Protecting The Environment: Green Microfinance. Or Green Micro Finance Institutions?

• Author: Fabio Daneri
• Position: University of New York Tirana
• Pages: 113-118

ISSN 2410-3918 Academic Journal of Business, Administration, Law and Social Sciences Vol 1 No 1

Acces online at www.iipccl.org IIPCCL Publishing, Tirana-Albania March 2015

113

Protecting e Environment: Green Micronance

Or Green Micro Finance Institutions?

Fabio Daneri

University of New York Tirana

Abstract

is paper represents a critical review of several papers and books written on the subjects of

micronance, poverty and environmental protection. It aims at linking the dierent themes and

also to oer specic suggestions on how micronance can provide solutions which are benecial

to the environment. e paper also concentrates on the disparities between rich and poor and how

they inuence the implementation of environmentally damaging activities. ese activities are in

fact implemented with a clear damage to the poor, especially at local level, where the poor has

diculties to protect itself due to the dierences in power between the rich and the poor. Particular

attention is also dedicated to the issue of environmental sustainability vs. Micronance Institutions’

sustainability since the promotion of environmental activities implies costs to be born by Micro

Finance Institutions. In fact, it must be highlighted that sustainability is a fundamental issue for

MFis. e majority of MFIs normally struggle for their existence, since their objective is to work

with poor and dicult clients and they mainly operate in very dicult business environments.

e nancial sustainability of MFIs is therefore a crucial prerequisite for the provision of nancial

services to the poor layers of the population. Additional costs concerning environmental protection

can be born only if adequate nancial support is provided by external donors.

Keywords: green, micronance, environment, sustainability, micronance institutions, poverty.

Introduction

Micronance is dened as the practice of providing nancial services to poor customers.

e poor are therefore considered as the main target of micronance activities, so that

micronance aims to help the subjects who are also very oen damaged by the presence of

environmentally costly activities. In fact, that’s the introductory framework described by

J. K. Boyce in his interesting paper “Inequality as a cause of environmental degradation”.

Boyce suggests that both winners and losers can be identied with regard to an activity

which is environmentally degrading. Winners are those who implement the activity and

gain a benet from that, losers are those who suer more from that. According to him,

environmentally costly activities are mainly implemented due to the disparity of power

between the rich and the poor1.

We are in particular discussing about activities which are implemented and have their

negative eects mainly at local level, so that they represent a cost only for the poor. For

example, we can think about the localization of an environmentally costly activity in the

poor part of town. It’s a typical situation that can be found in many developing countries as

The disparity factor is what allows the rich to implement the activity despite the damage that it

represents for the poor.