March 16, 2012
A sampling of what we've been reading this week from around the web:
March 13, 2012
The original promise of microcredit was to reduce poverty by fostering self-employment in low-income communities, an idea first promoted at mass scale in Bangladesh (Yunus 1999). But critics of Muhammad Yunus and the Bangladesh microcredit model argue that supporting larger businesses (small and medium enterprises or SMEs) may instead create more and better jobs for poor individuals (e.g., Karnani 2007, Dichter 2006). That’s only possible, however, if those larger enterprises employ poor workers in large...
March 8, 2012
Articles, blogs and papers we've been reading over the past month:
March 7, 2012
Last week Public Radio International reported on two young middle-class Indian men who spent three weeks in Bangalore living on 100 rupees a day followed by one week living at India’s controversial new poverty line of 32 rupees a day (roughly equal to 60 cents).
March 6, 2012
FAI is excited to announce Timothy Ogden has joined as Interim Director.
February 21, 2012
The notion that we cannot count on brick-and-mortar investments to massively expand access to finance in developing countries is now widely accepted. We need to go branchless, and to do so safely we have an opportunity to leverage mobile phones that are increasingly ubiquitous. That’s clear at an infrastructure level, but I don’t think there is much understanding of what that means at the service level. Let me paint the picture as I see it, at the risk of sounding all high-level and new agey. ...
February 15, 2012
What products are “right” for people who are outside of the formal financial system and/or poor? It’s a question as relevant in developed economies as in developing ones. During the housing bubble in the US, financial inclusion was often a justification for what in retrospect looks more like predatory behavior.
February 13, 2012
Part 1 ("The Economics of Microsavings") of this brief exploration into the economics of savings-driven microfinance looked at the role of microsavings at microfinance institutions. In one large study, poor borrowers, despite accounting for 75% of active accounts, only contributed 3% of total deposits mobilized, mainly because they maintain low balances.
February 6, 2012
I have a confession to make. When I began composing this blog, I approached it with a fairly simple hypothesis: Microfinance institutions (MFIs) that engage in large-scale deposit taking must likewise grow their loan portfolios. After all, deposits are a source of funding with high operational cost that must be appropriately offset by growing revenue, and only microfinance portfolios provide yields high enough to achieve that.
January 31, 2012
The microcredit movement is premised on the idea that access to capital will be liberating, empowering, and profit-making. But as the Indian microfinance sector closed out another year, it’s hard to be so ebullient.