Is microfinance the key to ending poverty in the developing world?
Microfinance, an economic development model pioneered by Bangladesh’s Grameen Bank in the 1970s, was once the realm of NGOs. But in recent years, private-sector financial institutions have discovered that making small loans to poor women can pay off. “I think there is a push toward private capital going toward the poorer sections of society,” says Professor Suresh Sundaresan, “not because of a philanthropic motivation, but because it’s good business.”
Sundaresan and PhD student Sam Cheung examined the issues facing both lenders and borrowers in the microfinance market, using data collected by the Microfinance Information eXchange (MIX), a nonprofit that promotes information exchange in the industry.
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