International Economics: IB Economics

This International Finance Corporation clip shows the role of microfinance in fostering development in Colombia. In this instance, a $330 loan allowed a young, single mother to support her bid to open a small shop - and she's now thriving.

However, for all the superficial appeal of microfinance, the empirical evidence about its effectiveness is more mixed; to the extent that many think that its effects on development are broadly neutral, including Nobel prize winners Esther Duflo and Abhijit Banerjee.

Judging by the number of new clips, the World Bank is getting down to some serious coronavirus work, and I wanted to be among the first people to 'scoop' this new material.

In this clip, the importance of microfinance to development is made clear by looking at the fate of an Egyptian potter, who was able to revive her workshop after the revolution saw it looted. 

It's interesting to note, that the clip highlights two things, the small-scale of the loans, and I was particularly intrigued by the fact that the borrower was female, which ties in with the 'classic' example of the genre, the lending undertaken by Grameen Bank.

Another article that looks at female empowerment in Africa, with some Somali women starting to breakdown barriers in the fish industry, and start selling fish.

As a result, their incomes have risen, and this improves their developmental prospects. That they are able to afford to do so results from microfinance, with women like Fardowsa able to borrow to rent a space in the market and to buy an icebox.