Microlending Taking Off in the US?

As banks tighten their lending criteria in response to the financial crisis, would-be entrepreneurs are finding that they can’t get start-up capital from the usual sources, and some small business owners are turning to microlenders like ACCION USA, Grameen America, and home-grown institutions like the Wisconsin Women’s Business Initiative...

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Measuring Use of Loans

A recent post from Alex in the Philippines addressed the common uses of microfinance loans, which leads logically to two follow-up questions.  How do we actually know with any certainty what microfinance clients do with their loans given that money is fungible? And, secondly, should we care as long as the loans are paid back?

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How are micro-loans used?

A frequent question that I get from friends and family members about the microfinance projects I work on for IPA is, “What do people actually do with the loans?”

Perhaps these questions come from confusion over the large differences between the economies of the developed versus developing world.  About 13% of the labor force in the developed world is self-employed versus about 49% in the developing world...

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Getting cash out from under the mattress and into the bank

Cash under your mattress?  These days it’s easy to feel like keeping our money at home—literally– may be the safest place for it. The Bill & Melinda Gates Foundation, though, is making a global push to get money into savings accounts, and Pascaline Dupas and Jonathan Robinson have just finished a paper that makes the cleanest case yet for getting money out from under the mattress...

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Did Congress worsen the banking crisis?

Researchers and financial analysts are still sorting through causes of the financial crisis. One target is the Community Reinvestment Act (CRA), which requires that banks to lend to low and moderate income people in the communities where they take deposits. Among the naysayers are Ron Paul, who charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks," and Jeffrey A. Miron, an economics professor at Harvard, who called for “getting rid” of policies like the CRA that “pressure banks into subprime lending.” But Paul and Miron may now have to eat their words...

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Mobile Banking

Fast, convenient and easy: the holy trinity of marketing adjectives. Any product or service that can legitimately claim to be all three should sell itself, or at least catch on fast. This blend of attractive features underlies the enthusiasm around mobile banking.  Plus it just seems cool—who doesn’t like a story of technological leapfrogging?

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Microfinance and the Financial Crisis: Thoughts from the Church

At the end of October, I was at the Riverside Church, one of New York’s great centers of social action and charity, for a panel held as part of Columbia's annual Social Enterprise conference.   The gothic setting was an odd match for the panel, but the timing was perfect for the topic: "Transitions in Capital Market Financing for Microfinance Institutions." If there was ever a time for thinking about financial transitions, this is it.

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Financial Access Initiative

Researchers and financial analysts will spend years trying to understand exactly what happened on Wall Street over the past four weeks.  No one was prepared for the rapid expansion of an economic crisis on such a massive scale. At the Financial Access Initiative offices in New York, however, we have been tracking a different expansion of the global financial system—one that is fueled by the possibility of financial empowerment instead of by risk and irresponsible lending...

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