An alternative perspective on microcredit

So, I’ll be honest here in that I know next to nothing about the economics of poverty. That said, I pretty much took it at face value that microcredit, a la the Grameen Bank (whose founder Mohammed Yunus was awarded the Nobel Peace Prize this year), was a good thing. My understanding is that the idea (ideal?) of microcredit is to empower poor people (esp. women) to start small enterprises using very tiny loans. Sounds pretty awesome to me – finding solutions within capitalism to give a leg up to the poor, right? Does that make me a neoliberal?

Today, Women’s E-News ran a commentary that pointed out the shortcomings of this system. Co-authors and economists Susan Feiner and Drucilla Barker argue that microcredit is not enough, that it keeps women working at home or in hazardous or inequitable working conditions, without legal protection, health care, child care, or opportunities for growth in their enterprises. They point to an existing organization in India, run by poor women for poor women, called the Self Employed Women’s Association (SEWA), which not only offers loans through its bank but many other services as well to enhance the wellbeing of its members. It is not only an organization but a movement for social change.

Hmmm, that sounds pretty good to me too.