the mif blog

“What is the point of college?” asked the New York Times’ Sunday Magazine recently. In the United States, the question of the value of investing in higher education stems from the steep price of attending college, particularly “for the average American household that doesn’t receive a lot of financial aid.”

What a micro lender does after giving a loan matters too

Microfinance was created in part because banks were not meeting the needs of the large segments of the population. One of the barriers to reaching those segments was the fact that formal credit records for those clients were nonexistent, leading microfinance institutions to consider other information instead. And for decades, the microcredit industry has considered two main factors when doing credit analysis: ability and willingness to pay.  

By Rania Anderson, president & founder of The Way Women Work 

Last week, I sat with four other judges in Miami, listening to the finalists at the WeXchange Latin American women’s entrepreneur pitch competition. The businesses and entrepreneurs were strong evidence of the rise of female entrepreneurs in Latin America.

There has been much conversation in recent months about the effective shut down of remittance services to Somalia from key sending markets such as the United Kingdom, United States and Australia. Somalia receives more than $1.3 billion in remittances a year, representing at least a quarter its GDP and far outweighing international aid. However, fears surrounding money laundering and terrorism financing have led banks to determine that holding remittance service provider accounts is simply too much of a risk, leading bank partners to drop their accounts until there were simply none left. Humanitarian workers fear that these moves will destroy the vital lifelines that keep many Somali families afloat. If remittances hold equal importance in some Latin American economies, should stakeholders fear that this trend could spread to our region?

Are Latin American governments interested in paying only for what works? Are there investors who want to link their financial returns to improved social outcomes? Can governments, private investors, and nonprofits work together to solve intractable social problems? These are some of the questions we asked ourselves at the Inter-American Development Bank’s Multilateral Investment Fund, before launching a regional program to support social impact bonds (SIBs) and results-based financing models in Latin America and the Caribbean.