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Study of microcredit finds generally positive, but not transformative, impacts

By Guest PostMay 16, 2013Economyanti poverty initiatives, bank, bill, central mexico, compartamos banco, credito mujer, dartmouth college, dean karlan, economist, grameen bank, jonathan zinman, manuela angelucci, market capitalization, melinda gates foundation, Mexico, microcredit, microcredit program, muhammad yunus, nobel peace prize, poverty, poverty action, sonora state, ultra poor, university of michigan, yale university

Microcredit generally benefits borrowers, according to new research focused on Mexico’s biggest for-profit microlender — but it’s not lifting people out of poverty.

In a multi-year, randomized evaluation of microloans provided by Compartamos Banco, Yale University economist Dean Karlan, with collaborators Manuela Angelucci of the University of Michigan and Jonathan Zinman of Dartmouth College, show there are generally positive effects on average and find little evidence that some borrowers end up worse off while others end up better off. However, the canonical story that microcredit leads to higher enterprise income did not bear fruit. (more…)

Q&A: Seeking “Real World” Solutions to Global Poverty

In discussions of how best to solve global poverty, helping the 3 billion people living on less than $2.50 per day, development economists tend to fall into one of two camps.

One camp claims that wealthy nations contribute too few dollars to combat poverty. The other camp counters that money doesn’t guarantee poverty alleviation, and points to the $2.3 trillion spent in foreign aid over the past 50 years as evidence that throwing money at the problem won’t solve it. Despite their differences, both groups agree that some types of development interventions work better than others. (more…)

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Study of microcredit finds generally positive, but not transformative, impacts

Q&A: Seeking “Real World” Solutions to Global Poverty