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The microfinance movement is one of the most successful ever in the worlds of foreign aid and philanthropy, not least thanks to the stories it told of poor women climbing out of poverty through entrepreneurship. But the hype has side effects: credit bubbles in India and other countries, and a brewing backlash as rigorous new studies challenge the claims of poverty reduction. David Roodman set out to cut through the hype with his Microfinance Open Book Blog that charted the journey to his 2011 book Due Diligence: An Impertinent Inquiry into Microfinance.
Recently CGD hosted the Second Annual Birdsall House Conference on Women, which focused on beyond-aid approaches for women’s economic empowerment, with particular emphasis on private sector engagement. CGD experts have written about how international organizations and national agencies should examine and correct gender biases in the design and delivery of their strategies for financial inclusion. But while public sector interventions are crucial for promoting women’s economic empowerment, the panelists pointed out that the private sector is in many ways better equipped to provide opportunities for women to grow their businesses, investments, and incomes. Here’s our takeaway.
On Monday, Grant Shapps, the UK's Minister of State at the Department for International Development, kicked off DFID’s Energy Africa campaign at an event hosted by the Shell Foundation designed to help his team figure out how the UK government can invest its political clout and an initial £30 million ($46 million) to tackle rural energy poverty in Africa. Given solar’s limitations and these risks, how can we make sure that Energy Africa fulfils Minister Shapps’s ambitious brief?
Twenty-five years ago today, I walked into Building 1 of the Microsoft Corporation’s wooded campus in Redmond, WA, and reported for work as a programming intern. I had a pretty good time that summer. What I remember most is wondering whether I should buy a bit of stock in the company—and then spending all my earnings on long-distance calls to my new girlfriend.
Kiva is the path-breaking, fast-growing person-to-person microlending site. It works this way: Kiva posts pictures and stories of people needing loans. You give your money to Kiva. Kiva sends it to a microlender. The lender makes the loan to a person you choose. He or she ordinarily repays. You get your money back with no interest. It's like eBay for microcredit. You knew that, right? Well guess what: you're wrong, and so is Kiva's diagram. Less that 5% of Kiva loans are disbursed after they are listed and funded on Kiva's site.
[I am honored to host Matt Flannery as my first guest blogger. My October 2 post about Kiva generated copious commentary and tweeting. Accepting a guest strays somewhat from the construct of this blog, but seems highly appropriate in this case.--David Roodman]
This is Matt Flannery, Co-Founder and CEO of Kiva.
I recently read and enjoyed David’s article “Kiva Is Not Quite What It Seems”. The article is well-written and thoughtful, and has generated a lot of passionate responses. I'm writing here because I thought it would be helpful to hear from Kiva, as part of this dialogue, to increase understanding about what Kiva does and where it is going.
I see Kiva as a public property, “owned”, in a sense, by its three main constituents---the entrepreneurs, the lenders and the MFI partners, all of whom we serve. It is a delicate balance to serve all three at once. Sometimes it may seem that, for a particular decision, one has to benefit at the expense of the others. However, this is a short-sighted way of looking at things.
I firmly believe that, in the long run, each of Kiva’s constituencies want the others to be well-served, as they are all inter-connected, and rely on each other in their shared efforts towards poverty alleviation. What is needed to create this environment of mutual support is rich communication, promoting greater understanding around the challenges and needs of each constituent.
The Kiva website serves as the hub for that communication to take place. However, large gaps in communication still remain. We at Kiva have a long way to go to increase the level of understanding between the three parties and this article sheds some light on certain areas where we can improve.