The economics of microfinance

The microfinance revolution has allowed more than 150 million poor people around theworld to receive small loans without collateral, build up assets, and buy insurance. The idea thatproviding access to reliable and affordable financial services can have powerful economic and socialeffects has captured the imagination of policymakers, activists, bankers, and researchers around theworld; the 2006 Nobel Peace Prize went to microfinance pioneer Muhammed Yunis and Grameen Bank ofBangladesh. This book offers an accessible and engaging analysis of the global expansion offinancial markets in poor communities. It introduces readers to the key ideas driving microfinance,integrating theory with empirical data and addressing a range of issues, including savings andinsurance, the role of women, impact measurement, and management incentives. This second edition hasbeen updated throughout to reflect the latest data. A new chapter on commercialization describes therapid growth in investment in microfinance institutions and the tensions inherent in the efforts tomeet both social and financial objectives. The chapters on credit contracts, savings and insurance,and gender have been expanded substantially; a new section in the chapter on impact measurementdescribes the growing importance of randomized controlled trials; and the chapter on managingmicrofinance offers a new perspective on governance issues in transforming institutions. Appendixesand problem sets cover technical material.