This post originally appeared on NextBillion.net.
In a recent article in Science, Dean Karlan and Jonathan Zinman find that small loans in the Philippines helped households manage risk, but did nothing for business growth, and actually seemed to reduce subjective wellbeing.
The emerging answer seems to be similar to the answer to the question: "Does Aid Work?": It depends.
We just finished up the first panel session at Microfinance Impact 2010, moderated by Jonathan Morduch, and with presentations by Dean Karlan (Yale and IPA), Abhijit Banerjee (MIT), Esther Duflo (MIT), Carlos Danel (Compartamos Banco) and Tanguy Bernard (Agence Française de Développement).