Unitus today released a rather sudden announcement that it will be releasing its staff and “shift[ing] its resources and activities to areas of maximum socio-economic impact for underserved people throughout the world that have yet to attain either scale or commercial viability.” I agree with Sean Stannard-Stockton that while the announcement presents the closing as…
The GiveWell Blog
All Microfinance charities Posts
Microfinance’s “failure” to reach the poorest
USAID’s most recent report on microfinance and microenterprise development tells an interesting story and, in my view, shows just how widely microfinance has been (and continues to be) misunderstood. While many advocate that microfinance institutions focus on people under the global “extreme poverty line”, USAID’s report implies that actually doing so is rare and even…
Kiva suspends partnership with large, criticized partner LAPO
Back in December, we expressed concerns about LAPO, one of Kiva‘s largest microfinance partners. Last month, the New York Times ran an article implying criticism of LAPO. Now, Kiva has suspended its partnership with LAPO. A couple of questions this raises: Which of the several objections to LAPO have led to the suspension? Several concerns…
If you’re worried about high interest rates, you should be worried about any microfinance institution
I’m very interested in the recent debate over microfinance interest rates (see our response to the NYT article, as well as Te-Ping Chen’s comments at Change.org). It seems that realizing how high interest rates can be has been a wake-up call to many that microfinance can easily be doing damage as well as good. If…
No interest rate is too high
Recent coverage of microfinance has had a sharp focus on interest rates, implying some line between “reasonable” interest (associated with “social investment”) and “excessive” interest (associated with “loan sharking”). In Nicaragua, President Daniel Ortega, outraged that interest rates there were hovering around 35 percent in 2008, announced that he would back a microfinance institution that…
Microfinance interest rates
One of the more difficult things to understand about the microfinance institutions we’ve investigated is the “true” interest rate they’re charging their borrowers. In July 2009, David Roodman of the Center for Global Development wrote: It appears that many MFIs impose subtle fees that effectively raise interest rates. Some charge one-time loan origination fees. Some…