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By Root 991 0

under three separate contracts funded by the World Bank and the U.S. Agency for International Development. Ann had what Patten lacked—an intimate knowledge of Indonesian villages. Working with teams of staff researchers from the bank, she designed and carried out what might be described as customer surveys and market research, the results of which were used to fine-tune and measure the success of the microfinance program. She spent weeks at a time traveling with her teams on field trips through Java, North Sumatra, South Sulawesi, and Bali, meeting with bank branch managers and interviewing customers for hours on end. The teams examined how customers were using the money they had borrowed. They gauged its impact on households and rates of employment. They studied repayment rates by gender, estimated the scope of unmet demand, and tracked the rates at which customers were either keeping up with or falling behind on their payments. The consultants used the studies—original research at a time when there was little like it—to refine the microfinance program and to convince the bank not simply to continue the experiment but to expand it, increasing the size of the loans. For every million rupiahs that the bank loaned, Ann told Kamardy Arief, the bank’s chief executive officer, her research showed that one additional job was created.

“Ann provided a justification from the field for the approach of commercial microfinance,” said Don Johnston, who joined the Harvard group in early 1990 and worked closely with her and Patten. “She was showing that this was something that was benefiting the customers—not something the banks were doing out of desperation. That left Dick and me free to worry about the operational side. We had our ammunition to deal with outsiders, and we had the information that gave us confidence that the basic product approach and expansion direction we were taking was right. So then we could worry about fighting the internal battles . . . to keep the institution on track.”

The microfinance program was an extraordinary success. In June 1990, it was making 115,000 loans a month with a value of $50 million and an average loan size of $437. It was soon a major source of the bank’s growth. During the East Asian monetary crisis of the late 1990s, when the repayment rate on the microloans remained higher than that of the small, medium, and corporate customers of the bank, the program helped the bank weather the crisis. As of 2009, the bank operated more than four thousand microbanking outlets in Indonesia. It had 4.9 million microloan customers and 19.5 million microsavings customers.

“If you work in the development racket, you’re lucky at the end of ten years or twenty or thirty to be able to look back and say, ‘I think I did more good than harm,’” Richard Hook, who was hired as an adviser on the Bank Rakyat Indonesia project the same year as Ann, told me. “The non-successes are all too numerous. Often you inflict collateral damage, albeit unwittingly and unwillingly. This project met Indonesian needs. It was based in a massive Indonesian institution—a state-owned commercial bank. It was run by Indonesians. We were external advisers. The concept was making small loans to low-income rural people. The conventional wisdom was you won’t get repaid and these people don’t know how to handle a loan, they were too innocent of sophisticated procedures and financial know-how to know how to handle credit. We didn’t believe that. A number of Indonesians didn’t, either. We worked together and made this project work. That was just such a delight.”

Patten was brilliant, creative, and not necessarily easy to get along with. Akhtar Hameed Khan, the microcredit pioneer whom he had known in East Pakistan in the 1960s, once described him as “the finest development worker I have ever met.” The son of a successful midwestern banker, he had grown up on a daily regimen of meat and potatoes so rigid, his daughter told me, that it drove him to swear off potatoes for life. He had spent most of his adult life in East Pakistan, Ghana, and Indonesia