Oct 16, 2009

Kiva, Transparency, Connections and Conduits

There’s been a great deal more conversation about the gap between the Kiva story and the Kiva reality since my post on Monday. You can see a mostly comprehensive guide to the conversation here (and I really recommend reading through the first several articles there if you’re not familiar with the debate). The most important update is that Kiva tonight posted a new, more complete description of how it operates. I want to react to various points made in the debate and Kiva’s update, clarify where I stand and ask a few more questions of everyone involved. I truly hope the outcome of all of this conversation is lots of Kiva users, and lots of other donors, who are willing to accept less connection in favor of more effectiveness.

Oct 12, 2009

Even More Questions About Kiva

Today I saw a Kiva document that, for me, points to a far bigger problem with Kiva than those already pointed out. Two points in the document floored me. First, all losses from Kiva-securitized loans are borne by the Kiva user. Second, Kiva’s monthly repayment reports are not based on actual repayment data.

Sep 22, 2009

Raising Tiny Tim

According to a recent study conducted by the OECD on child welfare, US-children rank among the lowest in certain indicators—such as material well-being and educational well-being—despite the fact that the US is one of the highest spenders. In fact, the study generally showed a poor relationship between funding and outcomes.

May 24, 2009

J-PAL Publishes Long Awaited Microfinance Impact Study

Some readers may think the report is fairly damning to the marketing claims of the impact of microfinance—more studies like this in other areas and over longer periods are necessary before we can reject the traditional views though. Ultimately, though, this study is very good news for microfinance because it begins to illuminate what is really happening among borrowers. That information, in turn, can be used to improve the product to make sure that the best products are offered to clients—and the impact of microfinance can improve.

Dec 11, 2008

When Is A Cow Not A Cow?

Oct 18, 2008

What’s So Hard About Saving?

One of the many confounding questions of microfinance is why people don’t save more. The first blush assumption that the poor cannot save because they don’t have the money has been dis-proven by data. Surveys of household consumption among those living on less than $2 a day show that they spend a significant portion of their income on non-essential items. In many cases where savings products are available they are widely used, even when they are objectively terrible (negative interest rates, inconvenient).

Oct 17, 2008

What Is It About Women?

There is no tenet of microfinance theory more fundamental than the focus on women. The marketing narrative is replete with reasons why a focus on women is sacrosanct. To quote Muhammad Yunus: “Women have greater long-term vision and are ready to bring changes in their life step by step. They are also excellent managers of scarce resources, stretching the use of every resource to the maximum.” And of course, we all “know” that women invest more in their households and children than men do. Get ready for a surprise.

Oct 17, 2008

Does the Design of Loans Impact Repayment Rates?

The first panel of the conference was on “Credit Product Design: Monitoring and Enforcement” – put more simply, how does the design of microfinance products affect repayment rates? Two very interesting studies were presented, one that examines the impact, or lack thereof, of moving from weekly to monthly repayments and another that looks at the impact of implementing a credit bureau.

Oct 17, 2008

Cutting Edge Research on Microfinance

We’re attending a conference of microfinance researchers hosted by Innovations for Poverty Action and the Financial Access Initiative. The conference is not your typical microfinance conference – all the presentations are by academic researchers who are conducting randomized controlled trials to learn how, how much and why microfinance works (or doesn’t). That being said, the research is not being done for academic purposes alone but to learn with microfinance organizations how they can improve their products and their impact. Jonathan Morduch set the stage by considering both the tremendous progress that has been made in research on microfinance in the last decade and the huge remaining gaps in knowledge we have. These gaps are critically important because although the industry has grown rapidly (from roughly 14 million clients a decade ago to 150 million clients today) the number of people without access to formal financial services remains in the billions.

Apr 30, 2008

No Punishment for Traffickers

Nearly every country on the globe is either a source or a destination location for trafficked people (or both). Most trafficking cases begin with the promise of a good job in another location (a separate country, or a different region). The trafficked person goes willingly at first, and only realizes later that he or she has been sold into slavery or debt bondage. While sex trafficking gets most of the headlines, labor trafficking is far more prevalent. The United States estimates that 800,000 people are trafficked across national borders every year, while many NGOs in the sector estimate that the total number, including those trafficked within their home country, exceeds 20 million.