Viewpoint: How We Talk About Microfinance: Alex Counts Replies to Dean Karlan

Thursday, August 27, 2015

On Sunday, August 23, as I was enjoying some of the final days of summer visiting friends in New Hampshire, I noticed that I had been tagged in a tweet by Dean Karlan, the founder and president of Innovations for Poverty Action.  He provided a link to an article about FINCA that included extensive quotes from its CEO, Rupert Scofield.  He asked Rupert if he really believed microfinance could reduce terrorism, and asked me what I thought (“whatcha think?” was the precise formulation of his question).  Hetweeted again on Monday, asking whether I was “still going to stand by [my] claim that no microcredit leaders make grandiose and overselling impact claims?”

First of all, I have never said that no microcredit leaders have ever exaggerated impact claims.  I believe that those exaggerated claims have been rare and atypical, especially in recent years.  In other words, the tendency for practitioners and advocates to make exaggerated claims not backed up by data has itself been quite exaggerated.

But I don’t think Twitter is the best medium for exploring such topics.  So I was grateful when the Center for Financial Inclusion agreed to publish this response to Dean’s public queries of me, in which I could address some related issues about microfinance advocacy and research.  (This post builds upon some of the observations I made inreviewing Dean Karlan and Jacob Appel’s impressive but flawed book, More Than Good Intentions.)

Regarding the article Dean tweeted about, I am supportive of Rupert’s statements and encourage others to read it and come to their own conclusions.  (Having been the public face of an international humanitarian organization for 18 years, I also realize that journalists sometimes focus on a very small part of what someone says in an interview, often on those things that are potentially the most controversial.)  For the most part, Rupert comments on specific microfinance clients he and the journalist met and on his past experiences and how they shaped his view of microfinance.  It’s impossible to challenge any of those observations and recollections.  They are statements of personal experience and opinion.

At one point he makes the case that microfinance – which research has shown to have consistent though modest positive impacts on human well-being and in a few cases, such as in Bangladesh and through microsavings in multiple countries, more pronounced positive impacts – is part of a larger movement to address the human suffering and poverty that can, as a byproduct, decrease the attractiveness of ideologies that encourage terrorism.

 

Source: Center for Financial Inclusion (link opens in a new window)

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Grameen Foundation, Innovations for Poverty Action, lending, microcredit, microfinance