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Microloans Work Best With Proven Entrepreneurs

1,000 rupees = approx. $14 USD

Source: National Bureau of Economic Research

Microcredit programs are more effective when the money is lent to people who have greater entrepreneurial acumen/have prior business experience, according to a National Bureau of Economic Research (NBER) study on the long-term impact of a microlending program in India.

The program “had strong positive effects for households that were already engaged in what they call ‘gung-ho’ entrepreneurship and almost no effect for others,” the researchers found after studying 52 Hyderabad neighborhoods receiving loans from lender Spandana between 2006 and 2016.

Some used the loans to hire employees or invest in their business, while others paid off other loans or put the money toward their business on a less ambitious scale, researchers found. 

“The majority of business growth associated with microcredit comes from a small share of firms. Their growth generates employment opportunities for others who might otherwise become ‘reluctant’ entrepreneurs,” NBER wrote in its summary of the research. 

Why US Supercities Are Losing Appeal

Source: Milken Institute, 2021

San Francisco, California, lost its place as the best-performing city in the United States, dropping 23 places in rank. It was replaced by Provo, Utah — a relatively new innovation center with a lower cost of living than California’s “supercities.” Intermountain western and southern cities outperformed those originally popular coastal cities, according to Milken Institute

The annual index tracks cities’ regional economies based on job creation, wage growth and high-tech innovation. For the first time, the 2021 criteria also considered broadband access and housing affordability to hold cities accountable to providing a more inclusive economy. 

Shifts to remote work during COVID-19 resulted in U.S. residents relocating away from pricier cities to ones that are more affordable. An Oliver Wyman Forum survey found that 2% of respondents have permanently or temporarily relocated because of COVID-19, while another 14% are planning to relocate or leaning toward doing so. These less-populated cities may be better positioned to prosper after the pandemic, with a higher chance of attracting companies, capital and citizens.

Why the Number of US Homeowners Grew During COVID-19

Source: Pew Research Center

The number of homeowners in the United States grew by 2 million over the last year, reflecting a 2.6% increase. This is the seventh-largest percentage increase in homeowners since 1965, according to Pew Research Center. By the fourth quarter of 2020, there were around 83 million owner-occupied homes in the U.S.

This growth in homeownership, Pew Research Center states, resulted from economic growth and an increasing number of households over time. Although the unemployment rate during COVID-19 skyrocketed, job losses fell heavily on young adults and low-income workers, who are less likely to be potential homebuyers. In 2020, interest rates were at record lows, there was a slowdown in foreclosures and household incomes were at a high before the pandemic — all factors made it easier to enter the housing market. Experts predict that the housing market will remain strong in 2021, driven by low mortgage rates, the vaccine distribution and growing consumer confidence

Global Food Prices Rise, Impacting Food Security

Source: Food and Agriculture Organization (FAO)

Global food prices rose for the ninth consecutive month in February, reaching their highest level since July 2014. Food prices increased by 26.5%, compared to the same time just last year. Pandemic-related disruptions to the food and agriculture industry — such as restrictions to global trading and economic distress — contributed to the lower supply of certain foods.  

The FAO Food Price Index — which tracks changes in global food prices — found the biggest increase in the price of sugar — which is up 6.4%, “as production declines in key producing countries together with strong import demand from Asia prompted ongoing concerns over tighter global supplies.” Vegetable oil prices saw the second-highest hike in prices with a 6.2% increase, reflecting concerns about low production, inventory and export potential. 

Food insecurity was growing prior to the pandemic, and estimates show that the virus could almost double the number of people experiencing hunger. International partners and governments are working together to monitor food supply chains and provide financial support for those who are unemployed and are unable to buy food.

Low-Income Households Rank Remote Learning Less Effective Than Other Income Groups

Source: World Economic Forum

By mid-April 2020, 94% of students worldwide were affected by COVID-19. In two surveys of more than 100 countries, online learning platforms were scored 58% fairly effective and 36% very effective. But lower-income households share a different experience: This group is more likely to express that remote learning has not been effective during the COVID-19 pandemic. 

The pandemic has prompted educators and students to adapt to new learning methods and technology. But low-income households are less likely to have access to technologies that allow for a sufficient adaptation to remote learning. In response, some education companies are creating learning content that can be accessed on SD cards and 2G and 3G networks. One company distributes donated smart devices for free to children with limited or no access to online education. 

Since reopening, some schools have adopted a hybrid approach to learning — a trend that may continue after the pandemic, as investments in some education technology companies reached into the billions in 2020. 

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