Compartamos versus Yunus

by Rob Katz, NextBillion.net - Development Through Enterprise - Microfinance on Aug 25, 2008

The Mexican micro-finance entity that raised $400 million from an IPO comes under fire for becoming the moneylender the micro-finance institutions were supposed to protect the poor from.

A crimson and red screen lights up and a clutch of golden fish stream left and then right. This is the home page of the website of Compartamos Banco, the Mexican entity that became the first micro-finance institution (MFI) in Latin America to raise equity capital, as much as $400 million, through an initial public offer last year. The MFI, formerly an NGO, which turned into a for-profit entity and then into a bank, decided to turn to the market to reach out to more poor. So what is wrong?

Today, Compartamos is the biggest success story/controversy in the micro-finance world, depending on which side you are.