Due Diligence: An Impertinent Inquiry into Microfinance

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David Roodman

12/13/2011

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The idea that small loans can help poor families build businesses and exit poverty has blossomed into a global movement. The concept has captured the public imagination, drawn in billions of dollars, reached millions of customers, and garnered a Nobel Prize. Radical in its suggestion that the poor are creditworthy and conservative in its insistence on individual accountability, the idea has expanded beyond credit into savings, insurance, and money transfers, earning the name microfinance. But is it the boon so many think it is?

Readers of David Roodman's Microfinance Open Book Blog will immediately recognize his thorough, straightforward, and trenchant analysis. Due Diligence, written entirely in public with input from readers, probes the truth about microfinance to guide governments, foundations, investors, and private citizens who support financial services for poor people. In particular, it explains the need to deemphasize microcredit in favor of other financial services for the poor.

“At a time when the pendulum of public opinion on microfinance is swinging from exuberance to cynicism, Roodman’s balanced, evidence-based assessment is a timely and seminal contribution. This is an essential read for practitioners, promoters, and critics of microfinance.”
—Sir Fazle Abed, founder and chair, BRAC

“Microfinance has more than its fair share of myths, both positive and negative. It’s a field in desperate need of cool, rational, and evidence-based analysis, and David Roodman has proved that he is singularly capable of providing it.”
—Tim Harford, author of The Undercover Economist and Adapt

“Due Diligence is the microfinance book that grown-ups have been waiting for, as complex and fascinating as its subject. Roodman brushes away the slogans and the oversimplified dogmas to uncover microfinance’s long history and multifarious present. And best of all, it’s a pleasure to read.”
—Felix Salmon, Reuters

Data and code for figures and tables

Table of Contents

Preview the Book

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Research Topics

• Economic Growth
• Finance
• Poverty

CGD Experts

• David Roodman

Articles

• Microcredit Doesn't End Poverty, Despite All the Hype (Washington Post)
• Learning From Microfinance's Woes (Harvard Business Review)
• What Ails Microfinance? (Forbes India)
• Think Again: Microfinance (Foreign Policy)
• Does Microfinancing Really Work? A New Book Says No (TIME)
• A Voice of Reason Amid the Sound and Fury of the Microfinance Debate (The Guardian)
• New CGD Book Looks Beyond Microfinance Hype and Backlash, Recommends Improvements
• Microfinance as Freedom?
• Roodman’s Microfinance Open Book Blog

Events

• Due Diligence: Separating Fact from Fiction in Microfinance
• Due Diligence: An Impertinent Inquiry into Microfinance

Multimedia

• Due Diligence: An Impertinent Inquiry into Microfinance (Event Video)
• David Roodman - Due Diligence: An Impertinent Inquiry into Microfinance
• Mohammed Yunus Forced Out –Whither Microcredit? David Roodman
• Unpacking India’s Microfinance Meltdown: David Roodman
• David Roodman on Microfinance and a Year of Blogging