Thursday, June 25, 2009

Business Training Boosts Profits for Microfinanced Farms

A study by Innovations for Poverty Action found that Peruvian farmers that received business training along with microfinance loans were significantly more profitable than similar farms that only received loans.  This finding is supported by anecdotal evidence from around the developing world, and emphasizes the need to promote business and entrepreneurial skills as an integral part of poverty reduction.

Microinsurance Companies Profit from Insuring the Poor

Microinsurance is being introduced to the developing world as a way for businesses and individuals to protect their assets from natural disasters such as floods.  While this insurance provides financial stability to the poor, it is controversial.  Unlike microfinance, which is often funded by nonprofits, microinsurance is primarily a for-profit enterprise, usually run by larger insurers at a significant profit.

Small Boards Invested More in Madoff

A study by the National Committee for Responsive Philanthropy found a strong correlation between losses due to the Madoff scheme and the size of a foundation’s board.  The study found that the of the 105 foundations that lost 30% or more of their assets to Madoff, the vast majority had four or fewer board members and over a third had only one or two.  The study suggests that larger boards are more likely to have a due diligence process for their investments and thus avoid risky investments.