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

AuthorFabio Daneri
PositionUniversity of New York Tirana
ISSN 2410-3918 Academic Journal of Business, Administration, Law and Social Sciences Vol 1 No 1
Acces online at IIPCCL Publishing, Tirana-Albania March 2015
Protecting e Environment: Green Micronance
Or Green Micro Finance Institutions?
Fabio Daneri
University of New York Tirana
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.
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.

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