Researcher calls Microfinance “a delusion” undermining those it would claim to serve

Two closely related pieces that caught our attention recently: This short article by a London School of Economics professor, offering a very critical view of why and how microfinance gained favor amongst the banking industry, why it hasn’t worked as promised and how ‘direct cash transfers, with no strings attached, appear to be the single most impactful anti-poverty intervention available.’

Also, in this piece, two co-authors break down the microfinance market ‘servicing’ Cambodia and outline how that overheated market has led to recipients juggling as many as six separate loans at a time. 

Both articles reflect our own work and experiences in this sector and reinforce the need to ensure that those caught-up in the cycle of ‘bottom-of the-pyramid’ strategies (as its been called) are contributing in a meaningful way to the dialogue about how microfinance loaning impacts their lives. For more, please see our issue page here.