The for-profit microfinance debate

By Felix Salmon
February 17, 2011

In which Matthew Bishop of the Economist schools me on the benefits of for-profit microfinance. For background, start with my post on why you shouldn’t invest in microfinance, and then my more recent post on what’s going on in Andhra Pradesh. Then check out Matthew’s post defending for-profit microfinance, my reply to Matthew, and — if you want more still — his reply to my reply. Matthew hasn’t succeeded in changing my mind, but he does give the best argument against my position that I’ve heard.

2 comments

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Great stuff! I kibitz from the sidelines here:
http://blogs.cgdev.org/open_book/?p=5894

Posted by DavidRoodman | Report as abusive

Agree with most of the discussion. The main reason why microcredit interest rates are higher than in other credit markets is the high operating expenses per dollar lent. The smaller the loan, the more expensive it is. This has been documented in the literature in places like here
http://www.themix.org/publications/micro banking-bulletin/2011/01/sacrificing-mic rocredit-unrealistic-goals
Great Discussion!

Posted by AdrianGonzalez | Report as abusive