Microfinance is dead! Long live microfinance! Critical reflections on two decades of microfinance policy and practice

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Abstract

The rise of the financial systems approach has been central to the past two decades of micro finance practice which aimed to achieve sustainability through scale and building profitable institutions. This resulted in extensive debates over its ability to reach poor and very poor people. The approach rode the wave of the Washington Consensus which promoted economic reform and liberalization. Now the policy discourse has moved even further away from a poverty focus to advocate financial inclusion for the unbanked into the mainstream financial sector. On these terms micro finance seems to be dead. However, the diversity of approaches on the ground aimed at poor people and hard-to-reach rural areas, points to a survival of 'micro finance', albeit largely outside the mainstream of the Washington consensus. This article also discusses where these developments leave the women's empowerment agenda that has been so central to micro finance.
LanguageEnglish
Pages291-303
Number of pages13
JournalEnterprise Development and Microfinance
Volume20
Issue number4
DOIs
StatusPublished - Dec 2009

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microfinance
finance
financial system
economic reform
empowerment
liberalization
rural area
poverty
inclusion
sustainability
policy
discourse
ability

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