Indeed, one of those who have thoroughly studied the phenomenon, Thomas Dichter, says that the idea that microfinance allows its recipients to graduate from poverty to entrepreneurship is inflated. He sketches out the dynamics of microcredit: "It emerges that the clients with the most experience got started using their own resources, and though they have not progressed very far--they cannot because the market is just too limited--they have enough turnover to keep buying and selling, and probably would have with or without the microcredit. For them the loans are often diverted to consumption since they can use the relatively large lump sum of the loan, a luxury they do not come by in their daily turnover." He concludes: "Definitely, microcredit has not done what the majority of microcredit enthusiasts claim it can do--function as capital aimed at increasing the returns to a business activity."
. Let's see if I understand this line of reasoning... It helps the impoverished but it doesn't "... increase (ing) the returns to a business activity.", so it's not working as intended according to "Thomas Dichter" who "...thoroughly studied the phenomenon, " Pardon me, while I spew up my lunch. Leigh http://leighm.net/ "The crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career." -- Albert Einstein.
