What is Social Capital?

The Sebstad & Cohen paper (2000) identified three pathways through which microfinance services can reduce vulnerability for poor households: smoothing income, building assets (financial, physical, human and social) and empowering women. I dealt with smoothing income and building financial and physical assets in Theme Four. Now, in Theme Five (Increased Social Capital & Improved Self-Confid read more...

What Does the Evidence Mean for Freedom from Hunger?

Over the past five months, I have been asking whether the poor can better smooth household consumption and manage financial shocks because of their use of microfinance services. Lynne Davidson Jarrell has provided us her summary of the main points of the fourteen posts. What does all this mean for Freedom from Hunger? For 25 years, Freedom from Hunger has designed, tested and taught independ read more...

Theme Four Wrap Up: More Household Savings & Better Consumption Smoothing?

by Lynne Davidson Jarrell Lynne has graciously volunteered to summarize the posts under Theme Four, from her perspective rather than mine. Note that she points to the posts relevant to each topic she covers (the numbers are hyperlinks). Each post on this blog is assigned a unique number in chronological order of posting, and all the posts for each theme are listed by number and title on the rig read more...

How Financial Deepening Affects Safety Nets of the Poor in Malawi—Indirect Impacts

In a prior post (# 49), I promised a closer examination of the unprecedented research reported by Jeffrey A. Flory on savings accounts offered by mobile units of the Opportunity International Bank in rural Malawi. This study is primarily concerned with the indirect effects of formal savings accounts on consumption-smoothing of non-users of the savings accounts—in particular, increase of inter-ho read more...

The Power of Suggestion (i.e. Financial Education) to Further Build Household Resilience

My last post (# 49) provided compelling evidence of consumption-smoothing and shock-coping that is improved by having access to microfinance. Can we (development interventionists) increase that positive effect by providing financial education? For a long time, there has been great enthusiasm and effort for building financial literacy through financial education of the populations of both develo read more...

Evidence that Shocks are Managed Better with the Help of Microfinance – The Recent RCTs

In my last post (# 48), I set out to look for evidence of shock-coping that is improved by having access to microfinance. Shocks are the more extreme (therefore more easily observed) manifestations of the consumption-smoothing capabilities, or resilience, of households. The last post offered evidence from Freedom from Hunger’s research. A data set of 224 “impact stories” of randomly selec read more...

Evidence that Shocks are Managed Better with the Help of Microfinance – Freedom from Hunger Research

Let’s look for shock-coping that is improved by having access to microfinance. Shocks are the more extreme, therefore more easily observed manifestations of the consumption-smoothing capabilities, or resilience, of households. Seasonal shocks are predictable, like scarcity of food in the months before the next harvest or downturn in business activities when local households are focusing on culti read more...

A Call for Evidence of Consumption Smoothing Due to Microfinance

A new theory of change is emerging for microfinance. People from poor households tap microfinance services to smooth consumption and build assets to protect against risks ahead of time and cope with shocks and economic stress events after they occur—leading to widespread poverty alleviation but not widespread poverty reduction. The research to date has been testing mainly the classic theory of c read more...

Observations of the USAID Evidence Summit – Day Two, December 13

While there will be videos and summaries on MicroLINKS, I would like to share what I took away from this very interesting meeting. Day Two of the USAID Evidence Summit (in Washington, DC) started with the topic that seems to be the focal point of USAID’s Office of Microenterprise and Private Enterprise Promotion (MPEP): Promoting Inclusive Value Chain Development Jeanne Downing moderated a read more...

Dunford’s Presentation to the USAID Evidence Summit – Day One

I’m in the midst of doing my final project for Freedom from Hunger, a throwback to my former life as an academic researcher. It has me crawling through our theory of change to deconstruct it and examine the evidence for each of the cause-and-effect linkages within—evidence from Freedom from Hunger’s research but also research by others on similar group-based microfinance programs. The most c read more...