Microfinance aims to accomplish two difficult goals at the same time: to create meaningful social impacts and to give investors a decent return on their money. The success of microfinance rests with getting the balance right. Fortunately, not all investors demand high financial returns, and not all demand high social returns. That diversity of preferences among investors gives room to maneuver. The crises in microfinance emerge when the balance between doing good and doing well gets too far out of whack.
“Microfinance & Social Investment” is a new research paper from Jonathan Conning and Jonathan Morduch. The paper begins with controversial debates currently facing microfinance, but the authors’ larger goal is to describe a framework for understanding the roles of social investment and commercial investment. By putting a corporate lens on microfinance, the study explains the rationale behind high interest rates, the difficulties serving the poorest markets, and the differences between non-profit versus for-profit microfinance institutions.
Watch an interview with Jonathan Morduch describing his motivation to write this paper (Part 1):
FAI Insights: The Financial Access Initiative's Jonathan Morduch explains the motivation for his most recent research report with Jonathan Conning on "Microfinance & Social Investment." This is part 1 of a two-part video series. To access the study or learn more: http://financialaccess.org/node/3706
Watch Part 2 of this video series in which Jonathan Morduch explains the research agenda behind "Microfinance & Social Investment":
FAI Insights: Jonathan Morduch explains the research agenda for his new study with Jonathan Conning on "Microfinance & Social Investment." This is part 2 of a two-part video series on the subject. To access the study or learn more: http://financialaccess.org/node/3706