Title_ If Finance Works, Microfinance Works: Contextual Evaluation and the Irrelevance of Randomized Controlled Trials

Author_ Salim RASHID

Pages 117-144

Abstract_ The choice to highlight microfinance as a primary means of poverty alleviation in the Millennium Development Goals should have brought clarity to the role and functioning of this widely used instrument. Instead, it seems to have generated a fog. It is time to take a fresh look and start from first principles to clear the air. Microfinance is micro finance―it is finance writ small. If finance works, microfinance works. Much of the confusion surrounding microfinance is due to it being treated as a new economic phenomenon. With the Bangladeshi case in mind, this article poses a series of specific questions about the research field. It argues that many interesting and constructive questions have been missing from the agenda. And rather than bringing clarity, the current focus on randomized controlled trials is merely serving to distract.

Keywords_ Microfinance, Microcredit, Grameen Bank, Poverty, Randomized Controlled Trials, RCT, Bangladesh