Monthly Archives: April 2010

How the Newspaper Discusses Microfinance

A recent article in the New York Times titled “Banks Making Big Profits on Small Loans” has been making the rounds in the microfinance community.  When major media outlets like the Times cover microfinance issues, they tend to paint a picture in broad, but accurate, strokes.  Generally, the topic is complex and nuanced and condensed into a thousand words or less, leaving many issues unaddressed.  Microfinance, like sea turtles and curling, does not generally attract the attention of non-enthusiasts.  So when an issue does make it to the second-most emailed spot on the NYT website, everyone with (or, in my case, without) a serious readership gives a response.  The CEO of Kiva, David Roodman of the Center for Global Development, Alex Counts, director of the Grameen Foundation, and (not, unfortunately) have all shared their thoughts.  The article and subsequent responses from the microfinance community touch on a lot of broader issues.   With that in mind, I’ll share some thoughts as well. Continue reading

Microfinance and Job Creation

The staff of the NWTF branch in Puerto Princesa

“So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade — we have got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today. We’ve got to look at that as more opportunity. All of those things under the umbrella of job creation.” – Sarah Palin

The international economic development community is constantly holding its own feet to the fire.  I sometimes describe the push for transparency and demonstrated as a circular firing squad.  It s probably an unfair characterization, since a lack of oversight leads to billions of dollars in squandered aid and international investment.  Microfinance, in particular, is a frequent target of scrutiny from economists.  It is the darling of the development world, and often mischaracterized as the long-awaited solution to poverty alleviation.  But the impacts of microfinance are nuanced and cannot be reduced to a simple formula (i.e. poor woman starts business, business earns money, woman no longer poor).  In reality, microfinance smoothes consumption, offers money for non-livelihood expenses, like tuition and home repairs, and, in a few cases, propels women above the poverty line.  The impact on poverty alleviation is real, but perhaps more muted than the literature would have you believe. Continue reading