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Microcredit Does Not Live Up to Promise of Transforming Lives of the Poor, Six Studies Show
Microcredit—providing small loans to underserved entrepreneurs—has been both celebrated and vilified as a development tool. Six new studies from four continents bring rigorous evidence to this debate, finding that while microcredit has some benefits, it is not a viable poverty alleviation tool.
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Peace Through Finance?: How the Middle East Investment Initiative uses financial tools to help a troubled region
It often seems like a unique set of religious and tribal conflicts are responsible for the Middle East’s problems. But they’re also driven in part by a more universal concern: a weak economy. That’s why the Middle East Investment Initiative is delivering finance and technical assistance that stimulate sustainable economic growth in the region. We discuss this approach with the organization’s CEO and Managing Director in part 1 of this Q&A.
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Teaching the Poor to be Better Customers: Marketplace literacy is the missing piece in the poverty fight
The knowledge gap results in lost wages and limited opportunity for poor people to lift themselves out of poverty. The answer, argues Business Professor Madhu Viswanathan, is marketplace literacy efforts that help the poor evaluate opportunity costs (money, time and effort) of buying a product or service. He reflects on the Marketplace Literacy Project, which he founded more than 10 years ago.
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Helios Investment Partners raises US $1 billion African investment fund
Pan-African private investment firm Helios Investment Partners has raised over US$1 billion for a third Africa-focused fund, with the firm claiming the fund is the largest in existence dedicated to African private equity.
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- Region
- Sub-Saharan Africa
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Viewpoint: Dirty Money and Development
Dirty money—MNCs’ undeclared profits, the proceeds of corruption, etc.—can play a large role in ending poverty.
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NexThought Monday (2/10/14) – The Kiva Fairytale: It’s a Microlending Superstar – But Who is it Really Serving?
Beloved by the public and celebrated by the likes of Bill Clinton and Oprah, Kiva is perhaps the most famous microlender in the world. It lets users lend small amounts via the Internet to individual low-income entrepreneurs, based on their personal stories and photos. But according to Hugh Sinclair, it’s focused more on making lenders feel good than on actually helping the poor.
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- Impact Assessment
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NexThought Monday (1/20/14) – The Tragic Failure of Microcredit: Yunus’ Dream Has Become a Nightmare for the Global Poor
Microcredit was devised as a free market solution that would enable the global poor to escape their own poverty by starting an income-generating activity. But Milford Bateman argues that due to deregulation, commercialization - and fundamental flaws in the model - microcredit has instead undermined developing economies and trapped the poor in a cycle of debt.
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- Impact Assessment
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More Than Credit: Can microfinance also deliver affordable health care?
Poor people should have greater demand for health coverage than any other market, but the microfinance sector has had difficulty convincing poor people to pay insurance premiums. In response, BRAC launched its own health loan pilot – the “medical treatment loan” – by partnering its microfinance and health programs in Bangladesh.
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- Education, Health Care