Looking at the studies through this lens does two things for me: ameliorates the harsh pronouncement against microfinance (by the first study and the Globe article in particular) and issues a challenge for “bottom of the pyramid” innovators on how to engage the inefficiencies and less impactful pieces of microfinance.

There are people already problem-solving some of these issues. For example, scaling micro-enterprise is key to improving the depth of help for 1 micro-borrower/entrepreneur (how much the microloan improves their life) and as well as the breadth (# of people whose lives improve and stabilize from a microloan). The Ayllu Initiative focuses on micro-franchising social enterprise, which will increase a micro-enterprises’ buying/selling power, amongst other benefits. The video on their website explains their model really well, so check it out for more details on scaling.

Another point well-made that I’ve always believed is microfinance is one arrow in the quiver of anti-poverty. Bringing access to wealth building financial tools to the economically marginalized (not just loans, but micro-savings, micro-insurance, personal micro-loans, etc) is a vital piece to the puzzle. But this needs to be coupled with structural change (public policy, societal beliefs, education, etc) so that future generations will not be born into such difficult circumstances.

It’s cliche, but true, that these are really complex problems. We need people on the ground making loans, people studying what impact those loans have, and people taking the information to take these tools to the next level.