Damian von Stauffenberg, Founder and Chairman of MicroRate, the first micro finance rating agency, was interviewed by the Association of the Luxembourg Fund Industry (ALFI) about trends within the micro finance industry and a variety of topics including negative publicity on microfinance, how microfinance investment changed during and after the global financial crisis, and on global trends in microfinance and on microfinance funds (May 2012).
Mr von Stauffenberg discusses how a temporary slowdown in the growth of the industry during the financial crisis was a blessing in disguise as the pace of growth had been too fast. The wave of interest in microfinance on the back of initiatives such as the UN’s ‘Year of Microfinance’ in 2005 meant that the role of microfinance was overplayed by some. It is a financial product and can play a crucial role but cannot alone solve world poverty. Damian explains the challenges facing microfinance funds during the crisis and the ultimately positive impact on micro finance institutions who have emerged as more professional financial intermediaries. He explains that social rating is a necessary complement to microfinance as there is a need to ensure promises are being fulfilled and that microfinance is helping people. Microfinance provides a means for poor people to become productive and thereby less poor. As such it is a hugely attractive product and the industry is once more growing rapidly.