PowerBlog has in the past endorsed the concept of micro-loans as a market-friendly and thereby effective way of aiding the poor, especially in developing countries.
Now Arneel Karnani has attacked microfinance in a prestigious publication, largely on the basis of macroeconomic data.
Over at Business as Mission Network, microfinancier Peter Greer supplies a thorough and fascinating response to the charges.
Certainly any movement needs it critics and Karnani scores some genuine points, but it seems to me that Greer’s rebuttals are on the whole convincing. Micro-loans won’t eliminate poverty, but they play an important role in its alleviation—and in the rehabilitation of the dignity of the individuals who are able to take responsibility for their economic welfare.