Dear Friend,

Last week, The Wall Street Journal published an excellent article critiquing the microfinance industry, including borrower overindebtedness, predatory lending practices, and research suggesting that some forms of microcredit have not delivered the poverty reduction once promised.

The concerns raised in the article are among the reasons Five Talents transitioned many years ago from a credit-led microfinance model to a holistic savings-led model that focuses on long-term resilience.

After many lessons learned (and still learning), Five Talents developed our methodology because it has benefits that go beyond economics. For a more detailed explanation of our approach, read my response, which breaks down the critical distinctions between the credit-led model and Five Talents’ savings-led approach.

For those of you who have reached out in recent days to thank us for taking a different approach, we are so grateful for your words of encouragement and support! Your partnership helps make this work possible. Together, we are helping families build resilience, opportunity, and hope for the future. If you have any questions, please feel free to reach out.