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Jonathan Morduch traces the rise of microfinance, and argues that it's time for a new vision.

People on low-incomes in the UK develop multiple long-term health conditions over 10 years earlier than affluent individuals. Financial diaries -new to public health- are used to explore the lived experiences of financially-vulnerable individuals, diagnosed with at least one long-term condition, living in two inner-city London Boroughs. Findings show that the health status of these individuals is a key barrier to work opportunities, undermining their income. Their precarious and uncertain financial situation, sometimes combined with housing issues, increased stress and anxiety which, in turn, contributed to further deteriorate participants' health. Long-term health conditions limited the strategies to overcome moments of financial crisis and diarists frequently used credit to cope. Restrictions to access reliable services and timely support were connected to the progression of multiple long-term conditions. Models that integrate healthcare, public health, welfare and financial support are needed to slow down the progression from one to many long-term health conditions. [ABSTRACT FROM AUTHOR]

The modern microfinance industry was built on the idea that lenders could (and should) profit while serving poor and excluded customers. This idea—that lenders could 'win' while customers would also 'win'—inspired the broader field of social enterprise and opened possibilities for business-driven responses to social problems. However, in hindsight it is possible to see that not only was the idea flawed—important claims underpinning the core idea have failed to find empirical support—but the lingering belief that 'win–win' was right continues to handicap not only financial inclusion and consumer protection policies, but the social investment and finance industry as a whole. The win–win formulation was driven by the assertion that customers would be indifferent to the level of interest rates on loans and that it was simply access to finance that mattered most to customers. The argument was used to justify charging the highest interest rates to the most operationally expensive customers, who turned out to not coincidentally be the poorest customers. However, studies show that customers are indeed sensitive to interest rates and that high interest rates discourage borrowers. Moreover, despite charging high rates, financial data show that most lenders failed to earn profit after fully accounting for the subsidies received from donors and social investors. Microfinance and the social investment industry it helped spawn remain important tools for addressing poverty and inequality, but both sectors are overdue for a transparent reckoning of the roles of subsidy (including its benefits) and greater recognition of the potential for exclusion caused by high prices and the drive for profitability or 'sustainability'. Muddled thinking on subsidy and prices handicapped the past but does not need to handicap the future. [ABSTRACT FROM AUTHOR]