Microfinance functions as 'saving down': the borrower receives $40 up front, spends it on consumption (food, education, medicine), then pays it off over time — reversing the normal 'save up then spend' pattern — and the group obligation and threat of shame/shunning provide the commitment device that makes repayment possible where saving alone is not.
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Speaker
Michael MungerEvidence Quote
“so what people call this now is saving down instead of saving up I'm saving down... all they're doing is reversing what you and I think of as the normal pattern of things you save up and then you spend well they spend it and they save down”
Created: 6/17/2026, 10:29:24 AM
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