Microfinance Resources

Microfinance is explained and researched by a great many authors.  Learning about it’s history and evolution gave me a good starting point. Here’s a short summary in case the 2006 link doesn’t age well:

Earliest microloans were initiated in Ireland 300 years ago.  In 1895 it started in Indonesia and in early 1900 adaptations started to appear in Latin America. Accion was founded in 1961 and initially focused on Brazil.  The SEWA women’s bank was founded in 1972 in India. In the 70s experimental programs were started to provide tiny loans to poor women to invest in micro-businesses. Grameen bank started as a research project, was founded in 1983 and won the prestigious Nobel Peace Prize together with its CEO Muhammad Yunus in 2006.

Can’t say I am presenting a complete overview but I felt pretty informed after reading both the books and the summaries of the research articles. Let me know if you are interested in an article – I might still have it as a PDF.

Let’s start with the books:

  • “The new Microfinance Handbook” by The World Bank (2013) (Updates about all aspects of Microfinance, enriched with live examples from practitioners and researchers)
  • “Microfinance for Bankers and Investors” by Elisabeth Rhyne (2009)
    (Book with case studies explaining opportunities and challenges of the market at the bottom of the pyramid)

Here is the research:

  • Can Commercially-oriented Microfinance Help Meet the Millennium Development Goals? Evidence from Pakistan.
    (Positive impact was found in rural areas, provided a supportive environment was present)
  • Microfinance and Household Poverty Reduction: New Evidence from India
    (Positive effect of productive micro loans has been confirmed)
  • Empowerment Through Microfinance: The Relation Between Loan Cycle and Level of Empowerment
    (Positive impact on empowerment of female borrowers)
  • Measuring Microfinance: Assessing the Conflict between Practitioners and Researchers with Evidence from Nepal
    (Practitioners tend to over-estimate, while researches tend to under-estimate the impact of microfinance)
  • The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence
    (Original positive impact disappears after removing outliers, data is useless to prove impact)
  • The miracle of microfinance? Evidence from a randomized evaluation
    (After 4 years of research in the slums of Hyderabad, India reputable researchers found no changes in any of the development outcomes that are often believed to be affected by microfinance, including health, education, and women’s empowerment – ouch!)
  • Can Microfinance Reach the Poorest: Evidence from a Community-Managed Microfinance Intervention
    (No, the poorest exit the project at one stage or the other – leaking pipeline model)
  • Does microfinance change informal lending in village economies? Evidence from Bangladesh
    (Less incidents of informal lending after access to microfinance has been provided)
  • Measuring the Impact of Microfinance on Child Health Outcomes in Indonesia
    (Significant improvements in children health through presence of microfinance institutions)
  • Practice What You Preach: Microfinance Business Models and Operational Efficiency
    (high depth of outreach drives profits, regardless of for-profit or not-for-profit business model)
  • The Profit Orientation of Microfinance Institutions and Effective Interest Rates
    (Stronger for-profit orientation corresponds with higher interest rates but does not contribute to higher profitability because for-profit business model is associated with higher cost)
  • The Vulnerability of Microfinance to Financial Turmoil – Evidence from the Global Financial Crisis
    (Local microfinance markets are indeed vulnerable to global financial turmoil)
  • Microfinance and Rural Entrepreneurship: An Assessment
    (Microfinance tend to have a positive impact on microenterprises or agricultural activities. Even more so when combined with higher experience in running these businesses. Trading activities bring less income due to lower risks)
  • Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions
    (Training leads to improved business knowledge, practices and revenues)
  • Microfinance and Poverty – A Macro Perspective
    (Countries with higher micro loan portfolios tend to have less poverty)
  • Where does microfinance flourish? Microfinance institution performance in macroeconomic context
    (Higher development in a country means lower growth for microfinance institutions. There seems to be a window of opportunity where microfinance can flourish)

A colleague of mine has created an overview of informative video clips:

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