06 January 2011

Microfinance, Macrostruggle ~ Political Backlash

Microlenders, Honored With Nobel, Are Struggling writes Vikas Bajaj in the NYTimes...
"...microloans have prompted political hostility in Bangladesh, India, Nicaragua and other developing countries. In December, the prime minister of Bangladesh, Sheik Hasina Wazed, who had championed microloans alongside President Clinton at talks in Washington in 1997, turned her back on them. She said microlenders were “sucking blood from the poor in the name of poverty alleviation,” and she ordered an investigation into Grameen Bank, which had pioneered microcredit and, with its founder, was awarded the Nobel Peace Prize in 2006. Here in India, until recently home to the world’s fastest-growing microcredit businesses, lending has slowed sharply since the state with the most microloans adopted a strict law restricting lending. In Nicaragua, Pakistan and Bolivia, activists and politicians have urged borrowers not to repay their loans. The hostility toward microfinance is a sharp reversal from the praise and good will that politicians, social workers and bankers showered on the sector in the last decade."
Let's hope extortionist neo-socialist politicians don't screw things up even further.

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