Small Loans, Big Problems: How the World Was Seduced and Betrayed by the Microcredit Model
The modern microcredit movement began in the 1970s as a small US government-led experiment in Latin America designed to combat leftist-oriented popular movements demanding the end of the US-led model of capitalism on their continent. By the 1990s the microcredit model had expanded worldwide, with advocates proclaiming it to be the all-time most powerful method of addressing poverty, deprivation, disempowerment and inequality in the global south. The US-trained Bangladeshi economist and 2006 Nobel Peace Prize winner Muhammad Yunus felt confident enough to claim that microcredit would “eradicate poverty in a generation” and that our grandchildren would have to go to “the poverty museum” to see what all the fuss was about. However, beginning in early 2007 the microcredit model very rapidly began to fall from grace after it became clear that it had had no impact on poverty and, worse, it had actually undermined and destroyed the establishment of pro-poor sustainable local development outcomes everywhere. Its ultimate ignominy was to evade complete collapse by quietly accepting sanctuary within another much wider elite-driven project termed ‘financial inclusion’. This talk will analyse how and why the international development community was so easily seduced by so many high-profile ‘faith healers’, and how the global poor were ultimately betrayed when a narrow global financial elite captured the microcredit model to serve its own ends.
MILFORD BATEMAN is a freelance consultant on local economic development, a Visiting Professor of Economics at Juraj Dobrila University of Pula, Croatia, and an Adjunct Professor of Development Studies at Saint Mary’s University in Halifax, Canada. He is the author of Why Doesn't Microfinance Work? The Destructive Rise of Local Neoliberalism and the co-editor (with Kate Maclean) of Seduced and Betrayed: Exposing the Contemporary Microfinance Phenomenon.
Registration necessary. Please register here.