Editor’s Note: I hadn’t appreciated the role that normalcy plays in allowing me to be sarcastic and jokey about the various topics I write about, until, well, everything stopped being normal. Please allow me some grace as I try to find a tone that is appropriately direct and honest, and still tries to find some humor in these dark days. - Tim
Read MoreViewing all posts with tag: microfinance
The Designed for Whom? Edition
Editors’ Note: Hi, it’s Laura and Jonathan again. As a reminder, we’re taking the wheel here every other edition and Tim will be back with you in a couple weeks. One question kept surfacing as we assembled this edition. Emergency savings advice built for stable households, child savings accounts that work best for families who already have 529s, and jobs policy that still imagines a mid-20th century labor market—Who are these systems designed for, really? - Laura Freschi and Jonathan Morduch
Read MoreThe Please Don't Unsubscribe Edition
Editors’ Note:The reborn faiV newsletter is on an every-two-week schedule. Tim Ogden wrote it for years, and it’s been Tim’s baby. But we’re here to provide another set of voices. Don’t worry, Tim will be back in 2 weeks. About us: Laura is FAI’s Deputy Director and, as she writes below, spent years writing and analyzing foreign aid policy. She now lives with her family in northern Italy. Jonathan teaches at NYU and used to write about finance as it connects to poverty. These days, he’s mainly writing about poverty as it connects to finance. - Laura Freschi and Jonathan Morduch
Read MoreAssessing the Future of Microfinance as a Development Tool: Continuing the Conversation
Co-hosted by the Financial Access Initiative (FAI) at NYU and FinDev Gateway, this faiVLive webinar held on October 3, 2024 continued our exploration of the present and future of microfinance in development policy and practice. We discussed pressing questions for funders, practitioners, and policymakers.
Read MoreThe Raining, Pouring Edition
Editor's Note: Just as I was returning from an excellent but exhausting weekend running a conference for my older son's ultra-rare genetic syndrome, my younger son broke his leg. Nothing like recovering from exhaustion by spending several nights sleeping in the pull-out chair/bed in a hospital room. And then Debby arrived on the US East Coast bringing 5 to 20 inches of rain, so the raining, pouring joke I'd been making all week seemed predestined.
- Tim Ogden
The Maybe Don't Hate Mondays Edition
Editor's Note: The next in the long series of faiV experiments—we're going to start sending it out on Mondays rather than Fridays for a bit. That gives me more time on Friday to assemble and write without it coming out well past the start of Asia/Europe weekends. We'll see how that goes on my side and on the opening/clicking side for a few weeks and then, who knows?
And just in case you need a reminder of a some good news, the cheaper of the new malaria vaccines is starting to be deployed in Ivory Coast today.
- Tim Ogden
The You Seem Vaguely Familiar Edition
Editor's Note: You're not hallucinating, experiencing a weird time warp or flashback. But maybe I am.
- Tim Ogden
1. What the hell?
Yes, this is a new faiV, for the first time since [checks notes; checks notes again; checks calendar on current date; checks calendar on current date and year; hangs head in shame and disbelief] June, 2021. So, you (and I) could hardly be blamed for asking "What the hell happened?" The answer is complicated but mostly prosaic: my time has been focused on a seven-country financial diaries study, and three or four other field work projects that we've been running or participating in. But it's also that the world that the faiV existed in and was a part of has changed a lot. Here I don't mean the pandemic etc., at least not directly. I mean that the world of information creation and sharing has changed dramatically. As we contemplated reviving the faiV at various times in 2022 and 2023, we kept running into barriers like: what platform should we be using? What's getting through email filters now? How do we gather the information to write a faiV? Where are people posting now?
The Microfinance Promise: Developing Worlds Interview Part 5
In this concluding excerpt, Morduch and Labie discuss the continuing relevance of microfinance, and re-assess an influential paper authored by Morduch in 1999 called “The Microfinance Promise.” While much has changed since the paper came out, Morduch says he’d keep the title— “The sector can count incredible successes, but the biggest economic and social ambitions remain as promises.”
Read MoreMicrofinance Methodologies: Developing Worlds Interview Part 4
Morduch and Labie discuss trends in thinking around how microfinance has been delivered and funded over the past decades, including group lending, subsidies for microfinance, the tension between the need for discipline and flexibility, and how advances in technology are shaping the field.
