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This title makes interesting conclusion as it seems contradictory. Stimulating enterprise in a developing region generally means more economic activity includin

This title makes interesting conclusion as it seems contradictory. Stimulating enterprise in a developing region generally means more economic activity including more jobs, which means people are working rather than not working - and I would consider this as a direct impact on poverty in a region. Beyond CGAP's work, I think one should consider microcredit as one tool in a suite known as "microfinance", which includes savings programs and economic literacy education, among other services. For a global summary check out the Microcredit Summit Campaign's 2012 report here: http://www.microcreditsummit.org/state_of_the_campaign_report/ http://www.microcreditsummit.org/state_of_the_campaign_repor...

kijin 15y ago
Here's a link to an article that was published about a year ago. It describes several reasons why microcredit might not alleviate poverty despite encouraging enterprise, such as the fact that most families must spend a large part of their loan on servicing other debts, medical emergencies, etc. There have also been rogue microcredit agencies that operated like loan sharks. The article proposes savings and insurance programs to augment loans -- a more comprehensive "microfinancing" scheme, as you proposed. > In fact, although many microloans did go towards starting businesses, a huge proportion was spent on simply getting by and surviving in poverty. The villagers used the loans to pay off other debts, meet medical fees or fund their children's weddings. http://www.independent.co.uk/news/world/asia/why-the-dream-of-microfinance-is-turning-sour-2280814.html http://www.independent.co.uk/news/world/asia/why-the-dream-o...
DanBC 15y ago
For more reporting about the disadvantages (and sometimes the advantages) of microfinance the IRIN site has plenty. (http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microfinance http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microf...) Micro financing thought to be neutral: (http://www.irinnews.org/Report/95067/Development-Microfinance-possibilities-and-limitations http://www.irinnews.org/Report/95067/Development-Microfinanc...) Some microfinancing is corrupt: (http://www.irinnews.org/Report/82247/BENIN-Corrupt-microfinance-institutions-profit-from-poorest http://www.irinnews.org/Report/82247/BENIN-Corrupt-microfina...)

kijin 15y ago

Here's a link to an article that was published about a year ago. It describes several reasons why microcredit might not alleviate poverty despite encouraging enterprise, such as the fact that most families must spend a large part of their loan on servicing other debts, medical emergencies, etc. There have also been rogue microcredit agencies that operated like loan sharks. The article proposes savings and insurance programs to augment loans -- a more comprehensive "microfinancing" scheme, as you proposed. > In fact, although many microloans did go towards starting businesses, a huge proportion was spent on simply getting by and surviving in poverty. The villagers used the loans to pay off other debts, meet medical fees or fund their children's weddings. http://www.independent.co.uk/news/world/asia/why-the-dream-of-microfinance-is-turning-sour-2280814.html http://www.independent.co.uk/news/world/asia/why-the-dream-o...

DanBC 15y ago

For more reporting about the disadvantages (and sometimes the advantages) of microfinance the IRIN site has plenty. (http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microfinance http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microf...) Micro financing thought to be neutral: (http://www.irinnews.org/Report/95067/Development-Microfinance-possibilities-and-limitations http://www.irinnews.org/Report/95067/Development-Microfinanc...) Some microfinancing is corrupt: (http://www.irinnews.org/Report/82247/BENIN-Corrupt-microfinance-institutions-profit-from-poorest http://www.irinnews.org/Report/82247/BENIN-Corrupt-microfina...)