It’s not very often that Nobel Laureates find their studies criticised, but that’s precisely what happened when husband-wife duo, Abhijit Banerjee, 58, and Esther Duflo, 46, won the Nobel Prize in Economics in October 2019. The MIT professors won the award for their experimental approach, involving the use of randomised control trials (RCTs), towards alleviating global poverty.

In one such RCT study, done between 2005 and 2010, in a cluster in Hyderabad that was facilitated by a microfinance institution (MFI) named Spandana, the authors concluded that “monthly consumption, a good indicator of overall welfare, does not increase for those who had early access to microfinance, either in the short run . . . or in the longer run”. While the study did find that borrowers restricted their consumption of temptation goods and that “microcredit expanded households’ abilities to make inter-temporal choices, including business investment,” the conclusion was that microfinance did not make much of a difference in terms of increased incomes.

The findings incensed India’s microfinance poster boy Vikram Akula, founder of SKS Microfinance, later renamed Bharat Inclusion and sold to IndusInd Bank. In fact, Akula had even debated the RCT approach taken by Duflo at a 2014 debate at