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Sarah Beaube

I found this article to be really interesting as it illustrated that the effects of microfinance can vary greatly from community to community. In my opinion, one of the most important takeaways from this reading is that the recipe for increasing opportunities will vary greatly in different communities. It will take time and patience to figure out the best way to do this -- to spot differences and create the right design for them. This somewhat reminds me of the O-ring theory, actually. Maybe tweaking one small detail in the design could produce vastly different results. Another section that I found compelling was the one on savings. In providing women access to saving accounts, it is astonishing to see the positive impacts. We have spoken countless times in class about how women in developing countries often lack the autonomy to save. I found it empowering that women's autonomy over expenditures and saving can be so profoundly impacted by changes in microfinance / access to to savings accounts.

Yuhan Liu

I enjoyed reading it because it does not just discuss the benefits of Microfinance with anecdotal evidence, instead, it is a rather comprehensive survey of randomized tests’ findings on Microfinance in urban, rural, and peri-urban settings. The paper shows that Microfinance does not always live up to the usual claims of its benefits (empowering women, increasing income…); it has more effect on the behaviors of consumption. Moreover, this paper illustrates the importance of product design in Microfinance and the potential conflict between the interests of the MFIs and the borrowers. I also find the part of the paper on savings design and microinsurance products very interesting. Researches show that there is some very cost-effective savings design that can be implemented. Microinsurance products may be a useful tool to be coupled with traditional microcredits to increase the effectiveness of the products. I think the low take-up rate is one of the most challenging problems facing the Microfinance community, and the paper shows that the most important factor is the lack of trust in financial institutions. Thus, I think promoting trust among the targeted borrowers should be of the highest priority of the Microfinance community.

Jack Denious

I think my main takeaway from the article is that financial institutions most likely need to rethink their expectations for how these microcredit loans will be used and therefore, the expected returns associated with the loans as well. Most of these loans, if the conditions were to permit, would be used to improve household wellbeing, consumption, and education rather than to start a small business with a large return as is the traditional thinking. This is a difficult task as MFIs typically will expect a high return for the associated risk of their investments. How can we improve this? I am not totally sure but I think it is extremely crucial to improving the lives of the world's large impoverished population.

Gavron Campbell

After reading this article about Microfinance, it made me think about a debate I recently had in my Strategic Management class about Bottom of the Period. This discussed the moral effects of corporations selling products to individuals with the lowest income in different countries. In line with this article about Microfinance, many families struggle to purchase necessary items because of lack of cash on hand, high interest rates, and unstable financial systems. In our debate, we determined that every individual has the free will to make those every-day choices, whether or not it is the right one. As we said in class, something as simple as a washer machine could change the entire life cycle for a women who no longer has to walk miles to wash her family's clothes. However, the problem comes down to how she can purchase such an item. I learned a lot in this article about the plausible ways of financing for families and would love to learn more about how this argument connects to the Bottom of the Pyramid argument.

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