Due Diligence: An Impertinent Inquiry into Microfinance Event Video

Microfinance has been whiplashed by the hype cycle. Where it once was seen as a powerful treatment for poverty, recent headlines have favored phrases such as "borrower revolt," "doesn't work after all," and "suicide." What to make of this cacophony? David Roodman seeks the sensible truth in his new book, Due Diligence: An Impertinent Inquiry into Microfinance, with an investigation that is unprecedented in its depth and breadth. He concludes that, while financial services are no more likely to lift people out of poverty than clean water and electricity, the microfinance movement has built thriving industries that deliver valuable services to millions of poor people. The challenge going forward is to help microfinance play to its strengths. In general, that calls for putting less money into microcredit, to avoid credit bubbles and increase the incentive for microfinance institutions to take savings deposits.

David Roodman is a senior fellow at the Center for Global Development currently focusing on microfinance. He wrote Due Diligence through a pathbreaking "open book" blog, where he shared questions, discoveries, and chapter drafts. In 2011, Roodman ranked in the top 10 on the RePEc list of top young economists in the world. Roodman previously worked at the Worldwatch Institute and spent academic year 1998--99 on a Fulbright in Vietnam. He has never taken a course in economics or statistics.

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Nonprofits & Activism

Tags:

• microfinance
• David Roodman
• Center for Global Development