The limits of micro credit as a rural development intervention

Pages: 50 (12324 mots) Publié le: 6 janvier 2011
The Limits of Micro Credit as a Rural Development Intervention

Prepared for the Institute for Development Policy and Management Manchester University
by

James Roth

1997

The limits of micro credit as a rural development intervention

Declaration

This dissertation has been submitted to the University of Manchester for the degree of MA (Econ) in the Faculty of Economic and SocialStudies in 1996.

No portion of the work referred to in the dissertation has been submitted in support of an application for another degree or qualification of this or any other university or any other institution of learning.

Preface
I would like to thank the British Council for their generous scholarship. I would also like to thank David Hulme my supervisor for his constant support andencouragement. Finally I would to thank my mother for numerous childhood trips to the Johannesburg Public Library without which I would not have been able to read for this degree.

2

The limits of micro credit as a rural development intervention

Table of Contents
OVERVIEW 5

SUMMARY

6

CHAPTER 1 - INTRODUCTION

7

B ACKGROUND DEFINITIONS OF FORMAL AND INFORMAL FINANCE AND TRADECAPITAL MARKETS AND THE POOR THE NEO -LIBERAL RESPONSE - WALKING BAREFOOT WHERE BANKERS FEAR TO TREAD I NNOVATIVE MICRO CREDIT INSTITUTIONS ASSESSING THE SUCCESS OF CREDIT AND MICRO CREDIT INSTITUTIONS AS RURAL
DEVELOPMENT INTERVENTIONS

7 8 8 10 12

13 13

DEVELOPMENT AS ECONOMIC GROWTH AND EQUITY

CHAPTER 2 - WHEN MICRO CREDIT FAILS - NON-VIABLE ENTERPRISES AND/OR ENTREPRENEURS 16

INFRASTRUCTURE HUMAN CAPITAL I NFORMATION SOCIAL FACTORS

16 17 17 18

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The limits of micro credit as a rural development intervention

CHAPTER 3 - WHEN MICRO CREDIT FAILS TO REACH THE POOREST OR OTHERWISE MARGINALISED 20

CHAPTER 4 - WHEN MICRO CREDIT FAILS - TREATS THE SYMPTOMS AND NOT THE CAUSES OF POVERTY 23

I NTRODUCTION THE ETHOS OF NEO -LIBERALISM M ETHODOLOGICAL INDIVIDUALISMPOWER RELATIONS AND THE LIMITS OF MICRO CREDIT

23 23 26 26

CONCLUSION

28

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The limits of micro credit as a rural development intervention

Overview
“Grameen Bank has achieved startling results providing millions of tiny, unsecured business loans to the landless poor of Bangladesh. Can a similar kind of "micro-credit" be made to work in Canada? If not, it won't be for lack oftrying.” - Judy Margolis in the Canadian Banker, January 1996. “LA PAZ, Bolivia-Juana Choque, a 39-year-old woman who migrated to La Paz from rural Bolivia, recently got the first bank loan of her life, $100 to expand her sidewalk vending business... The success of such overseas programs for the poor has given rise to some 200 micro-enterprise loan programs in the United States, including several inSouthern California, funded by various public and private sources. The founders of Micro Enterprise Loan Program of Orange County in Garden Grove, for example, patterned their program directly after the Grameen Bank in Bangladesh.” - Chris Kraul writing in the Los Angeles Times , Tuesday November 29, 1994. BEIJING, September 7 (IPS) - Ask the United States and the WorldBank how they can bestserve the interest of poor women, and theywill shout in unison, "microcredit". These two world powers will, on cue, launch into the success stories of Bangladesh's Grameen Bank and the wonders of extending credit for small-scale enterprises run by poor women. Yesterday, US First Lady Hillary Rodham Clinton lauded the Grameen Bank's success in serving the poor, while U.S. Ambassador Madeleine Albrightsaid outstanding micro-enterprise lenders in the United States will be honoured through special presidential awards” - Y Collymore in the Inter Press Service English News Wire, 9 November 1995. From Bangladesh to Bolivia, from the most developed countries to the least developed countries, development professionals and world leaders are promoting micro finance institutions, more often than not...
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