Four Great Microfinance Books

March 26, 2009

Savaging Dambisa Moyo’s Dead Aid yesterday left an ugly aftertaste. To cleanse my palette, I offer a list of fantastic books on microfinance. All are written by intelligent and deeply thoughtful people who have immersed themselves in their subject. They think and write with clarity and sensitivity. In no particular order:

• Elisabeth Rhyne, Mainstreaming Microfinance: How Lending to the Poor Began, Grew, and Came of Age in Bolivia (Bloomfield, CT: Kumarian Press, 2001). The story of the commercialization of microfinance and Bolivia, told by one of the players. A major inspiration for the “development as building institutions” plank of my book.
• Stuart Rutherford, The Poor and Their Money (New Delhi: Oxford University Press: 2001). Prominent in my chapter 2 and one source of inspiration for the “development as freedom” plank. I believe Stuart is working on a new edition now for Practical Action Publishing. A really old version is here.
• Helen Todd, Women at the Center: Grameen Bank Borrowers after One Decade (Dhaka: University Press Limited, 1996). A powerfully written report on a year in the lives of 62 women in two villages. One big flaw: she excludes from her study women who borrowed from Grameen but then dropped out in ten years or less. So read it as showing what microcredit can do for some women, rather than what it does on average.
• Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven, Portfolios of the Poor: How the World’s Poor Live on $2 a Day (Princeton, NJ: Princeton University Press, 2009), due out in June. I’m going out on a limb here, because I’ve only read a bit of my bootleg copy. The authors tell us what they learned from tracking the finances of many poor households in excruciating detail using “financial diaries.” [Update: I reviewed it.]

Some of these are best found through used-book channels such as abebooks.com and amazon.com.

Enjoy.

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1. Ben Elberger Says:
   March 28th, 2009 at 1:01 am

   David,

   How could you leave out the Economics of Microfinance by Jonathan Morduch and Beatriz Aghion de Armendariz?

   Best,
   Ben

2. Asif Dowla Says:
   March 31st, 2009 at 12:58 pm

   You are being unfair to Helen Todd. She was a journalist and used the best methodology at the time. Many well-know social science work face similar problem. Moreover, at that time there was not any significant drop-out from Grameen. So, even if she would have included them in her sample, the result would not have changed much.

   The World Bank major work on Grameen Bank did take care of some of the sample selection biases and those work were published in referred journals and as a book by Oxford University Press. But you guys (randoministas) keep on spreading the meme that there is no scientific proof that microfinance works.

   I loved Helen Todd and Rutherford’s books and every-time I re-read it, I learn something new. It suggests that one can learn a lot about the dynamics of how microfinance works without resorting to fancy methodology.

3. David Roodman Says:
   March 31st, 2009 at 9:29 pm

   Asif, I don’t think I am being that unfair to Todd. I list her book as excellent. Todd herself writes of drop-outs in her study village, and about the strategies that the center leaders used to replace them, so she could have included drop-outs in her sample and chose not to. I even gave her space to reply to my criticism by quoting her at length on this very issue. No study is perfect and I think her work has a tremendous amount to offer. Seems pretty fair to me.

   I agree, as I think you imply, that we can learn more from qualitative studies like hers than quantitative studies with fancy methodology. And that doubt of fancy math goes for the World Bank work you refer to. In fact, I am convinced that those studies have serious problems, and will demonstrate it soon.

   I’d ask that you be careful in labeling people: I have never done a randomized study and probably never will. I did one post on the power of randomized studies and another on their problems. So what does that make me?

4. Asif Dowla Says:
   April 1st, 2009 at 2:12 pm

   Good social scientist .