> Posted by Elisabeth Rhyne, Managing Director, CFI
In his book, The Emperor of All Maladies, Siddhartha Mukherjee tells the history of the fight against cancer. It’s a grand saga involving scientists, doctors, patients, and politics, all wielding their best tools to find better treatments and ultimately a cure. And of course, the tale is not over: the scourge continues, though much progress has been made, and an increasing number of bright spots are appearing.
As I read, I see parallels between the evolution of that medical “war” and the struggle against poverty waged by the international development community, or at least the part of that struggle I’m part of, the struggle to give people financial tools to better their lives. The more I read, the more I see, until in each corner of the cancer story I find parallels with our own sector and its searches for solutions.
In the early 20th Century, surgeons began to treat breast cancer with radical mastectomies in which not only breast but also lymph nodes and many of the neighboring chest muscles were taken. The more radical, the greater the chances of success, went the theory. By mid-century, chemotherapies appeared. They represented another radical approach in which patients were brought to the brink of death as chemicals attacked cancerous and normal cells alike. In both cases, Mukherjee argues, brute force substituted for the absence of a deep understanding of the causes and behavior of cancer. The medical profession simply applied the tools at hand, raising the intensity as high as patients could tolerate. The tools sometimes cured the patient, but more often postponed the inevitable recurrence, a partial success. According to Mukherjee, the surgeons and chemotherapists who wielded these instruments were so convinced of their efficacy that they closed their minds to alternatives (including each other’s solutions), scoffed at attempts to measure success through rigorous trials, and downplayed the suffering imposed on actual patients.
Maybe you’re already seeing parallels…
In the late 1970s and early 1980s, some development organizations began to “treat” poverty with microcredit. As with surgery and chemotherapy, the rationale behind this treatment was straightforward and plausible, so microcredit proponents (myself included) focused on spreading the work far and wide across the globe, not bothering about rigorous analysis of outcomes, but counting on high repayments and continued demand as signals that the treatment worked. A few decades later, digital financial services emerged and generated similar worldwide enthusiasm around a different set of products and techniques.
As the 21st Century turned, the “randomistas” joined in the microfinance/financial inclusion conversation, insisting that randomized trials, modeled on the trials used to test medical treatments, be the gold standard for measuring efficacy. Financial service providers raised many of the same kinds of objections to clinical trials that surgeons and chemotherapists had raised – about the ethics of randomization, the appropriate duration of trials (How long does success take?), biases inherent in even randomized methods, and so on. Nevertheless, in both medicine and microfinance, the trials, taken as a whole, served to temper high-flung claims and provide a sobering picture of how much progress had actually been made. The recent issue of the American Economic Journal, devoted to microfinance, is the rough equivalent of key papers in the Lancet or JAMA.
The exuberance with which microfinance was pursued resulted in several crises of overindebtedness among clients. Just as surgeons and chemotherapists often discounted the patient suffering inflicted by their treatments, so microlenders often failed to notice that many of their clients were falling into debt traps. Mukherjee describes how cancer patients, taking a cue from AIDS-inspired groups like Act-Up, began to organize to demand more from providers. Just as with debt protestors in microfinance, the client voice was raised infrequently and in unpredictable ways. Nevertheless, even a few emotionally-charged personal stories can ignite change, as they did in Andhra Pradesh in 2010.
Among the heroes in the cancer story, according to Mukherjee, are the scientists who sought to understand how cancer works. Recent learning about genes and the molecular biology of the proteins that carry out genetic directives provides the basis for treatments that are both more effective and less toxic than the previous generation. The analogous basic research in financial services are efforts such as financial diaries that seek a deep understanding of how clients conduct their financial and economic lives. In both medicine and financial services the translation from basic understanding to effective treatment is long, spotty (i.e. not every problem has an easy solution), and only now really gaining momentum. In both cases, deeper understanding revealed that there would be no simple, one-shot cure.
So here we are in 2015 with an array of players, each providing pieces of the solution. Surgeons and chemotherapists, microlenders and digital financial service providers all have important techniques to offer, if they collaborate with other practitioners and with researchers. Patient care and consumer protection are ever-present concerns. In both “wars” progress is evident, with the best tools reaching more and more people.
The strong medicine in these two histories steer us toward an appreciation for the contributions of pioneers, openness to a variety of solutions, and humility in expectations. And, by the way, The Emperor of All Maladies is an excellent book, even if you’re not looking for parallels.
Have you read?
