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Month: August 2010

Why Doesn’t the U.S. Invade Burma?

Why Doesn’t the U.S. Invade Burma?

I write quite a bit in this journal about Burma (you might know it as Myanmar).  That is because when I traveled there a while back the country left a strong impression on me.  My last day in the country was the first day of Thingyan, the water festival that marks the Buddhist New Year.  362 days of the year the people are repressed, but during these three days they all seem to cut loose.  I knew a few ex-pats…

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Aid vs. Investment: Stop Sending Your Old Shoes

Aid vs. Investment: Stop Sending Your Old Shoes

At a blog called “Friends of Ethiopia,” a fellow by the name of R. Todd Johnson has a serious bone to pick with the aid crowd in Africa: Outside of direct relief aid and some of the amazing health and education research and development, much (perhaps most) of what is done in the developing world through non-profits and NGO’s, could actually be accomplished through a business model, even if it would be harder to raise investment funding. Instead, someone begins…

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The Microfinance Narrative in Action

The Microfinance Narrative in Action

This is the opening paragraph from a recent article about whether or not microfinance is effective: Yohane Mdeme owns a food market in Tanzania. Though poor and with little to no collateral, he applied for a loan of $850 through Kiva.org to expand his small business. Twenty years ago in such a place and for such a client, Mdeme would never obtain the capital to increase his business. No bank would have given out such a small loan, much less…

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The Profit in Serving the Poor

The Profit in Serving the Poor

The philosophical and ethical quandary over the direction of microfinance is an interesting one that gets a lot of play here at Develop Economies.  A drive for financial sustainability and the prospect of making profitable investments in microfinance institutions has brought investors to the industry.  This development opens up a whole new source of endless capital, but brings with it a new set of conditions that were never there before.  For example, a number of private equity firms have begun…

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Creating a Credit Bureau for People Without Credit

Creating a Credit Bureau for People Without Credit

In any industry, when an increasing supply serves a stable demand, the market becomes overheated.  The same is true in microfinance.  As more microfinance institutions serve the same number of target clients, those clients begin taking loans from multiple sources, using one line of credit to pay off the others.  All of a sudden, instead of working with a single bank, now the clients have several different banks to choose from, all of which are vying for their business.  And…

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China’s Governing Philosophy

China’s Governing Philosophy

A window into China’s approach to politics and governance: Confucian reformers generally favor more freedom of speech in China. What they question is democracy in the sense of Western-style competitive elections as the mechanism for choosing the country’s most powerful rulers. One clear problem with “one person, one vote” is that equality ends at the boundaries of the political community; those outside are neglected. The national focus of the democratically elected political leaders is assumed; they are meant to serve…

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