Read MoreMicro-financing Women’s Empowerment and Rural Development: Developing Worlds Interview Part 3
Morduch and Labie take a look back at two of the original goals of the microfinance movement—empowering women, and bolstering rural development—and discuss the evidence on how well interventions have achieved those aims.
Read MoreBuzzwords in Microfinance: Developing Worlds Interview Part 2
Microfinance is a rich text for students of rhetoric. In practice, each shift in wording has brought a shift away from concerns with poverty and social justice toward finance for less poor populations.
Read MoreThe Evolution of Microfinance: Developing Worlds Interview Part 1
In a recent interview for the journal Mondes en Développement Jonathan Morduch looked back at what we’ve learned about microfinance and financial inclusion in the past decades, and shares how he thinks those lessons can shape future policies to help poor families better manage their money.
Read MoreThe Revolution MUST be Digitalized
If MFIs fail to digitalize, it could mean the end of financial services for the rural poor, because the business case is so challenging, particularly compared to the diverse, low-cost opportunities to serve the higher-value, connected urban market. In short, this could end years of progress towards financial and social inclusion.
Read MoreWhy Will this Crisis be Different for Microfinance?
In a new article out from the Economics Observatory, FAI’s Tim Ogden and Jonathan Morduch, along with their co-authors Muhammad Meki, Simon Quinn, and Farah Said explain the global and local forces that combine to make the crisis brought on by the coronavirus pandemic different from past disruptions.
Read MoreMicrofinance Investors are Boxed In - and DFIs Need to Step Up
Thanks to the COVID-19 crisis, many microfinance borrowers can’t repay their loans. That in turn means that microfinance institutions (MFIs) won’t be able to fulfill obligations to their investors. And that means that microfinance investment vehicles (MIVs) will have trouble maintaining obligations to the ultimate funders, who are often large, well-financed Development Finance Institutions (DFIs). So, there’s a value chain that often looks like this: Customers < MFIs < MIVs < DFIs. And if the chain breaks down, customers end up alone and without support.
Read MoreFinancial Consumer Protections in Unprecedented Times
by Dave Grace and Elisabeth Rhyne
During the economic slowdown in response to the novel coronavirus, the position of financial institutions is in some ways analogous to that of medical workers fighting the virus—without the health risk. Financial institutions have a duty to help their clients, even though doing so exposes them to increased risk. This is especially true for microfinance institutions, financial cooperatives and other bankers who serve lower income and vulnerable people. For these providers, taking steps to help customers like forgiving loans or offering payment holidays potentially threatens their own survival. Financial institutions are asked to support their small business and household customers through this unprecedented situation, even while their own solvency is challenged.
COVID-19: How Does Microfinance Weather the Current Storm
By Tim Ogden and Greta Bull
This blog post was originally published on CGAP.org.
COVID-19 has unequivocally arrived in the developing world. Hundreds of cases have been reported across Latin America and South Asia, and now there are at least 30 countries in Sub-Saharan Africa reporting infections. South Africa and India both announced yesterday that they would go into lockdown for three weeks, and others may soon follow. With health-care systems ill-equipped to cope with a pandemic, there are many reasons to believe that the effects of the virus in these countries will be even more damaging than in the developed world, with higher mortality rates.
Read MoreThe Most Vulnerable Small Businesses and Communities Will Be Left Behind Without Targeted Action: The Fed and Treasury Can Make Sure They Are Not
By Bill Bynum, Joyce Klein, and Tim Ogden.
This blog post was originally published on the Aspen Institute.org.
You’ve heard about how important small businesses are to the economy and the nation. You’ve heard various figures being proposed to help those small businesses: $300 Billion, $350 Billion, $500 Billion.
What you likely haven’t heard is who typically receives small business stimulus funds. Even with the vast figures being proposed those funds won’t reach the most vulnerable businesses or the most vulnerable communities. We know because we’ve seen it in the past.
Read MoreNew Publication: Exploring the Business Models Behind Microsavings
In a new paper, Exploring the Business Models Behind Microsavings, FAI affiliate Daniel Rozas seeks to disentangle some of the existing complications in the microsavings story by exploring several key questions:.
- How might one define the different models by which MFIs provide savings?
- How are they distinguished, where are they more prevalent, and which institutions are more likely to adopt them?
- And is there a difference in outcomes—in terms of cost, outreach, and profit?