Whose Sustainability Counts?: BASIX’s Long March from Microfinance to Livelihoods

Is microfinance failing to meet its promise? Several recent events have undermined confidence in microfinance and microfinance institutions (MFIs). They range from the collapse of the microfinance industry in Andhra Pradesh, to the Bangladesh government’s dismissal of Grameen Bank President Muhammad Yunus, Nobel Prize–winner and venerated father of microcredit, to the increasing publicity about micro-loan debt bondage and debt-induced suicides of MFI clients in the subcontinent.What do these crises signify for the future of microfinance? Are the basic principles of finance for the poor salvageable? Can the model be improved?From its inception in 1996, BASIX—one of the largest microfinance institutions in India—has realized that focusing solely on loans will not improve the lives of its poor clients. Recognizing that the complex problems of poverty require complex solutions, it has melded financial services with livelihood development and institutional sustainability to achieve its goals, all the while maintaining impeccable ethical standards and practices of social inclusion that give voice to the poor who rely on the financial services BASIX provides them.Malcolm Harper cuts through the cynicism and disillusionment about microfinance with his account of BASIX to show how the organization offers pathways for a revamped MFI of the future, one that responds to poor clients’ diverse needs equitably and effectively.