A big part of PR is brand and association. When we say “computer companies” you might say Apple or Dell… we say “Wall Street” you say Goldman Sachs…. you get the point. But, what happens when we say “microfinance”? Those outside the industry will probably scramble for answers. That said, if your organization engages in microfinance, then your PR brand thrives or suffers along with the image of the industry – unless you’ve taken steps to distinguish yourself.
Microfinance was once lauded by politicians and the media. One prominent microfinance institution, Grameen Bank, won a Nobel Peace Prize in 2006 along with its founder Muhammad Yunus. But microfinance has come under serious scrutiny because several crises have arisen all at once. Oversaturation of loans, high interest rates, mixed results for borrowers, and large profits for lenders have tarnished the industry image.
Grameen was harshly criticized in a Norwegian documentary which claimed that $100 million were improperly transferred to a bank affiliate. SKS Microfinance, the largest microfinance institution in India, has been questioned about the suicides related to microloans in Andhra Pradesh, India’s fifth-largest state. This isn’t the best kind of media attention. Even worse, SKS doesn’t seem to be sympathetic. Their statements to the press are bland (“The trigger factors for suicide are manifold, such as stressful situations at home,” according to Bloomberg).
When the PR and press were good, these institutions should have taken the opportunity to make themselves distinct, develop their brand, and control their own fate. Instead they relied on the goodwill associated with the microfinance industry and now lack the tools to respond and manage the problems of the industry – in other words, they lack good PR.