Wednesday, February 2, 2011

Micro-Dreams Documentary

In autumn 2009, a young Nepalese filmmaker extensively travelled dozens northern Bangladeshi villages meeting hundreds of microfinance service users and observing the alleged change brought about by the system. The documentary, Micro Dreams (2010), features the crux of his findings and poses some crucial questions to microfinance practitioners, development agencies and governments across the globe as to whether microfinance should continued to be taken as a virtual panacea for economic development and social empowerment of the poor. Preview this film!

Faculty Profile

Since 2000 Julia Paxton has served as associate professor in the department of economics here at Ohio University. She specializes in development economics and microfinance and has done research on microfinance and group lending in Africa where she has modeled group loan repayment behavior in Burkina Faso. In addition she has done extensive research on rural finance in Mexico and has worked with Technical Assistance to Rural Microfinance Project (PATMIR), a project specializing in technical assistance focused on achieving financial inclusion of marginalized rural population from Mexico. Her professional experience in microfinance includes working as Microfinance Consultant for The World Bank, BANSEFI, SAGARPA, and ALO. In 2005 she coordinated financing between International Studies and the Economics Department to bring. Mike Goldberg from the World Bank to speak about  the World Bank's approach to Microfinance. Dr. Paxton continues to teach courses on development and agricultural economics highlighting outreach and sustainability of financial institutions, savings by the poor, group lending. Her most recent research focuses on how access to microfinance influences the savings patterns of poor households in Mexico. Recently she talked with me candidly about the role of microfinance as a tool for development!

In the past few years microfinance has come under increased criticism by
development practitioners who see the operation as reinforcing the stigma of
money lending making people vulnerable to accepting financial support from
more exploitative forces, what are your opinions of such criticisms? How do
you view the role of microfinance as a tool for economic development?

"....A microloan is the same as taking on debt. In many cases, assuming more debt is not the most beneficial path for a poor person. Other types of development interventions or financial products might be more appropriate. For example, the demand for secure savings facilities is highly valued by the poor. However, almost all people need access to credit at one time or another in their lives. The more options that poor people have for financial services, the better. Providing microfinancial services to the poor is costly, particularly in rural areas. This sometimes results in high interest rates. Microfinance institutions need to be vigiliant to keep down costs in order to provide the most benefit to their clients. People who look to microfinance as a panacea to world poverty may be disappointed. Nevertheless, it provides the incredibly important service of smoothing the incomes of a vulnerable population and allowing them to have usefully large lump sums of money for emergencies, investments, education, special events, or consumption."

In this decade,where do you see the future microlending heading, do you
see changes in the way in which it operates as tool of economic development
for developing nations?

"...More innovations are needed to drive down the transactions costs of lending both for the microfinance institutions and for the clients. There is some exciting technology that may help this occur as we head toward a more cashless, electronic economy. The industry is heading into a wider array of financial services. The most innovative programs not only supply microloans, but also provide other extremely useful financial services including savings instruments, remittance
Contact Julia Paxton

services, microinsurance, housing loans, etc..."

Monday, January 24, 2011

Bangladesh probes bank founded by microfinance icon

In the latest crisis to hit the global microcredit industry, the Bangladeshi government launched an investigation recently of Nobel Peace laureate Muhammad Yunus's Grameen Bank whose microfinance model was hailed revolutionary and replicated worldwide. The investigation comes as other governments are scrutinizing the microcredit industry following reports of wildcat loans, sky-high interest rates and coercive debt collection sinking borrowers - many of them women into financial debt. As criticsms arise, is microfinance a viable future model for sustainable development? View this story in detail.

Wednesday, January 12, 2011

Economics and Development

Microlenders, Honored With Nobel, Are Struggling

In 2006, Grameen Bank,  pioneered microcredit in India. Along with its founder Grameen Bank was awarded the Nobel Peace Prize. However less than 5 years later there has been hostility toward microfinance-  a sharp reversal from the praise and good will that politicians, social workers and bankers showered on the sector in the last decade.In India- home to the world’s fastest-growing microcredit businesses, lending has slowed sharply since the state adopted a strict law restricting lending. View Story in Detail

Picture: Kainaz Amaria for The New York Times

Friday, January 7, 2011

Environment and Development/ Economics and Development

World Risks Food Riots as Grains Climb, Economist Chalmin Says

Crop damage caused by flooding in Australia and drought in Argentina is likely to boost grain prices in coming months, Chalmin, an economics professor at the University of Paris- Dauphine. According to the United Nation's Food and Agricultural Organization World food prices advanced to a record in December, partly driven by higher sugar prices. Combined with increase weather shocks around the world what will this mean for developing nations?
View story in detail.

Thursday, January 6, 2011

Health and Development

Mexico's other enemy: Obesity rates triple in last 3 decades

According to the Organization for Economic Cooperation and Development, 69.5% of the Mexican population aged 15 and older is overweight or obese. This is the highest rate in the world, even higher than in the United States -- which historically had the highest rate -- and the United Kingdom, which has the highest in Europe. In the attempts to curb the cycle of obesity the government launched a nationwide campaign urging people to excersize. Nevertheless as increases in income occur throughout the country, the government has noticed the number of Mexican citizens overweight.  View this story in more detail.

Wednesday, January 5, 2011

Gender and Development

Family planning helps women … and slows climate change

Recent research suggests that simply meeting the existing "unmet need"of global family planning would deliver up to one-seventh of the carbon reductions essential to slow global warming at a low cost. With women empowered to plan their pregnancies, the world's population grows more slowly, as do carbon emissions.
Providing women with family planning services they want and need is deemed to be  benefitial for the health of families throughout the world.  In the country of Uganda  Family Health International (FHI), an NGO working with Uganda's ministry of health, began providing family planning services to help increase women's empowerment and provide essential services, however challenges still arise in meeting the existing unment need of global family planning.