Beware Financial Inclusion
In about two months, there will be an important meeting in London, the Global Forum for Financial Inclusion, sponsored by such institutions as VISA, CitiBank, and MasterCard (not the foundation, but the company itself that issues credit cards).
The Forum is also sponsored by the Center for Financial Inclusion, CFI, an outstanding outfit run by great people who bring intelligence, hard work and vision to reforming microfinance and increasing outreach. I used to work for CFI, so I know what I’m talking about.
But the guest list at the Forum feels wrong, wrong, wrong. Oh, I know, it would be great to reform the big banks. But, uh - CFI, with all respect, it’s not going to happen. If you think for even a second that CitiBank will ever serve the interests of poor people, I’m afraid you are fooling yourself.
Harriet Tubman, an American woman who escaped from slavery herself and then worked tirelessly to free other slaves, knew from first hand experience the mind of the oppressor, and said this, in giving advice to president Lincoln:
Suppose that was an awful big snake down there, on the floor. He bite you. Folks all scared, because you die. You send for a doctor to cut the bite; but the snake, he rolled up there, and while the doctor doing it, he bite you again. The doctor dug out that bite; but while the doctor doing it, the snake, he spring up and bite you again; so he keep doing it, till you kill him. That’s what master Lincoln ought to know.
And that’s what CFI, and all the proponents of financial inclusion, ought to know. Big Finance, which just a few years ago earned billions by wrecking the world’s financial system, driving people out of their homes in the process, and becoming even more “too big to fail” in the process, will keep biting us again and again by manipulating the system, buying politicians to reduce regulation, influencing tax law, manipulating interest rates, developing complicated derivatives to fool people, and pocketing even more billions of dollars, until they are tightly regulated, which may now be impossible since they are more powerful than most elected politicians. And if we can’t regulate them, we must find alternative ways through which people can have financial services which are affordable and transparent, and serve their needs in the long run.
To be very clear, I’m not suggesting that Savings Groups are the only way for people to have affordable and transparent financial services. Check out your local Credit Union, or my bank, One Pacific Coast. There are many financial institutions that invest locally, take responsibility for the impact of their investments, and are transparent. But CitiBank, Visa… I don’t think so.
Unless you are hopelessly a fan of corporate banking (and if you are, you are probably reading the wrong website - maybe try Forbes instead?), you might enjoy this story by The Onion, the American satirical website. It’s a joke, but like many jokes, it contains much truth.