I get annoyed by the $3 fees I sometimes get charged by ATMs, but this figure pales in comparison to the high cost migrants face in sending remittances. According to World Bank estimates, some $317 billion in remittances were sent to developing countries in 2009. This money is often a vital income-stream for recipients.
access to finance
Microfinance has had its share of PR problems lately.
Editor’s Note: Lars Johannes is an Infrastructure Specialist in the World Bank’s Sustainable Development Network, working for the Global Partnership on Output-Based Aid (GPOBA). He is task team leader and advises projects in health, education, and energy.
Over on the CGAP Microfinance blog, Rich Rosenberg has a provocative analysis of interest rates charged by microfinance institutions (MFIs). Rich takes a look at a formula prooffered by Mohammad Yunus on how to judge the worthiness of MFIs:
David Roodman of the Center for Global Development has written an excellent blog on the woes at Grameen Bank, asking whether Grameen has been fueling a microfinance bubble. Many households in Bangladesh are overindulging in microfinance loans:
A few months ago I discussed the release of the World Bank publication on Bringing Finance to Pakistan's Poor. One of the authors' key findings was that most Pakistanis have a strong aversion to debt, and are seeking financial channels to store their savings, rather than for borrowing. According to their survey data, most Pakistanis are more interested in accessing savings accounts than loans.
Last month, Ryan took a look at the impact of the financial crisis on microfinance in Latin America, arguing that uncompetitive microfinance markets and small or inexperienced MFIs were responsible for increased premiums.
Brookings has released a report on the state of access to finance in developing countries, taking a specific look at the lessons learned from the mobile banking sector in Kenya. The report paints a troubling picture of the state of financial access in many developing countries, but then gives some reasons for optimism.
First, the bad news:
Yesterday I attended a presentation at CGAP on responsible finance, which featured three excellent guest speakers, including Fe de la Cruz, Director of Corporate Affairs, Central Bank of the Philippines (the other guests included a former member of the Brazilian Central Bank, and Daryl Collins, co-author of Portfolios of the Poor).