Rise and Fall of Global Microcredit

Milford Bateman, Visiting Professor of Economics, Juraj Dobrila at Pula University, Croatia, and Adjunct Professor of Development Studies, St Mary's University, Halifax, Canada.Stephanie Blankenburg is Head of the Debt and Development Finance Branch, Division on Globalization and Development Strategies, UNCTAD.Richard Kozul-Wright is Director of the Division on Globalization and Development Strategies, UNCTAD.

"This book provides a definitive, and much-needed, assessment of the microcredit movement: from the overselling of its modest initial promise, to its conversion into a new method of exploiting vulnerable people and communities, and to its misconceived embrace by global leaders and institutions. What cements this book’s importance for development policy and practice is that its critique is accompanied by an affirmation of the role of productive, accessible financing in sustainable development." -- Gary Dymski, Professor of Applied Economics, Leeds University Business School, UK"This is a must-read book to understand the financialisation of the poor from the perspective of the global microcredit industry. The Post-2015 Agenda, supporting financial and digital inclusion to achieve development and to end with poverty, hides the profit obtained by microcredit institutions when granting credit to small entrepreneurs and to those with fewer resources. The problem with indebtedness and lack of payment of loans affects the poor, causing greater debt in crisis and recession periods. This provides important evidence and insight into what went wrong with microcredit." -- Alicia Girón, University Program of Asian and African Studies, UNAM, Mexico"This unfailingly courageous and carefully researched book shatters the mythology around the microcredit myth that has captured the imagination and funding of the global development industry for far too long. It shines a bright light on the links between microcredit and rising indebtedness and financialised, rentier capitalism. Microcredit boosters take heed!" -- Ilene Grabel, Josef Korbel School of International Studies, University of Denver, USA"This book provides the inconvenient truth about how market-based mechanisms are far from panaceas for today’s development problems. With rigorous detail, the volume parades through case after case of failed micro-credit ventures in country after country—even in Peru the ‘center of origin’ for many of the financialization of the poor [this] has more often than not led to yet another case of the further transfer of wealth and power from the poor." -- Kevin P. Gallagher, Director at the Global Development Policy Center, Frederick S. Pardee School of Global Studies, Boston University, USA

• ContentsPrefaceAcronymsNotes on contributorsPart I: An overview Introduction Milford Bateman, Stephanie Blankenburg and Richard Kozul-Wright Development prospects in an era of financializationRichard Kozul-Wright Impacts of the microcredit model: does theory reflect actual practice? Milford BatemanPart II: Country case studies Looking through the glass, darkly: microcredit in PeruMatthew D. Bird Brazil: Latin America’s unsung heroFernanda Feil and Andrej Slivnik Colombia: A critical lookDaniel Munevar Mexico and the microcredit modelEugenia Correa and Laura Vidal Sustainability paradigm to paradox: a study of microfinance clients’ livelihoods in BangladeshMathilde Maitrot Cambodia: the next domino to fall? Milford Bateman The instability of commercial microcredit: understanding the Indian crisis with MinskyPhilip Mader11. Collective resistances to microcredit in MoroccoSolène Morvant-Roux and Jean-Yves Moisseron 12. Microcredit as post-apartheid South Africa’s own US-style sub-prime crisisMilford BatemanPart III: Policy implications 13. Delivering development finance in ‘the time of cholera’: a ‘bottom-up’ agenda for pro-development financial resource mobilisationStephanie Blankenburg 14. Conclusion Milford Bateman, Stephanie Blankenburg and Richard Kozul-Wright