In 1895 Priyayi Bank in the Purwokerto district of the Dutch East Indies became the first outpost of Friedrich Wilhelm Raiffeisen’s credit union cooperative movement in what we now call the developing world, and the predecessor of Bank Rakyat Indonesia (BRI), the world’s oldest and largest microfinance institution (MFI). BRI now has over three million borrowers, a staggering 30 million depositors and total assets of $3.5 billion. And it’s profitable.
This story de-bunks at least five myths about microfinance. It’s not new, it’s not small, it’s not just about loans, it’s not charitable, and it didn’t start in Bangladesh. To be fair on Bangladesh, it does have three of the four largest MFIs, including Grameen Bank, which shared the 2006 Nobel Peace with its founder Muhammad Yunus.
