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Can Impact Investing Avoid the Failures of Microfinance?

Harvard Business Review

Impact investing can learn from the history of microfinance — the provision of debt and other financial services to the poor — an industry that was at a similar stage 15 years ago. Lessons from Microfinance. There are two major debates in particular about microfinance that are relevant for the impact investment industry.

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Making Microfinance More Effective

Harvard Business Review

The Grameen model of microfinance gained a great deal of attention in the international development field after early data showed that it was associated with high repayment and low default. Our findings are captured in a working paper which we summarize below. This model makes small loans, usually to women, without requiring collateral.

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The Microfinance Contagion Scenario

Harvard Business Review

So far, the Andhra Pradesh (AP) microfinance crisis has largely been viewed as a local issue, with relatively little impact beyond AP or India's borders. Other microfinance crises, in Bolivia, Nicaragua, Nigeria, and Bosnia, have not spread beyond the borders of a particular country. That could likely have consequences.

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Women as Microfinance Leaders, Not Just Clients

Harvard Business Review

This year my organization decided to give an award for "excellence in leadership," and among the elements of excellence we expect to see in the winner, we're putting one criterion front and center: the nominees' commitment to gender diversity in their leadership ranks.

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Businesses Serving the Poor Need to Get Over Their Unease About Profit

Harvard Business Review

The microfinance industry is a rare D and E success story. Microfinance banks, which provide desperately needed loans to low-income consumers, draw mainstream investors because of their attractive returns. The result has been explosive growth. And in D and E markets, the environment demands a very high contribution per transaction.

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President Obama Can Make Start-Up America Succeed

Harvard Business Review

Many governments play too interventionist a role, and forget that to succeed, entrepreneurship requires an entire ecosystem, each aspect with its own committed stakeholders, not just government reform and support. Obama has placed real entrepreneurs at the heart of the dialogue, and you appear to be listening to them.

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How to Make Room in Your Work Life for the Rest of Your Self

Harvard Business Review

For example, when a working father is asked by his boss to entertain visiting clients last minute, he may reluctantly agree, feeling as though he has to supress his parental identity and commitment in order to be a good employee. To do this, you need to be socially savvy and flexible.

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