Jonathan Morduch discusses the challenges of living on $2 a day with Geoff Dabelko of the Woodrow Wilson Center.

Watch the video here.

The Bill & Melinda Gates Foundation just announced $38 million in grants to MFIs with the goal of building efficient models and systems for small savings accounts.

FAI Director Jonathan Morduch weighed in, saying that the Gates grant can “push much-needed innovation,” and that “Handling millions of small transactions is costly, and banks, rightly, are wary of taking on money-losing activities. But new technology promises to fundamentally recalibrate the cost equation.”

New podcasts available from FAI Directors:

Jonathan Morduch talks about Portfolios of the Poor. Listen here.

Dean Karlan discusses microfinance and commitment contracts. Listen here.

Dean Karlan and Sendhil Mullainathan examine the importance of structuring microfinance instruments to match the needs of clients and provide recommendations for further evaluations.  Key findings of the paper include:
•    Despite rapid growth in outreach, microfinance providers often have yet to reach a large proportion of the market of poor households.
•    One explanation may be that microfinance practitioners have been slow to implement innovations to the standard lending methodologies.
•    By tailoring products to clients’ needs and repayment capacity, flexible microfinance has the potential to reach many more clients at lower cost. This can be proven with randomized evaluations of flexible lending contracts.

To read the article.

Jonathan Morduch discusses how microfinance works to help the poor, and evidence from Portfolios of the Poor.

While the results of the Philippines and India microcredit impact studies are making the rounds, another (ongoing) FAI/IPA impact study recently made news in Mexico.

"...Compartamos, in its ten years of existence, has had many stories of success, but they decided to sponsor a study to be carried out by one of the organizations most commited to the fight against poverty, entrusting the work to Innovations for Poverty Action (IPA), which specializes precisely in analysis, evaluation, and research of techniques and programs for social development."

The full article is available here. (In Spanish)

SIPA's Microfinance Working Group invites you to join them for a special panel discussion on the social impacts of microfinance: Taking Stock of Microfinance: Does it Really Help the Poor.

Moderated by Louise Schneider, Vice President of Global Social Investment at Deutsche Bank

Panelists include:

Jonathan Morduch, Professor of Economics and Public Policy at NYU, Director of Financial Access Initiative

Richard Rosenberg, Senior Advisor to the Consultative Group to Assist the Poor

Micol Pistelli, Director of the Social Performance Program at the Mix Market

For more information and to RSVP click here.

New studies co-authored by Dean Karlan found that in Bolivia and in the Philippines, simply texting people and reminding them to save money increased their savings-account balances by 6%.

Read the full Wall Street Journal article here.

In this week's Slate.com advice column on philanthropic living and giving, Sandy Stonesifer discusses findings from Portfolios of the Poor to address a growing field of interest in microfinance: the impact of microlending sites on poverty alleviation.  Citing one of the fundamental lessons of Portfolios, Ms. Stonesifer asserts that the biggest challenge of poverty isn't necessarily how small your income is, but rather how variable and unpredictable it can be.  Thus, a financial instrument that helps households smooth their income is valuable even it it doesn't change their net income. 

To read this letter in full, please visit:

Matthew Bishop, the business editor of The Economist, spoke with Portfolios of the Poor co-author Jonathan Morduch last week at the Clinton Global Initiative.  Morduch discussed the unique research methods and surprising lessons of the book, and offered recommendations for improving financial tools for the poor.

To see the interview, please visit:

In this week’s Boston Globe letters to the editor, Elisabeth Rhyne from the Center for Financial Inclusion emphasized the need for more impact studies on microfinance, citing Portfolios of the Poor as an “invaluable” contribution to the field.  Read the entire letter here.

The chairman and CEO of Visa, Inc. draws on research Portfolios of the Poor to discuss the future of expanding financial access.

Read the full article here.

The Guardian publishes a second review of Portfolios of the Poor.  The review highlights a few of Portfolio’s “gripping” stories and commends the book for addressing questions “fundamental to many of the debates about aid and development.”

The Guardian first published a review of Portfolios of the Poor in June.

Chris Blattman recommends Portfolios of the Poor on his blog.

Caitlin Weaver and Aparna Dalal weigh in on how behavioral economics can help us design better products for the poor in the latest issue of Microfinance Insights.

