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Microfinance pioneer visits ThunderbirdMicrofinance pioneer visits Thunderbird

Companies that want to survive the global financial crisis and create sustainable value for shareholders need to start by creating value for their clients, microfinance entrepreneur Carlos Danel Cendoya said Feb. 10 at Thunderbird School of Global Management.

“Any sensible investor understands very well that in order to have economic success, they need to create value for their clients,” Danel told a group of about 50 students, faculty and staff at the graduate business school in Glendale, Ariz. “I think we often go into things that create value for everyone except the client, and we don’t focus enough on the value we create for them.”

Danel’s clients at Compartamos Banco in Mexico include more than 1 million low-income families that traditional banks often overlook.

His company stirred debate in 2007 when it became the first microfinance operation to go public — with shares traded in New York and Mexico. Nobel Peace Prize winner Muhammad Yunus and others blasted Compartamos Banco for profiting from the poor.

They said the bank would exploit Mexico’s rural poor in its rush to pay high dividends to investors, but Danel called these concerns short-sighted.

“We have very good examples of companies, when they do abuse their clients, they collapse,” he said. “Our mission at Compartamos Banco is to create social, economic and human value for all stakeholders. If we are unable to do that because of pressure from our shareholders, then it’s not going to last.”

To read more and watch videos of Danel, visit the Thunderbird Knowledge Network.