’Confessions of a Microfinance Heretic’: Talks at Google–132659






Your Case Analysis is based on the Topic:

“’Confessions of a Microfinance Heretic’: Talks at Google”



Your Case Analysis (also refer here to as “paper”) should address the Topic and demonstrate an understanding of relevant key concepts and appropriate conceptual frameworks.


The following instructions are intended to help you to articulate your written work. They are clearly explained, but please do not hesitate to contact me if you have any doubts.



  1. B.   INSTRUCTIONS                 ß How to articulate your Case Analysis



¤ Compulsory Format


®  Font size: the font size should be 12.

®  Lines: lines should be double-spaced

®  Pagination: all pages should be numbered at the bottom right of the page.

®  Printing: printing should be single-sided

®  Length: the strict maximum is 1500 words (excluding Table of Contents, References (if any), Appendices (if any), and footnotes.

®  You have to specify the number of words on the first page of your Case Analysis.


¤ Structure


The Structure of your Case Analysis consists of three (3) subtitles: Introduction; Main Body; and Conclusions.


Your “paper” must specify the subtitles (Introduction, Main Body; and Conclusions).



  1. 1.    Introduction [20 marks]


You have to explain the concepts of social innovation, business innovation, and the difference between them. Furthermore, you have to briefly describe the idea of improving human development through innovation.




  1. 2.    Main Body [40 marks]                              ß 700 – 800 words (suggested)


The body of your paper should be comprised of your writing about each of the following items:


  1. What is the impact of microfinance on poverty? [10 marks]
  2. What is the collateral effect of microfinance on child labour? [10 marks]
  3. What are the social responsibility challenges micro-financiers should meet? [10 marks]
  4. Brief discussion of microfinance using the principal-agent framework. [10 marks]


  1. 3.    Conclusions [40 marks]              ß 250 – 500 words (suggested)


In this (final) section, you have to answer the following questions (it is essentially your opinion, I do not expect any particular view to be held):


(a)  Does reality about microfinance match the press releases? [5 marks];

(b)  How would you suggest that human development should be improved: through social innovation or business innovation or both? [15 Marks]; and

(c)  What is the main lesson that you have derived from the video by Hugh Sinclair? [20 Marks]


Note 1

Please keep in mind that the total number of words cannot exceed 1500 words, but do not feel obliged to reach the maximum number of words. You can do an excellent job with less than 1,500 words.


®  Table of Contents


The following information is required on page 2 of your Case Analysis:



Page #

  1. Introduction
  1. Main Body
  1. Conclusions


Table 1

Table of contents


¤ Table of Penalties                                 ß IMPORTANT, READ CAREFULLY

Unfortunately, some students tend to ignore the prescribed Instructions. This omission makes the task of allocating a fair mark awkward. Failure to comply with the Instructions will be penalized according to the Table of Penalties (see Table 2)



Number of marks lost

Percentage of the total assessment


Ignoring word limit

Five (5) marks for each  50 word excess


or more


Lack of pagination

Ten (10) marks



Omission of Table of Contents

Twelve (12) marks



Lack of specification of the number of words on the front page of your paper

Fifteen (15) marks



Lack of specification of any of the three subtitles in your paper

Twenty (20) marks


Not single-sided

Twenty five (25) marks


Disregard of linguistic quality (e.g. poor grammar and style)

20 – 40 marks

20% – 40%



Table 2

Table of Penalties



¤ Your “paper” will be marked out 100 marks, but represents 20% of the Total Assessment.





Note 2


You may find the information on the following page useful

Front page (page 1 of your “PAPER”)






“’Confessions of a Microfinance Heretic’: Talks at Google”


Student No.:


Family Name: Fernandez-pol

Given Names: Jorge Eduardo



Number of words: (for example 1,450 words)


Page 1 ends here


Go to page 2 of your “Paper” à





Page 2 of your “PAPER”

Table of contents

                        Subtitles                                                                   Page #

