June 26, 2014
A new paper by Chris Blattman (Columbia) and co-authors provides optimistic new evidence on the returns to providing cash grants to impoverished women in northern Uganda. The new experiment varied whether the ultra-poor, largely women, were offered a business grant worth $150, training and supervision, and found dramatic impacts of the cash grant on entrepreneurship, hours worked, individual earnings, and household consumption.
The paper stands out from previous studies in that it finds...
June 23, 2014
Stephanie Hanson, Mike Warmington
An Expert Recommendation from our Big Questions Section on the topic of Credit
The majority of the world’s poor share one profession: farming. Most of these farmers cultivate less than 10 acres of land, far away from paved roads and with limited access to the improved seed and fertilizer they need to produce good harvests. Most of these farmers also lack access to financial services that could help them buy that seed and fertilizer. If the global microfinance industry seeks to have a long-term impact on global poverty, it must address the needs of smallholder farmers. Most microfinance institutions are focused in urban and peri-urban areas, but a few are...
June 20, 2014
1. Microfinance: New evidence from Morocco is the latest addition to the debate on whether microcredit can raise income and reduce poverty. The Economist
2. Credit: Arguing about fees in the small-dollar credit market distracts from more productive...
June 19, 2014
What does it mean to live between poverty and the middle class? In a multi-media report released last week, Al Jazeera America digs into the lives of 5 Californian families that "earn too much to receive most government benefits yet too little to reliably make ends meet."
Olivia and Jose Aguilar in front of their niece's home in...
June 17, 2014
Mudita Tiwari, Deepti KC
In Dharavi, Mumbai, the largest urban slum in Asia, groups of women make papad, crispy lentil dough wafers, for Lijjat Papad Company, one of the world’s largest papad retailers. Lijjat requires any woman who works for the enterprise to first open a savings account, and to encourage savings, the company deposits a small proportion of the women’s earnings (2 rupees of every 32 rupees earned) directly into the savings accounts, adding a bonus during the Diwali festival.
June 13, 2014
1. Financial Services: An audit study of financial institutions in peri-urban Mexico found staff voluntarily provides little information about avoidable fees and clients are almost never offered the cheapest product. The World Bank
2. US Income Inequality...
June 11, 2014
Whether it is education generally or domain specific skills, it seems obvious that imparting knowledge and skills should be an effective approach for improving outcomes. What’s not so obvious is how to deliver useful knowledge and skills. A few new papers shed some light on two areas of specific interest to us: financial literacy and business training for microentrepreneurs.
A new paper based on a two-year, in-school,...
June 10, 2014
June 6, 2014
1. Financial Inclusion: As part EMERGE: The Forum on Consumer Financial Service Innovation, attendees got a taste of what it is like (including how expensive it is) to be unbanked. ...
June 2, 2014
Popular financial advice guru Dave Ramsey has long advocated for what he calls the “debt snowball” approach to repaying debt for financially stressed households: order your debts by amount, smallest to largest, and repay them in order, ignoring interest rates. This sounds decidedly unscientific, and from a classical economics perspective it is bad advice. Rational actors should settle debts with highest interest rates first, regardless of the size of debt, in order to...