Economics 100 01:
"My greatest challenge has been to change
the mindset of people. Mindsets play strange tricks on us. We see
things the way our minds have instructed our eyes to see."
Fast Track to Course Calendar
This first year seminar explores the historical origins and economic
contemporary developments in microfinance institutions (MFIs) and
microfinance operations within other institutional structures, including
investment and commercial banks, insurance companies, and
non-governmental organizations (NGOs). This course introduces students
to concepts from finance, such as discounted cash flow analysis, capital
budgeting, and risk analysis, and economics that may be applied to the
analysis of microloans, microsavings, and microinsurance and the
innovative ways of delivering these products to customers who have not
been traditionally well-served by larger scale financial institutions.
Meets Social Sciences III-A requirement
Prereq. fy or permission of instructor; 4 credits
Gain an understanding of microfinance products and institutions
Learn to analyze the impact of microfinance projects and ongoing
operations upon households and the larger macroeconomy
Learn techniques for evaluating the success or failure of
- Explore the possible impacts of different public policies on the
development of microfinance and poverty reduction
Discover the complex interaction between finance and the larger economy
||Introduction to Microfinance: Concepts and
Theory of Microfinance|
Read the introduction to Gabriel, Hinckley, and Jawaid, Microfinance:
The Way of Grassroots Finance (henceforth referred to simply as
||Peer Groups, Due Diligence, and Business
.Peer Groups: Why Gender Matters. and .Multiplying Microfinance. in
Overdetermination and Poverty Alleviation
.The Need for a Broad-based Approach. in GHJ
||The Time Value of Money
Online essay will be provided on this topic.
Discussion of the Concept of Market Failure
||Discussion of the nexus linking financial
relationships, microenterprise development, and macroeconomic impacts.
This will include a lengthy discussion of the processes that shape
financial institutions, in general, and microfinance institutions, in
In preparation for the first debate on February 25th, we will
discuss the different theories on microfinance, pro and con.
Microfinance, Macroeconomics, and Economic Crises
The first essay will be due on March 11th. The essay question is as
follows: What is the relationship between microfinance,
microenterprises, and poverty alleviation?
||Discussion of the role venture capital and,
more broadly, the capital markets in advancing microfinance and
microenterprise development. Read the "Profiles" section of the
||First essay is due.
The Microenterprise-Microfinance Heuristic
Discussion of the Heuristic for linking microfinance,
government, and other social institutions: This week's discussion relies
heavily on the, as yet unpublished, theoretical work of Professor
Gabriel and, therefore, will not require additional reading beyond the
primary microfinance text. However, you should be ready to particpate in
lengthy discussion of the relationship of value creation within
microenterprises and the creation of mutual obligations via cash
distributions from this created value.
|March 28-April 1
||"The Microfinance Illusion" by Milford Bateman and
Click on the Link to and Read "The Microfinance Promise by
Morduch" and the "Reply to Jonathan Morduch" by Mark M. Pitt
Please read the above article. Each class participant is expected to
write three questions related to the material each of the articles for
class to discuss next week. If time permits, we will discuss all
three articles during the week, starting with the Bateman and Chang
article on Monday. In addition, I've asked Lamia
critic of the Grameen Bank, to send us a pdf from her upcoming
book. If I receive it in time, I will post it to Ella and/or send
it to you as an email attachment. However, we would probably have to
read Karim's pdf the following week. The
questions we formulate on the readings for this week
will form the basis for
your next essay assignment, which will be due in mid-April. Your first
essay assignment will be returned on Monday.
On Monday, April 4, we will discuss Karlan and Mullainathan's "Rigidity
in Microfinancing: Can One Size Fit All?" We explore alternative
microfinancing arrangements and contracts with the objective of
identifying where flexibility and innovation are necessary for
microfinance to be successful. Continuing in this vein on Wednesday and
Friday, we discuss the efforts of Grameen to expand the reach of its
projects and to "scale up" microfinance. We'll read "Tapping the Financial Markets for Microfinance: Grameen
Foundation USA's Promotion of this Emerging Trend" by Jennifer
Meehan and . On
Friday, we will also discuss the next week's debates (our second round
of debates), which will be scheduled for Wednesday and Friday. Groups
will chose the statement and position (pro or con) they will take in the
||The Second Round of Debates will occur on
Wednesday and Friday. On Monday, the second essay question will be
posted and we will review and summarize the conclusions reached so far
in the course, including the arguments in the papers read in the
This Friday the second essay is due. No extensions will be granted, so
plan for this well ahead of time and complete your essay on time.
This week we will begin our discussion of the book by John Cassidy,
How Markets Fail: The Logic of Economic Calamities and the
relevance of Cassidy's arguments to the effectiveness of microfinance
to the larger issue of poverty alleviation.
This week we will return to the primary text on
microfinance and discuss the various microfinance case studies in the
text. What cases do you believe best epitomize the potential for
microfinance to reduce poverty? What cases may actually indicate
potential problems for microfinance achieving its social mission?
The final essay will be due on Friday, April 29th. All students who have
successfully completed the three essays with at least an A- and have
earned equivalent grades (of A- or higher) in the debates will be
exempted from taking a final examination in the course.
© 2011, Satya Gabriel, Economics Department, Mount Holyoke