Emerging Themes in Responsible Digital Finance
Measuring the Impact of Microcredit – Six New Studies
2014 Banana Skins Report Reveals Overindebtedness as Biggest Concern in Microfinance Industry


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8 comments
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March 4, 2015 at 11:27 am
Alex Counts
As we think about what microfinance has accomplished and the path forward, I sense a real need to take a big step back and to look at our journey with a historical perspective that bears in mind other fields and how they have evolved. And this blog is a great contribution to that process of getting some needed perspective as we ready ourselves for the moving forward. Well done.
March 5, 2015 at 2:31 am
Fatina Abu Okab
Elisabeth, your blog is very true and lit a fuse in me. Three years ago, myself and siblings failed into getting cancer surgeons and radiotherpasits to work together in helping my father fighting cancer. Being one of the poverty alleviation community, I believe it is our all responsibility to ensure bringing all stakeholders efforts together smartly. Thanks a lot for this inspirational highlights.
March 5, 2015 at 12:33 pm
James Militzer
Another outstanding, thought provoking post on microfinance – combined with Alex Counts’ blog earlier this week, CFI has really been on fire with this topic lately. It’s good to see opinion leaders in the sector responding to the recent microcredit studies with such honest reflection and self-assessment. For those who are interested, we just published 10 takeaways from the World Bank forum on this research on NextBillion – you can read the post here: http://nextbillion.net/blogpost.aspx?blogid=5322.
March 6, 2015 at 11:59 am
John Gitau
Hi Beth! You have serendipitiously redefined financial inclusion as the struggle to give people financial tools to better their lives. It makes all earlier definitions of financial inclusion superfluous. Think about it; if all of us join forces to develop tools to help the poor, the issue of herding them towards financial institutions’ pastures to browse on their products would not arise. For example, the ROSCA mechanism is a tool that dispenses two products-savings and credits. Can it be supported to dispense more?
Your piece is intuitively diagnostic. An analogy cannot be more apt. Just wondering; will the miasma of “closing the mind to alternatives” continue to bedevil the new dispensation of basic understanding preceding effective treatment?
Genetic and molecular approaches to effective treatment indeed mirror financial diaries perfectly and point to a panacea. But, haven’t you put a spanner to the works when you talk about ” the array of players, each providing pieces of the solution—- if they collaborate with other practitioners and with researchers?” You sound disappointed that the so many people involved in our sector might not allow financial diaries, our scientific diagnostic tool to take preeminence.
March 6, 2015 at 1:52 pm
erhyne
Thanks for your kind comments, Alex, Fatina and James. Much appreciated.
John, I wanted to respond to yours on the genetic research-financial diaries analogy. In both cases, the deep understanding generated by “basic” research is very important for progress. However, in both cases, what the research reveals is complexity that does not lend itself to a one-shot solution, which means that different tools are going to be relevant to different needs, and that brings in multiple players.
On financial diaries, it appears to be difficult to move from the findings of the diaries to solutions.
I was perhaps disappointed to learn that there is unlikely to be a single “cure” for cancer, but of course we all know there’s no one “cure” for poverty.
March 7, 2015 at 9:43 am
John Gitau
Why is it difficult to move from financial diaries findings to solutions Beth? Do they unearth complexities that makes us not know where to start resolving them or reveal how the poor people manage their money as more complex than we thought?
March 9, 2015 at 9:34 am
Monique Cohen
Beth, I am not sure I understand your doubts about moving from financial diaries to solution. I have been involved in two sets of diaries and I have seen both result in new products. In both cases the changes did not come from reading the report as much as engaging mid-level staff of the financial institutions in their own analyses of the data. For some the interpretation of the data resonated with their own lives and they saw potential product changes in terms of the needs of their family members.
September 2, 2015 at 3:00 pm
Krishna
Excellent analogy! Encourages the reader to go out of their own little box / world and think beyond. If we were to continue on this line of thinking and zoom out further (a couple of levels above), it could raise a few interesting thoughts:
One way to look at it is that such big problems – cancer or poverty – are often a result of a lot of other problems at various levels and from a diverse set of fields such as politics, governance and policies, environment, psychology, genetics, luck / randomness and so forth. Sometimes, it gives an impression that these are independent and unique problems but in reality such problems are deeply connected with a host of other problems and are multi-dimensional. However, given our limited capabilities to understand these diverse fields and bring them all together, our solutions are often uni-dimensional, therefore also they can only go that far. So, unless solutions catch up from other fields and match the pace and the dots are connected, we can’t move too far ahead and that is probably how a problem of such magnitude gets solved
Also, this is a very western way of solving problems (I don’t mean it necessarily in a bad way). So, while it is important to continue on this line and keep improving, it might also be useful to ask a few more difficult and complex questions such as why does this problem happen at the first place? What can we do to prevent it so that we don’t have to cure it? Difficult / abstract questions, lesser chances of getting attention, money and quick wins but important nonetheless.