative framework that should be wrapped around the industry as a whole in gauging its contribution to society?
- How should and do for–profit and nonprofit firms price their credit services?
- What forces will cause the industry to grow larger and reach all those who can benefit from the services?
- What forces will motivate continued innovation in this industry?
Biographies:
Michael Chu was appointed a Senior Lecturer in the Social Enterprise Initiative of the General Management Group of the Harvard Business School in July 2003. He is also Managing Director of the IGNIA Fund, an investment firm based in Monterrey, Mexico, dedicated to investing in commercial enterprises serving low–income populations in developing countries, which he co–founded in 2007. Full bio.
Mark H. Moore is currently the Hauser Professor of Nonprofit Organizations at the Kennedy School of Government, and the Simon Professor of Organizations, Management, and Education at Harvard's Graduate School of Education. He is also a Visiting Professor of Management at the Harvard Business School working with the Social Enterprise Initiative. Full bio.
Seminar pre–reading materials:
- "Is it fair to do business with the poor?" Report on the debate between Muhammad Yunus and Michael Chu. World Microfinance Forum Geneva. October 2008.
Report will be sent to RSVPs one week prior to the seminar. HBS Faculty and Staff may access the report here. (HBS intranet login required)