Read the full article here.

Owen Barder of Development Drums recently spoke with Daryl Collins and Jonathan Morduch (two of the authors of Portfolios of the Poor) about the poor’s use of financial services and what new models of financial services would best assist them in managing their limited funds.

The interview is available for a listen here.

FAI Managing Director Jonathan Morduch was quoted in an Economist article called "Froth at the bottom of the pyramid."  Morduch commented on the potential for a "microcredit bubble" based on evidence from the book he co-authored, Portfolios of the Poor.

Read the full article here.

FAI Director Dean Karlan talks to Romesh Vaitilingam about FAI and IPA's experimental methodologies that examine what kinds of microfinance products work and why. They also discuss his work on ‘commitment contracts’, such as this project that helped people in the Philippines quit smoking. The interview was recorded at the American Economic Association meetings in San Francisco in January 2009.

Listen to the podcast here.

The magazine features recent and emerging research on the impact of microfinance from two JPAL and IPA studies conducted in India and the Philippines.

Read the full Economist article here.

Jonathan Morduch, Managing Director of FAI and co-author of Portfolios of the Poor, appeared on FOX Business on July 13, 2009, during a segment called "Understanding the Poor." Morduch discussed the surprisingly complex financial lives of people living on less than $2 a day. 

View the video clip here.

FAI Managing Director Jonathan Morduch discusses the opportunities and challenges of the "social business" model with social enterprise Devex.

The idea of "social business" is interesting, but the debate - now led by the likes of Bill Gates, microfinance trailblazer Muhammad Yunus and others - is still in its infancy, says Jonathan Morduch, New York University economics professor and microfinance expert. To prevent it from becoming a fad, an honest discussion must better articulate business models and address potential trade-offs, he argues.

See the interview here:

The New Yorker discusses Portfolios of the Poor. 

Read the full review here.

Tuesday morning, Tom Ashbrook, the host of On Point (WBUR) spoke with researchers Stuart Rutherford and Daryl Collins and one of their survey participants Lufefe about what it really means to live on $2 a day.  Lufefe, along with hundreds of others, participated in a year-long survey of the poor’s financial practices. Rutherford and Collins, along with Jonathan Morduch and Orlanda Ruthven, gathered meticulous financial diaries that demonstrate not only don’t the poor live hand-to-mouth, but they manage their money well enough to save for life’s big emergencies and celebrations. If you visit WBUR’s site, you can listen to the program and also view a series of photos taken in the Langa Township where Lufefe lives and where much of the research was conducted.

Collins and Rutherford’s research is available in Portfolios of the Poor. Visit the book’s web site here: http://www.portfoliosofthepoor.com/

FAI Managing Director Jonathan Morduch discusses his newest book, “Portfolios of the Poor.”

“Our new book, Portfolios of the Poor: How the World’s Poor Live on $2 a Day, comes to conclusions that turn common assumptions upside down. Far from living hand-to-mouth, all of the families interviewed were borrowing, saving, and leading active financial lives because of their poverty, not in spite of it. One of the central conclusions is that when you live on so little and face a life of uncertainty, thinking about the future is an imperative, not a luxury. You can’t afford not to save.”

Read the full article here:

Nicholas Kristof blogs about lessons on savings from Portfolios of the Poor: How the World's Poor Live on $2 a Day.

The New York Times Idea of the Day acknowledges assumptions about poverty and quotes research from Portfolios of the Poor: How the World's Poor Live on $2 a Day.

Challenging the assumption that the poor can't save, Dean Karlan found that even low-income bank customers in the Philippines and Bolivia managed to deposit some of their wages when nudged to do so by regular text message reminders.

Read more about the Philippines project here, and the Bolivia project here.

The Financial Access Initiative and Africa House Present:

Portfolios of the Poor: How the World’s Poor Live on $2 a Day
A panel discussion followed by a book signing and wine and cheese reception.

Thursday, May 7th, 6 - 8 pm
NYU Law School, Lipton Hall

Click here to RSVP.

