Unitus, a leader of the microfinance movement, announced today that they are suspending their microfinance activities and redirecting their resources to an as yet unidentified “area of maximum socio-economic impact.”
Acting president Ed Bland said in the press release:
"The fact that we have become largely unnecessary in the microfinance arena is fantastic news and is a tribute to our generous, enlightened donors and the phenomenal staff at Unitus, who worked tirelessly to validate and refine the microfinance model, and advance the operations of our partners.”
I’ve talked with multiple sources familiar with the situation who say that Unitus is not having any financial problems nor are their any problems in their portfolios. However, if the decision is being made strictly for strategic reasons to maximize impact, it seems odd that the announcement would be so sudden.
I am certainly not familiar with the inner details of Unitus and I have no opinion about what exactly is going on. But given the 2009 media storyline of microfinance being a “bubble” and lacking impact, it seems critical to me that Unitus get a hold of the narrative around their closure.
If Unitus is exiting microfinance for negative reasons (which my sources say is not the case), then it helps validate the anti-microfinance narrative. If Unitus is exiting microfinance because they have indeed fulfilled their mission of accelerating microfinance given the vibrant market driven microfinance field and are simply moving on to the next “area of maximum socio-economic impact,” then the event is cause for celebration by microfinance fans.
If you’ve ever doubted the power of narrative, this is a case study unfolding. The way in which the Unitus story unfolds may very well have a significant impact on public perception of the overall field of microfinance.