This brief focuses on David Roodman’s book, ‘Due Diligence: An Impertinent Inquiry into Microfinance.’ It states that Roodman finds no evidence that small loans lift people out of poverty en masse but argues that financial services, like clean water and electricity, are essential to a modern life. The practical question is not whether microfinance should continue, but how it can play to its strengths, which lie in providing useful services to millions of poor people in a businesslike way.

In the book, Roodman explores the financial needs of poor people, the history of efforts to meet those needs, the business realities of doing so, and the arguments and evidence about how well modern microfinance is succeeding. Drawing on this comprehensive survey, he offers practical recommendations to those involved in providing microfinance services, including donors, social investors, and microfinance leaders.