The New Yorker Magazine Tells All for a Scintillating But Hurtful Read

Long after its publication, we are still receiving frequent comments from readers about the October 30^th article on microfinance published in the New Yorker magazine. At least in the US, this article has captured imaginations, so, belatedly, we now respond to your requests for our comment on this article.

The New Yorker, a high-brow literary weekly, celebrated Mr.Yunus’ Nobel Peace prize with an expose about the international microfinance community entitled MILLIONS FOR MILLIONS: This year’s Nobel Peace Prize winner and some high-tech entrepreneurs are competing to provide credit to the world’s poor authored by Connie Bruck.

For microfinance industry outsiders, this story reads like a dream. Heroes and antiheroes civilly clash while the fate of billions of people hangs in the balance. In rich and lively detail, Ms. Bruck chronicles the great schism in microfinance between those taking a social approach (as represented by Mr. Yunus in the article) and those taking a commercial approach (as represented by Pierre Omidyar, the founder of internet company eBay). Ms. Bruck authors top-shelf investigative journalism that reads like great fiction, full of intrigue and controversy. Overwhelmingly, the reaction from industry outsiders is that the article is brilliant, and that they finally “get” or understand the microfinance community.

Predictably then, for microfinance industry insiders, this article was just too good. Ms. Bruck does all too good a job at uncovering the real dirt about a profound rift in microfinance, usually a feel-good topic in the mainstream press.

Yet, this rift has waned significantly over the past years as microfinance has grown. In this way, this essay is a throw-back, albeit an accurate one. Indeed, if this article had been published by the New Yorker 5 or 10 years ago with all the glitz of the Peace Prize, then its candid voice may have helped the industry develop.

What five years ago was useful, today is hurtful. It diverts us from the critical problems at hand that we are all trying to solve. This sentiment was conveyed best in a letter from a reader, who wrote:

“ It seemed to me, an uninformed observer, that there should be room for both approaches, given the magnitude and gravity of the problem. I never trust ideological purity in practical affairs, but I respect the deep commitment to the poor that underlies both of these movements .”

There is indeed room for both approaches. What’s more, the two approaches are fundamentally the same as our reader puts so well. Both approaches seek to serve micro-enterprise owners and support ethical business practice as a means to better our shrinking world.

To better understand the convergence of the New Yorker’s antiquated polemic, we would do well to look at the current activities of the stars of the article, Mr. Yunus and Mr. Omidyar. What are they doing now in microfinance? “The devil is in the details”.

Mr. Yunus has been fighting publicly with his foreign shareholder that more profits be ploughed back into Grameen Phone. In addition, he is leading a massive push to integrate information and communications technologies into microbanking across the globe. He is taking a social approach to business, working at a huge scale to undo global poverty.

Mr. Omidyar, through the Tufts University endowment fund he established, has recently invested USD 20 million in AccessHolding, an emerging global microbank. Mr. Omidyar too is taking a social approach to business, working at a large scale to undo global poverty.

So, the story today runs like this: The micro-banker is reinvesting profits in technology while the eBay techie is investing in microbanks, relinquishing the profits to a deserving University. This is why the New Yorker article is a throw-back: It portrays conflict whereas the reality is convergence. Mr. Yunus and Mr. Omidyar are becoming more and more alike everyday and that is very good news.

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