Open Access. Powered by Scholars. Published by Universities.®

Income Distribution Commons

Open Access. Powered by Scholars. Published by Universities.®

PDF

University of Rhode Island

Journal

Microfinance

Articles 1 - 1 of 1

Full-Text Articles in Income Distribution

Does Microcredit Reduce Poverty? An Empirical Exploration In India, Aneel Karnani, Seema Sahai Aug 2022

Does Microcredit Reduce Poverty? An Empirical Exploration In India, Aneel Karnani, Seema Sahai

Markets, Globalization & Development Review

Microcredit has grown dramatically over the last few decades and its supporters have made extravagant promises about its potential impact on reducing poverty. However, much recent research has shown that microcredit has no significant impact on reducing poverty. In this exploratory study we interview 205 clients of for-profit microcredit to better understand the causes of why microcredit has not lived up to its promise. We find the basic problem is that the lending policies of the microcredit organizations are designed to lower the costs and risks, and hence increase the profits of the organization, and are not responsive to the …