

Microcredit examined: stimulates enterprise but doesn't help poverty - lemming
http://microfinance.cgap.org/2012/04/11/latest-impact-research-inching-toward-generalization/

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danboarder
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_repor...](http://www.microcreditsummit.org/state_of_the_campaign_report/)

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DanBC
For more reporting about the disadvantages (and sometimes the advantages) of
microfinance the IRIN site has plenty.

([http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microf...](http://www.irinnews.org/AdvancedSearchResults.aspx?KW=microfinance))

Micro financing thought to be neutral:

([http://www.irinnews.org/Report/95067/Development-
Microfinanc...](http://www.irinnews.org/Report/95067/Development-Microfinance-
possibilities-and-limitations))

Some microfinancing is corrupt:

([http://www.irinnews.org/Report/82247/BENIN-Corrupt-
microfina...](http://www.irinnews.org/Report/82247/BENIN-Corrupt-microfinance-
institutions-profit-from-poorest))

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yaix
There are thousands of ways to implement Microcredit, and some implementations
have been in ways that were already proven to not work very well. But to make
money.

Yunnus/Grameen had some good ideas (read his book) that are not really about
the money they give out to poor people. The money is only a way to get the
poor people to come to the meetings regularly and follow certain important
principles, like "all my children go to school" or "we eat every day three
meals" or "we will try to build a stable home made of bricks/tin roof" etc.

Seems trivial, but those are important steps. Not to mention the fact that
many Grameen credits are given to groups that mutually guarantee their credit!
If one person fails to pay back, the others have to pay back for this person.
People learn by that to work together and to trust each other (building social
capital, the very basis of every lasting economic development, read
"F.Fukuyama, Trust - Social Virtues and the Creation of Prosperity" for
example).

Just handing out little credits will of course not help a lot, but in some
situations it may help, so its worthwhile anyway.

A next important step would be to make laws in all countries that banks /have
to/ give one free savings accounts to everybody. No credit account of course,
but a right to have a bank account would be an important and easy to implement
step.

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greghinch
This just in: centuries old economic and social inequity NOT immediately
solved by well intentioned startups! Hipster nerds decry the idea as a failure
for not generating a billion dollar valuation after 2 years.

Seriously, poverty in these regions is the result of so many factors,
stimulating enterprise is going to be helpful but it may take a generation or
more to see the effect.

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Dylanlacey
Perhaps this would be a good point to discuss how to keep the idea "Sexy"
enough to have payoff. I agree with you, incidentally, but if you want to have
lasting social effect AND it's going to take time, there needs to be something
to keep people trying until a visible payoff is available as "proof".

