Some regard it as the perfect form of development aid, as the best way people that can become self-reliant and leave poverty behind for good. Microcredit. Small loans to small businessmen, who otherwise would not be able to raise the money. Not a gift, a loan.

On Monday, in the presence of Princess Máxima of the Netherlands, Radio Netherlands Worldwide started a microfinance project which, as the editor-in-chief put it, aims to put aside the rose-tinted glasses. And the princess set the tone.

"Microfinance, who profits?" is the question RNW intends to answer bit by bit. The kick-off for this project took place in the Peace Palace in The Hague.

Touching moment
Linda Flores, a tortilla baker from Nicaragua took the stage to tell her story. A modest loan enabled her to give her family a job in her bakery. The business is doing well and she made a public promise in The Hague that she would send her children to school again next year. A touching moment which clearly moved the audience. Princess Máxima warmly thanked a beaming Linda Flores in Spanish.
 
On the RNW website, by contrast, you can see a video about a small Indian farmer who bought a cow which then became sick and died. It's unlikely she will be able to pay off her loan and the pressure on her growing. Her creditors want their money. The farmer says suicide seems the only way out of her suffering.
 
Princess Máxima, who is married to Dutch Crown Prince Willem-Alexander, sounded another critical note at the RNW meeting. She identified a growing problem in the world of microfinance. Moneylenders out to make a quick profit.
 
"We have to note that in certain markets some institutions have raised the yields, even as their operating expenses have been coming down. In these cases profits have started to play a more important role than sustainability."
 
Over-enthusiasm
Surprisingly critical words from the princess. But she was not the only one to go on the offensive in the Peace palace. Dutchman Klaas Molenaar, who gives advice about microcredit all round the world, witnessed how things went badly wrong in Afghanistan as a result of over-enthusiasm.
 
"Ooh, that's very bad. Very, very bad. I've seen donors coming in at a post conflict situation with a lot of money. That's so in conflict with the history of microfinance. It has to grow gradually and organically. There is no capacity when the donors just want to push in money."
 
Al those present agreed that microcredit is an invaluable tool. A small loan can permanently change human lives. Rik Rensen referred to a remark made by Princess Máxima some time ago that earning a dollar feels better than being given a dollar.
 
Lending not enough
But that was too simple to serve as the final conclusion. All those present supported the position that simply lending money is not enough. Microcredit only really has a future as part of a total package. Abureza Faisel Rahman, director of British organisation Fair Finance, spoke about his ideal form of microcredit.
 
"The issue about microfinance is: is it more than just about finance? And that's the question I think challenges everyone. How do you get about a billion people with more than just credit. How do you get to a billion families with education and with services that are actually be for progress. And that I think is the nub of all of these discussions."
 
That brought to an end a critical afternoon's examination of a promising financial phenomenon. The fact that microfinance was subject to and fended off so much criticism probably demonstrates that it has reached maturity.
 
And that the discussion needs to be continued.
 
You can do that on the Radio Netherlands Worldwide website. Go to the Microfinance Dossier and record your opinion or watch one of the video portraits of small businessmen and women whose lives have been changed by a microloan. Happily for the better in majority of cases, but not always...

Lead photo: (from left) Bert Koenders, Minister for Development Cooperation, Princess Máxima and RNW Director General Jan Hoek