I started the year by blogging about microfinance, discussing the institution’s woes after coming across an article in the New York Times that did the same. A few days later, I snarkily posted about the good news being that microfinance research was not as bad as medical research.
I am not an expert on microfinance. The last time I conducted any kind of research on the topic was for my Masters thesis at the Université de Montréal, which I hope no one ever reads given how embarrassingly bad it was. My knowledge of the institution comes from reading working papers and journal articles on the topic, a module on which I teach each fall in my development seminar.
Consequently, a friend of my wife’s and mine who has been working in the microfinance industry for a while now took me to task and wrote a lengthy reply on Facebook to my initial posts. Given how insightful his detailed response was, I asked him if I could blog it, and he agreed under the condition that he remained anonymous. The five most important points he made in his response follow.
- The Opposition is Politically Driven
- The Evaluation Timeframe Matters,
- The Poor Deserve Financial Services
- Governments Need to Regulate the Industry
- Microfinance is Here to Stay
These five posts represent my very modest contribution — with the help of a friend — to the policy discussion surrounding microfinance. If you have an interest in the topic, I strongly encourage you to follow senior Center for Global Development senior fellow David Roodman’s blog, in which he shares his insights while writing a book on the impacts of microfinance. I have a feeling his book will be required reading in my development seminar when it comes out.