To lift families out of poverty, most microfinance institutions (MFIs) target female borrowers. Yet a new field experiment in Sri Lanka suggests that MFIs are courting the wrong clients: “Poor urban men with high ability stand to benefit a lot from microfinance,” concludes David McKenzie, a senior economist at the World Bank and one of the study’s authors.

After receiving large infusions of cash or equipment, women’s businesses on average did not become more profitable, the researchers found....

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