e-MFP, 25 Apr 2014
A recent article by the Economist hails a study in Bangladesh by Shahidur Khandker as “the biggest study so far [which] finds that microcredit helps the poor after all.” Within the sector, the article has been widely circulated as proof that, indeed, microfinance does work. Rupert Scofield, CEO of FINCA, found vindication that this study finally resolved the problems of earlier randomized control trial (RCT) studies, which had found that microloans had zero impact on clients:
The recent short-term studies were undertaken in highly saturated markets and focused on clients who diverted some or even all of their loans into consumption. Microcredit works best when the client uses it to fund a business.
But there’s the danger of jumping to early conclusions. More →
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