Bloomberg News, 2023
Author(s): Gavin Finch, David Kocieniewski and Sinduja Rangarajan
In a powerfully produced and reported series, a team of Bloomberg journalists uncovered a global microfinance industry that was intended to provide banking services to low-income individuals or groups who otherwise wouldn’t have had access to financial services.
The reporters found that development banks, which provide loans to develop poorer countries, and their associated commercial lenders, have left thousands of low-income people around the world in an unending cycle of crippling debt.
The Bloomberg series exposed a network of microfinance companies, backed by larger financial institutions, that often use aggressive sales tactics and predatory collection practices, all under the banner of financial inclusion and reducing poverty.
The journalists found women in Cambodia who were forced to sell their homes; women in Jordan who were sent to prison because they couldn’t pay; and cases of suicide or attempted suicide in Sri Lanka.
Led by Gavin Finch, David Kocieniewski and Sinduja Rangarajan, the Bloomberg News series has prompted the World Bank – a leading advocate for financial inclusion – to investigate alleged abuses by Cambodian microfinance companies. This work also has resulted in the House Oversight Committee pushing U.S. development agencies to require more accountability and better consumer protections from the banks.
The series was supported by a database created by Rangarajan, senior investigative data reporter at Bloomberg, that enabled the team to track where the world’s six biggest development banks sent billions of dollars of financial support for the microfinance industry. In one story, the Bloomberg team followed the money raised by a JPMorgan-structured, $175 million collateralized loan obligation – a debt security that is essentially sold to a group of investors who receive scheduled debt payments from the underlying loans.
As one serial microfinance borrower put it: “Borrow, pay. Borrow, pay. Borrow, pay. We are stuck, and there is no way out.”