A Primer for New Microfinance Researchers

Key Articles on Microfinance

Morduch. (1999). The Microfinance Promise.
This is the most cited article on microfinance. It lays out the key features of microfinance and
includes case study examples. A great introduction for anyone new to microfinance.
Brau & Woller. (2004). Microfinance: A Comprehensive Review of the Existing Literature.
This is the best review to date that covers the wide variety of research that has been done on
microfinance. An easy read to get you up to date on where your research fits in.
Monitor Report. (2009). Emerging Markets, Emerging Models: Market-Based Solutions to the
Challenges of Global Poverty.
This is a recent report put out by the Monitor Group. Their focus is a little broader than
microfinance, but the value of the report is to see how they conduct quality, critical research. Their
goal is to use fact-based research to move beyond stereotypes, anecdotes, and common
assumptions about the potential of market-based solutions.
Useful Links

http://www.microlinks.org/ev_en.php?ID=12637_201&ID2=DO_TOPIC resources
prepared by USAID.
http://www.cgap.org/p/site/c/ - Invaluable publications on up to date issues in
microfinance

Basic Microfinance Data Sources

MIX Market (Microfinance Information Exchange)
http://www.mixmarket.org/
This is the largest collection of public microfinance data. You will notice that most of the data is
aggregated at the organizational level. They have some underlying detail that you may purchase
for a semi-reasonable price. Very useful data source, but has definite flaws and biases (see next
page).
CGAP (Consultative Group to Assist the Poor)
http://www.cgap.org/p/site/c/home/
CGAP is a unit of the World Bank. Its most useful for getting credible high-level statistics and
microfinance reports on specific topics.
The World Bank
http://www.worldbank.org/reference/
This is an obvious source of microfinance data. Well respected, but not as fine-grained as you may
need.
Microfinance Gateway
http://www.microfinancegateway.org/p/site/m/
An interactive source for microfinance information. This has a broader range of resources including
current research articles, working papers, conferences, and forums where you can discuss your
microfinance questions.

Biases and Objectivity

Data Biases:
A common challenge with microfinance research is that the data is often incomplete and of
questionable reliability. For example, MIX Market provides plenty of data, but it does not provide
a randomized sample of MFIs (i.e. MFIs with certain characteristics are more likely to report). This
is a major source of sample selection bias; so you have to be careful about making comparisons
between different organizations, geographies, cultures, etc. Further, most of the MFIs are selfreporting, meaning that the financials are NOT audited. It raises the question of how credible the
data is.
MicroBanking Bulletin:
http://www.themix.org/microbanking-bulletin/microbanking-bulletin
This is a semi-annual publication that attempts to overcome the biases of microfinance data. It is a
partner of the MIX Market. It attempts to make meaningful interpretations of the MIX Market
data by grouping the organizations into various peer groups. This provides a more realistic view of
microfinance trends. It is also useful to have a look at their methodology in order to understand
the basic biases in the data that they accounting for. It may provide insights to biases you should
account for in your own research.
Objectivity A common Sense Warning:
Microfinance is often viewed as the ideal solution to poverty by some proponents. Its perfect and
everyone should do it! However, meaningful microfinance research needs to be critical and
present a balanced view of the benefits and limitations. Though the positives are often focused on,
it is important to consider that there are negative effects as well. Consider:
o Brett (2006) "We Sacrifice and Eat Less": The Structural Complexities of Microfinance
Participation.
o Montgomery (1996) Disciplining or Protecting the Poor? Avoiding the Social Costs of Peer
Pressure in Micro-Credit Schemes.
o Woolcock (1999) Learning From Failures in Microfinance: What Unsuccessful Cases Tell Us About
How Group-Based Programs Work.
Whether the benefits outweigh the costs is a decision you will be making for yourselves. Enjoy!