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While participating in the CID South Africa Growth Initiative in 2006, Asim Khwaja and Bailey Klinger were struck by the fact that entrepreneurs' access to finance could be such a challenge in South Africa: a country with a financial system more developed than many OECD countries. After spending some months analyzing the problem, they began focusing on low-cost screening tools and alternative financial contracts as methods to stimulate entrepreneurial finance.
They partnered with a South African financial institution for a very small pilot to test these concepts. The results of the test seemed promising. In 2008, Drs. Khwaja and Klinger received grants from Google.org and SNV Latin America to conduct additional tests and to launch the 'Entrepreneurial Finance Lab'. The aim of this project was to assemble an enhanced psychometric entrepreneurial assessment and to pilot test it in a network of financial institutions across Africa and Latin America.
During the next two years, the Entrepreneurial Finance Lab worked with the world's leading psychometric firms and entrepreneurship researchers to assemble the prototype assessment, built a network of commercial banks, microfinance institutions, venture capital funds, and entrepreneurship training programs across 7 countries to pilot test this tool.
In 2010, we renamed our research lab to the Entrepreneurial Finance Lab Research Initiative. The Research Initiative is the home of our research into the impact of psychometric tools on access to finance, entrepreneurial training and skills, and experimental alternative financial contracts. We work in partnership with the EFL, LLC, an independent private organization to rapidly spread and scale-up the use of this technology to stimulate entrepreneurship, access to finance, and economic growth across the developing world.
Asim Khwaja is Pricipal Investigator for the Lab. He is also Professor of Public Policy at the Harvard Kennedy School of Government. His areas of interest include economic development, finance, education, political economy, institutions, and contract theory/mechanism design. His research combines extensive fieldwork, rigorous empirical analysis, and microeconomic theory to answer questions that are motivated by and engage with policy. It has been published in the leading economics journals, such as the American Economic Review, and the Quarterly Journal of Economics, and has received coverage in numerous media outlets such as the Economist, NY Times, Washington Post, International Herald Tribune, Al-Jazeera, BBC,and CNN. His recent work ranges from understanding market failures in emerging financial markets to examining the private education market in low-income countries. He was selected as a Carnegie Scholar in 2009 to pursue research on how religious institutions impact individual beliefs. Khwaja received BS degrees in economics and in mathematics with computer science from MIT and a PhD in economics from Harvard. A Pakistani, UK, andUScitizen, he was born in London, U.K., lived for eight years in Kano, Nigeria, the next eight in Lahore, Pakistan, and the last eighteen years in Cambridge, Massachusetts. He continues to enjoy interacting with people around the globe. [E-mail]
Dr. Khwaja's Research and Publications.