> Posted by Center Staff

In her latest article for Huffington Post, Elisabeth Rhyne addresses an important question raised in David Roodman’s new book Due Diligence: the contribution of microfinance in institutional development.

The post begins:

David Roodman’s book, Due Diligence, shapes today’s public conversation about microfinance. Time magazine, The Washington Post and others, have picked up on the book and its message. With, as his subtitle says, an impertinent but serious, approach, Roodman’s book attempts to answer a basic question: Does microfinance work?

His answer begins with a necessary pre-question: What, actually, is microfinance trying to do? Roodman sets out three possibilities, which then provide a framework for his investigation of the Big Question. First, lifting people out of poverty, second, increasing their freedom and ability to manage their lives (also called agency), and third, contributing to development through building institutions. Most of the commentary about the book and 100 percent of the headlines focus on poverty alleviation. Once they latch on to the poverty question, most reviewers look up only to announce that in the handful of studies Roodman considers methodologically rigorous, evidence has not shown that microcredit increases incomes on average. As important and discussion-worthy as that question may be, today I’d like to explore microfinance from a different angle.

To read the entire post, click here.

Have you read?

Microfinance in Bangladesh: It’s Not What You Thought

Making Consumer Protection a Reality in Microfinance