Are MFIs overstating their savings outreach?

e-MFP, 28 Oct 2013

Since the microfinance sector broadened its focus from loans to financial inclusion, savings have become a major focus.  And rightly so – the argument for providing poor customers with a safe and reliable place is backed by both robust research and common sense. Meanwhile, MFIs are already delivering on the promise: in 2011, MIX Market reported nearly 80 million depositors world-wide, with an average balance of $994.

It’s a great story. Unfortunately, it’s at least somewhat misleading. Simply put, when it comes to microsavings, objects in mirror may be larger than they appear.  More →

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Mr. Roodman Goes to Gates

e-MFP, 6 September 2013

This summer marked an important milestone in microfinance. David Roodman announced his move from the Center for Global Development to the Gates Foundation. In the process, David also stepped down from his role as the blogger of record for the sector. As we launch the new e-MFP blog, we look back and celebrate the most influential blog in microfinance.

My own journey into microfinance began at just about the time that David started his experiment of writing a book in the form of a blog, what he called the Open Book Blog. I have learned much from it, and I daresay few in microfinance can claim not to have been influenced by it. Even if you were not a reader, you likely have been exposed to ideas that were first broadly aired in David’s blog.  more →


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Beyond the Microenterprise: the Case for Housing Loans

European Microfinance Platform, August 2012 Newsletter

Allow me an impertinent question, dear reader:  what was the largest loan you ever borrowed?  Now, let me venture a guess – was it your home mortgage?  If you answered no, then you probably fit either of three profiles:  1) you never had to buy a home, 2) you live in a country with limited financial access, or 3) you are very lucky.

Let’s set luck aside for the moment.  Why the first two assumptions?  Because in developed countries, mortgage finance takes by far the largest share of consumer credit.  In the US, mortgages on residential property account for 84% of average household debt.  In the UK, the number is 89%.  There is no question that the primary goal of retail lending in rich countries is to fund housing.  Now consider the numbers for housing loans in the microfinance sector.

They are depressingly small.  more →

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