>I was flipping thru a recent issue of The Economist which focused on
>how the world's poor can be pulled out of their miserable state via
>"free enterprise," and the term thrown around most was
>"microfinance." Could any of you economic comrades please lay out
>for me what exactly microfinance really means? And is there a
>pseudo-evangelical tone to all this global captial raving?
Yeah, you're right about the tone, and it's in no small part because it does involve the triumph of faith over evidence. Microfinance - small loans to very poor people, mainly women, to finance very small businesses, usually gorified versions of the informal sector pursuits that occupy the desperately poor- is beloved of the official development crowd and their fellow travellers in the foundation world. There's little evidence that it does much to reduce poverty, or even to increase women's power (in many cases, men retain control over the money, because it goes into the patriarchal family pot). But it's market-based and grass-rootsy, so it gets liberal developmentalists all tumid and/or wet. It's a very weak substitute for what the poor really need, which is serious public investment in schooling, health, and infrastructure.
Doug