Comments on: Microfinance where access already exists http://blog.givewell.org/2009/11/03/microfinance-where-access-already-exists/ Exploring how to get real change for your dollar. Thu, 17 May 2012 07:20:20 +0000 http://wordpress.org/?v=2.0.7 by: Holden http://blog.givewell.org/2009/11/03/microfinance-where-access-already-exists/#comment-88019 Mon, 23 Nov 2009 15:05:10 +0000 http://blog.givewell.org/2009/11/03/microfinance-where-access-already-exists/#comment-88019 We aren't trying to argue from one study that this is always - or usually - the way it is. It's just a vivid example of what seems like inadequate knowledge of local context - and overestimation of the need for a product - on the part of nonprofits. (When we are making more general arguments rather than give examples, we do try to cite more recent studies.) It's possible that it was the researcher who was inadequately informed, and that the nonprofits had good reasons to be there (perhaps along the lines you cite). However, I would have guessed that such reasons would have made it into the paper. And the negative finding of the study - which, while not a randomized controlled trial, still appears to have an unusually good design for this area - is also worth noting. We aren’t trying to argue from one study that this is always - or usually - the way it is. It’s just a vivid example of what seems like inadequate knowledge of local context - and overestimation of the need for a product - on the part of nonprofits. (When we are making more general arguments rather than give examples, we do try to cite more recent studies.)

It’s possible that it was the researcher who was inadequately informed, and that the nonprofits had good reasons to be there (perhaps along the lines you cite). However, I would have guessed that such reasons would have made it into the paper. And the negative finding of the study - which, while not a randomized controlled trial, still appears to have an unusually good design for this area - is also worth noting.

]]> by: An NGO worker http://blog.givewell.org/2009/11/03/microfinance-where-access-already-exists/#comment-87684 Sun, 22 Nov 2009 05:57:26 +0000 http://blog.givewell.org/2009/11/03/microfinance-where-access-already-exists/#comment-87684 Your summary has a ring of truth to it but it is too simplistic. First, you a quoting a report that was published 10 years ago. This means that the data is probably older. A lot of things change in 10 years. You may want to quote studies that have been published in the past year or so instead. Second, in terms of microfinance.... People can always borrow. Moneylenders exist everywhere. Charities will always work in areas where lending already happens. Government programs exist nearly everywhere as well. This doesn't means that the program are suited to the needs of the clients. Requirements to get loans from government programs are usually quite onerous. From what I've heard, loan sizes is a significiant problem in the Thai context. The report quotes that the BAAC gives loans with subsidized interest rates. The problem is what will happen when the subsidized loan programs stop.... as it what is happening in Thailand now. Charities and non-profit try to set up an alternative program because subsidized programs always end. Perhaps charities are more long-term focussed on on solving problems then. While your viewpoint is a bit too simplistic in many ways, I do agree with you that many charities don't take the time to research the situation well before starting a program. This is a definite weakness that I see happening as I work in the development sector. Your summary has a ring of truth to it but it is too simplistic.

First, you a quoting a report that was published 10 years ago. This means that the data is probably older. A lot of things change in 10 years. You may want to quote studies that have been published in the past year or so instead.

Second, in terms of microfinance….
People can always borrow. Moneylenders exist everywhere. Charities will always work in areas where lending already happens. Government programs exist nearly everywhere as well. This doesn’t means that the program are suited to the needs of the clients. Requirements to get loans from government programs are usually quite onerous. From what I’ve heard, loan sizes is a significiant problem in the Thai context.

The report quotes that the BAAC gives loans with subsidized interest rates. The problem is what will happen when the subsidized loan programs stop…. as it what is happening in Thailand now. Charities and non-profit try to set up an alternative program because subsidized programs always end. Perhaps charities are more long-term focussed on on solving problems then.

While your viewpoint is a bit too simplistic in many ways, I do agree with you that many charities don’t take the time to research the situation well before starting a program. This is a definite weakness that I see happening as I work in the development sector.

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