Ideas to Action:

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CGD Policy Blogs


Yunus Wins Presidential Medal of Freedom

The President announced today the 16 recipients of the 2009 Presidential Medal of Freedom, America’s highest civilan honor. The President praised the recipients for breaking down barriers and lifting up their fellow citizens: "These outstanding men and women represent an incredible diversity of backgrounds. Their tremendous accomplishments span fields from science to sports, from fine arts to foreign affairs. Yet they share one overarching trait: Each has been an agent of change.

If Microcredit Had Bubbles, Would We Know?

Think of microcredit as you read John Kenneth Galbraith, who wrote that financial euphorias share common denominators:

This is of no slight practical importance; recognizing them, the sensible person or institution is or should be warned. And perhaps some will be. But...the chances are not great, for built into the speculative episode is the euphoria, the mass escape from reality, that excludes any serious contemplation of the true nature of what is taking place.


Indicators of (Dis)empowerment: Interest Rates Overrated? Repayment Rates Underrated?

In my writing now, I am sorting through lines of thought on how microlender behavior enhances or reduces the freedom of poor borrowers---freedom in Amartya Sen's definition, as agency in one's own life. The oldest strand here is that of "usury," the idea that charging interest above some level (maybe zero) is unjust, akin to the full-bellied selling food to the starving for a profit. As you probably know, the Compartamos IPO revived within the microfinance world the ancient debate over usury.

High-tech Microfinance: The Business Case

A theme I have hardly blogged is what the business perspective teaches us about how microfinance does and can work. A few years ago ABN AMRO commissioned CGD to write a report on why some microfinance institutions (MFIs), including non-profits, manage to cover costs, attract capital, and grow to serve more people---in a phrase, to succeed as businesses. Chapter 5 of the book (draft due soon) is based on that paper. Having worked this seam already, I think about it less now.