The Endorsement from the Economist: "Want a safe bet for 2009? Try Microcredit"

BY most accounts, the Economist magazine is no voice for misty eyed studio liberals. Launched over 160 years ago in the Ricardonian era of England, the magazine is known for the pursuit of efficiency and profit for the sake of efficiency and profit.

Therefore, it is striking that in a recent article penned by Leo Abruzzese, its editorial director, the magazine gives a rosy assessment of microfinance as a investment:

A study ... puts the inflation-adjusted returns for lenders (of microfinance) at around 2.5% of assets, on a par with commercial banking. ... a decent return will attract more capital, broaden its reach and make the whole enterprise more sustainable.

Given the loan repayment rate at 96% and above in most cases, no wonder the Economist declares, "Want a safe bet for 2009? Try microcredit"

Even the Wall Street Journal echoes the sentiment. In an article in its Asian flagship publication, WSJ states,

If you are wondering where to park your investments as global financial
markets tumble, rural credit in China may offer a silver lining.