Designing for Behavior Change, 2nd Edition

Chapter 15. Evaluating Next Steps

Throughout the first decade of the 21st century, microcredit was hailed as a broad solution to poverty worldwide. Low-income people, especially in developing countries, were offered small, often unsecured loans, at rates ranging from a few percentage points to over 100% a year. Many of these programs focused on enabling poor women to become entrepreneurs, providing loans to groups of women at a time who would support and hold each other accountable. The idea was that if motivated but cash-poor women simply had access to capital, they could start or grow their businesses and lift themselves out of poverty.

As U2’s Bono said of the microcredit, “Give a man a fish, he’ll eat for a day. Give a woman microcredit, she, her husband, her children, and her extended family will eat for a lifetime.”¹ One of the most prominent microcredit organizations, Grameen Bank in Bangladesh, and its founder Mohammad Yunus, in fact won the Nobel Prize in large part for their efforts to alleviate poverty through microcredit. In 2008, for example, Grameen Bank had over seven million borrowers, 97% of whom were women, with over $500 million USD in loans outstanding.

When I was in graduate school in 2005, microcredit was a shining example of innovative work for social good: many of my friends went into careers in microfinance (as the broader field is known), as nonprofits, ...