international development

What goes up, as the saying goes, must come down, and for all the splash that the microcredit movement has made in the past decade, it seems that the belief that small loans will provide a pathway out of poverty is revealing some fissures.

A recent Times of London article (World poverty guru "fails" to spread wealth) brought attention to the questions surrounding the movement to which Muhammad Yunus helped to bring awareness.  The article cited a recent study conducted by Dean Karlan and Jonathan Zinman in the Philippines, where they discovered that microcredit recipients did not fare better than those not receiving loans.

That's not to say that the advent of microlending has not been a vital and necessary innovation.  But it isn't a panacea, and more voices have arisen to ask: what about providing the poor the financial services to which they so often lack access; most notably, a safe place to deposit and save their money?

*This blog by Evelyn Stark of CGAP and Jamie Zimmerman originally posted on 7-10-08 at CGAP's new Microfinance Blog site: http://www.cgap.org/p/site/c/template.rc/1.11.1909* 

Just released last week and swiftly making its way through the fast lanes of the internet, Nike Foundation's new video for its GirlEffect campaign is stunning and provocative. It resonates with the socially-minded, big hearted idealist in all of us. The video explains how global poverty eradication will come from empowering a girl through micro-credit: the loan enables her to purchase a productive, money making asset (a cow), which quickly snowballs into further financial and social opportunities, more assets, greater social, economic and political empowerment, and into economic development of entire nations and opportunities for all women around the world. You get the picture (but if not - you can watch it here: http://www.girleffect.org/).