Tag Archives: global finance

Microcredit: “A political economy of shame”

by Guest Contributor Tanglad, originally published at Tanglad

It’s easy to understand the appeal of microcredit. Poor women from the Global South use loans as small as $20 to start businesses and lift themselves from poverty. The creditors make a profit when the loans are repaid. Win-win.

What do they say about things that look too good to be true?

A whopping 90 to 99 percent of these loans are paid back with interest, another shining indicator of microcredit’s success. But there is an ugly side to ensuring repayment, where poor women are made to police one another and punish defaulters with collective acts of aggression.

In her study of Grameen Bank microcredit programs in rural Bangladesh,* Leila Karim finds that the focus on the 98 percent loan recovery rate hides how beneficiaries are co-opted into “a political economy of shame.” Continue reading