We spotted this statement in a profile of MIT professor and economist Esther Duflo in The New Yorker (May 17, 2010). Dr. Duflo studies the economies of developing countries, but her observations offer a helpful insight for our own work with poor households:

"... the poor are very clever about money, except when they are not clever at all; they are 'incredibly smart' about day-to-day financial matters, 'because the cost of errors is much bigger,' but 'so busy doing this effort, and optimizing on some margin, that they might entirely miss some huge elephant in the room,' like the importance of buying fertilizer for their crops, or immunizing their children."

Or, it might be added, carrying high interest credit card balances, overpaying at check cashing stores, taking high-interest tax anticipation loans and other predatory loans, or buying staples at the corner grocery store.

Creating economic opportunities for the poor, which is central to the Community Loan Fund's mission, isn't just a matter of making credit available. Much of our work involves educating low-income households about the wise use of credit and other ways to reduce the money they spend in unproductive ways, so their earnings, however small, go further.

That work, which is so essential to helping them reach goals of homeownership or growing a business, is paid for by donations from people like you. Between 2005 and October 2023, we have connected our borrowers with more than 500,000 hours of this coaching, or technical assistance.

If this sounds to you like necessary, vital, work, please consider supporting it with a gift.

By the New Hampshire Community Loan Fund's Business & Community lending team.