CGD in the News

Talk Point: Have Your Say on Microfinance (The Guardian)

March 28, 2011

David Roodman will appear in the Guardian's podcast this month about microfinance.

From the article

For almost 35 years microfinance has been the golden child of development policy, offering the simple idea that lending very small amounts of money to very poor people can help them get themselves out of poverty. But now these claims are under the microscope.

On Tuesday, Nobel peace prize-winner and "banker to the poor", Muhammad Yunus will appear at the supreme court of Bangladesh to appeal his removal from the position of managing director of Grameen Bank, the world's best-known microfinance institution that he set up.

Popularised by Yunus and Grameen Bank in Bangladesh, the idea of microfinance has spread all over the world, amassing powerful backers, such as Barack Obama. In 2009, more than 128 million of the world's poorest people received a microloan. Many people like the sound of microfinance because, unlike charity, it promises to put power in the hands of the poor. But are all poor people budding entreprenuers? What happens if you cannot repay your loan? In the Indian state of Andhra Pradesh, a series of suicides by rural borrowers provoked concerns about coercive debt collectors.

We'll be discussing microfinance in this month's Global development podcast. We'll take a look at the current controversies in India and Bangladesh, and examine the underlying debates about the power of "financial inclusion" to tackle poverty on a mass scale.

In the studio to debate these issues will be Ha-Joon Chang, Cambridge economist, co-author of a recent paper on microfinance, The microfinance illusion, and a member of our advisory panel, and Ajaz Khan, microfinance adviser at the NGO Care International, which recently launched the new microfinance initiative Lendwithcare.org.

And down the line from Washington DC, we'll be joined by David Roodman, microfinance expert and senior fellow at the Center for Global Development.

We'll also hear clips from The Micro Debt, the controversial documentary from Danish investigative journalist Tom Heinemann, which had its UK premiere in London earlier this month and has helped spark the debate about whether microfinance really does reduce poverty, and from Vikram Akula, founder of India's largest and one of the fastest-growing microfinance institutions, SKS Microfinance, and author of the 2010 book A fistful of rice: My unexpected quest to end poverty through profitability.

In advance of the podcast, we want to hear your thoughts. Does microfinance work, particularly for the world's poorest people? Can it do more harm than good?

Read the Article