Tuesday, June 30, 2009

More on Micro-Lending

To build upon what I discussed in my last post about micro-lending, I thought I'd include a new study that takes a closer look at the effects it has in helping people out of poverty. The results conclude that it may not be helping as much previously thought.

Given my background in journalism, I do like to play devil's advocate and present both sides of any story. In their working paper, U.S. economists, David Roodman, of the Center for Global Development, and Jonathan Morduch, of New York University, take a look at the studies conducted in Bangladesh about the impact of microcredit in households and conclude that although it does not do harm, there is a lack of evidence that it improves the lives of the poor.

Here's more information from Newsweek where you can also view the working paper by Roodman and Morduch.

In light of their findings I feel that this may be a testament that micro-lending is indeed a good method that just needs some tweaking and revising.

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