The recent study by the National Council for Applied Economic Research (NCAER), sponsored by the Microfinance Network (MFIN), brings much-needed data into the discussion. Covering over ten thousand households across multiple Indian regions, this study merits attention.
For Amartya Sen, the Nobel-winning economist and philosopher, development is freedom. Sen’s “freedom” is not the freedom of libertarians—not merely freedom from interference—but increased agency in one’s life, increased control over one’s circumstances.
Thanks to the launch of the Global Findex data set, based on nationally representative surveys of more than 150,000 adults in 148 economies, we know that approximately 2.5 billion adults lack a formal bank account and most of these people are concentrated in developing economies.
Lots of MFIs are now drawing billions (really!) in investment from microfinance investment funds that are dominated, not by development agencies, but by investors who are not willing to accept anything below a fully commercial risk-return profile.
Policymakers are swamped. They have a wide range of interest groups talking to them all the time, they have large numbers of papers and emails and phone calls to deal with every day. So if you approach them with a brilliant evaluation that is fifty pages long, complete with graphs and tables and lots of Greek equations, it will go straight to the bottom of the stack. And stay there.
In the financial inclusion world today, there is some healthy debate about the role of research, including the pros and cons of different approaches. There is great information out there, but academic research might have more impact if more people know about it.