The award of the 2006 Nobel Peace Prize to Bangladeshi economist Muhammad Yunus—founder of Grameen Bank and a prominent advocate of microfinance—drew worldwide attention to the link between microfinance and conflict prevention.

E.S. “Sam” Kona, of DAI’s new Kenya Transition Initiative Program, returned to that issue in a paper presented in Mombasa this month, where he argued that peacebuilding should be a primary goal of microfinance practitioners and institutions.
Kona spoke to students at the School of Applied Microfinance as part of a two-week course for managers, lenders, and others who facilitate financing for small businesses. Students from throughout Africa, the Middle East, and Asia attended.

Kona, an expert in the role of economics in stabilizing at-risk communities who is currently advising DAI’s Kenya Access to Rural Finance Program, said the chances of conflict are lessened when a nation’s entrepreneurs are given a solid foundation on which to do business.

Among the factors that exacerbate local and regional tensions, said Kona, are economic decline, wide gaps between haves and have-nots, power-grabs for state resources, an abundance or scarcity of natural resources, and a disproportionate number of unemployed young people (the youth bubble).

Many of these factors can be mitigated by microfinance practitioners who contribute to and advocate for an improved and more equitable business climate, including efforts to create a fair economic playing field, push governments to support a broad-based business sector, champion ideas and enterprises that create jobs for young people, encourage businesses to work together instead of fighting each other, and discourage business that triggers illegal activities such as smuggling, trafficking, and corruption.

The School of Applied Microfinance teaches topics such as accounting and financial analysis, good lending and credit practices, marketing, product costing, and portfolio management.