Independent Research and Policy Advocacy

The Miracle of Microfinance – An Evaluation

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The miracle that microfinance is thought to be was subjected to a randomized evaluation in a study which was a result of a research partnership between MIT and the Centre for Microfinance at IFMR.

The research findings were presented by Prof. Esther Duflo to a packed audience at the IFMR campus on July 9th, 2009.

Prof. Esther Duflo presenting the study
Prof.Esther Duflo

According to her, the need for such an evaluation was necessitated by the fact that microfinance is often subsidized and there is a problem of self-control, which can if not dealt with, lead to a debt-trap.

Audience in rapt attention

Some of the key findings which she summed up with were:

  • Take-up of MFI loans is lower than is often predicted – this matters for planning sample sizes and it also suggest that microcredit is not for everyone.
  • Microcredit does have impacts and they differ for different households.

To know more about the research study please click here.

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