Following The Money

Felix Salmon points to a new trend in microfinance: the fact that we need to look at where microfinance money actually goes (not always to the one purchase, like a sewing machine, that we think it does). One study showed that:

[S]ome 46% of borrowers used a decent chunk of their business loan to pay down other debt and about 28% spent part of the money on a big household purchaseeven though fewer than 4% of people in either category ever admitted this to their bank. ...

As [microfinancer Carlos] Danel put it, microfinance is an industry that was born out of supplyone that came from people thinking about what organizations were capable of doing. Now, he said, the challenge is to figure out what poor people around the world actually need.

(Cardboard depiction of the homeless by Michael Aaron Williams via Wooster Collective)