  1. Introduction


  1. Main Body
  1. Conclusions

Case Analysis

Name of the Student

Name of the University

Author’s Note

Table of Contents

1. Introduction. 2

2. 1 Impact of Microfinance on Poverty. 2

2.2 Collateral Effect of Microfinance on Child Labour 3

2.3 Social Responsibility that must be met by Micro-financiers. 4

2.4 Discussion of Microfinance using the Principal-Agent Framework. 5

Conclusion. 5

Reference List 7

1. Introduction

            The purpose of social innovation is to provide novel solution for the social problems and the solution provided by social innovation is more effective, efficient and sustainable. It focuses on creating the value for society rather than to private individual. Social innovation is a new a new concept and provides the solution related to products, services, models, processes and markets, etc.) which meet the social need more effectively in spite of existing solution (Nicholls and Murdock 2012). It helps in bringing new capabilities and relationship for using the assets and resources in better way.  In better way, it can be said that social innovation helpful for both society and enhance the capacity of society to act (Olsson and Galaz 2012). Business innovation is innovation of new processes for an organization such bringing of new ideas, methodologies, workflows, services and products (Chesbrough 2013). The basic difference between social innovation and business innovation is that the social is innovation is focused on the development of entire society and business innovation is only focused on the development and improvement of organizational processes (Mulgan 2012). Innovation can be utilized in various ways for human development. Innovation can help in removing the challenges and changing the existing condition such as facilities of drinking water, eradicating neglected diseases and eliminating the poverty. New innovation and development of technologies has contributed largely for developing countries. The cooperation of both public and private bodies is necessary to develop new mechanism for identifying new solution.

2. 1 Impact of Microfinance on Poverty

            Microfinance is widely known as a provision of financial services such as credit, saving, deposit, insurance and repayment services to those who are deprived of accessing into conventional financial services because they are poor and they cannot offer collateral (Imai and Azam 2012). The underlying logic is that through extending financial services, low income people will have the ability to participate in the economic market and exploit entrepreneurial opportunities through start-up new businesses extending current business or introducing new activities. Subsequently, they will be able to combat the poverty and satisfy their households’ needs independently and consistently (Van Rooyen, Stewart and de 2012). In contrast, microfinance institutions will have the ability to develop their capacity through imposing a small ratio of interest on the given loans. A large size of microfinance studies from various disciplines suggest that microfinance has significant impact on poverty reduction as well as household wellbeing at deferent levels such as asset acquisition, household nutrition, health, food security, children education, women’s empowerment, and social cohesion. However, recently the impact of microfinance has been questioned and many studies argue that the impact of microfinance is divergent between positive, no impact and even negative impact.

2.2 Collateral Effect of Microfinance on Child Labour

            The rise and development of microfinance institutions in developing countries, and also affect investigation on their clients, has offered ascend to the thought that financial services could be a successful instrument to diminish child labour (Fors 2012). A few effect appraisals assert that microfinance has prompted higher schooling rates and a reduction in child labour among the groups of microfinance clients. On the other side, economic literature also suggests that the development of micro-finance and access to financial services especially increasing in credit facility reduces the child labour (Augsburg et al. 2012). But some research study show that there is also negative impact of child labour. These studies explain that microfinance can increase the child labour indirectly. Microfinance help in expanding the household productive activity and children can also be engaged with that, the amount of credit may increase the opportunity cost for sending children to school.  If the loan amount increases at high level, it can create burden to the parent for the payment of loan. In such case, it becomes necessary to provide support to parents by the children (Chakrabarty 2012). So, in overall, it can be said that credit access may increase the demand of child labour side by side it reduces child schooling.

2.3 Social Responsibility that must be met by Micro-financiers

            The basic goal of a social finance should fulfill the need of society. The financial instrument should be used for promoting the social goals such providing financial support (providing credit). It has been found that many of people are not qualified for taking loan from large institution. So, they face difficult situation for fulfilling their need. In this case, micro finance plays effective role for fulfilling the requirement of poor people by providing credit of small amount (Bateman 2012). It helps the poor people to cope with the better risk and help in bringing income-generating opportunities. Social finance should concern about general public and provide support to lower income populations. Micro-finance can take effective role in eliminating the property and developing of society. So, it can also help in develop the economic environment of a country. The function and objective of Micro-financers should social development rather than only expecting higher return from the borrowers (Odebiyi and Olaoye 2012). On other side, Micro-financiers can provide training and support for setting a business by lower income group of people. It has been found that maximum people become fail to set a business due to not having capital and they also do not able to meet the criteria of financial institutions for getting a loan. In such case, it can take effective action for setting of business for the development of society as well economy. In overall, it can be said that the basic of social financiers should meet the social objective for the development of society.

2.4 Discussion of Microfinance using the Principal-Agent Framework

            The concept of principal-agent theory describes the relationship between the owners and managers of the business. In case of business organization, the interest of owners and managers are not. In the case of microfinance, principal-agent theory can be applied to understand the relationship between borrowers and lenders. The purpose of principal and agent should be same otherwise it can create conflict in the decision. In case of microfinance, the basic goal of lenders is to fulfill the requirement of social needs in the society (Al-Shami et al. 2014). The purpose is to eliminate the property and develop the economy into a better environment.  On the other side, the borrowers borrow the money for fulfilling their need and finding the food, shelter and sources of income for the future. But some time, it can be found that there is conflict between goal of lenders and borrowers. The agent wants to take benefit of poor people for increasing their earnings and profit. On the other side, borrowers misuse the taken credit rather than using in specific purposes. So, it can create difficult situation to meet the common objective of microfinance. So, in actual it the goal deviates from the development of society as well as economy.


