In the popular literature surrounding microcredit (or microfinance), a number of claims is repeatedly made which deserve a closer look. The mass media are full of heartwarming stories, anecdotes and PR-like representations of MFIs’ work, showing the apparent power of microcredit to improve the lives of the poorer inhabitants of this planet. In fact, many academic productions make similar claims without providing sufficient evidence to back them up.
In this way, the impression is being created that the development industry has found a panacea for poverty; a dangerous insinuation which can only lead to disappointment. Over my next few blog entries I will address and critically illuminate some myths – insufficiently supported claims or untested assumptions – which currently stand in the way of a balanced assessment of the true powers and drawbacks of microcredit as a development tool.