Your post is great and thought provoking as you have balanced several sides of your perspectives.

If microcredits chunned by MFIs for over two decades have contributed to the economic improvement of the poor ( even if not eradicating poverty), that is commendable. Most MFIs are for profit and there is no problem making profit while delivering a value adding service. Also, there is no consensus of what should constitute enough or too much profit.

My take is that, most of the time, the full benefits of microcredits go unnoticed or unmeasured. If a poor farmer gets $100 micro-loan and buys a cow whose milk is sold and pays school fees, how do we measure that education benefit? The farmer will still be the poor farmer with a cow-at least in the eyes poverty monitorers. If the same cow yields manure that improves the small parcel of land’s yield whose proceeds sustain rotational contributions in a ROSCA, how do we measure that benefit of rotational sustainability? If the micro-loan helps the farmer buy tree seedlings that in two years will be stores of value waiting harvest, how do we measure that economic value?

It would be premature to conclude that microcredits have not worked perhaps until we do the balance sheets of the beneficiaries. A poor farmer who has educated his children to university and they are now working will still be classified poor. But don’t we need to value that benefit? Even in normal business, you can’t value a business by its one year profit and loss accounts. Real value is seen in the balance sheet. Loss in one year just tells one bit of the story. Same with poverty intervention business stories.

I suppose we don’t say “credits have not worked-so lets emphasize savings and insurance”. All, earning, savings, debt, insurance, investments are important cogs in the wheel. Let everyone who can contribute to their greasing do so without reservations.

Rutherford’s “borrowing as a preferred form of saving thinking is absolutely paradigmic in an intriguing way!

Chris, hope I haven’t moved far way from your well thought and laid out posting.