Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World.
David Roodman, Senior Fellow at the Center for Global Development, the country’s leading think tank on overseas aid and international development, has written Due Diligence: An Impertinent Inquiry into Microfinance, a remarkable book about microfinance. It is, quite simply, the best book I have ever read about microfinance among the many I have gone through. He analyzes the history, track record, recent developments and future of microfinance, and though I do not agree with all of his judgments, I agree with the vast majority of them and admire how he went about deconstructing such a diverse arena of human endeavor.
Most impressive is how he carries the reader through his rigorous thought process. He repeatedly poses important questions, weighs the evidence, assesses whether there is enough information to make a definitive judgment, presents alternative answers and their implications, admits to a degree of uncertainty, and then does his best to provide an answer – all in plain language. The hallmarks of his writing are nuance, detail-based distillations of publicly available information, fairness and dispassionate analysis. If I had to keep one book on my desk for easy access to guide my writings, conversations, analysis and decisions, it would be his. (Due Diligence is the culmination of research and writing process that played out on his blog, which has evolved to become a leading online source for microfinance information and analysis over the past couple of years.)
[caption id="attachment_1991" align="aligncenter" width="200" caption="Alex Counts, Grameen Foundation's president and CEO, calls David Roodman's new publication "the best book I have ever read about microfinance.""][/caption]
After some introductory remarks, Roodman sets the modern microfinance movement in a historical context, and does this better than I have ever seen before. His survey also provides some important lessons for those working to expand and improve microfinance today.
The bulk of the book addresses the question “Does microfinance work?” in distinct ways. Does microfinance reduce poverty, does it improve the control the poor have over their lives regardless of whether it leads them to a poverty-free life and, thirdly, has it become a vibrant new industry that strengthens societies by enhancing ecosystems (in the broadest sense) consistent with long-term socio-economic development? I admire how he has given equal weight to the three dimensions of “working” – I strongly agree with him that all are important and the latter two (especially the third) have been comparatively neglected by microfinance advocates and critics alike.
Due Diligence deserves to be read by anyone involved in microfinance, including those who volunteer their time or contribute and/or invest their money. Let me summarize how he answers the main questions he asks, as well as his recommendations, and then distill how I believe someone involved with Grameen Foundation – or any microfinance network or institution – should feel about their past and future involvements, given his judgments and recommendations.