The University of Mary Washington will host the fourth annual Month of Microfinance this April, leveraging the month as a platform for a global discussion surrounding the results of a new study questioning microfinance’s impact on poverty.
The Month of Microfinance is a global grassroots movement that aims to solve poverty through client-centered microfinance programs, including microcredit loans. Yet recent studies show that this movement might not be making a difference. The academic research, presented at the World Bank in February, included six randomized control trials of microcredit programs. The results showed that while microcredits are a viable method of developing business pursuits, the loans lack a significant and sustainable impact on moving people out of poverty.
According to UMW Professor of Economic Shawn Humphrey, founder of the Month of Microfinance, the research is a challenge to the traditional microfinance narrative, where clients access credit to become entrepreneurs and pull themselves and their families out of poverty.
“It’s a big moment for the movement,” said Humphrey. “Microfinance is more than just microcredit though. The conversations throughout April will highlight the need for microcredit to be complemented by additional services like financial literary training.”
With the Month of Microfinance taking place in April, just two months after the results were published, the month becomes an opportunity for the microfinance community to respond to the research.
“We’re the stage for the conversation about how to respond to this research,” said Humphrey. “We’re publishing responses to the research from key players in the space to start the discussion.”
The Month of Microfinance blog includes two key responses to the research from Larry Reed, Director of the Microcredit Summit Campaign, and Sam Daley-Harris, author of Reclaiming our Democracy. The blog also shares an article by James Militzer, editor of NextBillion Financial Innovation, who notes that “for a researcher working on microcredit, this is kind of a defining moment.”
UMW will also host a screening of the documentary “Living on One Dollar” and a panel discussion about the work of La Ceiba, a student-run microfinance organization in Honduras, on Friday, April 24. The event will begin at 6:30 p.m. at the Whole Foods in Richmond, Virginia.
The Month of Microfinance was established in 2008 by Humphrey and is run by five UMW students. The month brings students, instructors, microfinance professionals and researchers together with more than 100 global partners to facilitate conversations and connections among those involved in poverty.
For more information about the Month of Microfinance, visit http://monthofmicrofinance.org/ or join the conversation on Twitter with #MicrofinanceCanBe.