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microcredit

Microcredit that helps more than just the borrower

David Evans's picture


Prices in African agricultural markets fluctuate a lot: “Grain prices in major markets regularly” rise “by 25-40% between the harvest and lean seasons, and often more than 50% in more isolated markets.” To an economist, this looks like a massive missed opportunity: Why don’t farmers just hold onto their harvested grain and sell at a much higher price during the lean season?

Broadening the Discussion of Microcredit Impact

Erin Scronce's picture



On Friday, February 27, CGAP, IPA, JPAL and the World Bank will host a full-day event to share the latest evidence from six randomized controlled trials across six countries. The event will feature the results presented by the researchers themselves, followed by a discussion on what this evidence means for policy and practice.

The impact of microcredit has been widely debated for the past decade, and has been both vilified and celebrated as a development tool. This new set of RCTs goes a long way toward confirming what many have suspected, but argued without much evidence, in recent years: that while microcredit can benefit some, the effects on poverty are modest, not transformational. Microcredit is but one tool in a multi-dimensional approach to addressing the multi-dimensional nature of poverty.

Counting Financial Inclusion and Debating its Merits

Leora Klapper's picture

Since October 29, 2015, Central Asia experienced fifteen earthquakes of moment magnitude 5.0 or greater, which on average amounts to an earthquake every 6 days.  Among these events are two notable ones that occurred on December 7th and 25th of 2015. The first earthquake was a 7.2 magnitude event in Murghob district of Tajikistan.

This was the largest earthquake in the country since the 1949 Khait earthquake and it brought widespread damage throughout the Gorno-Badakhshan Autonomous Region, Tajikistan's largest province located in the Pamir mountains. Losses consisted of 2 fatalities caused by landslides,  multiple injuries, complete or partial destruction of over 650 houses and 15 schools and kindergartens, damages to several health centers and a small hydroelectric power station, and loss of livestock. Estimates suggest that 4,000 people have been displaced and over 124,000 were affected by the earthquake, leaving many people homeless over the harsh winter period.

How Many More Bangladeshis are Now Breaking out of Poverty?

Naomi Ahmad's picture
Ancient cities, like Mohenjodaro in modern-day Pakistan, emerged relatively recently in human history.
Ancient cities, like Mohenjodaro in modern-day Pakistan, emerged relatively recently in human history (photo courtesy of Saqib Qayyum used through a Creative Commons license.)​


The growth of large metropolitan areas around the world has been very recent and very rapid, particularly when measured against the duration of human beings’ existence as a species. For the first 95% of our time on earth, we built no settlements at all. Cities of a million people arose during only the last 1% of homo sapiens’ time on earth, and there are already 500 such cities in the world today.

If we have spent most of our existence as small wandering bands, does that mean we are ill-equipped to manage urban settlements of this vast size? The key to success in our current urban transformation may in fact be the same as the key to mankind’s earliest origins - our ability to cooperate.

let my people go...but busfare certainly helps: seasonal migration in Bangladesh

Markus Goldstein's picture
A paddy farmer with his umbrella on a rainy day in West Bengal, India. Photo by Amit Jain / World Bank
Farmer in West Bengal, India. Photo by Amit Jain / World Bank)

If God appeared in the dream of a paddy farmer in India’s West Bengal and said, “You have made me happy with your hard work, make any three wishes and they will be granted,” the farmer will say “I want rain, rain, rain.”

That thought kept playing over and over in my mind, after interacting with farmers in the paddy fields of the Siliguri and Jalpaiguri districts of West Bengal. Located in India’s northeast, the area is famous for its scenic beauty, tea plantations and paddy fields. While the region’s fertile soil makes it ideal for a variety of crops, it is almost entirely dependent on rainfall for irrigation, like anywhere else in the world.

To reduce their dependence on the monsoons, India’s farmers have taken 12 million electricity connections and 9 million diesel pump sets with which they pump up groundwater for irrigation.

Although agriculture’s share of India’s economy is declining—it contributes to less than 15% of India’s GDP—it still employs 50% of the country’s workforce. Not surprisingly, perhaps, up to 20% of all the electricity used in India is for agriculture, mostly for irrigation. In some states, this can account for as much as 30-50% of all the electricity used in the state.

There are many states where power for agricultural purposes is highly subsidized, and this, combined with an unreliable supply of electricity, often causes farmers to leave their pumps on all the time. This wastes both electricity and water, with too much energy being used and too much groundwater being extracted, often way more water than needed. 

Since more than half of India’s cultivated land is yet to be irrigated, a business-as-usual scenario will lead to a huge rise in India’s energy needs for agriculture alone.

But there is an alternative—solar energy.

With decreasing solar modules prices (70% in the last 4 years), solar pumps are fast becoming a viable financial solution for irrigation.

However, there are several questions about the use of solar pumps that need to be answered:

Won’t solar pumps only make farmers more lax about using energy resources and wasting groundwater?

Microcredit deserves support to benefit the poor

Shahid Khandker's picture

I’m currently attending this large conference in lovely Toronto and trying to pack-in as many sessions as possible. A handful of papers have stood out to me – two evaluations of on-going pay-for-performance schemes in health and two methodological papers related to the economics of obesity.