            In overall discussion, it is clear that microfinance has effective role for the development society. On the other side, it has also certain negative impact on society. The question is that whether the microfinance meets the societal objective or not. The basic purpose of microfinance is to provide support to the poor people for eliminating the poverty from the economy. But most of cases, it has been found that public are cheated through the microfinance. Most of cases, it has been that their results does not meet the reality. In reality, they are in the market for generating their return rather providing support to the poor people and taking action to the human development and the development of society. Their published results are just to increase the brand of their institutions to the public not for the development of society. The reality does not meet with the press releases.

            Social innovation and business innovation are essential for the human development. In this case both public intuition and private institution should take effective role for the human development. Development of social innovation can fulfill the need of the society and can also develop of society. It can help in increasing the capabilities and building the strong relationship for human development. On the other side, it provides better way for using the assets and resources. Business is also responsible for development of society. It helps in bringing new processes, methodologies, technology for increasing the quality of products and service. It can also help in offering the products to the public at lower prices. So, they can consume the product and follow of money will take place. In the economy, flow of money is essential for the development and to meet the needs of public. In overall, it can be said that both social innovation and business innovation are responsible for human development.

            According to the video of Hugh Sinclair, it is clear that microfinance is not success to meet objective. It is not meet the requirement of the public in reality. In reality, poor people do not get the required money due to existing of so many intermediaries. Whistleblower can also be found in this sector. So in reality money does not reach to poor people and it does not able to fulfill the societal objective.

Reference List

Al-Shami, S.S.A., Majid, I.B.A., Rashid, N.A. and Hamid, M.S.R.B.A., 2014. Conceptual framework: The role of microfinance on the wellbeing of poor people cases studies from Malaysia and Yemen. Asian Social Science,10(1), p.230.

Augsburg, B., De Haas, R., Harmgart, H. and Meghir, C., 2012. The impacts of microcredit: Evidence from Bosnia and Herzegovina (No. w18538). National Bureau of Economic Research.

Augsburg, B., De Haas, R., Harmgart, H. and Meghir, C., 2012.Microfinance, poverty and education. Cambridge, MA: National Bureau of Economic Research.

Bateman, M., 2012. The role of microfinance in contemporary rural development finance policy and practice: imposing neoliberalism as ‘best practice’. Journal of Agrarian Change, 12(4), pp.587-600.

Cajaiba-Santana, G., 2014. Social innovation: Moving the field forward. A conceptual framework. Technological Forecasting and Social Change, 82, pp.42-51.

Chakrabarty, S., 2012. Does micro credit increase child labour in absence of micro insurance?.

Chesbrough, H., 2013. Open business models: How to thrive in the new innovation landscape. Harvard Business Press.

Dos Anjos, P.L., 2014. Conventional social behaviour amongst microfinance clients.

Fors, H.C., 2012. Child labour: A review of recent theory and evidence with policy implications. Journal of Economic Surveys, 26(4), pp.570-593.

Ibtissem, B. and Bouri, A., 2013. Credit risk management in microfinance: The conceptual framework. ACRN Journal of Finance and Risk Perspectives, 2(1), pp.9-24.

Imai, K.S. and Azam, M.S., 2012. Does microfinance reduce poverty in Bangladesh? New evidence from household panel data. Journal of Development Studies, 48(5), pp.633-653.

Imai, K.S., Gaiha, R., Thapa, G. and Annim, S.K., 2012. Microfinance and poverty—a macro perspective. World Development, 40(8), pp.1675-1689.

Link, A.N. and Scott, J.T., 2012. Employment growth from the small business innovation research program. Small Business Economics, 39(2), pp.265-287.

Mulgan, G., 2012. The theoretical foundations of social innovation. In Social Innovation (pp. 33-65). Palgrave Macmillan UK.

Nicholls, A. and Murdock, A., 2012. The nature of social innovation. InSocial innovation (pp. 1-30). Palgrave Macmillan UK.

Odebiyi, O.C. and Olaoye, O.J., 2012. Small and Medium Scale Aquaculture Enterprises (SMES) Development in Ogun State, Nigeria: The Role of Microfinance Banks. development, 2, p.3.

Olsson, P. and Galaz, V., 2012. Social-ecological innovation and transformation. In Social Innovation (pp. 223-247). Palgrave Macmillan UK.

Van Rooyen, C., Stewart, R. and de Wet, T., 2012. The impact of microfinance in sub-Saharan Africa: a systematic review of the evidence.World Development, 40(11), pp.2249-2262.