November 17, 2009

Last week, President Obama nominated Rajiv Shah to be the new USAID Administrator.  We’re a big fan of Shah, in part because without Raj Shah there wouldn’t be a Financial Access Initiative.

Raj Shah first approached me about setting up a research consortium when he headed Strategic Opportunities group at the Bill & Melinda Gates Foundation. He had read The Economics of Microfinance and was moving toward building a presence in financial inclusion. The foundation eventually moved in boldly, launching the Financial Services for the Poor program under their Global Development Progam. The umbrella program disbursed over $462 million in 2008.

Shah's original thought in setting up a research consortium was to get a group together to hash out what the burning questions were. The impulse signaled his comfort with intellectual debate and bringing diverse views to the table.

But after more discussion, we realized that the debate was already active—maybe even too active.  People were too often talking past each other, and we saw that conversations could be made sharper and more constructive with a stronger knowledge base.  What we most needed was more basic evidence.

After batting around ideas with Shah, we formed FAI as a consortium of researchers at Harvard, NYU, Yale and Innovations for Poverty Action. Since its inception in Nov 2006, the consortium has launched over 40 studies in 15 countries, including work on the impact of microcredit, how to design better savings products, and how insurance can benefit poor households. FAI has also been part of a successful push for more and better data on financial access, including a new report the global unbanked population.

Shah went on to lead the foundation’s effort’s in agriculture, and President Obama tapped Shah to be under-secretary of USDA.  Last week, President Obama tapped Shah a second time. 

The USAID job calls for a unique recipe of strategic thinking, passion for development, and willingness to engage beyond the development community to drive reforms. Sharp elbows will also help.  The buzz in the development community has been positive, with some concerns about Shah’s age (he’s 36). He may be on the young side relative to past administrators, but his record speaks for itself. 

 

From what we’ve seen, we’re enthusiastic.