The Hope and Hype of Microcredit

Posted on August 13, 2005 - 10:46pm :: ISD-World Affairs | Economics
Anja Tranovich Aug 10, 2005 | Inter Press Service TF! Editorial Comment: 2005 has been declared the International Year of Microcredit by the United Nations. Amidst all the hoopla, critics are questioning some of the basic premises like effectiveness in reducing poverty. But microfinance operations are not designed to address the needs of the poorest of the poor and must be seen as only one component in a larger context of mobilizing development of local economies. In the article below, critical questions about the effectiveness of microcredit in reducing poverty serve notice that while microcredit should not be treated as a panacea for the complex social challenge of eradicating poverty, it can be a useful tool and component of integrated development strategies.