Research: No Profit for Her
To lift families out of poverty, most microfinance institutions (MFIs) target female borrowers. Yet a new field experiment in Sri Lanka suggests that MFIs are courting the wrong clients: “Poor urban men with high ability stand to benefit a lot from microfinance,” concludes David McKenzie, a senior economist at the World Bank and one of the study’s authors.
After receiving large infusions of cash or equipment, women’s businesses on average did not become more profitable, the researchers found. But after random capital windfalls, men’s businesses did enjoy an average annual profit boost of 60 percent. In addition, men with fewer…
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