I don’t know if Hugh Sinclair realizes this, but despite lacking any formal journalism training, he has indeed committed an act of journalism in his recently published book, “Confessions of a Microfinance Heretic: How Microlending Lost Its Way and Betrayed the Poor.”
The book’s title is indicative of what’s inside and Mr. Sinclair does a nice job backing up his claims with well researched and annotated sources where the source is not his own decade of experience in the field. Among the basic findings:
- Microborrowers at some of the industry’s poster child institutions pay interest rates considered usurious, extortionate and predatory in any other context, but somehow the microfinance canon has convinced a critical mass of people that this is the road to solving poverty;
- Due diligence by American and European microfinance investment funds into microfinance lenders is all too often a joke, and not a very funny one;
- In certain cases, financiers, some of whom represent the largest banks in the world, are aware of what are arguably unsustainable and unethical practices at microfinance institutions but turn a blind eye to them in the pursuit of greater yield.
And much, much more. Here’s a short list of what else this book is: jarring, jaw-dropping, infuriating, inflammatory, and yes, heretical. At the same time: enlightening, engaging, inspiring, illuminating.
And now here’s an even shorter list of what this book is not: bullshit.