Why doesn't microfinance work? (A whole book tells us)
Source Patrick Bond
Date 10/05/20/21:23

Why Doesn't Microfinance Work?
by Milford Bateman
published by Zed Books, priced £18.99/$34.95, ISBN 9781848133327.

SINCE ITS emergence in the 1970s, microfinance has risen to become one
of the most high-profile policies to address poverty and
under-development in developing and transition countries. It is beloved
of rock stars, royalty, movie stars, high-profile politicians and
'trouble-shooting' economists. Its most famous pioneer, Muhammad Yunus,
was awarded the Nobel Peace Prize in 2006.

In this provocative and controversial analysis, Milford Bateman reveals
that microfinance doesn't actually work. That, in fact, the case for it
has largely been built on a desire to advance a particular free market
ideology, on hype and egregious half-truths, and - latterly - on the
Wall Street-style greed, deception and individual self-interest of those
promoting and working in microfinance. Using a multitude of case studies
from across the globe - from India to Cambodia, Bolivia to Uganda,
Serbia to Mexico amongst many others - he exposes why many of its most
fundamental building blocks are largely myths. In doing so, he
demonstrates that microfinance actually constitutes a major barrier to
sustainable economic and social development, and thus also to
sustainable poverty reduction.

As developing and transition countries attempt to repair the devastation
wrought by the global financial crisis, Bateman argues forcefully that
the role of microfinance in development policy needs to be urgently and
fundamentally reconsidered.

Why Doesn't Microfinance Work? by Milford Bateman is published by Zed
Books, priced £18.99/$34.95, ISBN 9781848133327. For more information or
to request a review copy please contact Ruvani de Silva on 020 7837 8466

‘For some time, there has been fragmented evidence that microcredit is
way over-hyped as an instrument of development, but Bateman pulls it all
together and connects the microfinance fad with the underlying
neoliberal themes of so much official development assistance. It's a
timely, much-needed, and must-read book for anyone interested in the
problems of development assistance.'

David Ellerman, author of Helping People Help Themselves: From the World
Bank to an Alternative Philosophy of Development Assistance

‘Microfinance has suffered too long from unthinking enthusiasm, but some
negative views are beginning to make themselves heard. Bateman is the
first, however, to examine microfinance critically and coherently as a
whole, and to take a sceptical long term view of its social and economic
effects. Few readers will agree with everything he writes, but anyone
who has any connection with microfinance should read this book.’

Malcolm Harper, Cranfield School of Management

‘DO NOT READ THIS BOOK - if you wish to retain the myths attached to
microfinance rather than enjoy and appreciate the best available
scholarly, reasoned and readable critique.’

Ben Fine, SOAS

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