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Month: October 2010

The Changing Microfinance Industry in India

The Changing Microfinance Industry in India

When most people think of microfinance (which most people do not), they envision a poor person in a faraway country borrowing a few bucks to buy a goat.  In an article titled “Microlender Forecloses on Goat,” The Onion proves once again that it has its finger on the pulse: Representatives from One World Finance, a U.S.-based microcredit provider, confirmed Monday that they had initiated foreclosure proceedings on a goat in southern India following a borrower’s repeated failure to make her…

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Rainfall as a Predictor of Democracy

Rainfall as a Predictor of Democracy

From the National Bureau of Economic Research, an organization reviled by Fox News, comes a fascinating paper.  Two economists suggest that the volume of rainfall in a certain location determines whether a democratic government will be successful.  It is actually a fairly simple argument.   Success in agriculture allows specialization, which, in economic terms, refers to the production, distribution, and consumption.  When farmers produce more food, fewer people need to participate in agriculture, leading the greater economic diversity.  This, in turn,…

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Osama Bin Laden Tells Bono to Shove it

Osama Bin Laden Tells Bono to Shove it

Within the aid and development community, there are two camps whose views on the subject are diametrically opposed.  One side, led by economist Jeffrey Sachs and indie rock star Bono (one name), believes in a top-down approach, providing governments with aid money to implement programs that improve the welfare of the population.  The other side, under the spiritual guidance of economist Bill Easterly and championed by Dambisa Moyo, an economist with the conviction and warmth of Ayn Rand, and others,…

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Government is a Prerequisite for Hope in Haiti

Government is a Prerequisite for Hope in Haiti

The other day I had the chance to hear Michael Schlein speak about microfinance.  Schlein is the current CEO of Accion, one of the largest microfinance organizations in the world, serving over 150 million clients in during its history.  It currently operates 62 microfinance institutions in 31 countries covering 4.9 million outstanding loans.  He said a few things that I found out interesting. Having only worked as CEO for one year, Schlein spent the better part of 2010 visiting Accion’s…

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ShoreBank: A Banker to the Poor Goes Bust

ShoreBank: A Banker to the Poor Goes Bust

ShoreBank is a Chicago-based financial institution that was founded on the principle that everyone deserves access to financial services and that, by offering these services to the urban poor, the community will benefit.  Sound familiar?  Its mission is very much aligned with that of microfinance.  And, since 1973, Shorebank was largely successful in achieving that mission.  Initially serving the South Side of Chicago, the bank eventually spread to Detroit, Cleveland, and much of the Pacific Northwest.   The organization’s ties to…

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