Articles on financial services to the poor

From Debunking Myths about the Poor and Financial Services by Suyash Rai and Sona Varma ( via India Development Blog):
"The poor are not sophisticated in using financial services, so access to finance may end up damaging their livelihoods: On the contrary, research on the use of financial services by the poor shows that given the complexity in their financial lives, the poor are very sophisticated in their use of financial instruments. Due to the absence of well-designed formal services, they end up creating a complex mesh of informal financial mechanisms around their lives. It seems this is the only way they can meet multiple needs using informal instruments. For example, financial diaries of the poor show how they creatively use a variety of loan sources to deal with the irregularity in their incomes and expenditures. Research also shows quite convincingly that on an average the chronic poor, i.e. those who fail to move out of poverty, do take initiatives to change their conditions. Failure to move out of poverty is primarily because of lack of access to capital and relevant networks. The recent evaluation of a micro credit program in India shows how entrepreneurial households consistently use credit to start successful new businesses or improve the profitability of existing businesses."
Chris BlattmanThe main problem with living on $2 a day…:
"The central finding: cash management is even more important for the poor than it is for you and me. Every household had both savings and debt, and often those savings and debt were scattered about 4 or 5 or 10 different people and places. They spread out their risk. This built a portfolio of the poor.

Unfortunately, they’re miserable about it. Informal financial obligations are unpleasant and insecure, but the poor don’t have any alternative.

This raises an important point: people value microfinance even if it doesn’t lead to rising incomes and development (like some recent evidence might suggest). They like it because microfinance helps them manage their day to day cash problems without the messy social obligations or discomfit. They want their financial intermediation to be impersonal.

It’s a nice point, convincingly made."

Brief summaries with links some micro finance studies by Duflo, Banerjee et all( a study from the slums of Hyderabad), Karlan and Zinman ( a study in Philippines)and an article by Dennis Rodman on self help groups are in these two posts from India Development Blog:
Apples and Jackfruit?
New Light for SHGs?