I'm attending the Microfinance Impact and Innovation Conference, and Abhijit Banerjee is presenting his Miracle of Microfinance?.
I'd seen versions of the paper before, but there is one new bit (or a bit I missed the first time) that I found insightful:
Microcredit can act like "savings in reverse": the household obtains the loan principal in a large sum, which can be invested, and then group and lender pressure to make regular loan repayments every week provides discipline that may make resisting temptation (tea, cigarettes, etc.) or requests for money from other family members or friends easier.
Not only do they find just this, but that the money not spent on alcohol, tobacco, gambling, and food was spent (in part) on durable goods used in a household business.
The absolute effect is relatively small, but in relative terms quite large: an increase of 20% relative to usual spending on durables.
