A Contrarian View on Microfinance
This article makes some interesting points and claims that microfinance is not a panacea.
Labels: Microfinance, Poverty
posted by Harish at
4:32 PM
Labels: Microfinance, Poverty
posted by Harish at
4:32 PM
3 Comments:
I am not to impressed by the article. With the exception of a few sentences, the article completely misses one of the most important issues in a developing country - the distribution of wealth. Yes, you need other mechanisms to create wealth. However, even in fairly primitive countries, if one were to have a more humane distribution of it, we wouldn't be anywhere near the hunger and poverty levels that actually persist. And in countries like India, wealth creation is certainly not the only problem - as P. Sainath notes - we simultaneously have a major representation in the richest people in the world list and the most backward in terms of health and living standards for all (on par with some countries in sub-Saharan Africa) - and that's a problem where microfinance does make sense.
So, while I agree that microfinance doesn't make too much sense in a largely urban environment, the lack of that level of life all over the planet is precisely the big problem that needs to be solved.
I agree with that... but I interpret the point as being largely dissuading "fad microfinancing" - Natalie Portman posing with a Uruguayan clothes seller. Uruguay is neither desperately poor nor is a clothes seller destitute. Mohd. Yunus in his book says that microfinance works best in bringing people out of abject poverty - but a more institutionalized mechanism may be needed to take people to the next level. There may be some substance to that claim.
Of course, it's probably wise to be sceptical about fad anything!
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