Can microcredit worsen poverty? Cases of exacerbated poverty in Bangladesh
Jahiruddin, ATM Short, Patricia Dressler, Wolfram Khan, M. Adil
Jahiruddin, ATM
Short, Patricia
Dressler, Wolfram
Khan, M. Adil
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2011-11-01
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Journal article
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12
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Worldwide, microcredit has been recognised as a successful innovation in poverty alleviation. However, some claim that microcredit exacerbates poverty in developing countries. This study examines cases in Bangladesh where microcredit has actually worsened poverty among borrowers and investigates the underlying reasons for this adverse trend. Our results show that microcredit can exacerbate poverty in four interrelated circumstances. We argue that households living in extreme conditions of poverty who possess minimal or no surplus financial capacity to cope with contingencies are prone to adverse effects of microcredit, and suggest ways to avoid microcredit borrowers falling victims to such unintended consequences.<p>This article is hosted by our co-publisher Taylor & Francis.</p>
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English
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Development in Practice
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21
Issue
8
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0961-4524
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1364-9213