If the demand for credit by the poor changes little when interest rates increase, lenders can raise fees to cost-covering levels without losing customers. This claim is at the core of sustainable microfinance strategies that aim to provide banking services to the poor while eschewing long-term...

Microfinance institutions (MFIs) are often seen by aid practitioners as a manifestly effective means of improving the position of the poor. However, detailed research studies have been much more guarded about their impact. In particular, several studies have raised doubts about the effectiveness...