Last week, The Wall Street Journal published a hard look at the global microfinance industry. The stories are heartbreaking: interest rates topping 400%, families losing the land they put up as collateral, children pulled out of school to help repay loans, and even documented suicides from borrowers collapsing under the weight of their debt. They shared research suggesting that decades of microlending have done little to move families out of poverty.

It’s awful, and it was hard to read.

When lending is separated from relationship, wisdom, and accountability, it can trap the very families it was meant to free. That should grieve all of us.

Two leaders I deeply respect have already responded with honesty and grace.

Peter Greer, CEO of HOPE International, named the abuses honestly and refused to defend any model that puts profit over people. He also made the case that the article paints an entire sector with the brush of its worst actors, overlooking the responsible organizations that carefully measure their impact and put families first. HOPE provides both Christ-centered credit-led and savings-led microfinance and is a strategic partner of Seed Effect. We are sharper and more effective because of them.

Liz Ha, CEO of Five Talents, wrote about why a savings-led model is fundamentally different from the credit-led approach that the article critiques. Five Talents has a model similar to Seed Effect’s and is bringing effective, Christ-centered, savings-led microfinance to parts of South Sudan where Seed Effect isn’t and won’t need to go. We have admired their work for years, and we are honored to be collaborating with their team on a forthcoming joint article. 

As both leaders have already addressed the differences between our models and those discussed in the article, I’ll keep my summary brief.

With the help of a Seed Effect trainer from their own community, members form Savings & Loan Groups. They pool their own savings and decide together who borrows, on what terms, and at what rate. Every member is an investor in the group, which means there is shared ownership, shared accountability, and no outside lender pressuring repayment. When hardship strikes, the group is equipped to respond with flexibility and support. All of it is surrounded by business and agriculture training, community, and the hope of Jesus. Importantly, and in contrast, our members do not borrow outside capital, and no one puts up their land to join.

It can be a slower path, but also a dignifying one, because it starts from a simple conviction: people living in poverty are capable. They do not need a handout. They need access to better, more reliable financial tools and the opportunity to build on what they already have.

What I want to add is this: when microfinance is done right, it works.

We have eight years of longitudinal data showing what happens when our members have access to these critical financial tools. Even in a refugee settlement, we see them move from having less than $7 in savings to over $60 after one year and another $80 after a second year, with the amount continuing to grow year after year. Members who couldn’t pay for school fees or medical care without resorting to predatory borrowing or selling an income-generating asset now use savings or business income, or lean on their group’s support. They also accumulate livestock and provide better nutrition for their families.

But we also have two independent studies conducted by Dr. Stephen DeLoach, professor of Economics at Elon University. The first study compared Seed Effect members to non-participants in the same communities and found that our members, refugees and host community alike, accumulated significantly more savings and assets over the course of a single year. Those findings are now published in a peer-reviewed journal.

The second study, completed in 2025, evaluated our program in Lamwo District, Northern Uganda, and was built to answer the question that weakens many impact studies: were members better off because of the program, or simply more motivated to begin with? Because more individuals wanted to join than we could serve at once, Dr. DeLoach compared groups that started a year apart, all of whom had already chosen to participate. After a single savings cycle, members were significantly more likely to have a safe place to save and their first-ever access to credit, and significantly less likely to sell off assets to cover medical bills or school fees. Those gains held even after the UN cut refugee food rations by a third partway through the study.

For Seed Effect, measuring our impact is not about proving ourselves. It’s about ensuring we are truly providing tools and a service that help, not hurt. The families we serve deserve to know that the way they spend their time, the investments they make, the tools they use, and the services they access will truly help them provide for their families rather than oppress them. 

The Journal is right that poverty is about more than a lack of money. So is the way out. Trauma, displacement, shame, lack of opportunity: the drivers are complex, and a loan alone has never been the answer.

The hard places are worth investing in, and the people who live there are capable, resilient, and made in God’s image. We are grateful to do this work alongside partners who share this belief.