David Roodman's Microfinance Open Book Blog

 

Posts in: 9. Implications

 

Last Chapter Revised!

April 29th, 2011

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Yay. I have at last finished the rewriting pass on the book, having just posted chapter 9 (.docx and .pdf).

The major additions were material on regulation, based on the fantastic CGAP review of the issues by Bob Christen, Tim Lyman, and Rich Rosenberg; and material on the controversial Nigerian MFI LAPO, based primarily on the sharp work of GiveWell, as a way of highlighting concerns about the tensions in the microfinance investment industry between pressure to disburse and social performance.

I am feeling more strongly that the global microfinance investment industry, because of its scale, is throwing microfinance out of kilter. That criticism applies at least as much to public investors as private ones, so it doesn’t work to blame the profit motive. We’ve had crises recently in Bosnia, Morocco, Pakistan, India, Nicaragua… I’ve just been learning about how Nigeria blew up in its own strange way (with domestic factors mainly to blame, but some involvement of foreign investors). Perhaps the crisis in India is the needed corrective. But I will feel better if the investors were forthrightly acknowledging that sometimes they are part of the problem.

Here is the revised peroration:

I began this book with two opposing stories. One was about Murshida, who climbed out of poverty on a ladder of microcredit The other was about Razia, who slipped down a rung after taking loans. I did so to expose how storytelling forms the public image of microfinance, and to make the case for serious research. We need good research not to move beyond thinking in stories, but to test stories, to inform us about which are representative. That is as close as we can come to the truth about something as diverse as the microfinance experiences of 150 million people.
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Hurrah, the Last/From Millstone to Milestone

May 11th, 2010

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I feel an inward tremor as I type this. I have just posted the last chapter (revised version, June 22: .docx and .pdf). I began writing almost two years ago, never thinking it would take this long. This blog has been wonderful reason for the delay. It feels very fine to have reached the end of the draft. The labor is far from over. There is much editing to do. But today the completion of the draft has gone from millstone around my neck to milestone.

I am happy with the prose of this draft. I suspect however that the logic and conclusions could be greatly be improved by feedback. Daniel, Tim, Alex, other loyal critics, and newcomers too: I hope you will dig in.

Note: There’s one hole toward the end for a paragraph about M-PESA in Kenya, which I will visit next week. Stay tuned.

Here’s the conclusion:

I began this book with two opposing stories, one of Murhsida who climbed out of poverty on a ladder of microcredit, one of Eva Yanet Hernández Caballero who, if anything, slipped down a rung. This I did to expose how storytelling forms the public image of microfinance, and to make the case for serious research. We need good research not to move beyond narrative knowledge, but to test it, to inform us about which stories are most representative. That is as close as we can come to the truth about something as diverse as the microfinance experiences of 100 million people.
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