Savings Outside of Groups

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Savings groups are a popular and effective way of helping poor households increase their savings. But is there a way to incorporate the mechanisms that make them effective outside of the group in savings products in general?

Dean Karlan and Timothy Ogden discuss microfinance

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"What do you do with the households that are so poor that there is no real sustainable livelihood going on?" Professor Dean Karlan and FAI's Managing Director Timothy Ogden discuss some of the recent research into poverty alleviation programs targeting the ultra-poor; questions of internal validity versus external validity; and evaluating economic well-being as well as psychological well-being.

FAI 101: Adverse Selection

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Clearly, poor households would benefit from access to formal insurance. But why is it so hard to get it to them? One reason is what economists call "adverse selection." Watch the video.

FAI Video: Shawn Cole Discusses Microinsurance and Factors Affecting Take Up

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Economist Shawn Cole discusses findings from several experiments on rainfall insurance in India and index insurance products. In Part 2 of this FAI video conversation, Cole discusses an experiment that was conducted in Gujarat, India. Here the researchers were interested in understanding what were the barriers to adoption of a particular product. The goal of the study is to help farmers manage risks due to failed monsoons when making production decisions. 

Carlos Danel: Part 2 - The Future of Microfinance

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In 1990, Carlos Danel and Carlos Labarthe co-founded Compartamos—which means "let's share" in Spanish—to provide poor residents (mainly rural women) of Mexico with access to economic opportunities. At its inception Compartamos was a nonprofit organization serving mainly indigenous, rural women in some of the poorest regions in Mexico. The company has since evolved into a commercial bank. While some are critical of the company for what they believe is its emphasis on profits over social returns, our research into microfinance and social investment provides a more nuanced response to the criticism. Nonetheless, there's no denying Compartamos' impact on the region. It is currently one of the largest microcredit institutions in all of Latin America. Most of its more than 600,000 clients live in rural areas of Mexico.

Turning Interest Into Savings

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Low-income households are often trapped in a "debt-cycle": They borrow to cover necessary expenses, repay the loan with their subsequent income, then borrow again because they have nothing remaining after repayment. Inconsistent income and seasonality, especially for farmers, makes borrowing attractive at the time of necessity.

Jonathan Morduch: Credit Is Not a Right

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Is credit a human right? Muhammad Yunus, the most visible leader of a global movement to provide microcredit to world's poor, says it should be. NYU's John Gershman and FAI's Jonathan Morduch disagree.

Carlos Danel: Part 3 - The Indian Microfinance Crisis

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In 1990, Carlos Danel and Carlos Labarthe co-founded Compartamos-which means "let's share" in Spanish-to provide poor residents (mainly rural women) of Mexico with access to economic opportunities. At its inception Compartamos was a nonprofit organization serving mainly indigenous, rural women in some of the poorest regions in Mexico.

Carlos Danel: Part 1 - The SKS IPO

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In 1990, Carlos Danel and Carlos Labarthe co-founded Compartamos-which means "let's share" in Spanish-to provide poor residents (mainly rural women) of Mexico with access to economic opportunities. At its inception Compartamos was a nonprofit organization serving mainly indigenous, rural women in some of the poorest regions in Mexico.

FAI Insights: What Is Rigorous Impact Evaluation?

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Michael Clemens, Senior Fellow at the Center for Global Development (CGD) and visiting scholar at the Financial Access Initiative and at NYU-Wagner and the NYU Dept. of Economics (Spring 2011), talks about the findings from his research into the UN Millennium Villages.

Targeting the Ultra Poor

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Can the poorest be reached with finance? "Ultra poor" members of society face a series of constraints and deprivations that distinguish them from the general poor. Limited social networks, chronic malnutrition, and reliance on patronage systems characterize a socioeconomic class that is hard to "bank."

Stuart Rutherford on Portfolios of the Poor Part 3

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Stuart Rutherford outlines the three major challenges Portfolios of the Poor authors continually observed among diarists: 1) extreme poverty is not only about being very poor, but about managing daily expenses with unpredictable earnings and unreliable jobs: 2) the hardships of limited earnings are compounded by emergencies to which the poor are so vulnerable, forcing already-poor households to patch together an adequate level of cash; and 3) low wages and frequent emergencies prevent households from assembling usefully large sums for bigger expenses, such as housing, marriages, and education, etc.

Introduction to Portfolios of the Poor: An Interview with Bob Christen

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Bob Christen, director of the Financial Services for the Poor Initiative at Bill & Melinda Gates Foundation, offers a thoughtful introduction to Portfolios of the Poor. Critical to the value of microfinance, he states, is the recognition and understanding of the nuances in the financial lives of the poor: broader financial inclusion can be achieved in ways that extend beyond loans for investment purposes. Portfolios revealed that what poor households need are better ways to manage and save their limited resources. Christen emphasizes that with this awareness, microfinance practioners can design a better generation of financial instruments for the poor, and identifies Portfolios of the Poor as the "guide" to achieve this goal.