Microcredit has been seen in recent decades as having great potential for aiding development in poor developing countries, with Bangladesh being one of the countries which has pioneered microcredit and implemented it most widely. This book, based on extensive original research, explores how microcredit works in practice, and assesses its effectiveness. It discusses how microcredit, usually channelled through women, is often passed to the men of the family, a practice disapproved of by some, but regarded as acceptable by borrowers who have a communal approach to debt, rather than viewing debt as something held by single individuals. The book demonstrates how the rules around microcredit are often seem as irksome by the borrowers, how lenders often charge high rates of interest and work primarily to preserve their institutions, thereby going against the spirit of the microcredit movement, and how borrowers often end up on a downward spiral, deeper and deeper in debt. Overall, the book argues that although microcredit does much good, it also has many drawbacks.

In the mid-1980s the international development community helped launch what was to quickly become one of the most popular poverty reduction and local economic development policies of all time. Microcredit, the system of disbursing tiny micro-loans to the poor to help them to establish their own income-generating activities, was initially highly praised and some were even led to believe that it would end poverty as we know it. But in recent years the microcredit model has been subject to growing scrutiny and often intense criticism. The Rise and Fall of Global Microcredit shines a light on many of the fundamental problems surrounding microcredit, in particular, the short- and long-term impacts of dramatically rising levels of microdebt. Developed in collaboration with UNCTAD, this book covers the general policy implications of adverse microcredit impacts, as well as gathering together country-specific case studies from around the world to illustrate the real dynamics, incentives and end results. Lively and provocative, The Rise and Fall of Global Microcredit is an accessible guide for students, academics, policymakers and development professionals alike.

Since its emergence in the 1970s, microfinance has risen to become one of the most high-profile policies to address poverty in developing and transition countries. It is beloved of rock stars, movie stars, royalty, high-profile politicians and ‘troubleshooting’ economists. In this provocative and controversial analysis, Milford Bateman reveals that microfinance doesn’t actually work. In fact, the case for it has been largely built on hype, on egregious half-truths and – latterly – on the Wall Street-style greed of those promoting and working in microfinance. Using a multitude of case studies, from India to Cambodia, Bolivia to Uganda, Serbia to Mexico, Bateman demonstrates that microfi nance actually constitutes a major barrier to sustainable economic and social development, and thus also to sustainable poverty reduction. As developing and transition countries attempt to repair the devastation wrought by the global financial crisis, Why Doesn’t Microfinance Work? argues forcefully that the role of microfinance in development policy urgently needs to be reconsidered.

The first feminist critique of the much-lauded microcredit process in Bangladesh.

Microcredit has been seen in recent decades as having great potential for aiding development in poor developing countries, with Bangladesh being one of the countries which has pioneered microcredit and implemented it most widely. This book, based on extensive original research, explores how microcredit works in practice, and assesses its effectiveness. It discusses how microcredit, usually channelled through women, is often passed to the men of the family, a practice disapproved of by some, but regarded as acceptable by borrowers who have a communal approach to debt, rather than viewing debt as something held by single individuals. The book demonstrates how the rules around microcredit are often seem as irksome by the borrowers, how lenders often charge high rates of interest and work primarily to preserve their institutions, thereby going against the spirit of the microcredit movement, and how borrowers often end up on a downward spiral, deeper and deeper in debt. Overall, the book argues that although microcredit does much good, it also has many drawbacks.

When Grameen Bank was awarded the Nobel Peace Prize in 2006, microfinance was lauded as an important contributor to the economic development of the Global South. However, political scandals, mission-drift, and excessive commercialization have tarnished this example of responsible or inclusive financial development. Politicized Microfinance insightfully discusses exclusion while providing a path towards redemption. In this work, Caroline Shenaz Hossein explores the politics, histories and social prejudices that have shaped the legacy of microbanking in Grenada, Guyana, Haiti, Jamaica and Trinidad. Writing from a feminist perspective, Hossein’s analysis is rooted in original qualitative data and offers multiple solutions that prioritize the needs of marginalized and historically oppressed people of African descent. A must read for scholars of political economy, diaspora studies, social economy, women’s studies, as well as development practitioners, Politicized Microfinance convincingly deftly argues for microfinance to return to its origins as a political tool, fighting for those living in the margins.

The idea that small loans can help poor families build businesses and exit poverty has blossomed into a global movement. The concept has captured the public imagination, drawn in billions of dollars, reached millions of customers, and garnered a Nobel Prize. Radical in its suggestion that the poor are creditworthy and conservative in its insistence on individual accountability, the idea has expanded beyond credit into savings, insurance, and money transfers, earning the name microfinance. But is it the boon so many think it is? Readers of David Roodman's openbook blog will immediately recognize his thorough, straightforward, and trenchant analysis. Due Diligence, written entirely in public with input from readers, probes the truth about microfinance to guide governments, foundations, investors, and private citizens who support financial services for poor people. In particular, it explains the need to deemphasize microcredit in favor of other financial services for the poor.