Jonathan Morduch is the keynote speaker at the University of Pennsylvania's Third Annual Microfinance Conference: Microfinance on the Move: The Road Ahead on Friday, April 3rd at the University of Pennsylvania Jon. M Huntsman Hall

FAI Managing Director Jonathan Morduch talks about being an entrepreneur in the U.S. in a new Associated Press article.

FAI Managing Director Jonathan Morduch is the keynote speaker at the University of Pittsburgh conference "Microfinance and the Law".

A new article by FAI Director Sendhil Mullainathan discusses how a psychologically richer view of the tough choices poor households make in managing their resources will transform the way we understand and deal with poverty.

FAI and IPA request your participation in a short survey of institutions that offer or plan to offer credit life insurance. The survey is designed to support research on the design, demand, and use of credit life insurance around the world in order to assist in the development of these products.If your institution offers or plans to offer credit life insurance, please participate in the survey - it should take less than 15 minutes.

FAI Managing Director Jonathan Morduch was awarded a Doctorate Honoris Causa from the Universite Libre de Bruxelles. Morduch spoke before the Centre for European Research in Microfinance on the topic of "The Microfinance Promise: Banking the Next Billion".

Results from randomized evaluations conducted by Dean Karlan, David McKenzie, and Jonathan Zinman have shaken solidly held beliefs about microfinance.

Related Projects and Papers:                                   

Estimating the Impact of Small Consumer Loans on the Working Poor in South Africa
Impact of Group versus Individual Liability in the Philippines

Microfinance Meets the Market

FAI Managing Director Jonathan Morduch discussed the challenges facing domestic microlender, Grameen America.

FAI Managing Director Jonathan Morduch was featured on Business Week TV, discussing the expansion of microfinance in the U.S. Morduch addressed the challenges that microentrepreneurs face in the U.S. relative to in the developing world. He argued that the 40 million unbanked and under-banked residents of the United States first need improved access to basic banking services like checking and savings accounts, rather than primarily access to loans to run small businesses.

To watch the full interview - Business Week TV

FAI Director Dean Karlan provides commentary for Marketplace on how microlending is a valuable tool, but how it needs more creativity to keep growing.

To read the full text and listen to commentary - Marketplace

The article highlights the importance of stepping back from the rhetoric of microfinance and taking a close look at how financial access helps people better run their lives.  It also underscores the importance of impact studies.  In line with the new FAI paper on Indonesia ("The Unbanked"), the article highlights that small loans are used for a variety of purposes, not just for business investments.  These include consumption smoothing, coping with crises, and paying for education. 

In quoting Jonathan Morduch's work, it highlights that larger impacts on employment and economic growth might be found by lending to larger-scaled businesses - and that interventions beyond finance might, in some contexts, be critical to truly unlocking the potential of small-scale entrepreneurs.

To read the full article - New Yorker

Related Projects:
The Unbanked: Evidence from Indonesia

FAI Directors Jonathan Morduch and Dean Karlan weigh in on evidence surrounding the impact of microfinance in Business Week Online.

To read the full article - Business Week

Related Projects:
Estimating the Impact of Small Consumer Loans on the Working Poor in South Africa

Dean Karlan, FAI Director and assistant professor of economics at Yale, has been given a Presidential Early Career Award for Scientists and Engineers (PECASE), the highest honor for beginning researchers in the United States.

Karlan is only the fourth economist to win the distinguished award since it was established in 1996 to recognize talented young scientists and engineers who “show exceptional potential for leadership at the frontiers of knowledge.” Karlan was chosen “for his outstanding contributions to the fields of behavioral, experimental, developmental and financial economics; and for providing students with hands-on experience in field experiments and international collaborations.”

To read the full article - Yale University

Development strategies often focus on expanding access to credit as a key component, and microfinance has grown rapidly due to this idea that expanding access to "traditional" entrepreneurial credit will help improve the welfare of the poor. There is less consensus on the role of consumer credit (often referred to as "pay day lending") in expansion initiatives, and many practitioners and policymakers are skeptical about this type of "unproductive" lending.

Financial Access Initiative researcher, Dean Karlan, and his co-author Jonathan Zinman of Dartmouth, have shed some light on this debate and their groundbreaking results are highlighted in this week's edition of the Economist.

To read the full article - Economist

Related Projects:

Estimating the Impact of Small Consumer Loans on the Working Poor in South Africa